PNC Bareilly Nainital Highways Private Limited

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On 1st August 2011, the Uttar Pradesh State Highway Authority (UPSHA) signed a 25 year concession (including construction period of 30 months) with PNC Infratech Limited for the strengthening,improvement, 4-laning, operation and maintenance, and tolling of 54kms of Bareilly-Almora-Bhageshwar section on State Highway-37, in the state of Uttar Pradesh. Under the contract, PNC Infratech was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing carriageway to a 4-lane highway with paved shoulders. The scope includes construction of 4-lanes including construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections, interchanges, drains, etc. Besides cutting down on travel time, the other benefits expected of this road widening are increase in traffic and trade activities, entry of more businesses in the region and infrastructure developments. PNC Infratech Limited established PNC Bareilly Nainital Highways Private Limited,a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by UPSHA. Details of bidding couldn't be ascertained at the time of collection of this information. While it was understood that GoI had given an in-principle sanction of INR 708.1mn (US$ 14.2mn) viability gap funding (upfront grant) the actual outcome of bid was unknown. There were 10 pre-qualified bidders for this project. 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 17th March 2012. The debt equity ratio of the project was 76:24. The estimated capital cost of the project at the time of financial closure was US$ 120.9mn (INR 6045.5mn @ 50 INR/USD). Financing comprised 15-year term loan of US$ 92mn (INR 4600mn) and sponsor equity of US$ 28.9mn (INR 1445.5mn). The term loan had a repayment schedule of 144 monthly installments. The debt was solely arranged by Canara Bank. Construction on the project began in March 2012 and was expected to be completed by September 2014.Over 90 percent of the land required for the construction of the road project had already been made available by UPSHA at the time of collection of this information.