Singapore-based Cube Highways, which bagged the third bundle of highway projects given on a long-term lease from the National Highways Authority of India (NHAI), is also in the fray for the fourth TOT bundle on offer.
Backed by I Squared Capital, a wholly owned subsidiary of the Abu Dhabi Investment Authority, Cube highways was also the highest bidder for the second bundle, but the NHAI had abandoned the plan as the bid price was lower.
Cube Highways has been on a highways assets acquisition spree in recent times. Couple of months before bagging the third bundle from the NHAI, it had acquired in September last year five hybrid annuity projects from Dilip Buildcon. In January this year, it entered into an agreement to acquire a 100% stake in KNR Walayar Tollways, an operating toll road in Kerala. Following this, Cube Highways will have 28 projects and over 8,600 lane km of highways across India.
Under the TOT model, publicly-funded operational projects are given on a long-term lease basis to domestic and foreign “patient capital” investors. Successful bidders are required to pay the lease amount upfront while they can recoup their investments and returns by collecting toll over the lease tenure of 15-30 years.
For the fourth bundle, the reserve price for six stretches measuring 341.58 km has been kept at Rs 2,166 crore and the lease period at 20 years. Following investors’ apprehensions due to a chequered history of political agitations in one of the stretches, the NHAI took out a 60-km stretch from the bundle. Earlier, the base price was fixed at Rs 4,170.31 crore. The last date for submission of bids is February 13.
Sources said apart from Cube, IRB Infrastructure, PNC Infrastech, MEP Infrastructure and Edelweiss Group are in the fray for the fourth bundle.
For the first time in October 2017, the NHAI had invited bids for such public-funded highway projects. In the first tranche, nine highway projects were offered and Australia-based Macquarie bagged them quoting Rs 9,681.5 crore for the total length of 680.5 km, against the floor price of Rs 6,258 crore.
NHAI’s second TOT attempt, however, failed. Against its floor price of Rs 5,632 crore from eight highway projects with a total length of 586.55 km, the highest bidder quoted only Rs 4,612 crore, forcing the authority to abandon the plan. The third one went to Cube Highways.
In the Budget for 2020-21, the NHAI has been given permission to monetise 12 such bundles which is expected to fetch around Rs 60,000 crore till 2024.
