Khed Sinnar Expressway Limited

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In March 2013, the National Highway Authority of India (NHAI) awarded a 20-year concession (including construction period of 910 days which was about 2.5 years) to ILFS Transportation Networks Limited (ITNL) for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 137.946kms (from KM42.000 to KM177.000 including a bypass section of 31.78kms) of Khed to Sinnar section of National Highway-50 (NH50),in the state of Maharashtra. Under the contract, ITNL was responsible for the design, construction, finance,operation and maintenance and widening of the existing 2-lane carriageway to a 4-lane highway with paved shoulders. The scope included 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 National Highway Development Project Phase-IVB would ease traffic congestion and give significant stimulus to trade and commerce in the entire region.Khed - Sinnar section of was proposed as a part of Delhi Mumbai Industrial corridor and thus was considered an important link. NH-50 is a link between NH-3 in Maharashtra and shall be giving feeder service to Golden Quadrilateral (GQ) 4 at Pune city. ILFS Transportation Networks Limited established Khed Sinnar Expressway Limited (KSEL), a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest upfront subsidy of US$ 50.6mn (INR 2966mn @58.6 INR/USD). Out of the 40 pre-qualified bidders, 4 developers participated in the final bid. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement for the project was signed on 8th May 2013. The project attained financial closure on 1st November 2013. The grant/debt/equity ratio for the project was 15/66/19. The estimated capital cost of the project at the time of financial closure was US$ 341.3mn (INR 20000mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 2966mn, financing comprised of a 14-year 9-months term loan of US$ 226.1mn (INR 13250mn) and sponsor equity of US$ 64.6mn (INR 3784mn).The debt was solely arranged by Yes Bank Limited. Construction on the project was expected to begin in November 2013 (this was the assigned appointment date post signing of concession agreement in May 2013 and financial closure in November 2013) and be completed by May 2016.