US$500 million highway concession in India up for sale
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Ramky Infrastructure is reportedly in talks to sell the Narketpally Addanki Medarametala Expressway (NAMEL) concession to Cube Highways, valued at between INR33 and 35 billion (~US$470 and 500 million).
The concession to upgrade the existing 212.5km road to a four-lane expressway was awarded to Ramky Infrastructure in consortium with IL&FS Transportation Networks (ITNL) in May 2010. It follows a build-operate-transfer model.
The 24-year contract was awarded by the Andhra Pradesh Road Development Corporation, but is now contracted with the government of Telangana, following the division of Andhra Pradesh in 2014.
A senior Telangana government official has confirmed that the state government has approved an application for the transfer of ownership in the project to Cube Highways. Neither prospective buyer or seller has yet announced an agreement regarding the transaction though.
The toll road operator would acquire 100% of the concession, as last week ITNL, the road-focussed subsidiary of infrastructure developer IL&FS Group, informed the stock exchange that it is selling its stake in NAMEL to Ramky Infrastructure in an agreed asset swap.
NAMEL has been in operation since January 2014. Ramky Infrastructure and ITNL are thought to have invested INR17.6 billion (US$251.7 million) in the construction phase.
Should the sale be completed, the expressway will add to Cube Highways' extensive portfolio of over 1,700 lane km of highways in India. The company was formed by global infrastructure investment manager I Squared Capital and the World Bank's International Finance Corporation (IFC).
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