MP Highways Private Limited

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On 13th December 2010, Madhya Pradesh Road Development Corporation (MPRDC on behalf of National Highway Authority of India) ) signed a 14-year concession with PNC Infratech Limited for the strengthening, improvement,two-laning,operation and maintenance,and tolling of 108kms of Gwalior to Madhya Pradesh/Uttar Pradesh border section of National Highway-92 from km 000/000 to km 180.000,in the state of Madhya Pradesh. Under the contract, PNC Infratech was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing 2-lane carriageway to 2-lane divided carriageway.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 National Highway Development Program (through MPRDC), was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. PNC Infratech established MP Highways Private Limited (MPHPL),a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by requesting the lowest upfront subsidy of US$ 4.6mn (INR 270mn @58.6 INR/USD).Government of India had sanctioned the grant for this project. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession.PNC Infratech would execute the EPC for the project. The project attained financial closure on 20th February 2013. The grant/debt/equity ratio of the project was 8.6/75/16.4. The estimated capital cost of the project at the time of financial closure was US$ 53.7mn (INR 3145.3mn @58.6 INR/USD). Apart from the vaiability gap funding (grant) of INR 270mn, financing comprised of 11-year term loan of US$ 40.1mn (INR 2350mn) and sponsor equity of US$ 8.9mn (INR 523.5mn). The term loan had a grace period of 1-year 3-months and a repayment schedule of 115 monthly installments. Axis Bank was the lead arranger and the other participating banks were State Bank of Patiala (INR 500mn), and Union Bank of India (850mn). The project was operational at the time of collection of this information.