Lenders, led by Axis Bank, have invited bids to replace Era Infra Engineering-owned Haridwar Highways Project as the concessionaire of an 80-km stretch along NH-58 extending from Muzaffarnagar in Uttar Pradesh to Haridwar in Uttarakhand, according to sources.
Deloitte Touche Tohmatsu has been appointed financial advisor to the lenders and assist them in identifying investors for carrying out the substitution of the concessionaire as per the terms of the concession agreement. The project’s total liabilities as on March 31, 2017 were Rs 842 crore. In June 2018, Care Ratings had downgraded its rating on Haridwar Highways’ long-term bank facilities worth Rs 981 crore to D from B, citing delay in debt-servicing obligations.
“There are ongoing delays in debt-servicing obligation by the company on account of significant delays in project completion and stretched liquidity profile,” Care wrote in its rating rationale.
Haridwar Highways is a special purpose vehicle promoted by Era Infra and OJSC Sibmost (Sibmost) for augmentation of a two-lane carriageway of the existing section of NH-58 from km 131 to km 211 to a four-lane dual carriageway under National Highways Development Programme (NHDP) Phase III of NHAI on Design, Build, Finance, Operate & Transfer (Toll) basis.
As per the concession agreement signed between National Highways Authority of India (NHAI) and Haridwar Highways in February 2010, the concession period is 25 years from the appointed date of September 3, 2010.
According to the note by Care Ratings, the total project cost was originally envisaged at Rs 1,100.60 crore to be funded through promoter contribution of Rs 200 crore, grant of Rs 210 crore from NHAI, and term loans of Rs 690.60 crore. “The project cost has been revised to Rs 1,563.55 crore to be funded through promoter contribution of Rs 372.46 crore, grant of Rs 210 crore from NHAI, and term loans of Rs 981.09 crore,” the rating agency wrote.
An email seeking a comment from Axis Bank remained unanswered till the time of going to press.