A consortium led by GMR Infrastructure Limited has been issued Letters of Award for construction of 417Km long Eastern Dedicated Freight Corridor railway project at a cost of 5080 crore on EPC basis. The project is divided into 2 packages i.e.; package 201 from Mughalsarai to Karchana (near Allahabad) for 180 km and package 202 from Karchana to Bhaupur (near Kanpur) for 237 Km in the state of Uttar Pradesh. The project which is funded by World Bank involves Design and Construction of Civil, Structures and Track Works for Double Line Railway on Design Build Lump Sum Basis and shall be completed in 45 months. Earlier in Nov’14, GMR led Consortium emerged lowest amongst five other bidders for the project through and international competitive bidding process.
DFCCIL is a special Purpose Vehicle set up under the Ministry of Railways to Undertaking construction, Maintenance and operation of the Dedicated Freight Corridors in the Country. The Eastern and Western rail freight corridor projects are expected to be game changers in the country by creating much required rail transportation capacity. The eastern corridor covers a length of approximately 1840 Kms.
GMR group is not required to provide any equity for the project since it is to be implemented on an EPC (engineering procurement contract) basis. The project has to be completed in 45 months after the award. GMR Infrastructure, which has interests in airports, highways and urban infrastructure, is implementing two railway projects for Rail Vikas Nigam Ltd. Current EPC order book of the company stands at Rs 5700 crore.
GMR Infrastructure also has 7 operational road assets out of which 4 are annuity based(284 kms) and 3 are BOT(447 kms) with a residual concession period of 5-20 years(min – max) contributing gross revenue of Rs738 crore with an EBITDA of Rs509 crore in FY14.GMR infrastructure also holds 26% stake in 2 additional BOT projects.
GMR Infrastructure focus from the last 2 years has been on “Asset Light, Asset Right” strategy where it has divested assets and reduced debt considerably. GMR Infrastructure current consolidated debt stands at approximately Rs46000 crore and its right issue is again a step to bring down the debt further.