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CAREVIEW2

Sponsors Profile

The majority stake of 51% in the SPV is held by ETA

group through two of its group companies namely

Emirate Trading Agency (ETA) LLC and ETA StarHolding Limited (ESHL). These companies are mainly

in the business of shipping & chartering, projects &

contracting work, trading (coal, cement, fertilizers,

plastics, sand, oil products, etc.), operating bus transport

services, real estate, etc. KMC Construction has track

record in road & bridges sector with long experience in

development of road, highway, bridges earth movement

projects and development & maintenance of airport

runways and taxi tracks.

Sponsor Undertakings

The sponsors have furnished an undertaking to the

lenders of PCEPL, inter-al ia, with the fol lowing

provisions:

Both the sponsors shall be jointly & severally liable to

meet their equity contribution towards the project cost.

To meet any cost overrun and shortfall in resources of

PCEPL in respect of completion of the Project.

To cover any shortfall in respect of lenders dues in the

event of termination of the Concession Agreement dueto Concessionaire event of default.

To arrange to meet any shortfall in major maintenance

expenditure

To bring additional funds to meet any deficiency in toll

receipt treated as a part of project cost.

To bring cash support required during the operation

phase of the project to ensure that all financial covenants

are complied with.

Operations

The project is on existing Delhi-Mumbai section of NH-

8 that passes through 2 states connecting Haryana &

Rajasthan traversing through towns of Manesar,

Dharuhera and Bawal industrial hubs of the state of

Haryana and through Behror, Kotputli, Shahpura and

Manoharpura in Rajasthan. After the rapid development

of Gurgaon (one of the most prominent outsourcing &

offshoring hubs in South Asia), the highway has attained

a strategic importance. Besides this, the policies of the

Haryana government to develop various industrial hubs

and expanding the existing industrial area has led to

increased use of the said highway. Further, Rajasthan

being not only a tourist destination but also a business

destination attracts regular traffic from northern and

western India, through this highway. The present heavy

traffic on this 4 lanes highway has resulted in congestion

and saturation in capacity due to which the need has

arisen of widening the highway from 4 lanes to 6 lanes.

As per traffic studies at the existing three toll plaza

locations viz. Shahjanpur, Manoharpur and Daulatpur,

the total freight traffic (LCV, 2-axle, multi-axle trucks)

accounts for a significant 63% of the total vehicular traffic

and this is the major traffic feature of the project stretch.

The CA specifies the vehicle category-wise toll rates

and provides for yearly escalation in toll rates which

would be based on the Wholesale Price Index (WPI).

EPC contractor

The EPC contract was awarded to KMC Constructions

Private Ltd. & ETA Star Infrastructure Ltd. The contract

is of Fixed price fixed time nature and contractors are

responsible for maintenance of existing roads and

project facilities and traffic management. The EPC

contractors have subcontracted the same to eight

contactors at aggregate cost of Rs.1788.78 crore. The

subcontracts have price escalation clause in it. However,

PCEPL is insulated from price variation and all the risk

is to be borne by EPC contractors.

Routine and Major Maintenance

The CA specifies the O&M standards and specification

and the manner in which PCEPL would carry out O&M

of the facility. Also, the CA provides PCEPL to control

and regulate traffic on the Project Highway, thereby

reducing leakage.

PCEPL has given the O&M contract to seven contractors

at an aggregate contact price of Rs.2.62 crore on the

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CREDIT ANALYSIS & RESEARCH LIMITED 3

basis of Letter of Intent (LOI). All the O&M contractors

have reasonable experience in carrying out O&M of

several roads across India.

Project progress and status on approvals as onSeptember 23, 2009

The company has started the construction of highway

in parts wherever the land was acquired. Of the total

land required for construction, ~85% including the

existing Right of Way (RoW) has been made available

to PCEPL. The pending RoW constitutes electrical util ity

shifting, land encroachment and few religious and urban

structural encumbrances on part of the project stretch,

for which necessary procedure for shifting / acquisition

is under way. The project is running smoothly and

expected to meet first milestone (completion of ~25%

of project work) with in the projected timeline of March

3, 2010.

Competing/Alternate facilities

Two roads, part of SH-13 starts at Gurgaon and passes

via Sohna, Nuh, Firozpur, Alwar, Umren, Sariska, Thana

gazi and joins NH-8 (at km 197.4) before Shahpura and

another SH-25 starts at Bhiwadi and passes via Tijara,

Alwar, Rajgarh, and Bandikui towns before terminating

at NH-11 (Agra Jaipur Road).Both these roads can

provide some competition to the project stretch by way

of diversion of traffic. The impact of such alternative

transport routes on the growth prospects of PCEPL

remains to be seen.

Disclaimer

CAREs ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bankfacilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from sources believed by it to beaccurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is notresponsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bankfacilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments.

October 2009

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CREDIT ANALYSIS & RESEARCH LIMITED 1

CARE is headquartered in Mumbai, with Offices all over India. The office addresses and contact numbers are given below:

HEAD OFFICE: MUMBAI

Mr. D.R. Dogra Mr. Rajesh MokashiManaging Director Dy. Managing Director

Cell : +91-98204 16002 Cell : +91-98204 16001

E-mail : [email protected] E-mail: [email protected]

Mr. Ankur Sachdeva

Head - Business Development

Cell : +91-9819698985

E-mail: [email protected]

4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway,

Sion (East), Mumbai 400 022 Tel.: (022) 67543456 Fax: (022) 67543457

Website: www.careratings.com

Mr.Mehul Pandya

Regional Manager

32 TITANIUM

Prahaladnagar Corporate Road,

Satellite,

Ahmedabad - 380 015.

Tel - 079 4026 5656

Mobile - 98242 56265


Mr.Ashwini Jani

Regional Manager

Unit No. O-509/C, Spencer Plaza,

5th Floor, No. 769,

Anna Salai,

Chennai 600 002

Tel: 044 2849 7812/2849 0811

Mobile - 91766 47599

E-mail :[email protected]

Mr. Sukanta Nag

Regional Manager

3rd Floor, Prasad Chambers

(Shagun Mall Building)

10A, Shakespeare Sarani

Kolkata - 700 071.

Tel - 033 2283 1800/1803

Mobile - 98311 70075

E- mail: [email protected]

OFFICES

Mr.Sundara Vathanan

Regional Manager

Unit No. 8, 1st Floor, Commanders

Place No. 6, Rajaram Mohan Roy Road

(Opp. PF Office), Richmond Circle,

Bangalore - 560 025.

Tel - 080 2211 7140/41

Mobile - 98803 60878


Mr. Rahul Patni

Regional Manager

401, Ashoka Scintilla

3-6-520, Himayat Nagar

Hyderabad - 500 029

Tel - 040 4010 2030

Mobile - 91600 04563


Ms. Swati Agrawal

Regional Manager

710 Surya Kiran,

19 K.G. Road,

New Delhi - 110 001.

Tel - 011 2331 8701/2371 6199

Mobile - 98117 45677

E-mail :[email protected]

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