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HomeNewsTop NewsSingapore-based Cube Highways yet to pay NHAI for road assets

Singapore-based Cube Highways yet to pay NHAI for road assets

Singapore-based Cube Highways and Infrastructure, an active player in the highway space in India with over 8,500-km projects portfolio, hasn’t yet made the requisite upfront payment of Rs 5,011 crore and taken possession of the nine toll-operate-transfer (TOT) stretches, which it had won under auctions held in last November. The due date for making the payment was mid-April.

Industry executives take Cube’s failure to stick to the deadline as sign that even the foreign road-sector players with strong investor backing are facing difficulties in mobilising funds at this juncture.

Backed by I Squared Capital and a wholly-owned subsidiary of the Abu Dhabi Investment Authority, Cube emerged as the highest bidder for the third TOT bundle with a combined length of 566.27-km, put together by the National Highways Authority of India (NHAI).

While three stretches in the bundle are in Tamil Nadu, other segments are in Uttar Pradesh, Bihar and Jharkhand.

As per the request for proposal (RFP), Cube as the successful bidder had to sign a concession agreement with the NHAI within a month of the authority issuing the letter of award (LoA) and pay the concession fee within another 120 days, i.e., by mid-April, to take possession of the ongoing projects and start collecting tolls.

A query sent to Cube did not elicit any response.

Sources said Cube are concerned about the fact that three stretches which are part of the bundle are located in those parts of Tamil Nadu where Covid-induced lockdown is still in place. Nevertheless, keen on fulfilling its commitment, the company is learnt to have shown proof of funds tied up with the State Bank of India (SBI). Cube had outbid National Infrastructure and Investment Fund (NIIF) and IRB Infrastructure for the TOT asset.

The NHAI, according to the sources, has sent a reminder to the company last week requesting it to adhere to the commitment and make the payment. It is, however, not pushing hard since it is still collecting user fees from those stretches. Cube Highways is assured of the tenure of the concession period (30 years) as this would start only from the day the upfront payment is made. NHAI had set Rs 4,995.48 crore as the base price for the TOT asset, its third bundle.

Cube Highways was also the highest bidder for the second TOT bundle, but since it quoted below the base price set by NHAI, the authority abandoned the plan to monetise eight stretches with a total length of 586.55 km. Against NHAI’s floor price of Rs 5,632 crore, Cube Highways had quoted only Rs 4,612 crore.

Cube Highways is also in the fray for the fourth TOT bundle on offer. 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.


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