Mhow Agroh Pathways Private Limited

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On 28th July 2011, Madhya Pradesh Road Development Corporation (MPRDC) signed a 30-year concession (including construction period of 2 years) with a consortium of S&P Infrastructure Developers Private Limited and BLA Infrastructure Private Limited for the strengthening, improvement, two-laning, operation and maintenance, and tolling of 69.379kms of Rau Mhow Jamghat Mandleshwar section of State Highway-38 from km 14/780 (old NH3) to km 0/000, in the state of Madhya Pradesh. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing carriageway to 2-lane road 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 the MPRDC Highway Development Program, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of S&P Infrastructure Developers Private Limited and BLA Infrastructure Private Limited, established M/s Mhow Agroh Pathways Private Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC, by requesting for the lowest upfront subsidy (viability gap funding) of US$ 13.3mn (INR 663.3mn @50 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The project attained financial closure on 18th June 2012. The grant/debt/equity ratio of the project was 24/50/26. The estimated capital cost of the project at the time of financial closure was US$ 55.1mn (INR 2754.8mn @50 INR/USD). Apart from viability gap funding (grant) of INR 663.3mn (Central Government - INR 352.1mn, and Govt of Madhya Pradesh - INR 311.2mn), financing comprised a 15-year term loan of US$ 27.7mn (INR 1387.3mn) and sponsor equity of US$ 14.1mn (INR 704.2mn).The term loan had a grace period of 2 years and a repayment schedule of 156 monthly installments. The debt was arranged by Dena Bank. The Appointed Date of the project had not been notified as 90 percent land was not available. It had been informed that 80 percent of the total land requirement was available. However, additional land pertained to forest area and Ghat portion for which the process was underway. Construction works on Mhow bypass had commenced at the time of collection of this information and completion was scheduled in 2 years from the Appointed Date.