VIL MPSV Tollways Private Limited

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Madhya Pradesh Road Development Corporation (MPRDC) signed a 15-year concession (including construction period of 1 year) with Vijai Infrastructure Limited (VIL) for the strengthening, improvement, two-laning, operation and maintenance of 106.33kms of Mandla-Pindrai Road (33.15kms in Mandla district) and Salimnabad Vilayatkalan Road (73.18kms in Katni district) sections of MDR roads in Jabalpur Division in the state of Madhya Pradesh. Under the contract, VIL was responsible for the design, construction, finance, operation and maintenance,strengthening and widening the existing carriageway to 2-lane road. 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-II, was expected to ease traffic congestion and give significant stimulus to trade and commerce in the entire region. Vijai Infrastructure Limited established VIL MPSV Tollways 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 lowest fixed annuity of US$ 4.74mn (INR 237mn @50 INR/USD). Under the contract, the SPV was to recover the capital costs and operating costs including returns through fixed semi-annual payment of INR 118.5mn from MPRDC during the term of concession. VIL would execute the EPC for the project. The project attained financial closure on 21st June 2012. 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$ 28.4mn (INR 1418.1mn @50 INR/USD). Financing comprised of a 15-year term loan of US$ 21mn (INR 1050mn) and sponsor equity of US$ 7.4mn (INR 368.1mn). The term loan had a grace period of 6 months and a repayment schedule of 47 quarterly instalments.The debt was arranged by ICICI Bank. Construction on the project began in June 2012 and was expected to be completed by June 2013.