Deals

India awards Macquarie $1.5bn toll road concession

With a bid that exceeded the governing body’s target by nearly 50%, MIRA secured a 30-year contract to manage nine national highways – the first bundle the country has privatised.

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Macquarie Infrastructure and Real Assets has won the rights to collect tolls on nine highways in India for the next 30 years under a Toll-Operate-Transfer contract tendered by the country’s highway authority.

Macquarie’s bid of 96.82 billion rupees ($1.49 billion; €1.21 billion), exceeded the original target of $1 billion the National Highways Authority of India expected to raise from institutional investors in this first round of road privatisations – part of an asset recycling programme the Indian government announced last June as it seeks to raise funds for new development projects by monetising 75 selected highways in a series of bundles.

“This is a unique opportunity to invest in a high-quality, diversified portfolio of roads over a long concession period of 30 years,” a Macquarie spokeswoman told Infrastructure Investor.

“MIRA-managed funds have been investing in Indian toll roads since 2012. We are the largest foreign investor in the toll road sector and are pleased to continue to bring our experience to invest into the sector,” the spokeswoman added. “We take a long-term perspective when acquiring and managing assets, seeking to develop investments profitably and responsibly.”

Macquarie is funding its investment in the toll roads that span 648 kilometres through Macquarie Asia Infrastructure Fund II, which had a first close on $3 billion last December. MIRA expects to reach a final close on its target of $3.25 billion in the first half of this year. The vehicle is the largest in the region, targeting infrastructure assets in Greater China, India, Korea, Japan, Australia and New Zealand as well as investment-grade Southeast Asian countries.

Other bidders were reportedly Canadian fund manager Brookfield, Indian firm IRB Infrastructure and a joint venture between PSP Investments’ road platform Roadis Infrastructure and India’s National Infrastructure Investment Fund, with bids of 75.11 billion rupees, 69.3 billion rupees and 66.11 billion rupees, respectively.

NHAI had not responded to queries at the time of publication.