SEW Krishnagar Baharampore Highways Limited

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In February 2011, the National Highway Authority of India (NHAI) awarded a 30 year concession (including construction period of 36 months) to SEW Infrastructure Limited (SEW) for the strengthening,improvement, four-laning, operation and maintenance of 78kms (KM 115.00 to KM 193.00) of Krishnanagar to Bahrampore section of National Highway-34 (NH-34) in the state of West Bengal.The project was covered in two districts of the State of West Bengal - Nadia and Murshidabad. Under the contract, SEW Infra was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing 2-lane highway to a 4-lane highway with paved shoulders. The scope included 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.The expansion project,part of National Highway Development Project Phase -III, was expected to expedite the improvement of infrastructure in the state.NH-34 was an important highway and lifeline for North-South road transport in the State of West Bengal as it passes through the state longitudinally and connects the North-eastern States and neighbouring countries such as Nepal, Bhutan and Bangladesh. The traffic on this National Highway was expected to increase substantially due to the implementation of South Asia Free Trade Agreement (SAFTA) among SAARC Countries (Nepal, Bhutan and Bangaldesh). The commercial traffic generated/originated from Haldia Port, Kolkata and industrial areas in South Bengal heading towards North Bengal, North-eastern States and neighbouring countries had only a route i.e. NH-34. SEW Infra established a special purpose vehicle, SEW Krishnagar Baharampore Highways Limited, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI,by quoting the lowest upfront subsidy from NHAI of US$13mn (INR 612mn @47 INR/USD).Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The concession agreement was signed in July 2010. The project attained financial closure on 23rd November 2011. The grant/debt/equity ratio of the project was 7.5/74/18.5. The estimated capital cost of the project at the time of financial closure was US$ 172.7mn (INR 8116 mn @ 47 INR/USD) million. Apart from the upfront grant from NHAI, financing comprised INR 6003.2mn 13year 6months term loan,and INR 1500.8mn equity. The INR 6003.2mn term loan had a grace period of 6months and a repayment schedule of 21 semi-annual instalments. The loan was priced at 225bp over the prevailing SBI PLR (prime lending rate).The debt was arranged by State Bank of India (SBI). The participating banks were IIFCL(1000m), ICICI Bank(1000m),Indian Bank(500m), Indian Overseas Bank(500m),State Bank of Bikaner & Jaipur(250m), State Bank of Mysore(250m),Union Bank of India(750m), Allahabad Bank(250m). Construction on the project began in February 2012 and was expected to be completed by July 2014.