Srinagar Banihal Expressway Limited

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In September 2010, the National Highway Authority of India (NHAI) awarded a 20-year concession (including construction period of 1095 days) to a consortium of Ramky Infrastructure Limited and Jiangsu Provincial Transportation Engineering Group Company Limited (China) for the strengthening, improvement,4-laning,operation and maintenance of 67.76 kms of Srinagar to Banihal section of National Highway-1A (NH-1A) in the state of Jammu & Kashmir - from KM 187.000 to KM 189.350 (Banihal Bypass) and KM 220.700 to KM 286.110 in Jammu and Kashmir. Under the contract,Ramky was responsible for the design, construction, finance, operation and maintenance and strengthening and widening of the existing passageway to a 4-lane highway with paved shoulders. The scope would include construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, tunnels, viaducts, culverts, road intersections, interchanges, drains, etc.The expansion project, part of National Highway Development Project Phase -II was was an important link in the North-South corridor and was expected to give significant stimulus to trade and commerce in this difficult terrain. The consortium of Ramky Infrastructure Limited (74% equity) and Jiangsu Provincial Transportation Engineering Group Company Limited (26% equity) established Srinagar Banihal Expressway Limited (SBEL), a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding,conducted by NHAI, by requesting the lowest fixed annuity of US$ 57.4 million (INR 2696.4 million @ 47 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 1348.2mn from NHAI during the term of concession. The concession agreement was signed on 28th October 2010. While in-principle sanction was given on March 2011, the project attained financial closure on 16th September 2011.The debt equity ratio of the project was estimated at 90:10.The estimated capital cost of the project at the time of financial closure was US$ 340.4 (INR 16000mn @ 47 INR/USD) million. Financing comprised of INR 12800mn 15-year term loan, a INR 1600mn 17-year term loan, and INR 1600mn sponsor equity. The INR 12800mn term loan had a repayment schedule of 22 semi-annual installments. The INR 1600mn term loan had a repayment schedule of 24 semi-annual installments. Debt was arranged by ICICI Bank.The participating banks were Indian Overseas Bank(2000mn),Federal Bank (750mn), State Bank of Patiala (1000mn), Oriental Bank of Commerce (1000mn),Jammu & Kashmir Bank (2000mn),Bank of India (2000mn),Andhra Bank (1000mn), ICICI Bank (1600mn). Construction on the project began in April 2011 and was scheduled to be completed by April 2014.