Valecha Kachchh Toll Road Limited

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In May 2011, the Gujarat State Road Development Corp (GSRDC) awarded a 20 year concession (including construction period of 18 months) to a consortium led by Valecha Engineering Limited for the strengthening, improvement, six-laning,operation and maintenance, and tolling of the 77km of Bhuj-Bhachau section on SH-42 in the state of Gujarat. Under the contract, the consortium was responsible for the for the design, construction, finance, operation and maintenance and strengthening of the existing carriageway to a 4-lane highway with paved shoulders. The project also includes widening of all culverts, two major and 24 minor bridges, besides providing two railway over bridges, eight underpasses, one truck lay-by, retro reflective sign boards, thermoplastic road markings, toll plazas with standby ambulance, crane, medical aid, telephone kiosks and such facilities. The expansion project, part of State Highway Development Program will ease traffic congestion and give significant stimulus to trade and commerce in the entire region. The consortium led by Valecha Engineering Limited (59%) established Valecha Kachchh Toll Road Limited, a special purpose vehicle, to implement the project. The SPV won the tender through international competitive bidding, conducted by GSRDC. Details of bidding couldn't be ascertained at the time of collection of this information. 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 was signed in November 2011. The project attained financial closure on 13th December 2011. The debt equity ratio of the project was 75/25. The estimated capital cost of the project at the time of financial closure was US$ 93.8mn (INR 4690mn @ 50 INR/USD). Financing comprised a 15-year 6-month term loan of US$ 70.4mn (INR 3520mn) and sponsor equity of US$ 23.4mn (INR 1170mn).The debt was arranged Canara Bank(2000mn) and Indian Overseas Bank (1520mn). Construction on the project began in November 2011 and was expected to be completed by May 2013.However, on account of delays in receipt of right of way (RoW) from GSRDC and local agitation, the project is delayed and is now expected to be completed by March 2015. As on September 30, 2014, 69.98% of physical progress is achieved in the project.