Raebareilly Allahabad Highway Private Limited

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In December 2010, the National Highway Authority of India (NHAI) awarded a 16 year concession (including construction period of 30 months) to Vijai Infrastructure Limited (VIL) for the strengthening, improvement, 2-laning, operation and maintenance of 106kms (from KM 82.00 to KM 188.60) of Raibareli to Allahabad section of National Highway-24B (NH-24B) in the state of Uttar Pradesh. Under the contract, VIL was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing carriageway to a 2-lane highway with paved shoulders. The scope includes strengthening & maintenance of existing carriageway 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.The expansion project was a part of National Highway Development Project Phase -IV and was expected to ease traffic congestion on this busy section. Vijai Infrastructure Limited (74%) and its subsidiary Vijai Constructions (26%),established a special purpose vehicle, Raebareilly Allahabad Highway Private Limited, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI,by quoting the lowest upfront subsidy from NHAI of US$8.96mn (INR 421mn @47 INR/USD).Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession.Vijai Infrastrutcure Limited (VIL) was the EPC contractor for the project. The project attained financial closure on 4th October 2011. The grant/debt/equity ratio of the project was 11.8/63.2/25. The estimated capital cost of the project at the time of financial closure was US$ 75.8mn (INR 3562.9 mn @ 47 INR/USD) million. Apart from the NHAI subsidy, financing comprised INR 2250.8mn 14year 6months of debt,and INR 891.1mn sponsor equity. The debt was further divided into a 2150.8mn 14.5 years term loan and 100mn 14.5 years term loan. The INR 2150mn term loan had a grace period of 1 year, a repayment schedule of 144 monthly instalments and was priced at floating rates, linked to benchmark rates of respective banks (effecitve rate at the time of sanction worked out to be 12.6%).The INR 100mn term loan had a grace period of 3 years, repayment schedule of 120 monthly instalments and was priced at prime lending rate of 17.75% with negative margin of 3.15% (worked out to be at 14.6%). The debt was arranged by SBI Capital. The participating banks were Punjab National Bank,IIFCL, State Bank of Bikaner & Jaipur, and Reliance Capital. Construction on the project began in October 2011 and was expected to be completed by April 2013.