Case- Yamuna Expressway

8/9/2019 Case- Yamuna Expressway

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Cases in Project Finance

Yamuna Expressway

Padmalatha Suresh 1

1 Case prepared with inputs from Ashley Thomas Mathew, V Gayatri, Sanketa Pawar, Shweta Shankar andSonia Karmali, students of Goa Institute of Management, class of 2010. Their contribution to the case isacknowledged with gratitude.This case has been developed solely as the basis for class discussion from published sources. Names/ detailshave been disguised, and hypothetical characters have been introduced to facilitate case analysis. Cases are

not intended to illustrate effective or ineffective management or decision makingCopyright Padmalatha Suresh 2013


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It was mid June 2009, and Sirish Kumar 2, CEO, Jaypee Infratech Ltd [JIL], waited in the Board roomof 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 finalizethe debt requirement of the Yamuna Expressway project.

Shirish and the team knew that there were barely five weeks left for the Yamuna Expressway projectto achieve financial closure. JIL, the SPV formed by Jaypee Associates Limited to execute the Rs9740 crore Yamuna Expressway project, had to arrange Rs.6000 crore non-recourse project financingfrom 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 fewtimes for discussing the syndication of the remaining portion of the debt. He knew that the banks wereimpressed with the project profile considering that this was the largest PPP financing in the Indianroads sector so far, and the first where government support had been in the form of transfer of realestate development rights. If the project was successful, it would herald a new template for futureIndian PPP in road development. The challenge was to convince the bankers of the economic viabilityand financial feasibility of the project and also that all necessary measures had been adopted tomitigate the most critical risks of the project. Sirish knew that if bankers were not convinced about thecash flow assumptions, he would have to go back to the parent company for more equity, whichwould entail more negotiations and further delay in the project that was awarded in 2003, but could

begin construction only in January 2008.

Roads in IndiaIndia, the worlds largest dem ocracy in terms of population (1.2 billion people), and the second-fastestgrowing economy in the world, had been investing heavily in infrastructure projects under the public-

private partnership [PPP] model. Infrastructure expenditure had increased from 5.4% of GDP in 2005to 7.5% in 2009 and was poised to go up to 8% of GDP in 2010. Over 2012-17, India forecast itsinfrastructure 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 3.3million kilometres. In descending order based on the volume of traffic movement, the road network inIndia 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, withthe 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 Name changed3 Source: Indias Planning commission website


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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 the2001 census report. It had the largest network of highways in the country. The Government of UttarPradesh [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 and2009, respectively, the highest by any state government in the country 4. In the past, the GoUP hadtaken up road projects to facilitate growth in the Noida region such as NH 8, NH 26, the Delhi-Noida-Delhi Flyover and the Noida-Greater Noida Expressway.

The GoUP promoted PPPs in various infrastructure sectors and identified expressway projects acrossthe state to bring connectivity to various parts of the state. Many of these projects had been awardedon a build-operate-transfer (BOT) basis with concessions to collect toll revenues for a specified periodof 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 th e GoUPs acquisition cost which can be used by thedeveloper for real estate development.

Real Estate Sector in IndiaThe real estate sector, along with the construction sector, played a very important role in the overalldevelopment 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 andtheir application, limited availability of bank financing, high interest rates and transfer taxes and thelack of transparency in transaction values. The recent improved efficiency and transparency in thissector was primarily due to the enactment and implementation of laws and regulatory reforms.Investments by domestic and international financial institutions increased, allowing real estatedevelopers greater access to capital and financing. The Government of India [GoI] in March 2005amended existing legislation to allow FDI in the construction and real estate businesses subject tocertain conditions 5.

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 productsand services. The rising investment trends in the real estate sector were reinforced by substantialgrowth in the Indian economy. Additionally, certain tax and other benefits applicable to specialeconomic 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 summarizessome features of real estate sector reforms in India.

4 Source: CRISIL Research - Roads and Highways Annual Review, August 20095

According to the Department of Industrial Policy and Promotion of the GoI, FDI inflow into Indiafrom April 2000 through July 2009 was Rs. 306,750 million in the housing and real estate sector andRs. 259,580 million in the construction sector (which includes roads and highways).


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Sponsors OverviewJaiprakash 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 engineeringand construction, cement, expressway and real estate, power, hospitality and education. JAL was anoperating 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 YamunaExpressway] and projects valuing Rs 34,023.44 crore for future execution [including YamunaExpressway].

To take advantage of the growing opportunity in Indias infrastructure and power sectors, JALundertook projects on a Build-Own-Operate (BOO) model or Build-Operate-Transfer (BOT) model inhighways, expressway and real estate sectors. JAL was also present in the power sector withdevelopment of thermal power projects, hydro power projects and oil and gas exploration. Thecompany s strengths in engineering, technology, and construction expertise and project managementin 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 stepdown subsidiaries created for different operations. Exhibit 5 contains the summarized financialstatements 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. Theconcession agreement had been signed in 2008 by Jaypee Ganga Infrastructure Corporation Ltd, awholly owned subsidiary set up to execute the 1047 km long Ganga Expressway project, along withdevelopment 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 fromacquisition of land for the expressway construction and area development, the YEA was maderesponsible for preparation of master plans for development along the expressway, and developmentof drainage, feeder roads, electrification and other facilities in the area. More than 330 villages in thesurrounding areas were brought under YEA to hasten their development.

Project OverviewThe project involved the Design, Engineering, Finance, Construction, Operation and Maintenance of anew access controlled Six Lane Expressway (extendable to 8-lane) between Noida and Agra withService Roads and Associated Facilities on BOT (Toll) basis and the acquisition and development of6175 acres [2500 hectares] of land, along the Expressway as an integral part of the project.

The length of the Expressway would total 165.537km 6. The GoUP intended to build this expresswayas a strategic, high-density road corridor to connect Delhi with Agra that would relieve the congestionon 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 be165.537 Km based upon the actual alignment.


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91). To enhance use of the new road, the government had also decided to develop a SpecialEconomic 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 JaypeeGroup company, emerged as the preferred bidder and Yamuna Expressway Authority [YEA] issuedthe LOA on 23 rd January 2003. Thereafter, the Concession Agreement [CA] was executed betweenJIIL and YEA on 7 th February 2003. In terms of the requirement of the bidding process, JIILsubmitted Detailed Project Report (DPR) to YEA, in terms of the provisions of the CA, on 11 th June2003. The total construction period envisaged for the Project was 7 years from the date of executionof the CA, with provisions for extension. Subsequently the project was transferred to Jaypee InfratechLimited [JIL] on 22 nd October 2007. The concessionaire could not commence the construction of theExpressway immediately because of the delay in land acquisition. YEA subsequently startedtransferring land to the company in 2006 and the company commenced the construction of theExpressway 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 membersand senior managers of other group companies, the project company inducted a retired highly rankedofficial from National Highways Authority of India [NHAI] 7, and an experienced project clearancesand implementation expert well versed with government procedures.

The Concession AgreementThe 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. Theland will be leased to JIL, free of all encumbrances, for a period beginning from the date of transfertill the end of the concession period.

The Concession Agreement between the GoUP and JIL [ Concessionaire] contained the following keyfeatures:

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 toApril 2013

3. The sale premium to be paid by JIL for the land transferred for the project would be equal tothe YEAs acquisition cost plus an annual lease rental of Rs 100 per hectare of land. Theacquisition cost would be the actual compensation paid to land owners

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


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4. Two separate lease agreements were drawn up. The first was the expressway lease agreementfor total land of 5106 acres, which YEA would lease to JIL from the date of possession till theend of the concession period. The second was the agreement for land of 6175 acres to bedeveloped, the lease for which between YEA [lessor] and JIL [lessee] would be from the dateof transfer of leased land for a term of 90 years. For both agreements, the lease rental wasfixed at Rs 100 per hectare of land leased per year.

5. The land would be released in every phase only after satisfactory financing arrangementswere made by JIL

6. It was YEAs responsibility to provide right of way to JIL, free from all encumbrance s.7. There was a provision to create mortgage of land for expressway, interchanges and real estate

development with banks and other financing institutions8. 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 haltedthe 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 beingused by the public. However, the capital cost for the construction would be treated as aninterest free loan and had to be paid by JIL in 15 equal installments, commencing from the11 th 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. Ho wever, if such a road is built and it adversely affects JILsrevenues, 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 anddevelopment of land as an integral part of the Concession Agreement. To assess the potential of eachrevenue stream, JIL had contracted with independent consultants Design Aid [in association withTPA Engineering consultancy India P Ltd] as traffic consultant, and Cushman and Wakefield as realestate consultant. Jaypee Ventures P Ltd, a group company, was the Design consultant.

Exhibit 7 shows the project contractual structure

Design and ConstructionThe entire stretch of land meant for the expressway was flat, with minimum cutting and filingrequired to begin construction. The project road runs almost parallel to the Yamuna river and itsalignment was in the catchment area of the river, with some portions prone to inundation due tofloods. A large network of canals existed in the project influence area. The status of land acquired forthe Expressway and interchanges is given in Table 1

Table 1: Status of land acquisition for expressway [31 st March 2009]Required [acres] Acquired by JIL

[acres]Amount requiredto be paid

Amount already paid to YEA

Expressway 3991 3991Rs 900 crore Rs 831 croreInterchanges 753 41

Total 4744 4032Source: Project Information Memorandum, 2009


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

Source: Project Information Memorandum, 2009

Of the payments of RS 1719 crore to be m ade by JIL for land acquisition for real estate developmentto YEA, Rs 539 crore had been paid at the end of March 2009.

Removal of encroachments, clearing the site and obtaining all necessary clearances, includingenvironmental clearances were the responsibility of JIL. YEA would provide the necessary support toJIL in carrying out these actions.

JIL entered into a works contract with JAL in November 2007 for construction of the expressway ona cost plus 8 basis. The scope of work included construction of the road and allied structures [such asculverts, underpasses, bridges and interchanges], toll management system, highway trafficmanagement 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 thecontract, with a provision for extension. The contractor [JAL] would be responsible for all materialand equipment required for construction. If the construction is not completed within the specified [orextended ] period, JAL would pay JIL liquidated damages for every week of delay at the rate of Rs 2crore per week of delay, subject to a maximum of Rs 100 crore. After construction, JAL had tocorrect, 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 JALhad entrusted some of the packages to experienced sub contractors for execution, the material andequipment 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 indirectexpenditure such as salaries, temporary/ancillary work, welfare activities, taxes, duties, statutory charges,insurance and other incidental charges


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An environment management plan was prepared to study the impact and suggest mitigation measuresduring the construction and operation phases. JIL had carried out an environment impact assessmentand obtained the necessary clearance from the Ministry of Environment and Forests, Government ofIndia.

Major risks that could arise during the construction and operation of the project were to be covered byinsurance. During the construction period, JAL/JIL would maintain insurance coverage for risks suchas 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 insuranceincluding loss of revenue, special contingency policy for removal of encroachments, and wo rkmenscompensation. JIL was willing to take on additional insurance cover if the project or contractsrequired such insurance.

Operations and MaintenanceJIL 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 othercommitments on behalf of the project company, as laid out in the concession agreement such astraffic monitoring, routing and periodic maintenance of the expressway, preventing leakages in tollcollection, recording of defects, etc.

Tr aff ic study and projectionsThe likely traffic on the project road was estimated by Design Aid 9 in association with TPAEngineering 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 trafficfrom 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 volumedata were collected at all survey locations over 24 hours on an average working day to determine theaverage day traffic. Based on the elasticity based econometric model [IRC -108, 1996], the trafficgrowth rates were arrived at as in Table 3.

For assessing the financial viability, the normal growth rates were assumed. Using the Saturnsoftware [that employs the stochastic state of user equilibrium technique for traffic analysis], theconsultants 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 developmentalong the expressway. The consultants used a combination of macro analysis, micro market study andSWOT analysis to arrive at their assessment of real estate revenues. The popularity of the JaypeeGreens project started in 2006 along the corridor was a pointer to the success of the real estatedevelopment plans. The development of the international airport along the expressway would providemore 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 areshown in Exhibit 7.

9

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


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Table 3: Projected traffic growth rates [%]Period Bus Car LCV 2A 3A MAV

Normal growth scenarioUpto 2012 5.5 7.5 6.5 6 7 82013-17 5 7 6 5.5 6.5 7.52018-22 4.5 6.5 5.5 5 6 7After 2022 3 6 5 4.5 5.5 6.5

Low growth scenarioUpto 2012 4.7 6.4 5.5 5.1 6 6.82013-17 4.3 6 5.1 4.7 5.5 6.42018-22 3.8 5.5 4.7 4.3 5.1 6After 2022 3.4 5.1 4.3 3.8 4.7 5.5

High growth scenarioUpto 2012 5.9 8.1 7 6.5 7.5 9.62013-17 5.4 7.5 6.5 5.9 7 8.12018-22 4.8 7 5.9 5.4 6.5 7.5After 2022 4.3 6.5 5.4 4.8 5.9 7

Project cost and financing

Cost of the ProjectThe total cost of completion of the project was estimated at Rs. 9739.29 crore.The break up of thecosts is as given in Table 4 (Project Information Memorandum, 2009):

Table 4: Project cost breakup

Description Amount (Rs. in crs.)Cost of land for Expressway 900.00Cost of land for Development 1719.00Cost of construction of Expressway 5300.00Preliminary & Preoperative Expenses 240.00Contingencies 230.00Interest During Construction 1350.29Total Project Cost 9739.29

Financing Mix1. Equity:

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


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Promoters Equity Rs. 1500.00 crore

IPO/ Sponsor Support Rs. 750.00 crore

Internal Accruals (f rom Real EstateDevelopment)

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 fromICICI Bank and the balance senior debt requirement of Rs3000Cr had to be obtained from a syndicateof banks led by ICICI Bank, Axis Bank and SBI Caps. The lenders and lead arrangers were reputedand 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 theend of March 2009. Of this Rs 1482 crore had been incurred for civil work on the expressway. Theexpenditure had been funded by Rs 990 crore of equity, Rs 1867 crore of term loan from ICICI Bankand Rs 555 crore of real estate sale proceeds. He was reasonably sure that the bankers should besatisfied with the risk mitigation measures and the progress so far, and agree for financial closureduring the impending meeting.

However, he was not certain how the bankers would view the projections made, especially in view ofthe economic slowdown. If they viewed the pessimistic scenarios as the most likely, there would be afunding gap that would have to be bridged with more equity from the promoter company. Sirish knewthat 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 themitigation measures put in place. He knew that he had a difficult task the following week, convincingthe 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 discussthe JIL proposal for non recourse funding of Rs 3000 crore. They agreed that the proposal lookedattractive with the base case projections presented to them. The positive changes transpiring in theinfrastructure sector, the support that this project drew from the Government of UP and the reputationof the sponsors involved in the project were all encouraging signs. All the same, the bankers wereconcerned about factors that could significantly impact the ability of JIL to service the debt, the majorones being the variations in traffic volumes and fall in the real estate prices. They also decided to takea deeper look at all the risks associated with the project and the adequacy of the mitigation measuresadopted, and propose suitable covenants for the loan if they were in favour of financing the project.


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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: MorganStanley . Retrieved September 2010, from Economic Times:http://economictimes.indiatimes.com/news/economy/indicators/India-to-become-worlds-fastest-growing-economy-by-2013-15-Morgan-Stanley/articleshow/6322333.cms


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

Exhibit 2: Demand projection for real estate sector


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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) L and Acqui siti on Act, 18 94 (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 propertyacquired 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 fixe d 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.


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Exhibit 4- Jaypee Group corporate structure

Source: JAL investor presentation


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Exhibit 8: Key Financial projections

For the YE March

31,

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Months ofOperation

12 12 12 12 12 12 12 12 12 12 12 12 12 12

Toll Revenue(a) 303 322 343 410 436 465 552 586 621 738 782 826 977 1,031

Real EstateRevenues(b)

- - 3,506 2,549 3,112 5,966 10,163 9,452 10,777 11,010 10,452 10,327 11,150 10,889

Total Revenue 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 OperatingExpenses (c)

71 74 78 98 99 90 95 100 273 232 155 163 171 210

Real estate

Expenses

- - 2,460 1,788 2,183 4,421 7,668 7,059 8,109 8,392 8,113 8,126 8,812 8,597

Total Expenses 71 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

EBITDA 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 5

PBT (802) (773) 343 174 441 1,146 2,227 2,206 2,385 2,515 2,377 2,353 2,783 2,886

Tax (e) - - 58 30 75 195 378 375 405 427 404 400 473 491

PAT (802) (773) 285 145 366 951 1,848 1,831 1,980 2,087 1,973 1,953 2,310 2,396

PrincipalRepayments

35 176 505 537 523 310 380 441 145 145 165 981 1,287 455

Increase in NWC (920) (1495) (1064) (1455) (1350) (899) (49) (270) 296 733 515 495 520 1207

Increase in majormaintenance capex

12.76 16.29

Notes:

(a) GoUP has not issued toll rate notification. Assumed on the basis of toll levied on Mumbai-PuneExpressway. 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 theresults 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

Case- Yamuna Expressway

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