Solapur Yedeshi Tollway Private Limited

active

In January 2014, the National Highway Authority of India (NHAI) awarded a 29-year concession (including construction period of 910 days or approximately 2.5-years) to IRB Infrastructure Developers Limited for the strengthening, improvement, 4-laning, operation and maintenance, and tolling of 98.72kms (from KM0.0 to KM100.000) of Solapur-Yedeshi section of National Highway-211 (NH211),in the state of Maharashtra. Under the contract, IRB was responsible for the design, construction, finance, operation and maintenance and widening of the existing carriageway to a 4-lane highway with paved shoulders, with a provision to augment capacity at a later date. The scope included 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 National Highway Development Project Phase-IV would ease traffic congestion and give significant stimulus to trade and commerce in the entire region. IRB established Solapur Yedeshi Tollway Private Limited (SYTPL), a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting the lowest upfront subsidy of US$ 31mn (INR 1890mn). Out of the 8 qualified bidders, only 2 developers participated in the final bid. 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 on 3rd March 2014. The project attained financial closure on 28th August 2014. The grant/debt/equity ratio for the project was 13/61/26. The estimated capital cost of the project at the time of financial closure was US$ 244.6mn (INR 14920mn @61 INR/USD). Apart from viability gap funding (grant) of INR 1890mn, financing comprised of a 19-year 9-months term loan of US$ 149.2mn (INR 9100mn) and sponsor equity of US$ 64.4mn (INR 3930mn). The average cost of the financing was approximately 11.75% per annum. The debt was arranged by IDBI Bank and the participating banks were India Infrastructure Finance Co Ltd (2000mn), Canara Bank (2000mn), Union Bank of India (1000mn), Corporation Bank (850mn), Indian Overseas Bank (750mn). Construction on the project was expected to begin in March 2014 and be completed by April 2017.