Cases in Project Finance

Yamuna Expressway

Padmalatha Suresh1

Case prepared with inputs from Ashley Thomas Mathew, V Gayatri, Sanketa Pawar, Shweta Shankar and
Sonia Karmali, students of Goa Institute of Management, class of 2010. Their contribution to the case is
acknowledged with gratitude.
This case has been developed solely as the basis for class discussion from published sources. Names/ details
have been disguised, and hypothetical characters have been introduced to facilitate case analysis. Cases are
not intended to illustrate effective or ineffective management or decision making

Copyright Padmalatha Suresh 2013

It was mid June 2009, and Sirish Kumar2, CEO, Jaypee Infratech Ltd [JIL], waited in the Board room
of the companys corporate office while his team assembled and took their seats. The meeting had
been called on a Sunday since the bankers had scheduled a discussion the following week to finalize
the debt requirement of the Yamuna Expressway project.
Shirish and the team knew that there were barely five weeks left for the Yamuna Expressway project
to achieve financial closure. JIL, the SPV formed by Jaypee Associates Limited to execute the Rs
9740 crore Yamuna Expressway project, had to arrange Rs.6000 crore non-recourse project financing
from banks. Of this, Rs 3000 crore had been tied up with ICICI Bank.
Sirish had previously met the three lead arrangers Axis Bank, SBI Caps and ICICI Bank- a few
times for discussing the syndication of the remaining portion of the debt. He knew that the banks were
impressed with the project profile considering that this was the largest PPP financing in the Indian
roads sector so far, and the first where government support had been in the form of transfer of real
estate development rights. If the project was successful, it would herald a new template for future
Indian PPP in road development. The challenge was to convince the bankers of the economic viability
and financial feasibility of the project and also that all necessary measures had been adopted to
mitigate the most critical risks of the project. Sirish knew that if bankers were not convinced about the
cash flow assumptions, he would have to go back to the parent company for more equity, which
would entail more negotiations and further delay in the project that was awarded in 2003, but could
begin construction only in January 2008.

Roads in India
India, the worlds largest democracy in terms of population (1.2 billion people), and the second-fastest
growing economy in the world, had been investing heavily in infrastructure projects under the publicprivate partnership [PPP] model. Infrastructure expenditure had increased from 5.4% of GDP in 2005
to 7.5% in 2009 and was poised to go up to 8% of GDP in 2010. Over 2012-17, India forecast its
infrastructure spend at $1 trillion as compared with $530 million over the previous five-year period.3
As of September 2007, India had the second largest road network in the world, aggregating 3.3
million kilometres. In descending order based on the volume of traffic movement, the road network in
India could be divided into the following categories:

Expressways and National highways (NH);

State highways (SH);
Major district roads; and
Rural and other roads.

Road planning and financing was the responsibility of both the Central and State Governments, with
the Central Government being responsible for the construction, operation and maintenance of the
National Highways (NHs) and the States for all the other type of roads such as State Highways (SHs)
and Major District Roads (MDRs).

2
3

Name changed
Source: Indias Planning commission website

Expressway Development under Public Private Partnership in Uttar Pradesh

Uttar Pradesh was the most populous state in India with a population of 166 million according to the
2001 census report. It had the largest network of highways in the country. The Government of Uttar
Pradesh [GoUP] showed its eagerness to improve road infrastructure in the state - it had incurred
capital expenditures of Rs. 44 billion, Rs. 48 billion and Rs. 54 billion in Fiscal years 2007, 2008 and
2009, respectively, the highest by any state government in the country4. In the past, the GoUP had
taken up road projects to facilitate growth in the Noida region such as NH 8, NH 26, the Delhi-NoidaDelhi Flyover and the Noida-Greater Noida Expressway.
The GoUP promoted PPPs in various infrastructure sectors and identified expressway projects across
the state to bring connectivity to various parts of the state. Many of these projects had been awarded
on a build-operate-transfer (BOT) basis with concessions to collect toll revenues for a specified period
of time. Exhibit 1 shows the status of some large projects in Uttar Pradesh in 2009
In order to improve the financial viability of the projects, the GoUP proposed to allot land parcels
along the expressway to the developer at the GoUPs acquisition cost which can be used by the
developer for real estate development.

Real Estate Sector in India

The real estate sector, along with the construction sector, played a very important role in the overall
development of core infrastructure in India. The sector comprised residential housing, commercial
buildings, hotels & restaurants, cinemas & retail outlets and the purchase & sale of land &
development rights.
Historically, the real estate sector in India was unorganized and characterized by factors such as the
absence of a centralized title registry providing title guarantees, a lack of uniformity in local laws and
their application, limited availability of bank financing, high interest rates and transfer taxes and the
lack of transparency in transaction values. The recent improved efficiency and transparency in this
sector was primarily due to the enactment and implementation of laws and regulatory reforms.
Investments by domestic and international financial institutions increased, allowing real estate
developers greater access to capital and financing. The Government of India [GoI] in March 2005
amended existing legislation to allow FDI in the construction and real estate businesses subject to
certain conditions5.
The nature of demand was also changing with heightened consumer expectations influenced by
greater disposable incomes, increased globalization and the introduction of new real estate products
and services. The rising investment trends in the real estate sector were reinforced by substantial
growth in the Indian economy. Additionally, certain tax and other benefits applicable to special
economic zones were expected to result, over time, in increased demand in the real estate sector.
Exhibit 2 shows an estimate of the likely growth of the realty sector in India. Exhibit 3 summarizes
some features of real estate sector reforms in India.

Source: CRISIL Research - Roads and Highways Annual Review, August 2009
According to the Department of Industrial Policy and Promotion of the GoI, FDI inflow into India
from April 2000 through July 2009 was Rs. 306,750 million in the housing and real estate sector and
Rs. 259,580 million in the construction sector (which includes roads and highways).
5

Sponsors Overview
Jaiprakash Associates Limited (JAL), the flagship company of Jaypee group, held 98.86%
shareholding in JIL. The Jaypee Group had a diversified portfolio with operations in civil engineering
and construction, cement, expressway and real estate, power, hospitality and education. JAL was an
operating entity for some of the group businesses and holding company for some group subsidiaries.
In March 2009, JAL had projects valuing Rs. 30,046.77 crore under development [excluding Yamuna
Expressway] and projects valuing Rs 34,023.44 crore for future execution [including Yamuna
Expressway].
To take advantage of the growing opportunity in Indias infrastructure and power sectors, JAL
undertook projects on a Build-Own-Operate (BOO) model or Build-Operate-Transfer (BOT) model in
highways, expressway and real estate sectors. JAL was also present in the power sector with
development of thermal power projects, hydro power projects and oil and gas exploration. The
companys strengths in engineering, technology, and construction expertise and project management
in addition to well trained workforce, highly specialised machinery, plant and equipment were its
competitive advantage. Exhibit 4 shows the corporate structure of JAL, with subsidiaries and step
down subsidiaries created for different operations. Exhibit 5 contains the summarized financial
statements of JAL

Of the other two Expressway projects being executed by the group, Himalayan Expressway Ltd,
executed by a wholly owned subsidiary of JAL, had achieved financial closure in June 2008. The
concession agreement had been signed in 2008 by Jaypee Ganga Infrastructure Corporation Ltd, a
wholly owned subsidiary set up to execute the 1047 km long Ganga Expressway project, along with
development of 30000 acres of land.

The Yamuna Expressway Industrial Development Authority [YEA]

YEA was established by the GoUP for anchoring the development of the Yamuna Expressway
project. The primary responsibility of YEA was to ensure proper execution of the project. Apart from
acquisition of land for the expressway construction and area development, the YEA was made
responsible for preparation of master plans for development along the expressway, and development
of drainage, feeder roads, electrification and other facilities in the area. More than 330 villages in the
surrounding areas were brought under YEA to hasten their development.

Project Overview
The project involved the Design, Engineering, Finance, Construction, Operation and Maintenance of a
new access controlled Six Lane Expressway (extendable to 8-lane) between Noida and Agra with
Service Roads and Associated Facilities on BOT (Toll) basis and the acquisition and development of
6175 acres [2500 hectares] of land, along the Expressway as an integral part of the project.
The length of the Expressway would total 165.537km6. The GoUP intended to build this expressway
as a strategic, high-density road corridor to connect Delhi with Agra that would relieve the congestion
on the existing arterial roads on either side of the Expressway NH2 and Old Grand Trunk Road (NH
6

In the Concession Agreement of the project, the length of the Expressway is envisaged to be 160 km.
However, as per the DPR accepted by the YEA, the length of the expressway is envisaged to be
165.537 Km based upon the actual alignment.

91). To enhance use of the new road, the government had also decided to develop a Special
Economic Zone (SEZ) [Taj Economic Zone (TEZ)] and Taj International Hub airport in this region.
Exhibit 6 is a pictorial depiction of the project site
To summarise, the objectives of the Yamuna Expressway were as follows:

To provide a fast travel corridor to minimize the travel time from Delhi to Agra.
To connect the main existing and proposed townships/commercial centers on the eastern side
of Yamuna River.
To relieve traffic congestion on NH-2 which runs through cities of Faridabad, Ballabgarh and
Palwal

Based on the bid of 36 years concession period from COD, Jayprakash Industries Ltd [JIIL], a Jaypee
Group company, emerged as the preferred bidder and Yamuna Expressway Authority [YEA] issued
the LOA on 23rd January 2003. Thereafter, the Concession Agreement [CA] was executed between
JIIL and YEA on 7th February 2003. In terms of the requirement of the bidding process, JIIL
submitted Detailed Project Report (DPR) to YEA, in terms of the provisions of the CA, on 11 th June
2003. The total construction period envisaged for the Project was 7 years from the date of execution
of the CA, with provisions for extension. Subsequently the project was transferred to Jaypee Infratech
Limited [JIL] on 22nd October 2007. The concessionaire could not commence the construction of the
Expressway immediately because of the delay in land acquisition. YEA subsequently started
transferring land to the company in 2006 and the company commenced the construction of the
Expressway from January 2008.
The Board of directors of JIL was mostly drawn from the parent company, JAL. Jaiprakash Gaur,
Founder Chairman of the Jaypee Group, was part of the Board of JIL. Apart from family members
and senior managers of other group companies, the project company inducted a retired highly ranked
official from National Highways Authority of India [NHAI]7, and an experienced project clearances
and implementation expert well versed with government procedures.
The Concession Agreement
The Concession Agreement proposed that the expressway be developed in three phases. Land would
be released by YEA in stages corresponding with milestones for the three phases of development. The
land will be leased to JIL, free of all encumbrances, for a period beginning from the date of transfer
till the end of the concession period.
The Concession Agreement between the GoUP and JIL [ Concessionaire] contained the following key
features:
1. Concession period of 36 years from Commencement date [COD]
2. Construction period of 7 years from date of execution of Concession Agreement or the date
permitted by YEA. In this case, as the land acquisition was delayed extension was given up to
April 2013
3. The sale premium to be paid by JIL for the land transferred for the project would be equal to
the YEAs acquisition cost plus an annual lease rental of Rs 100 per hectare of land. The
acquisition cost would be the actual compensation paid to land owners

NHAI is the apex body for highway /road development in India

4. Two separate lease agreements were drawn up. The first was the expressway lease agreement
for total land of 5106 acres, which YEA would lease to JIL from the date of possession till the
end of the concession period. The second was the agreement for land of 6175 acres to be
developed, the lease for which between YEA [lessor] and JIL [lessee] would be from the date
of transfer of leased land for a term of 90 years. For both agreements, the lease rental was
fixed at Rs 100 per hectare of land leased per year.
5. The land would be released in every phase only after satisfactory financing arrangements
were made by JIL
6. It was YEAs responsibility to provide right of way to JIL, free from all encumbrances.
7. There was a provision to create mortgage of land for expressway, interchanges and real estate
development with banks and other financing institutions
8. Termination payments under different events of default and force majeure situations were
specified in the agreement. Where JIL was responsible for termination of the contract,
damages would be paid by JIL. However, where political or other force majeure events halted
the project, YEA would compensate JIL
9. The agreement granted special permission to JIL to use 23.8 kms of existing expressway
between Noida and Greater Noida, that had already been constructed by the GoUP and being
used by the public. However, the capital cost for the construction would be treated as an
interest free loan and had to be paid by JIL in 15 equal installments, commencing from the
11th year of the concession period.
10. A non compete agreement between JIL and YEA provided that a competing road would not
be built by the government. However, if such a road is built and it adversely affects JILs
revenues, the concession agreement would be extended suitably to place JIL in the same
position as it would be had the competing road not been built.
The business model of the company was based on revenue streams from traffic on the expressway and
development of land as an integral part of the Concession Agreement. To assess the potential of each
revenue stream, JIL had contracted with independent consultants Design Aid [in association with
TPA Engineering consultancy India P Ltd] as traffic consultant, and Cushman and Wakefield as real
estate consultant. Jaypee Ventures P Ltd, a group company, was the Design consultant.
Exhibit 7 shows the project contractual structure
Design and Construction
The entire stretch of land meant for the expressway was flat, with minimum cutting and filing
required to begin construction. The project road runs almost parallel to the Yamuna river and its
alignment was in the catchment area of the river, with some portions prone to inundation due to
floods. A large network of canals existed in the project influence area. The status of land acquired for
the Expressway and interchanges is given in Table 1
Table 1: Status of land acquisition for expressway [31st March 2009]
Required [acres]
Acquired by JIL Amount required Amount already
[acres]
to be paid
paid to YEA
Expressway
3991
3991
Rs 900 crore
Rs 831 crore
Interchanges
753
41
Total
4744
4032
Source: Project Information Memorandum, 2009
6

The status of land acquisition for real estate development project is shown in Table 2
Table 2: Status of land acquisition for real estate development [31st March 2009]

Source: Project Information Memorandum, 2009

Of the payments of RS 1719 crore to be made by JIL for land acquisition for real estate development
to YEA, Rs 539 crore had been paid at the end of March 2009.
Removal of encroachments, clearing the site and obtaining all necessary clearances, including
environmental clearances were the responsibility of JIL. YEA would provide the necessary support to
JIL in carrying out these actions.
JIL entered into a works contract with JAL in November 2007 for construction of the expressway on
a cost plus8 basis. The scope of work included construction of the road and allied structures [such as
culverts, underpasses, bridges and interchanges], toll management system, highway traffic
management system, and other miscellaneous work including utilities and road safety arrangements.
The entire construction had to be completed within 36 months from the date of execution of the
contract, with a provision for extension. The contractor [JAL] would be responsible for all material
and equipment required for construction. If the construction is not completed within the specified [or
extended ] period, JAL would pay JIL liquidated damages for every week of delay at the rate of Rs 2
crore per week of delay, subject to a maximum of Rs 100 crore. After construction, JAL had to
correct, at its cost, any defects in construction noticed over the succeeding 12 months.
JIL had already paid Rs 900 crore as advance to JAL. Thereafter, payments for work executed would
be made on a monthly basis. The entire construction activity had been divided into packages, and JAL
had entrusted some of the packages to experienced sub contractors for execution, the material and
equipment being supplied by JAL. A project team from JAL would monitor the project execution

888

Costs included all the actual cost of all direct expenditure on material, labor, plant, machinery, equipment,
vehicles, subcontracted work, safety gear, additional scope of work due to change in design etc; and indirect
expenditure such as salaries, temporary/ancillary work, welfare activities, taxes, duties, statutory charges,
insurance and other incidental charges

An environment management plan was prepared to study the impact and suggest mitigation measures
during the construction and operation phases. JIL had carried out an environment impact assessment
and obtained the necessary clearance from the Ministry of Environment and Forests, Government of
India.
Major risks that could arise during the construction and operation of the project were to be covered by
insurance. During the construction period, JAL/JIL would maintain insurance coverage for risks such
as contractors all risk, advance loss of revenue, third party liability and workmens compensation.
The operation period insurance would cover third party liability, burglary, property all risks insurance
including loss of revenue, special contingency policy for removal of encroachments, and workmens
compensation. JIL was willing to take on additional insurance cover if the project or contracts
required such insurance.
Operations and Maintenance
JIL would enter into an O&M contract with an experienced and reputed contractor before
commencement of operations. The O&M contractor would be responsible for toll collection and other
commitments on behalf of the project company, as laid out in the concession agreement such as
traffic monitoring, routing and periodic maintenance of the expressway, preventing leakages in toll
collection, recording of defects, etc.
Traffic study and projections
The likely traffic on the project road was estimated by Design Aid 9 in association with TPA
Engineering consultancy (I) P Ltd. The projections were made for 40 years, assuming 2007 as the
base year. The traffic on the Greenfield expressway was estimated to be a sum of diverted traffic
from other routes in the corridor, and induced/ development / new generation traffic. The base
projections were arrived at after primary surveys were conducted to estimate traffic volume counts,
origin-destination analysis, speed and delay analysis, and road network inventory. The traffic volume
data were collected at all survey locations over 24 hours on an average working day to determine the
average day traffic. Based on the elasticity based econometric model [IRC-108, 1996], the traffic
growth rates were arrived at as in Table 3.
For assessing the financial viability, the normal growth rates were assumed. Using the Saturn
software [that employs the stochastic state of user equilibrium technique for traffic analysis], the
consultants arrived at the projected traffic on the expressway, assuming no seasonality in traffic flow.
The toll revenue thus estimated is shown in Exhibit 8
Cushman & Wakefield prepared the Market Assessment study report for real estate development
along the expressway. The consultants used a combination of macro analysis, micro market study and
SWOT analysis to arrive at their assessment of real estate revenues. The popularity of the Jaypee
Greens project started in 2006 along the corridor was a pointer to the success of the real estate
development plans. The development of the international airport along the expressway would provide
more connectivity, while the Formula One track that was expected to be operational by 2011 would
put the region on the world map. The consultants made optimistic estimates of cash flows, which are
shown in Exhibit 7.
9

Established in 2003 for consultancy services in highway engineering. It has been actively involved in
major highway projects in India, Afghanistan and Bangladesh. It has a team of experts for planning,
designing and implementing infrastructure projects.

Table 3: Projected traffic growth rates [%]

Period
Bus
Car
LCV
2A
Normal growth scenario
Upto 2012
5.5
7.5
6.5
6
2013-17
5
7
6
5.5
2018-22
4.5
6.5
5.5
5
After 2022
3
6
5
4.5
Low growth scenario
Upto 2012
4.7
6.4
5.5
5.1
2013-17
4.3
6
5.1
4.7
2018-22
3.8
5.5
4.7
4.3
After 2022
3.4
5.1
4.3
3.8
High growth scenario
Upto 2012
5.9
8.1
7
6.5
2013-17
5.4
7.5
6.5
5.9
2018-22
4.8
7
5.9
5.4
After 2022
4.3
6.5
5.4
4.8

3A

MAV

7
6.5
6
5.5

8
7.5
7
6.5

6
5.5
5.1
4.7

6.8
6.4
6
5.5

7.5
7
6.5
5.9

9.6
8.1
7.5
7

Project cost and financing

Cost of the Project
The total cost of completion of the project was estimated at Rs. 9739.29 crore.The break up of the
costs is as given in Table 4 (Project Information Memorandum, 2009):
Table 4: Project cost breakup
Description
Cost of land for Expressway
Cost of land for Development
Cost of construction of Expressway
Preliminary & Preoperative Expenses
Contingencies
Interest During Construction
Total Project Cost

Amount (Rs. in crs.)

900.00
1719.00
5300.00
240.00
230.00
1350.29
9739.29

Financing Mix
1. Equity:
The total equity contribution for the project was proposed at Rs. 3739.29 crore, including internal
accruals of Rs. 1489.29 crore from real estate development during construction period. The proposed
equity mix is given below (Project Information Memorandum, 2009):

Promoters Equity

Rs. 1500.00 crore

IPO/ Sponsor Support

Rs. 750.00 crore

Internal Accruals(from Real Estate

Development)

Rs. 1489.29 crore

At the end of March 2009, JIL had received Rs 555.23 crore from real estate proceeds.
JAL provided an undertaking to cover any shortfall in equity from IPO proceeds and internal accruals.
2. Debt
The total debt requirement for the project was of Rs. 6000 crore. JIL had tied up Rs. 3000 crore from
ICICI Bank and the balance senior debt requirement of Rs3000Cr had to be obtained from a syndicate
of banks led by ICICI Bank, Axis Bank and SBI Caps. The lenders and lead arrangers were reputed
and well experienced in project financing deal making.
At JIL.
From the papers before him, Sirish observed that Rs 3412 crore had been spent on the project at the
end of March 2009. Of this Rs 1482 crore had been incurred for civil work on the expressway. The
expenditure had been funded by Rs 990 crore of equity, Rs 1867 crore of term loan from ICICI Bank
and Rs 555 crore of real estate sale proceeds. He was reasonably sure that the bankers should be
satisfied with the risk mitigation measures and the progress so far, and agree for financial closure
during the impending meeting.
However, he was not certain how the bankers would view the projections made, especially in view of
the economic slowdown. If they viewed the pessimistic scenarios as the most likely, there would be a
funding gap that would have to be bridged with more equity from the promoter company. Sirish knew
that he would have a tough time convincing JALs Board about the need for more equity.
Sirish concluded the meeting, asking his team to revisit the major risks in the project, and the
mitigation measures put in place. He knew that he had a difficult task the following week, convincing
the bankers about the need to part with Rs 3000 crore of additional debt. Even if they were convinced,
what would be the covenants and other terms and conditions they would stipulate?
At SBI
Senior managers of ICICI Bank, Axis Bank and SBI met at SBIs main branch boardroom to discuss
the JIL proposal for non recourse funding of Rs 3000 crore. They agreed that the proposal looked
attractive with the base case projections presented to them. The positive changes transpiring in the
infrastructure sector, the support that this project drew from the Government of UP and the reputation
of the sponsors involved in the project were all encouraging signs. All the same, the bankers were
concerned about factors that could significantly impact the ability of JIL to service the debt, the major
ones being the variations in traffic volumes and fall in the real estate prices. They also decided to take
a deeper look at all the risks associated with the project and the adequacy of the mitigation measures
adopted, and propose suitable covenants for the loan if they were in favour of financing the project.

10

Reference
(n.d.). Retrieved September 2010, from Axis bank:
http://www.axisbank.com/aboutus/aboutaxisbank/About-Axis-Bank.asp
Jaypee, I. (2010, April 22). Jaypee Infratech - Red Herring Prospectus.
Prasad, N. (2010, September). (A. Mathew, Interviewer)
Project Advisory and Structured Finance. (n.d.). Retrieved September 2010, from SBI Caps:
http://www.sbicaps.com/Main/index.aspx
Project Finance. (n.d.). Retrieved September 2010, from ICICI Bank:
http://www.icicibank.com/campaigns/project-finance.htm
(2009). Project Information Memorandum.
Times, E. (2010, August 17). India to become world's fastest growing economy by 2013-15: Morgan
Stanley. Retrieved September 2010, from Economic Times:
http://economictimes.indiatimes.com/news/economy/indicators/India-to-become-worlds-fastestgrowing-economy-by-2013-15-Morgan-Stanley/articleshow/6322333.cms

11

Exhibit 1: Some large Road Projects in Uttar Pradesh -2009

Exhibit 2: Demand projection for real estate sector

12

Exhibit 3
Real Estate Sector Reforms in India
The real estate sector had been among the most highly regulated sectors in India. In order to
explore the potential of this sector and meet the rising demand, the Central as well as the
individual state governments initiated progressive reform measures.
1) Land Acquisition Act, 1894 (the LA Act)
GoI and the state governments were empowered to acquire any property if it appeared to the
government that it is needed for any public purpose or for use by a corporate body. However,
Indian courts have stipulated that any property acquired by the government must satisfy the
due process of law. Under the LA Act, public purpose means:
The provision of land for town or rural planning;
The provision of land for its planned development from public funds in pursuance of any
scheme or policy of government
The provision of land for any other scheme of development sponsored by government, or,
with the prior approval of the appropriate government, by a local authority
Any person having an interest in the land being acquired by the Government had the right to
object and the right to receive compensation. The value of compensation for the property
acquired depended on several factors, which include the market value of the land and damage
sustained by the person in terms of loss of profits. The aggrieved person also had the right to
approach the courts.
2) Urban Land (Ceiling and Regulation) Act, 1976 (the ULCA)
The ULCA prescribed the limits to urban areas that can be acquired by a single entity. The
ULCA allowed the government to take over a persons property and fixed ceilings on vacant
and urban land. Under the Act, excess vacant land was required to be surrendered to a
competent authority for a minimum level of compensation. Alternatively, the competent
authority was empowered to allow the land to be developed for permitted purposes. Even
though the ULCA was repealed later, it remained in force in states like Haryana, Punjab,
Uttar Pradesh, Gujarat, Karnataka, Madhya Pradesh, Rajasthan, Orissa and the Union
Territories.

13

Exhibit 4- Jaypee Group corporate structure

Source: JAL investor presentation

14

Exhibit 5 JAL summarised financial statements

15

Exhibit 6 Project site map

Source: JIL Project documents

Exhibit 7 Project contractual structure10

10

Source: Project Information Memorandum

16

Exhibit 8: Key Financial projections

For the YE March
31,
Months of
Operation

2012

2013

2014

2015

12

12

12

12

2016 2017

12

2021

2022

2023

2024

2025

12

12

12

12

12

12

12

12

343

3,506

2,549 3,112 5,966 10,163

303

322

3,850

2,959 3,549 6,431 10,716 10,037 11,398 11,748 11,235 11,153 12,127 11,921

Road Operating
Expenses (c)
Real estate
Expenses

71

74

78

Total Expenses

71

EBITDA

Total Revenue

586

621

738

782

826

977

1,031

9,452 10,777 11,010 10,452 10,327 11,150 10,889

95

100

273

232

155

163

171

210

2,460

1,788 2,183 4,421

7,668

7,059

8,109

8,392

8,113

8,126

8,812

8,597

74

2,538

1,886 2,282 4,511

7,763

7,159

8,381

8,623

8,268

8,289

8,983

8,806

232

248

1,312

1,073 1,266 1,920

2,953

2,879

3,016

3,125

2,966

2,865

3,144

3,114

Depreciation

223

223

223

223

223

223

222

223

223

223

222

223

223

223

Interest (d)

810

798

746

676

602

551

505

450

408

388

368

289

138

(802)

(773)

343

174

441 1,146

2,227

2,206

2,385

2,515

2,377

2,353

2,783

2,886

58

30

75

195

378

375

405

427

404

400

473

491

(802)

(773)

285

145

366

951

1,848

1,831

1,980

2,087

1,973

1,953

2,310

2,396

35

176

505

537

523

310

380

441

145

145

165

981

1,287

455

(920)

(1495)

(1064)

(1455) (1350) (899)

(49)

(270)

296

733

515

495

520

1207

Tax (e)
PAT
Principal
Repayments
Increase in NWC
Increase in major
maintenance capex

99

552

90

PBT

98

465

2020

322

Real Estate
Revenues(b)

436

2019

303

Toll Revenue(a)

410

12

2018

12.76

16.29

Notes:
(a) GoUP has not issued toll rate notification. Assumed on the basis of toll levied on Mumbai-Pune
Expressway. The rates are assumed to be revised every three years.
(b) The cost of construction and selling prices are assumed for each place along the Expressway and the
results aggregated. No escalation has been assumed either in cost of construction or selling price
(c) Estimated by JIL
(d) Interest was estimated at a minimum of 12.5%. However the actual interest would be pegged to each
banks base rate and would be quoted as a floating rate
(e) Corporate tax rate assumed at 33.99% and MAT at 17%. No other taxes or duties assumed

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