Singapore-based toll roads operator Cube Highways and Infrastructure has reached an agreement to acquire a hybrid annuity model (HAM) project in the Indian state of Tamil Nadu.

The Singapore-based company will acquire the highway project from KNR Constructions and KNR Srirangam Infra.

The deal gives Cube Highways the rights to construct and operate approximately 160 lane-kilometres highway in the state of Tamil Nadu.

Developed by the National Highway Authority of India (NHAI), HAM projects are a hybrid between conventional EPC contracts and BOT (Annuity) projects.

Under the concession, NHAI will pay around 40% of project costs during the construction phase. The remaining amount will be structured as regular annuity payments on a fixed amortisation schedule over a 15-year operational period.

“We continue to focus on building a robust portfolio of long-term infrastructure assets and improving safety levels and the customer experience on Indian highways for millions of people.”

Cube Highways director Gautam Bhandari said: “The HAM model offers robust growth potential for the Indian highways sector and we are excited to partner with KNR Constructions, one of the leading construction companies in India.

“We remain keen to expand our presence in this space by working with quality developers with proven execution capabilities.”

Cube Highways Advisors CEO Dr Harikishan Reddy said: “The steady annuity income from HAM projects will diversify the current Cube Highways portfolio of traffic-linked toll roads. Our experienced in-house project management and engineering team will closely monitor all phases of construction to ensure that the roads are delivered on time and within budget.

“With this addition, we continue to focus on building a robust portfolio of long-term infrastructure assets and improving safety levels and the customer experience on Indian highways for millions of people across India.”

The transaction is subject to customary regulatory and lender approvals.