KCC Lateri Expressway Private Limited

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In July 2011, Madhya Pradesh Road Development Corporation (MPRDC) signed a 15-year concession (including construction period of 2years) with KCC Buildcon Private Limited (KCC) for the strengthening, improvement,two-laning,operation and maintenance,and tolling of 119.36kms of Lateri-Ananspur-Bhagwantpur section of MDR road in Madhya Pradesh.The Project Highway constituted five different stretches:Lateri-Anandpur-Bhagwantpur of 22.60 km;Tyonda (NH - 86)-Ganjbasoda of 37.80 km;Itkhedi-Raslakhedi of 9.34 km; Kurawar-Iklera- Talen of 39.22 km and Ankhia-Barkheda-Dongargaon of 10.40 km. Under the contract, KCC Buildcon was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing carriageway to 2-lane road. The scope would include construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections,interchanges, drains, etc.The expansion project, part of MPRDC Highway Development Project, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. KCC Buildcon Private Limited established KCC Lateri Expressway Private Limited, a SPV, to execute this project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by quoting the lowest fixed annuity. The details of the bid were not available at the time of collection of this information. Under the contract, KCC was to recover the capital costs and operating costs including returns through fixed semi-annual payment from MPRDC as well as through tolling during the term of concession. The project attained financial closure on 7th October 2013. The debt equity ratio of the project was 74:26. The estimated capital cost of the project at the time of financial closure was US$ 25.4mn (INR 1491.7mn @58.6 INR/USD). Financing comprised of an 12-year 9-months term loan of US$ 18.8mn (INR 1100mn) and sponsor equity of US$ 6.7mn (INR 391.7mn). The term loan had a grace period of 9 months and a repayment schedule of 21 semi-annual installments.The debt was arranged by Punjab National Bank and other participating banks were Canara Bank (INR 450mn) and Dena Bank (200mn). Construction on the project began in August 2013 and was expected to be completed by August 2015.