Suratgarh Bikaner Toll Road Company Private Limited

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On 9th January 2012, the Government of Rajasthan (Public Works Department on behalf of Ministry of Road Transport and Highways (MoRTH), Government of India) awarded a 16 year concession (including construction period of 24 months) to a consortium of MBL Infrastructures Limited (MBL) and SREI Infrastructure Finance Limited for the strengthening, improvement, two-laning, operation and maintenance, and tolling of 237.578 kms Bikaner – Suratgarh Section of NH-15 (from Km 553/869 of NH11 to Km 173/000 of NH15 via Km 10/630 of NH15), 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 carriageway to a two-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 Government of India, Ministry of Road Transport and Highways (MORTH) through PWD, Government of Rajasthan had decided to take up the development of various National Highway Corridors for augmentation of capacity for safe and efficient movement of traffic by widening to 2-lane with paved shoulder. Under this program, this project covering Suratgarh and Bikaner districts of Rajasthan was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of MBL Infrastructures Limited (MBL) and SREI Infrastructure Finance, established Suratgarh Bikaner Toll Road Company Private Limited, a special purpose vehicle, to implement the project. The consortium won the tender through competitive bidding, conducted by PWD Rajasthan, by quoting the highest annual premium of US$0.5mn (INR 25.1mn @50 INR/USD),which would increase by 5% per annum through the life of concession period (this amounts to an NPV payout of about US$5.3mn through the life of concession period at a discount rate of 10%). There were 33 pre-qualified bidders out of which 6 submitted their final bids. The second lowest bidder had quoted a premium of about INR 10mn. Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. MBL would execute the EPC for this project. In September 2012, MBL had entered into an agreement with SREI Infrastructure to swap its stake (50%) in Rimuli-Roxy-Rajamunda toll road project with SREI’s stake (50%) in Bikaner-Suratgarh toll road project. With this agreement MBL Infra now held 100% stake in Bikaner-Suratgarh toll road project while SREI would hold 100% in Rimuli-Roxy-Rajamunda toll road project. The concession agreement was signed on 9th May 2012. The project was expected to attain financial closure in January-March period of 2013. The estimated capital cost of the project at the time of bidding was US$ 100.2mn (INR 5010.8mn @50 INR/USD). Construction off the project was expected to begin in May 2012 and be completed by May 2014. However the construction progress on the project could not be ascertained at the time of collection of this information.