Sehore Kosmi Tollways Limited

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In February 2012, Madhya Pradesh Road Development Corporation (MPRDC) signed a 15-year concession (including construction period of 2 years) with Ramky Infrastructure Limited for the strengthening, improvement, two-laning,operation and maintenance, and tolling of 50.12kms of Sehore-Icchawar-Kosmi section from km 0/00 to km 50/120 of State Highway-53, in the state of Madhya Pradesh. Under the contract, Ramky was responsible for the design,construction, finance, operation and maintenance,strengthening and widening the existing carriageway to 2-lane road The scope will include 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 MPRDC Highway Development Project, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Ramky Infrastructure Limited established Sehore Kosmi Tollways Limited, a special purpose vehicle, on 2nd September 2011 to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by quoting the lowest fixed annuity of US$ 1.8mn (INR 88.2mn @50 INR/USD). Under the contract, the consortium was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 44.1mn from MPRDC as well as through tolling during the term of concession. EPC for the project would be executed by Ramky Infrastructure. The project attained financial closure on 5th March 2012. The debt equity ratio of the project was 77:23. The estimated capital cost of the project at the time of financial closure was US$ 19.2mn (INR 961.8mn @50 INR/USD). Financing comprised of a 14-year term loan of US$ 14.8mn (INR 741.8mn) and sponsor equity of US$ 4.4mn (INR 220mn). The term loan had a repayment schedule of 45 quarterly installments. The debt was arranged by Yes Bank and was priced at 50 basis points above the bank's prime lending rate. Construction on the project began in February 2012 and was expected to be completed by February 2014.