The Marubeni-Mitsui Engineering combine has been shortlisted as the engineering procurement and Construction (EPC) contractors for the Delhi-Noida bridge pipping, among others, Larsen and Toubro.
The Japanese combine is also likely to pick up a stake in the special purpose company, which has been formed to implement the project, sources here said. This bridge has been offered on a build-own-operate-transfer (BOOT) basis.
The combine is also the sub contractor for the Friendship bridge on the river Yamuna.
Project promoters Infrastructure Leasing and Financial Services Ltd (ILFS) have begun informal talks with Japans Overseas Economic Cooperation Fund (OECF) for picking up a stake in the project.
OECFs chief representative Yoshitaro Fuwa had said last week, we have begun an informal dialogue with OECF to pick up a stake in the project.
If OECF does decide to pick a stake in the project, it will be its first in a transportation project.
OECF already has substantial equity investments in infrastructure projects in South Asia. OECF holds equity worth Yen 550 million in the Hub Valley power project in Pakistan.
At present, the equity holders in the Noida bridge project include multilateral financial institutions like the Asian Development Bank, which is also providing most of the debt finance for the project.
The present estimated cost of the bridge is Rs 433 crore, which is to be funded on the basis of a 70:30 debt equity ratio, implying an initial equity of Rs 130 crore.
The special purpose company is expected to tap the domestic market with a Rs 100-crore 20-year deep discount bond issue, sources said here. The promoters will not extend any guarantees implying that project revenue will be used to meet the redemption, the sources said.
However, unlike conventional privatisation formats, the bridge is being constructed with an open-ended concession pact, where the promoters will exit only after realising the targeted rate of return.
The company is targeting an equity rate of return of 23 per cent and a project rate of return of 18 per cent. Besides, it has a toll escalation factor linked to the consumer price index, as opposed to the wholesale price index currently being offered by the ministry of surface transport. The company carries no traffic guarantees either from the ministry or the Uttar Pradesh and the Delhi state governments, which are involved in the project.
