4. Risk Analysis – Construction Period
Risk Mitigating Factor
Increase in construction • Lump Sum Turnkey Design and Build Contract
cost arrangement
• Contingency in construction cost (10% of construction cost)
Delay in completion • Penalty clause / liquidated ascertained damages, insurance
during construction period & performance bond
Technical performance • Penalty clause & defect liability / warranty period
Land acquisition • Minimum land acquisition is required
• Under M9 CA, NHA shall bear all costs, expenses or
charges incurred in making available the land required
Public Utilities • Under M9 CA, NHA shall pay for the costs and expenses
associated with the removal, relocation or diversion of
Public Utilities and services ancillary affected by the Works
at a date no later than the Work Commencement Date
4
5. Risk Analysis – Operating Period
Risk Mitigating Factor
Traffic Volume • Minimum traffic assurance by NHA. Under M9 CA, NHA
shall pay the Concessionaire on the lost tolling revenue in
the event the actual traffic volume for any operating year
of the Concession is lower than the Minimum Traffic
Volume for that year
• Independent traffic & revenue study by Exponent
Engineers
Toll Rate • Under M9 CA, monetary compensation shall be payable
by NHA to Concessionaire on any reduction in Schedule
Toll Structure
Competing Routes • Under M9 CA, NHA shall undertake that any Competing
Route shall be tolled at the toll rate equivalent to 1.33
times higher than the prevailing toll rate imposed by the
M9 Motorway
Highway Maintenance • Minimal risk as existing Bina Puri’s highway concession in
Malaysia (LATAR) has not encountered major operational
problems as all expressways in Malaysia are governed &
regulated by stringent standards
5
6. Risk Analysis – Concession
Risk Mitigating Factor
Termination due to Event of Prior to Financial Close
Default & Force Majeure NHA shall compensate the Concessionaire for actual pre-
development cost and actual development cost
Prior to Completion of Works
NHA shall compensate the Concessionaire for actual pre-
development cost, actual development cost, actual cost in
raising finance, value of completed work, consultant fees &
third party costs, and interests as well as penalty charges
Upon Completion of Works
NHA shall compensate the Concessionaire for actual pre-
development cost, actual development cost, actual cost in
raising finance, value of completed work, consultant fees and
third party costs, interests as well as penalty charges, and
return on equity of the Concessionaire (for NHA’s event of
default)
Notwithstanding, under Concessionaire’s event of default,
Lenders are compensated for any amount due
6
8. Proposed Security Arrangement
Assignment of all rights, interests and benefits whatsoever (to the
exclusion of any liabilities therein) under the M9 CA including the right to
collect and retain toll and other revenues
Debenture on fixed and floating assets – main office and administration
buildings (2 units), maintenance offices (at least 7 units), machineries,
vehicles, quarry, etc
Assignment of lease and rental contracts with third parties for RSA, petrol
stations, restaurants, bill boards, etc
Assignment of Turnkey Construction Contract
Assignment of Performance Bond
Assignment of Insurance proceeds
Shareholders’ Undertaking for cost overruns
Assignment of DSRA and any cash in-hand & bank balances
8
10. Estimated Capital Expenditure
Detailed Breakdown
Rupees
Description (“PKR”)
Main Carriageway (North & South Bound) 12,898,796,912
Interchanges (7 nos) 1,507,732,244
Service Road 1,084,549,545
Service Areas (North and South) 676,595,473
Main Toll Plaza 378,494,986
Weigh Bridges & Allied Works 236,559,366
Construction Cost 16,782,728,525
General & Preliminary, Consultancy, Design & Project
Management Fees 1,485,271,472
Grand Total 18,267,999,997
NB: The above capex does not include refurbishment cost for the existing road
10
11. Estimated Capital Expenditure (Cont’d)
Proposed Implementation Schedule
Year Implementation Amount
Schedule (%) (PKR ‘Million)
2012 30# 5,480.4
2013 40 7,307.2
2014 30 5,480.4
Total 18,268.0
NB: #Indicative of full year
11
13. Preliminary Financing Plan and Parameters
Indicative Salient Terms
Earlier Case Revised Case
(Current)
Interest Rate 13.5% p.a. 15% p.a.
Loan Tenure: 10 years 10 years
- Grace 3 years 4 years
- Repayment 7 years 7 years
Debt to Equity Ratio 80 : 20 75 : 25
DSRA 3 months 4 months
DSCR (min) 1.5 times 1.5 times
13
14. Preliminary Financing Plan and Parameters (Cont’d)
Source & Application of
Funds
Earlier Case Revised Case
(Current)
PKR ‘Million Total Total
Debts 18,524.0 16,969.8
Equity 4,652.5 5,655.7
Total Uses 23,176.5 22,625.5
Construction Cost 18,268.0 18,268.0
Interest During Construction 3,569.7 3,690.7
Other Funding Costs, Cash Balance & Debt Service
Reserve Account 1,338.8 666.8
Total Funds 23,176.5 22,625.5
14
16. Sensitivity Analysis
Adverse Case Best Case
(Potential Case)
Total Projected Toll Revenue Reduce by 8% or PKR As per Revised Case or
703.3 bill PKR 745.7 bill
(As per NHA case /
Minimum Traffic Assurance)
Sectional Completion & Tolling None Hydrebad – Noriabad
section completed
(Additional of PKR 857
bill for 1 year after 18
months of construction)
Non-Toll Revenue 2% of Toll Revenue 10% of Toll Revenue
16
17. Project Economics
SUMMARY OF FINANCIAL RESULTS Revised Adverse Best / Potential
Total Revenue (PKR ‘Million) 745,717.0 685,761.3 807,757.6
- Toll Revenue 764,848.7 703,356.5 765,701.4
- Other Revenue (Ancillary Incomes) 15,297.0 14,067.1 76,484.9
- NHA Revenue Sharing (34,428.7) (31,662.3) (34,428.7)
Total Capex (PKR ‘Million) 18,268.0
Total O&M Cost (PKR ‘Million) 109,224.6 103,075.3 109,878.5
Financed by: 22,625.5
- Commercial Loan 16,969.8
- Equity 5,655.7
Debt to Equity Ratio 75 : 25
Interest Rate:
- Commercial Loan 15% p.a.
Loan Tenure:
- Commercial Loan 10 years
DSCR (min):
- Commercial Loan 1.5 times 1.5 times 1.5 times
DSRA
4 months 3 months 6 months
17
19. Way Forward
To humbly request lenders with indicative participation with terms in order
to expedite construction works
To request lenders’ debt arranger proposal (with indicative fee) for Bina
Puri to appoint joint lead arranger
19