Patna Buxar Highways Limited

cancelled

In November 2011,the National Highway Authority of India (NHAI) awarded a 20-year concession (including construction period of 30 months) to Gammon Infrastructure Projects Limited (GIPL) for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 125.44kms of Patna-Buxar Section from km 0.000 to km 124.850 on NH-30 and NH-84,in the state of Bihar. Under the contract, Gammon was responsible for the design, construction, finance, operation and maintenance and widening of the existing 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-III would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Gammon Infrastructure Projects Limited established Patna Buxar Highways Limited on 22nd November 2011,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$ 63.2million (INR 3160mn @50 INR/USD). There were 36 pre-qualified bidders but Gammon was the sole bidder 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 21st March 2012. The project attained financial closure on 26th March 2012. The grant/debt/equity ratio for the project was 21/65/14. The estimated capital cost of the project at the time of financial closure was US$ 301.4mn (INR 15073mn @50 INR/USD). Apart from viability gap funding (grant) of INR 3160mn, financing comprised of 15-year term loan of US$ 197mn (INR 9850mn) and sponsor equity of US$ 41.2mn (INR 2062.7mn).The term loan had a repayment schedule of 138 monthly installments. The debt was arranged by Punjab National Bank. Construction on the project was expected to begin in March 2012 and be completed by September 2014. PBHL was in talks with NHAI for terminating the Patna-Buxar concession on amicable terms due to non-availability of land and government approvals.In August 2014, NHAI finally cancelled the concession for the project.