Soma Isolux Varanasi Aurangabad Tollway Private Limited

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In April 2010, the National Highway Authority of India (NHAI) awarded a 30 year concession (including construction period of 30 months) to a consortium of Soma Enterprises Limited and Isolux Corsan for the strengthening, improvement, six-laning,operation and maintenance of 192.4kms of Varanasi-Aurangabad Section of National Highway-2 (NH-2),in the states of Bihar (135kms) and Uttar Pradesh (57.4kms). Under the contract, the consortium was responsible for the design, construction,finance, operation and maintenance and strengthening of the existing carriageway to a 6-lane highway with paved shoulders. The scope will 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 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 of Soma Enterprises Limited (50%) and Isolux Corsan Concesiones SA (50%) established Soma Isolux Varanasi Aurangabad Tollway Private Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by requesting for the lowest grant of US$ 125.5 million (INR 5650 million @45 INR/USD) from NHAI. The nearest competitor, a consortium of Gammon Infrastructure and Macquire Infrastructure, had requested a grant of INR 7140million. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The project attained financial closure on 24th January 2011. The debt/equity/grant ratio of the project was 47/39/14. The estimated capital cost of the project at the time of financial closure was US$ 876.5 (INR 39444.5mn @45 INR/USD) million. Apart from the upfront grant of INR 5650mn from NHAI, financing comprised INR 18500mn 15year term loan,and INR 15294.5mn equity. The participating banks were Andhra Bank,Bank of Baroda, Bank of India, Central Bank of India, India Infrastructure Finance Co. Ltd., Indian Overseas Bank, Punjab National Bank, State Bank of Hyderabad,and Union Bank of India. Construction on the project began in January 2011 and was expected to be completed by July 2013.