Shreenathji Udaipur Tollway Private Limited

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In March 2012, the National Highway Authority of India (NHAI) awarded a 27-year concession (including construction period of 30 months) to Sadbhav Engineering Limited for the strengthening,improvement, four/six-laning,operation and maintenance, and tolling of 79.31 kms of Gomti ka Chauraha-Udaipur section from km 177/000 to km 260/100 of National Highway-8 (NH-8) in the state of Rajasthan. Under the contract, Sadbhav Engineering was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing 2-lane carriageway to a four/six-lane highway with paved shoulders. The scope included construction of 4/6-lanes including construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections,interchanges, toll plaza, tunnel section, etc.The expansion project, part of National Highway Development Project Phase-IV would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Sadbhav Engineering Limited established a special purpose vehicle, Shreenathji Udaipur Tollway Private Limited (SUTPL), to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by quoting the highest premium to NHAI. The SPV would pay NHAI a sum of US$4.3mn (INR 216mn @50 INR/USD) in the first year of operations with 5% increase in each subsequent year (this amounted to an NPV payout of US$64.6mn over the concession period at a discount rate of 10%). There were 39 pre-qualified bidders for this project out of which 10 offered their final bids. The L2 Bidder had offered a premium of INR 138mn. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The EPC contract for the project has been awarded to Sadbhav Engineering Limited. The concession agreement was signed on 17th April 2012. The project attained financial closure on 1st March 2013. The debt/equity ratio for the project was 73/27. The estimated capital cost of the project at the time of financial closure was US$ 196.5mn (INR 11514.6mn @58.6 INR/USD). Financing comprised of a 18-year term loan of US$ 143.3mn (INR 8400mn) and sponsor equity of US$ 53.1mn (INR 3114.6mn). The term loan had a repayment schedule of 174 monthly installments.The debt was arranged by ICICI and the participating banks were Central Bank of India (1500mn), Oriental Bank of Commerce (2000mn). Construction on the project began on 18th April 2013 (the Appointed Date) and was expected to be completed by October 2015.