Rajahmundry Godavari Bridge Limited

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In August 2008, the Andhra Pradesh PWD awarded (signed the LoA) a concession of 25 years (including a construction period of 3 years) to India's Gammon Infrastructure Projects Limited for constructing a bridge across river Godavari Andhra Pradesh, a major bridge across the river Godavari connecting Rajahmundry and Kovvur in Andhra Pradesh . The bridge will be constructed on upstream side of the existing rail-cum-road bridge near Katheru at Rajahmundry connecting EGK road at km.82/4 at Kovvuru and NH-5 at km.197/4 on Rajahmundry side in East Godavari district in the state of Andhra Pradesh. Under the contract, Gammon was responsible for the design, construction, finance, operation and maintenance of this greenfield bridge over the existing rail-cum-road bridge. The expansion project, was expected to ease traffic congestion, improve connectivity between the two towns of Kovurru and Rajahmundry, and give significant stimulus to trade and commerce in the entire region. Gammon Infrastructure Projects Limited established Rajahmundry Godavari Bridge Limited, a special purpose vehicle, to implement the project. Gammon won the tender through competitive bidding, conducted by State PWD, by requesting for the lowest subsidy of US$ 42.9 million (INR 2075.5 million @ 48.41 INR/USD). Under the contract, Central Government was to give a grant of US$ 24.5 million (INR 1186 million @ 48.41 INR/USD) and the State government was to give a grant of US$ 18.4 million (INR 889.5 million @ 48.41 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. Other bidding details were not available at the time of collection of this information. The concession agreement was signed in November 2008. The project attained financial closure on May 1st 2009. The estimated capital cost of the project was US$ 177.85 million (INR 8610 mn @ 48.41 INR/USD) million. A consortium of banks arranged US$ 116.9 million (INR 5660 million debt @ 48.41 INR/USD). The balance amount of US$ 60.9 million (INR 2950 million @ 48.41 INR/USD) was expected to be provided by sponsors as equity. Construction on the project began in May 2009 and was expected to be completed by 2nd quarter of 2012. http://www.gammoninfra.com/financial_pdf/Godavari%20Financial%20Closure.pdf