Transstroy Obedullaganj-Betul Tollways Private Limited

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On 6th February 2012, the National Highway Authority of India (NHAI) awarded a 30-year concession (including construction period of 912 days) to a consortium led by Transstroy (India) Limited for the strengthening,improvement, four-laning,operation and maintenance, and tolling of 121.36 kms of Obedullaganj-Betul section from km.2.800 to km.8.300 and from km20.700 to km 137.000 of National Highway-69 (NH-69) and a 2-lane bypass stretch (km28.000 to km61.500, in the states of Madhya Pradesh. Under the contract, Transstroy was responsible for the design, construction, finance, operation and maintenance and strengthening of the existing 2-lane carriageway to a four-lane highway with paved shoulders. The scope included construction of 4-lanes including construction of new pavement, rehabilitation of existing pavement, construction and/or rehabilitation of major and minor bridges, culverts, service roads, road intersections,interchanges, toll plaza, tunnel section, etc.The expansion project, part of National Highway Development Project Phase-III will ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium of Transstroy (India) Limited (74%) and OJSC Corporation Transstroy (26%), established Transstroy Obedullaganj-Betul Tollways Private Limited (TOBTPL), a special purpose vehicle in February 2012, to implement the project. The SPV won the tender through international competitive bidding, conducted by NHAI, by quoting the highest annual premium. The SPV would pay to NHAI a sum of US$6.2mn (INR 330mn @53.4 INR/USD) in the first year of operations, with 5% increase in each subsequent year (This amounts to an NPV payout of about US$ 98.1mn over the concession period of 30 years at a discount rate of 10%). Under the contract, the SPV was to recover the capital costs and operating costs including returns through tolling during the term of concession. The EPC contract for the project had been awarded to Transtroy (India) Limited. The concession agreement was signed on 30th April 2012. Timeline for financial closure couldnot b ascertained. Based on Credit Report, the estimated capital cost of the project at the time of financial closure was US$ 184.1mn (INR 9829.5mn @53.4 INR/USD). The debt/ equity ratio was 70/30. Financing comprised of term loan of US$ 129.2mn (INR 6900mn) and sponsor equity of US$ 54.8mn (INR 2929.5mn). The loan was raised through a consortium of 6 banks. Construction on the project was expected to began in April 2013 and was expected to be completed by August 2015. But because of delays in land acquisition, the Appointed Date (for start of concession) was shifted to February 2014 and now the project's scheduled completion was August 2016.