Sanjose Supreme Tollways Development Private Limited

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In May 2011, the Jaipur Development Authority (JDA) awarded a 28 year concession (including construction period of 21 months) to a consortium of Supreme Infrastructure India Limited (Supreme) and Sanjose Constructora Spain S.A. for the strengthening,improvement, 6-laning, operation and maintenance of 47kms of the Ring Road of the city of Jaipur in the state of Rajasthan.The ring road would connect Ajmer Road to Agra Road.This particular stretch was the first phase of the Jaipur Ring Road Project. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing carriageway to a 6-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.This expansion project was a part of the Phase-I of the Jaipur Ring Road project being implemented by Jaipur Development Authority to ease traffic congestion on this busy section. The consortium of Supreme Infrastructure India Limited (40% equity) and Sanjose Constructora Spain S.A. (60% equity),established a special purpose vehicle,Sanjose Supreme Tollways Development Private Limited, to implement the project. The SPV won the tender through international competitive bidding, conducted by JDA,by quoting the highest premium to be paid to JDA - a payment of US$5.1mn (INR 239.9mn @47 INR/USD) every year through the concession period (This translates to an NPV of about US$51.4mn payout through the concession period at a discount rate of 10%).L2 bid by Mumbai based developer, Atlanta Limited, was INR 100mn per year. The third bid (by Om Metal-Shiv Vani Group consortium) was disqualified on procedural lapses. While 22 companies had bought the tender document, only 3 companies finally bid for the project. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession.The toll rates would be fixed by JDA and it was expected that toll revenue share with JDA may also be incoporated into the concession agreement. The SPV would also be given 20,000 sq metres in two blocks, however, it would be required to pay half the reserve price for the commercial land leased.The EPC work would be executed jointly by Supreme and Sanjose in equal proportion. The concession agreement was expected to be signed on May 27th 2011. The project attained financial closure on 24th October 2011. The debt/equity ratio of the project was 72:28. The estimated capital cost of the project at the time of financial closure was US$ 222.3mn (INR 10447 mn @ 47 INR/USD) million. Financing comprised INR 7900mn 13year 2months term loan,and INR 2547mn sponsor equity. The INR7900mn term loan had a repayment schedule of 44 quarterly instalments. The Debt was arranged by Punjab National Bank, Central Bank of India, IIFCL, Oriental Bank of Commerce and State Bank of Bikaner and Jaipur. Construction on the project began in June 2011 and was expected to be completed by April 2013.The JDA had acquired around 1,620 hectares for the project.Officials claimed that the JDA has completed the land acquisition for the 47-km Phase-I.