Transstroy Bhopal Bypass Tollway Private Limited

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On 18th November 2010, the Madhya Pradesh Road Development Corporation (MPRDC) signed a 15-year concession (including construction period of 24 months) with Transstroy Consortium for the strengthening, improvement, four-laning, operation and maintenance of 52kms of Bhopal Bypass road Section of National Highway-12 and NH86 in the state of Madhya Pradesh. Under the contract, Transtroy consortium was responsible for the design,construction, finance, operation and maintenance,strengthening and widening the existing 2-lane road portion of Bhopal bypass to 4-lane road from km. 300/6 of NH-12 Km to km 13/6 of NH-86 towards Raisen and Km.324/4 of NH-12 to Km. 18/6 of NH-86 towards Sehore.The project also includes the construction of 4-lane road connecting the point from Km. 13/6 of NH-86 to Km. 324/4 of NH-12.The scope included 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 MPRDC Highway Development Project, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Transstroy (India) Limited (74%), and OJSC Corp Transstroy (26%), established Transstroy Bhopal Bypass Tollway Private Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC, by quoting the highest premium of US$ 4.7million (INR 210 million @ 45 INR/USD) per year to be paid to MPRDC (This amounted to an NPV of US$ 39mn (INR 1757mn @45 INR/USD) at a discount rate of 10% through 15 years 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 with the current SPV was signed on 18th November 2011 after cancelling the concession agreements with earlier sponsors. The project attained financial closure on 31st May 2011. The debt equity ratio of the project was 70:30. The estimated capital cost of the project at the time of financial closure was US$ 67.7 (INR 3049 mn @ 45 INR/USD) million. Financing comprised INR 2130mn 15year term loan and INR 918.9mn equity. The term loan had repayment schedule of 45 quarterly installments.The debt was arranged by Canara Bank, Indian Overseas Bank, Oriental Bank of Commerce and Central Bank of India. Construction on the project began in May 2011 and was expected to be completed by May 2013.