Reengus Sikar Expressway Limited

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In March 2011, the National Highway Authority of India (NHAI) awarded a 17-year concession (including construction period of 30 months) to G R Infraprojects Limited for the strengthening, improvement,4-laning,operation and maintenance of 43.88 kms (from KM 298.075 to 341.047) of Reengus to Sikar section of National Highway-11 (NH-11) in the state of Rajasthan. Under the contract,GR Infraprojects was responsible for the design, construction, finance, operation and maintenance and strengthening and widening of the existing passageway to a 4-lane highway with paved shoulders. The scope would include construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, tunnels, viaducts, culverts, road intersections, interchanges, drains, etc.The expansion project, part of National Highway Development Project Phase -III was expected to give significant stimulus to trade and commerce in the entire region. G R Infraprojects Limited established Reengus Sikar Expressway Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding,conducted by NHAI, by requesting the lowest fixed annuity of US$ 7.99 million (INR 375.4 million @ 47 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 187.7mn from NHAI during the term of concession. Thw concession agreement was signed on 27th April 2011. The project attained financial closure on 13th October 2011.The estimated capital cost of the project at the time of financial closure was US$ 48.5 (INR 2280mn @ 47 INR/USD) million. The debt equity ratio of the project was estimated at 75:25. Financing comprised of INR 1710mn 12year term loan and INR 570mn sponsor equity. Debt was solely arranged by State Bank of Bikaner and Rajasthan. Construction on the project began in April 2011 and was scheduled to be completed by April 2014.The SPV already had possession of around 60% land for the project.