ORIENTAL INFRATRUST

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 IFC is considering providing a senior loan and an investment in the units of the proposed Infrastructure Investment Trust (InvIT) of Oriental Structural Engineers Limited (OSEL or the Sponsor) and its wholly owned subsidiary, Oriental Tollways Private Limited (jointly referred to as Oriental or the Company) in India. Oriental is one of the leading road operating companies in India having thirteen highway concession projects (nine operating and four under construction hybrid annuity model projects). All these road assets have been developed and are being operated by separate special purpose vehicles (SPVs) which are subsidiaries of Oriental. These road assets were bid out by the National Highways Authority of India (NHAI), the concessioning authority, on competitive bidding basis. Each SPV has its own personnel and contractors for undertaking operation & maintenance (O&M) activities.It is envisaged that the InvIT's operations will be undertaken by three distinct operating entities, the Investment Manager (IM), the Project Manager (PM) and Maintenance manager (MM). IM will be responsible for undertaking a review of all future assets against the eligibility criteria and recommending those assets that meet the eligibility criteria for acquisition by the InvIT. The PM will be responsible for O&M of all assets of the InvIT for the concession period. To start with, five operating assets/ SPVs of Oriental may be transferred to the InvIT including all the personnel in each SPV. In future, InvIT will acquire more operational roads from Oriental and possibly other road developers as well on meeting pre-agreed eligibility criteria. The five operating assets that have been transferred to InvIT as seed assets are:(i) Etawah- Chakeri: 160 km length, CA for 4- to 6- laning signed in March 2013 and completion certificate issued by independent engineer in November 2016. After the issue of the completion certificate, a 46.530 kilometer stretch of service road between Km 323.475 and Km. 459.500, 3 foot-over bridges, 5 gantry signboards, 9 high-mast lightings, street lights of 34.349 kilometres between Km 323.475 and Km 461.00, 3 truck lay-bys including other ancillary work remain outstanding under the concession agreement.(ii) Hungund- Hospet: 97 km length, CA for 4- laning signed in Sept 2010 and final COD awarded in May 2014. While all construction activities as per the CA are complete, the construction activities involving a major flyover and one vehicular underpass are under progress under additional scope of work. All additional construction activities are being accommodated within the available right of way (RoW).(iii) Indore- Khalghat: 72 km length, CA for 4- laning signed in September 2006 and final COD awarded in December 2009. After the certificate of completion, a 43 meter stretch of service road between Km 37.522 to Km 37.565 and a 265 meter stretch between Km 70.070 and Km 70.355 remain outstanding for additional construction under the concession agreement. However, there has been no update since the past 10 years, and therefore the company will be writing to NHAI to descope the additional construction mentioned above.(iv) Nagpur- Betul: 175 km length, CA for 4- laning signed in January 2012 and Provisional COD awarded in February 2015. The construction of a toll plaza in the Maharashtra section of the project highway remains outstanding under the concession agreement. The toll plaza at chainage Km 25.780 in Maharashtra section is temporary and it requires additional land of 5000 square meter. ONBHL has demanded this land from NHAI. It was informed by the concessionaire that NHAI is under negotiation with land owner for direct purchase of land. As per the CA, a 2.4 km bypass at Badchicholi was also supposed to be constructed and was finally completed in 2018. (v) Nagpur Byepass: 117 km length, CA for 4- laning signed in April 2010 and provisional COD awarded in June 2012. Construction of pending 38 km stretch along with certain other activities under change of scope was also completed and the completion certificate was issued on March 19, 2019.