Rohtak Hissar Tollway Private Limited

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In March 2013, the National Highway Authority of India (NHAI) awarded a 22-year concession (including construction period of 910 days which was about 2.5 years) to Sadbhav Engineering Limited for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 98.81kms (from KM87.000 to KM170.000 including connecting link from KM87.000 on NH10 to KM348.000 on NH71) of Rohtak to Hissar section of National Highway-10 (NH10),in the state of Haryana. Under the contract, Sadbhav Engineering Limited was responsible for the design, construction, finance,operation and maintenance and widening of the existing 2-lane carriageway to a 4-lane highway with paved shoulders. The scope included construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, road intersections, interchanges, drains, etc. The expansion project, part of National Highway Development Project Phase-III would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Sadbhav Engineering Limited established Rohtak Hissar Tollway Private Limited (RHTPL), a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest upfront subsidy of US$ 36mn (INR 2115mn @58.6 INR/USD). Out of the 34 pre-qualified bidders, 5 developers participated in the final bid. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement for the project was signed in October 2013. The project attained financial closure on 9th November 2013. The grant/debt/equity ratio for the project was 17/75/8. The estimated capital cost of the project at the time of financial closure was US$ 217mn (INR 12715.8mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 2115mn, financing comprised of a 18-year term loan of US$ 162.5mn (INR 9524mn) and sponsor equity of US$ 18.4mn (INR 1076.8mn). The term loan had a repayment schedule of 174 monthly installments. The debt was solely arranged by Canara Bank. Construction on the project was expected to begin in 26th December 2013 (this was the assigned appointment date post signing of concession agreement in October 2013 and financial closure in November 2013) and be completed by June 2016.