highway april 2012

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Bina Puri Holdings Bhd CIMB Investment Bank Berhad


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Financial Report

Table of Contents

Section 1 : Project in Brief

Section 2 : Project Structure

Section 3 : Estimated Capital Expenditure

Section 4 : Traffic and Revenue Projection

Section 5 : Key Project and Financial Assumptions

Section 6 : Preliminary Financing Plan and Parameters

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Section 1

Project in Brief


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Project in Brief

The 135 km Karachi-Hyderabad (M9) dual 4-lane motorway (popularly known

as super highway) is the most important link of Karachi Port to Port of Qasim

to the rest of the country. The motorway is currently serving a traffic volume

of over 24,0000 vehicle per day with over 60% being heavy vehicle traffic.

The average traffic growth rate of the motorway is about 5% annually. The

route is the shortest possible distance between Karachi and Hyderabad and it

connects to the main North-South Links i.e. National Highway N-55 (IndusHighway) and the National Highway N-5 (Grand Trunk Road).

The Karachi-Hyderabad (M9) motorway was constructed as part of First

Highway Project with the assistance of World Bank during 1964 68 and

dualised in 1991 as part of Fourth Highway Project. The Toll is being collected

by the National Highway Authority (NHA).

To date, road users are facing inconvenience because of immense growth of

traffic gradually exceeding 4-lane capacity. Solution lies in the upgrading of

this road to a 6-lane Motorway (M9)(the Project).

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Project in Brief(Contd)

The NHA has offered the Project to the private sector to develop, design,

engineer, finance, construct, rehabilitate, commission, manage, operate,

maintain, insure and, at the end of the Concession Period, transfer, all under a

Build-Operate-Transfer (BOT) arrangement, and during the Concession

Period to collect, receive and earn the Tolls and other revenues generatedfrom the Project.

.

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Project in Brief(Contd)

The Concessionaires scope of work covers the key engineering features of

the Project include the following:

rehabilitation of the existing 134.35 km of 2 lane carriageway;

construction of an additional new lane;

extension of the four (4) existing bridges;

minimum of seven (7) new interchanges to be provided;

minimum of two (2) main service areas to be provided;

minimum of seven (7) weigh stations;

two (2) maintenance and operation compounds;

construction of two (2) new toll plazas; and

other ancillary development relevant to the M9 Motorway.

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M9

Project in Brief The Alignment


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Project in Brief The Alignment (Contd)


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Section 2

The Project Structure


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Bina Puri Pakistan

(Private) Limited

SPVLenders

Bina Puri Holdings

Berhad

Main EPC Contractor

Sub-Contractors

NHA

Insurance

Concession

Agreement

Debt/Equity

M9 Motorway

Loan

Repayment

Equity

Project Structure


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Section 3

Estimated Capital Expenditure


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Estimated Capital Expenditure

Description

Rupees

(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

Detailed Breakdown

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NB: The above capex does not include refurbishment cost for the existing road


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Year Implementation

Schedule (%)

Amount

(PKR Million)

2012 30# 5,480.4

2013 40 7,307.2

2014 30 5,480.4

Total 18,268.0

Estimated Capital Expenditure (Contd)

Proposed Implementation Schedule

NB: #Indicative of full year

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Section 4

Traffic and Revenue Projection


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Type of Vehicles Assumed

Growth Rate*

(%)

Cars/Jeeps/Taxis 4 p.a.

Wagons 4 p.a.

Minibuses/Coasters 4 p.a.

Buses 5 p.a.

Truck 5 p.a.

Articulated 5 p.a.

Traffic and Revenue Projection

Traffic Projection

Note: * For Year 2015 (expected 1styear of operation),

growth rate for Class 1,2,3 and Class 4, 5 & 6 is assumed

at 10% and 9% respectively.

AADTEstimates

Growth ofVehicles

Growth inFuel

Consumption

Growth inGDP

DivertedTraffic to M9

Traffic fromKarachiNorthernBypass

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Class Type of Vehicles Toll Multiple Annualisation Factor

1 Cars/Jeeps/Taxis 1.00 365 days2 Wagons 1.38 365 days

3 Minibuses/Coasters 2.20 365 days

4 Buses 3.15 365 days

5 Trucks 3.85 365 days

6 Articulated 4.96 365 days

Traffic and Revenue Projection (Contd)

Proposed Toll Structure and Toll Rate

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Traffic and Revenue Projection (Contd)

Toll Rate Per KM (Year 2015) (PKR)

- Class 1 : Cars/Jeeps/Taxis

- Class 2 : Wagons

- Class 3 : Minibuses/Coasters

- Class 4 : Buses

- Class 5 : Trucks

- Class 6 : Articulated

0.89

1.23

1.96

2.80

3.43

4.42

Toll rate increment 10% p.a.

Frequency of toll rate review Annually over the operating period

Proposed Toll Structure and Toll Rate

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Section 5

Key Project and Financial Assumptions


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Concession Period 28 years (effective upon signing

of CA)

Construction Period 30 months

Project Structure Build-Operate-Transfer

Expected Commercial Operating Date Year 2015

General

Routine Maintenance Cost PKR 2.70^ mil/km

Heavy Maintenance Cost PKR 12.94* mil/km

Incurred every 7 yearsOperating Cost 10% p.a. of toll revenue

Escalation Rate of O&M 5% p.a. (as per RFP)

Operating &

Maintenance (O&M)

Key Project and Financial Assumptions

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Corporation Tax 35% p.a.

Capital Allowance 4% Annual Allowance over 25 years

Qualifying Capital Expenditure 75% of total Capex

Tax & Capital

Allowance

Depreciation Based on no. of years left in concession

Surplus Funds 50% of opening cash balance @ 7% p.a.

NHA Revenue Sharing 5% p.a. of net toll revenue. Payment is after full

settlement of project cost

Others

Key Project and Financial Assumptions (Contd)

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Section 6

Preliminary Financing Plan and Parameters


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Preliminary Financing Plan and Parameters

Structure Islamic

Profit Rate 15% p.a.

Loan Tenure:

- Grace

- Repayment

15 years

6 years

9 years

Debt to Equity Ratio 80 : 20

DSRA 3 months

DSCR (min) 2.5 times

Indicative Salient Terms

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highway april 2012

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