Tantia Raxaul Tollway Private Limited

Active

In January 2011, the National Highway Authority of India (NHAI) awarded a 20 year concession (including construction period of 30 months) to a consortium of Tantia Construction Limited and Jiangsu Provincial Engineering Transportation Group Company Limited (China) for the strengthening,improvement, 2-laning, operation and maintenance of 68.79kms (from KM 82.00 to KM 188.60) of Motihari-Piprakoti-Raxaul section of National Highway-28A (NH-28A) in the state of Bihar. Under the contract, the consortium was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing carriageway to a 2-lane highway with paved shoulders. The scope includes strengthening & maintenance of existing carriageway including construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections,interchanges, drains,etc.The expansion project was a part of National Highway Development Project Phase -III and was expected to ease traffic congestion on this busy section. The consortium of Tantia Construction Limited (74% equity) and Jiangsu Provincial Engineering Transportation Group Company Limited (26% equity),established a special purpose vehicle, Tantia Raxaul Tollway Private Limited, to implement the project. The SPV won the tender through competitive bidding, conducted by NHAI,by quoting the lowest upfront subsidy from NHAI of US$31.9mn (INR 1498mn @47 INR/USD).Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession.Tantia Construction Limited was the EPC contractor for the project. The project attained financial closure on 28th September 2011. The grant/debt/equity ratio of the project was 25.9/35.3/38.8. The estimated capital cost of the project at the time of financial closure was US$ 123.2mn (INR 5791.1 mn @ 47 INR/USD) million. Apart from the NHAI subsidy, financing comprised INR 2045.1mn 15year term loan,and INR 2248mn sponsor equity. The INR 2045.1mn term loan had a grace period of 1 year, a repayment schedule of 46 quarterly instalments and was priced at 150bps over prime lending rate of Indian Bank.The debt was arranged by SBI Capital. The participating banks were Indian Bank(450mn),State Bank of Patiala(400mn),Bank of India(350mn),Dena Bank Ltd (300mn),IIFCL (295.1mn),Oriental Bank of Commerce (250mn). Construction on the project began in October 2011 and was expected to be completed by April 2014.