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GIP-Vinci India roads deal nixed on concession doubts

A deal by Global Infrastructure Partners and Vinci Concessions to jointly acquire a 207km highway in India has been cancelled due to a lack of clarity over the extension of its concession period, sources familiar told Infralogic.

A pre-condition for the conclusion of the deal to buy HKR Roadways was a five-year extension of its concession to 2041, the two sources said, adding that the Telangana government has not been forthcoming in its responses to the extension request.

The concession period granted by the Andhra Pradesh Road Development Corporation initially to the project’s developer, Gayatri Highways, is for 25 years through 2036, according to a 16 January note by CRISIL Ratings.

This was subject to revision in October 2022 and in case of a shortfall in traffic at the time, the concession was to be extended, which has already been approved by an independent engineer, according to the note.

Following the bifurcation of Andhra Pradesh state in 2014, the newly formed state of Telangana assumed control of the project and is now the concession authority.

While the developer expected the extension approval to come through since the issue was pending for more than two years, this has not happened, the sources said.

Gayatri said in a 17 January exchange filing that “certain conditions” were not met within the specified timeline and the parties involved have agreed to terminate the sale agreement.

HKR Roadways is 74% owned by Kotak Special Situations Fund with the remaining held by Gayatri Highways.

GIP declined to comment. Kotak did not respond to a request for comment.Gayatri Highways did not immediately respond to a request for comment.

GIP and Vinci Concessions are already jointly evaluating another deal and signed a non-binding agreement with local developer DP Jain late last year.