Noida toll bridge O&M pact revised

Holders of deep discount bounds issued by the Noida Toll Bridge company will now get a lower rate of return of 8.5 per cent, instead of the earlier 16 per cent, when they line up to redeem these bounds in November 2007.

This follows the company restructuring its loan again in order to reduce interest laibility on the 1998 bonds. The Allahabad High Court has given the go ahead for this loan restructuring.

"The company had appealed to the Allahabad court under section 390 of the Companies Act for re-structuring of its debt," Pradeep Puri, chief Executive Officer and President of the Noida Toll Bridge said.

In addition, the Noida Toll Bridge has also restructured its Operations and Maintenance contract with Intertoll India Consultants Private Limited, which will bring about a savings of about Rs 6-7 crore over the expenditure with the original O&M contract, Puri said.

Both these steps together would bring about a 25 per cent savings to the company's turnover Puri said. The company's turnover this year may touch Rs 37-38 crore this year, he said, and a Rs 9-10 crore annual savings is substantial for the company, he added.

This is the second time Noida Toll Bridge has gone for restructuring. Earlier, in 2003 it had undertaken a financial restructuring involving a reduction in the debt servicing cost from 16 per cent to 8.5 per cent resulting in a saving of about Rs 35 crore for three years between 2002 and 2005.

The company had issued deep-discount bonds of Rs 50 crore in 1998 and the liability at the 16 per cent rate of interest would have ballooned to Rs 450 crore by 2014, which would have been unsustainable. The first tranche were redeemed in November 2004.

The revised O&M contract, effective from January 1, 2006 stipulates the fee of Rs 21 lakh per month, in addition to which the Company will reimburse to Intertoll certain direct O&M costs.

According to the earlier contract, executed on December 21, 1998 a variable fee of 11 per cent of the toll revenue for the first 10 years. After 2011, a variable fee of Rs 0.725 per vehicle and a fixed fee of Rs 2.656 million per month linked to the Consumer Price Index (CPI).