Soma-Isolux NH One Tollway Private Limited

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In June 2008, the National Highway Authority of India (NHAI) signed a 15 year concession (including construction period of 30 months) with a consortium formed by India’s Soma Enterprises and Spain’s Isolux Corsan Concesionnes and Corsan Corviam Constructions SA, to widen and strengthen the 291.10 km section on National Highway (NH-1) between Panipat and Jalandhar in the states of Haryana and Punjab. Under the contract, the consortium was responsible for the design, finance, operation and maintenance and widening of the existing four lane highway to a six-lane highway with paved shoulders. The expansion project, part of National Highway Development Project Phase V, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium established Soma-Isolux NH OneTollway Private Limited (SINOTPL), a special purpose vehicle, to implement the project. The consortium won the tender through international competitive bidding, conducted by NHAI, by quoting the highest (20.14%) revenue share from operations to NHAI. This revenue share proportion would increase by 100 basis points (1 percentage point) every year, up to the end of the 15-year (34.14%) concession period. 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 June 2008. The capital cost of the project was estimated at US$ 1000 million. Spanish Isolux Corsan reported to had obtained euro 530 millons in long term debt provided by a consortium of Indian banks led by State Bank of India in 2008. Further details of the actual financial closure were not available in public domain Construction on the project began in June 2008 and was expected to be completed by December 2010.