KKR wins rights for 361 km-long highway project in ToT bid

US-based private equity firm Kohlberg Kravis Roberts & Co. (KKR) has secured the rights to operate a 361 km-long, four-lane highway stretch connecting Lalitpur with Lakhnadon on National Highway 26 in Uttar Pradesh and Madhya Pradesh. The project was awarded on a toll, operate, and transfer (ToT) mode, with KKR emerging as the successful bidder by offering Rs 4,181 crores, surpassing competing bids from Cube Highways, Caisse de dépôt et placement du Québec, and IRB Infrastructure Developers.

The project, the longest single road asset offered by the National Highways Authority of India (NHAI), will be managed by KKR's platform, Highway Concessions One Pvt Ltd, acquired from Global Infrastructure Partners India LLP in 2021. The concession period for this project is set at 20 years.

In a separate bid, Singapore-based Cube Highways and Infrastructure Pte Ltd has placed the sole bid of Rs 1,850 crore to operate the 84 km-long Allahabad Bypass in Uttar Pradesh under ToT bundle 11.

Under the ToT model, selected highway stretches funded by public funds are auctioned to concessionaires who, in turn, collect user fees or tolls for a period of 20 years against an upfront payment (concession fee) to the government. The acceptance of a single bid per project is permitted, provided it exceeds the initial estimated concession value (IECV) calculated by NHAI based on projected cash flow over the concession period.