Valecha LM Toll Private Limited

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On 4th May 2010, Madhya Pradesh Road Development Corporation (MPRDC) signed a 25-year concession with Valecha Engineering Limited (VEL) for the strengthening, improvement,4-laning,operation and maintenance,and tolling of 34.30kms of existing major district road- Lebad (on SH-31 )-Narayanpura-Digthan-Manpur (on NH-3) section,in the state of Madhya Pradesh. Under the contract, VEL was responsible for the design, construction,finance, operation and maintenance,strengthening and widening the existing 2-lane carriageway to 4-lane divided carriageway.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 the MDR (major district roads) development project, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. VEL established Valecha LM Toll Private Limited (VLMTL),a special purpose vehicle in April 2010, to implement the project. The SPV won the tender through international competitive bidding, conducted by MPRDC,by requesting the lowest grant of US$ 18.1mn (INR 826.1mn). Other details of bidding were not known 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. VEL would execute the EPC for the project. The concession agreement for the project was signed on 4th May 2010. The project was financed with a debt/equity ratio of 75/25. The estimated capital cost of the project at the time of financial closure was US$ 61.5mn (INR 2812mn @45.7INR/USD). Financing comprised of a term loan of US$ 46.1mn (INR 2110mn) and sponsor equity of US$ 15.3mn (INR 702mn).Other details of financing were not known at the time of collection of this information. The project was completed on December 01, 2011 vis a vis scheduled project completion date of November 01, 2012.