Pune Solapur Expressway Limited

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On 17th Feb 2009, the National Highway Authority of India (NHAI) awarded (signed the LoA) a 21 year concession (including construction period of 910 months) with a consortium of Navinya Buildcon and Atlantia SPA for strengthening and widening the 110.5 km of the Pune-Solapur section of National Highway-9 (NH-9 from km.40 to km.144.4) in the state of Maharashtra. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and widening of the existing two-lane highway to a four-lane highway with paved shoulders. The project has provisions of bridges, flyovers, vehicular under passes, pedestrian under passes, and truck lay-byes. There will be a 124-km long service road on both sides of the project. The expansion project, part of National Highway Development Project Phase - II, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of India's Navinya Buildcon Limited (50% equity, its a 100% subsidiary of Tata Realty & Infrastructure Limited) and Spain's Atlantia SPA (50% equity) established Pune Solapur Expressway Limited, a special purpose vehicle, to implement the project. The consortium won the tender through competitive bidding, conducted by NHAI, by quoting the minimum subsidy required of US$ 61.8 million (INR 2990 million @ 48.41 INR/USD). Under the contract, the concessionaire was to recover the capital costs and operating costs including returns through tolling during the term of concession. Other details of the bidding were not available at the time of collection of this information. The concession agreement was signed in May 2009. The estimated capital cost of the project was US$ 283.2 (INR 13710 mn @ 48.41 INR/USD) million. The project attained financial closure in October 28th, 2009 with a debt equity ratio of 70:30. Financing comprised US$ 198.1 million (INR 9590 million @ 48.41 INR/USD) 15-year term loan provided by IDBI. A group of 10 other banks participated in the debt syndication. The balance US$ 85.1 million (INR 4120 million @ 48.41 INR/USD) was expected to be brought in as equity by the project sponsors. Construction on the project was expected to begin in May 2009 and completed by Dec 2011.