SEW LSY Highway Limited

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On 1st August 2011, the Uttar Pradesh State Highway Authority (UPSHA) signed a 25 year concession (including construction period of 30 months) with a consortium of SEW Infrastructure Limited and Prasad & Company Limited for the the strengthening,improvement, 4-laning, operation and maintenance, and tolling four laning of 206kms of Delhi- Saharanpur-Yamunotri section upto Uttarakhand Border from 10.91 km to 217.00 km on SH-57 in the State of Uttar Pradesh. Under the contract, Gammon was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 4-lane highway with paved shoulders. The scope would 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 UP State Highway Development Program would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of SEW Infrastructure Limited (70%) & Prasad & Company Limited (30%), established SEW LSY Highway Limited in July 2011, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by UPSHA by requesting for the lowest viability gap funding (upfront subsidy) of US$ 68mn (INR 3400mn). The SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. SEW Infrastructure Ltd was the EPC contractor of the project. The concession agreement was signed on 1st August 2011. The project attained financial closure on 17th March 2012. The grant/debt/equity ratio of the project was 12/61/26. The estimated capital cost of the project at the time of financial closure was US$ 553.3 (INR 27664.8mn @ 50 INR/USD) million. Apart from the VGF grant of INR 3400mn from GoI, the financing comprised a 14-year 9-month term loan of US$ 340mn (INR 17000mn) and sponsor equity of US$ 145.4mn (INR 7264.8mn). The 17000mn term loan had a grace period of 6 months and repayment schedule of 46 quarterly installments. The term loan was priced at PNB Base Rate plus 1.75% (Floating). The debt was arranged by SBI Capital Markets Limited.The participating banks were Punjab National Bank(3000mn), ICICI Bank Ltd(2700mn), India Infrastructure Finance Co Ltd(2400mn), Corporation Bank(1400mn), Union Bank of India(1150mn), Indian Overseas Bank (900mn), Oriental Bank of Commerce(900mn), Dena Bank Ltd(700mn), State Bank of Hyderabad(450mn), State Bank of Mysore(450mn), State Bank of Patiala(450mn), Vijaya Bank(700mn), Central Bank of India(900mn), Punjab & Sind Bank (900mn). Construction on the project began in April 2012 and was expected to be completed by September 2014. Over 90 per cent of the land required for the construction of the road project had already been made available by UPSHA.