MESB also relies on the automatic wall thickness measurement tool in the DURR NDT D-Tect software to perform their pipeline corrosion monitoring tasks.
Previously, a large issue MESB experienced was the amount of time required for reshoots - with conventional radiography they found that at least 15 to 20 % of images needed to be reshot due to poor image quality or under/over-exposure.
Due to the high demand for radiographic inspection of pipelines in the region, the HD-CR 35 NDT investment payback period for MESB was only one year.
RAM has also received a written confirmation from MESB that there is no restriction on any financing to be obtained by Bright Focus under MESB's concession.
While MESB has yet to appoint a contractor for these works, construction risk is considered less pronounced as most of the road will be at grade and is unlikely to affect the operation of the Highway.
In that respect, premised on the second feasibility report submitted by MESB to the Government in January 2013 and latest available information, RAM has been made to understand that the Spur Link is to be viewed as a separate project to be funded via additional debt as well as incremental cashflows from the introduction of potentially 2 new toll-plazas.
While MARC believes that MESB's creditworthiness would become more intricately linked to that of its parent upon the successful financial closing of Bright Focus' proposed issuance, the rating agency has concluded that the project debt at MESB should be reasonably insulated from recent credit developments at Bright Focus in the absence of any variations to the existing issue structure of the IMTNs.
Key considerations supporting MARC's view that MESB will remain relatively independent from Bright Focus include: 1) financial covenants under MESB's IMTN Programme currently restrict the parent's direct accessibility to project cash flows.
While the new interchange introduces some degree of construction risk as well as additional traffic forecasting risks, MARC believes that the funding of the construction of the new interchange with subordinated shareholder advances should offset the downside risks posed to MESB's noteholders by the additional leverage at MESB and construction completion to a large extent.