The Hindu Business Line : KMP ties up funds for expressway project

KMP Expressways Ltd, a special purpose vehicle executing the Rs 1,915 crore Kundli-Manesar-Palwal expressway, has announced that it has achieved the financial closure for the project.

Awarded by the Haryana State Industrial and Infrastructural Development Corporation (HSIIDC), the project, which envisages construction of 135.6 km road, would be implemented on a build-operate-transfer (BOT) basis. The concessionaire would operate the toll road for 23 years and nine months including the period of construction (of about three years). The work on the project has already begun and is scheduled for completion by July 2009.

Out of the total cost of Rs 1,915 crore, the SPV has tied up a debt of Rs 1,149 crore, through a consortium of 12 banks and financial institutions including SBI and IIFCL, led by IDBI Ltd. The arrangers for the debt are SBI Capital Markets Ltd and IDBI Ltd.

"The debt costs are in the range of 10-10.5 per cent per annum. DS Construction has the engineering procurement contract for the project," said Mr H.S. Kohli, Chairman, KMP Expressways. KMP Expressways is a joint venture between DS Constructions (67 per cent) and the UK-based Apollo Enterprises Ltd (33 per cent).

There is no positive or negative grant in the project - which means that the Haryana Government neither gives any money to KMP for constructing the road, nor does it receive any money from KMP for letting it collect the toll for about 20 years.

Mr Deepak Chatterjee, Senior Vice-President, SBI Capital Markets Ltd, added: "We are pleased to be associated with India's largest BOT expressway project and one of the most significant in the PPP infrastructure development sector, as the lead arranger for the debt." More than 98 per cent of the land has already been acquired by HSIIDC and handed over to KMP. The execution of the project has been divided into three packages of 45 km each to be supervised by a Senior Project Manager.

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