Sai Maatarini Tollways Limited

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In August 2011, the National Highway Authority of India (NHAI) awarded a 24-year concession (including construction period of about 2years) to Gayatri Projects Limited for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 166.173kms (from KM0.000 to KM163.000) of Panikholi to Rimoli section of National Highway-215 (NH215),in the state of Orissa. Under the contract, Gayatri Projects 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.The key driver of traffic on the project road was the demand for iron ore from industrial plants in the proximity. The project corridor acts a major connection for mining industries which are located at Joda and northern Keonjhar areas. Gayatri Projects Limited established Sai Maatarini Tollways Limited (SMTL) in September 2011, 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$ 93.6mn (INR 5484.9mn @58.6 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. Toll rates were subject to annual escalation, based on inflation indices (40% of Wholesale Price Index), in addition to the fixed escalation of 3.0% per year. SMTL had a fixed-price, fixed-time engineering, procurement and construction contract with Gayatri Projects Limited. The concession agreement for the project was signed in early 2013 (date couldn't be confirmed at the time of collection of this information). The project attained financial closure in April 2013. The grant/debt/equity ratio for the project was 24/60/16. The estimated capital cost of the project at the time of financial closure was US$ 393.5mn (INR 23061.6mn @58.6 INR/USD). Apart from viability gap funding (grant) of INR 5484.9mn, financing comprised of a 14-year term loan of US$ 238.4mn (INR 13973.5mn) and sponsor equity of US$ 61.5mn (INR 3603.2mn). The Term Loan had a variable interest rate (currently at 12.25%), with a reset every year post COD (commercial operation date) at Base Rate plus 2%. Debt/Equity ration was not to exceed 1.75:1.0 at any point of time until maturity of rated debt. Term loan would mature on 1st October 2027.The debt was arranged by IDBI Bank and SBI Capital Markets. The other participating banks were IIFCL(2000mn), Bank of India (2000mn), Canara Bank (1500mn), Central Bank of India (1000mn), Indian Overseas Bank(1000mn), Oriental Bank of Commerce (1000mn),LIC(1000mn), Andhra Bank (973.5mn). Construction on the project was expected to begin in May 2013 (this was the assigned appointment date) and be completed by June 2015.