Soma Isolux Kishangarh Beawar Tollway Limited

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In May 2009, the National Highway Authority of India (NHAI) signed a 18 year concession (including construction period of 910 days) with a consortium of India's Soma Enterprise Ltd and Spain's Isolux Corsan for strengthening and widening the 93-km Kishangarh-Ajmer-Beawar section of National Highway-8 (NH8 from Km 364.124 to Km 58.245) in the state of Rajasthan. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and widening of the existing four-lane highway to a six-lane highway with paved shoulders. The section would include structures like eight flyovers, 11 vehicular underpasses, four cattle under passes, 57 km of service road and adequate number of major/minor bridges. The expansion project, part of National Highway Development Project Phase - IIIB, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Soma Enterprise of India and Isolux Corsan of Spain established Soma Isolux Kishangarh Beawar Tollway Limited, a special purpose vehicle, to implement the project. The consortium won the tender through competitive bidding, conducted by NHAI, by quoting the maximum revenue share. The concessionaire will start paying a share of its toll revenues to the government after 151 days of commercial operations date (COD). The share that will accrue to the Government is 2 per cent in the first year, followed by a one per cent increase in each subsequent year. Under the contract, the concessionaire was to recover the capital costs and operating costs including returns through tolling during the term of concession. Other bidding details were not available at the time of collection of this information. The concession agreement was signed in May 2009. The estimated capital cost of the project at the time of bidding was US$ 164.2 (INR 7950 mn @ 48.41 INR/USD) million. The project reached financial closure in December 2009. Debt equity ratio for all the three projects has been set at 75:25.Soma-Isolux accessed funds from half a dozen public sector banks with tenure of 15 years and two-year moratorium. Cost of funds were pegged anywhere between 13 and 14 per cent. Construction on the project was expected to begin in May 2009 and completed by Dec 2011.