Road min downs shutters on new projects till Nov

July 30, 2013

TIMSY JAIPURIA : NEW DELHI, JUL 25, 2013,

At a time when the Prime Minister’s Office (PMO) has stepped up tracking the progress in award and implementation of infrastructure projects, the road ministry and the National Highways Authority of India (NHAI) have decided not to award any new highway projects until November.

The reason: financial stress at potential bidders, non-availability of land and uncertainty over securing environment clearances. The virtual suspension of bidding follows a steep decline in award of new projects. Awards of build-operate-transfer (BOT) highway projects which had peaked in 2011-12 at 6,491 km saw a dramatic decline to 1,116 km in 2012-13. This year, clearly, is going to be worse.

Government sources and officials from developers like Soma Enterprises and Reliance Infrastructure separately confirmed to FE that no new projects were likely to be awarded till close to the end of 2013. “The bull run in the highway sector is over. There are no takers for any new road projects,” said DV Raju, vice-president, National Highway Builders Federation.

A senior NHAI official said: “We are not ready to launch any bid on the engineering procurement and construction (EPC) mode nor the BOT mode as of now. Developers are cash-strapped and the investment climate is not conducive enough. We don’t want to launch bids in a hurry in a bad market.”

Developers feel the government must prepare detailed project reports and traffic studies to attract the right bidders and take steps to prevent long-pending arbitration cases, high interest rates and falling toll collections hindering projects.

“The market scenario is not good. Highway developers have had several communications with the roads ministry and the NHAI has highlighted the problems faced by developers.

Land acquisition and banks’ reluctance to lend are major concerns. Until these issue are resolved, the highways sector is unlikely to look up,” Sudhir Hoshing, CEO Reliance Infrastructure said. Government sources, however, said the authorities would ensure that developers do not face problems and address their concerns at the earliest. The government is disturbed by rising incidents of developers unable to achieve financial closure and walking away from contracts. NHAI has been encouraging builders not to abandon projects and complete the contracts, these sources said.

“We are working towards organising the back-end work including minimum of 80% of land acquisition and environment and mining clearances. Until we meet all necessary requirements, we won’t be in a position to award any new project either on EPC mode or the BOT mode until October-November,” the a road ministry official quoted earlier said.

Source-http://www.financialexpress.com

Written by ITW Editor · Filed Under MORTH, Road Transport and Highways (Ministry)

Slowdown takes toll on India’s highway projects

July 30, 2013

TIMSY JAIPURIA : NEW DELHI, JUL 30, 2013,

The number of new highway projects awarded, which peaked in 2011-12 at 6,491 km, has come down to 1,116 km in 2012-13. Indications are that the figure could fall to an even more abysmal level this fiscal. The reason: Economic slowdown that has constrained the finances of players in the sector and made toll revenue targets unattainable. A tight monetary policy, which made loans costlier, has also hit potential developers hard.

What needs to be seen is whether the scenario would now improve after the government’s recent measures such as catalysing compatible financing and easier exit for developers.

The prominent view is that given that the economy is unlikely to look up over the next couple of quarters, at least short-term prospects for the sector are not very good .

Sector watchers point that private players’ interest in public-private partnership (PPP) projects in the highways sector has waned. This, they said, is evident from the weak response to the projects being bid out, stated intent of some prominent developers to reduce their exposure to the build-operate-transfer (BOT) projects and lower number of pre-qualified bidders for CY13.

There is also an intent among large players to exit or renegotiate some projects awarded earlier. While the decline in investor interest may be attributed partly to the subdued environment, the weakening of the financial profile of many developers has also led to a lukewarm response to the bidding processes.

Given the sentiment towards the BOT projects in the sector is expected to continue to remain weak in the short to medium term, the NHAI’s new initiative to award more projects on the engineering, procurement and construction (EPC) and operate, maintain and transfer (OMT) modes could bring some respite to the sector.

Experts said the decision to resume awarding projects again on the EPC mode — virtually stopped in 2008-09 — is a welcome step as this would unbundle the execution, funding and traffic risks and could stimulate participation from the private sector.

“Everybody in the infrastructure space is stressed. Road projects were taken up under BOT model, expecting a 8-10% growth in traffic every year based on the automotive sales numbers. But the reality turned out to be different,” said DV Raju, vice-president, National Highway Builders Federation.

Industry chambers like Confederation of Indian Industry have consistently argued for the need to derisk the sector through well-directed policy measures.

“Given the need for capital, these measures (taken by the government) might indeed help. These would allow early-stage investors to plough back the released equity into the sector and facilitate entry of long-term investors. However, investors would wait to see the detailed guidelines before committing themselves to projects. A liberal regime that permits transfer of equity through bilateral negotiations with the consent of NHAI and lenders will help boost private investments,” said Athar Shahab, chairman, CII core group on roads & highways and CEO, Uniquest Infra Ventures.

A major problem with which the sector is going through right now is the dearth of equity financing. Even though the Cabinet approved allowing 100% exit by developers, till the time such exits start happening, it could be tough to see a revival of investor interest, analysts said.

“Lack of equity has severely affected many projects under execution. Bringing in substitutes will help in timely completion of such projects and also revive market position of the developers,” said Vinayak Chatterjee, chairman, Feedback Infrastructure Services.

“Till the time some unlocking of funds, which are currently tied in the project SPVs happen, it is difficult to enable long-term strategic investors to bid for newer projects and reinvigorate the growth momentum in the sector,” said a senior road ministry official. Lower-than-committed tolling revenue has in many cases led to financial calculations of construction firms going awry, putting several road developers in trouble. In a chain reaction, this impacted institutions that funded these projects as road developers failed to service debt .

The road ministry admits the government erred in projecting a high growth rate in the sector. One of the key considerations for NHAI was the falling traffic growth and its impact on the lenders’ confidence in several projects . BOT projects bid out during 2011-12 received aggressive bids. As many as 25 projects received premium bids, including Kishangarh-Udaipur-Ahmedabad awarded to GMR.

From these projects the NHAI was to get premium amounting to Rs 98,115 crore over the concession period. Since, these projects are unable to start execution due to financing constraints, the entire future financing model of NHAI is now being questioned.ICRA in a report said that after awarding 6,491 km of roads in FY12, the sector witnessed a slump in awarding of projects with only 1,156 km of projects being bid out in FY13, which is about 17% of the target of 7,000 km set for the financial year.

The decline in awarding activity has been on account of weak interest from private sector participants due to difficulty in raising funds, stressed financial position of many developers, delays in getting right of way and clearances, the report added.However, according to ICRA, despite the sharp decline in project awards, the performance on the execution front improved in FY13.

“Backed by strong pipeline of projects under execution, the completion rate for NHAI projects increased to 7.9 km/day in FY13 from average of 6.2 km/day in FY12. However, progress on the projects awarded in FY12 remained muted mostly in the absence of requisite right of way, clearances and inability to achieve financial closure,” the report said.

Sources in the know said the NHAI has now stepped-up its efforts on land acquisition. However, the acquisition process is often elongated due to capacity constraints faced by NHAI and opposition from land owners over compensation.

A banker who did not wish to be quoted told FE that “Many lenders have introduced stringent conditions like 100% right of way, clearance, and significant upfront contribution from promoters before the sanction/disbursement of the loan. Bank lending to the sector has also constrained due to large requirement of the sector which could hit the internal sectoral exposure limit of some banks, and the unsecured tag, which was associated with the road projects until few months back, is also responsible for the poor and overcautious lending to the sector to some extent”.Analysts, however, said while the interest for new BOT projects is weak, completed projects with established traffic are witnessing demand from private equity and other global as well as domestic funds. Some contractors and developers are also exploring the options of divesting their stakes in the completed projects to release their blocked capital and redeploy them for new projects.

Land acquisition is a major problem. According to Rohit Inamdar, senior vice-president, ICRA, “Around 18 projects that were awarded in FY12 could not achieve financial closure till March 2013 due to uncertainty on land acquisition.”

Source-http://www.financialexpress.com

Written by ITW Editor · Filed Under Highway, Infrastructure, Projects

Boost likely for public transport in Tier 2 cities

July 29, 2013

ANIL KUMAR SASTRY

Transport corporations seek sanction for projects worth Rs. 972 crore in the transition phase 2013-14

Public transport in Tier 2 cities and towns is set to get a boost with the State government hopeful of getting substantial grants from the Union government to procure buses and create infrastructure under Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

The three transport corporations serving Karnataka other than Bangalore, Karnataka State Road Transport Corporation (KSRTC), North West KRTC and North East KRTC, are submitting their own proposals to the Union Urban Developmeniest Ministry seeking sanction for projects, in all, worth Rs. 972 crore. The proposals include procurement of new buses for Tier 2 cities and construction of bus depots, workshops and bus stations.

Principal Secretary to Government (Transport Department) P. Ravi Kumar told The Hindu that the transport corporations are in advanced stages of making the proposals ahead of their counterparts in the country for JNNURM Transition Phase 2013-14.

He said, “Since we are conversant with the procedure, we are ahead of others and we might get the projects sanctioned very soon.”

The Union government would offer 80 per cent of the funds for JNNURM projects for Tier 2 cities while the beneficiary corporation and the State government have to bear the balance amount equally. This will help the transport corporations to provide affordable city commuting in their jurisdictions, Mr. Ravi Kumar said. KSRTC, which caters to commuters in the southern parts of the State, has submitted a proposal for Mysore city exclusively seeking to procure 500 buses, including air-conditioned vehicles, at a cost of Rs. 211 crore. It has proposed to procure 500 buses for 10 other cities/ towns under its jurisdiction at a cost of Rs. 137 crore besides proposing to spend Rs. 136 crore for various infrastructure projects, he said.

On the other hand, the North West KRTC, which caters to people in the north-western parts of the State, has proposed to procure 440 buses at a cost of Rs. 156 crore to serve seven towns under its jurisdiction. It has proposed to take up infrastructure projects worth Rs. 256 crore to provide more facilities to passengers. The NEKRTC, serving the north-eastern region of the State, is keen on procuring 140 buses for eight towns at a cost of Rs. 38 crore. It has sought sanction for infrastructure projects worth Rs. 38 crore, Mr. Ravi Kumar said.

Source-http://www.thehindu.com

Written by ITW Editor · Filed Under JNNURM, Transport

HP to get 1,000 new buses under JNNURM scheme

July 29, 2013

PTI Jul 27, 2013,

(At least 1,000 new buses…)

DHARAMSALA: At least 1,000 new buses will be provided to Himachal Pradesh under the Centre’s Jawaharlal Nehru National Urban Renewal Mission(JNNURM) scheme to strengthen the communication and transport facilitiesbetween its local and urban areas.

“1,000 buses are provided under JNNURM scheme by the Centre to promote public transport and to reduce traffic congestion and pollution,” state Urban Development ministerSudhir Sharma told reporters.

“Once the buses are handed over to Himachal it will cater to the local communication needs of the municipal areas and these will not be given to Himachal Road Transport Corporation (HRTC),” Sharma said.

The Union government had provided few buses to Shimla a couple of years back but they were handed over to HRTC, the minister said.

“The Union government is spending more than Rs 4,900 crore to provide 14,695 buses for the various mission cities under JNNURM. The buses supplied to the cities and hill states are of mid-size category for an easier travel,” he informed.

Source-http://economictimes.indiatimes.com/

Written by ITW Editor · Filed Under JNNURM

New flyovers, bridges in JNNURM phase-II

July 29, 2013

Anjaya Anparthi, TNN Jul 28, 2013,

NAGPUR: The city may hope for new flyovers, bridges and railway overbridges (RoB) as the central government has asked the state government to send developmental project plans under its ambitious Jawaharlal Nehru National Urban Renewal Mission (JNNURM) phase-II. The Nagpur Municipal Corporation (NMC) has already sent a letter requesting the state government to consider the pending plans of one flyover and RoB each and two bridges. The Centre has also asked the state to drop the Maskasath RoB from phase-I and submit the revised plan in phase-II.

The Congress-led central and state governments have been giving approval to developmental projects for the city. But the BJP-led ruling alliance in NMC is time and again slamming the state. Under JNNURM phase-I, the Centre has approved 19 projects for the city with a project cost of Rs1,581.23 crore. Besides, the Centre has also approved projects worth Rs327.29 crore under basic services for urban poor (BSUP) scheme under JNNURM phase-I.

As reported by TOI on July 16, the state had put in all its efforts to convince the union ministry of urban development (MoUD) to continue the projects sanctioned under JNNURM phase-I. Minutes of the meeting held on July 10 to decide the fate of slow-moving and other delayed projects were released a couple of days ago. The state had assured to complete the remaining projects in given deadline.

In the same meeting, the MoUD asked the state to drop Maskasath RoB from phase-I and submit a revised plan in phase-II. The state accepted the MoUD’s suggestion. Maskasath RoB was approved on January 22, 2007. The NMC has completed only 10% work till date, citing reasons of delay from the railways for approval. Still the NMC was criticizing the state government for delay.

The MoUD has asked all the states to submit new proposals for JNNURM phase-II. Municipal commissioner Shyam Wardhane sent a letter dated July 19 to the government requesting to consider the pending projects. “Hope for positive results as government always considered the NMC’s projects.”

NMC got approval of four RoBs in phase-I, including Ram Jhula, Kalamna, Mangalwari and Itwari with two remaining to be completed. Besides, the civic body also got approval of railway under bridge at Anand Talkies which has been completed.

NMC also submitted plans of Sadar flyover, RoB at Mominpura near Kadbi Chowk and three bridges on Nag River at Yashwant Stadium, Gangabai Ghat and Juni Shukrawari. But NMC did not get approval for these projects as water supply and sewage projects were taken up on priority. NMC started to construct a bridge on Nag River at Juni Shukrawari. The other pending projects may come up if approved by the Centre under phase-II.

Now, the NMC has also prepared plans to construct a flyover at Pardi and railway overbridge at Manish Nagar. The two proposals may also be submitted under JNNURM phase-II. Already, the civic body has submitted sewage scheme with an estimated cost of Rs1,328 crore under phase-II.

Source-http://timesofindia.indiatimes.com/

Written by ITW Editor · Filed Under ITS

Contract for phase-II of Outer Ring Road soon

July 29, 2013

SPECIAL CORRESPONDENT

When completed, the 61.65-km-long Outer Ring Road will form a semicircle around the city and help decongest Chennai’s roads. Photo: B. Jothi Ramalingam

(The Hindu When completed, the 61.65-km-long Outer Ring Road will form a semicircle around the city and helpdecongest Chennai’s roads.)

(Photo: B. Jothi Ramalingam)

With work on phase-I of Chennai Outer Ring Road, from Vandalur to Nemilichery, nearing completion, the State government recently gave its nod for a consortium of Ashoka Buildcon and GVR Infra Projects to build phase-II, from Nemilichery to Minjur.

On completion, the 61.65-km-long road will form a semicircle around the city and help decongest Chennai’s roads. It will act as a major link and connect four national highways — NH 4, NH 5, NH 45 and NH 205.

According to sources in the Tamil Nadu Road Development Company (TNRDC), the managing associate for the project, the work order has been issued and the contract is to be signed with the consortium to execute the 32-km stretch.

The cost of the project, being executed under a design, finance, build, operate and transfer basis, would be Rs. 985.44 crore, of which Rs. 197 crore will be provided by the State government as project support fund.

Of the 20 years during which the company would operate the road, 2.5 years is for construction. The consortium will get six months to achieve financial closure after which it will commence work.

The various features of the road include a flyover at Red Hills–Tiruvallur Road, an interchange on the Kolkata Road at Padianallur and a bridge across the Kosasthalaiyar river near Minjur.

The end point at Minjur is on the Tiruvottiyur-Ponneri-Panchetty Road, which is 10 km away from Ennore Port to which the road will provide connectivity.

According to an official, the Chennai Metropolitan Development Authority is carrying out land acquisition for the project and of the 278.25 hectares of private land, 90 per cent has been acquired. Government land too is required for the project. The road would pass through the Sidco Industrial Estate near Vellanur.

Meanwhile, lighting on 25 km of phase-I has been completed and residents of villages such as Mannivakkam, Varadharajapuram, Nazarathpet, Kolapancheri, Amudurmedu and Thandarai have begun using the road.

“The lights are kept on to avoid accidents at night. We are unable to prevent residents from using the road. Bus shelters have been installed on one side for the entire stretch,” said a TNRDC official. The work, except on the three interchanges, is expected to be completed by October end.

It may be recalled that farmers of Karunakaracheri, Ramapuram, Annambedu and Thandarai have been protesting against the proposal to take over 100 acres of agricultural land for setting up a truck terminal abutting ORR phase-I.

Source-http://www.thehindu.com

Written by ITW Editor · Filed Under Road Transport and Highways (Ministry), Traffic Management

Travel on Delhi buses to get smarter

July 29, 2013

SPECIAL CORRESPONDENT

With the intent of making travelling in public transport a smoother and more reliable experience for commuters, the Delhi Integrated Multi-Modal Transit System (DIMTS) has launched the Delhi Transit Bus Info application. Providing vital information on the estimated time of arrival of buses, routes and locations of bus stops, the application aims at helping passengers get all the information at the click of a button, all in real time.

The application will provide details on the estimated time of arrival, route details, track location of a bus, bus schedule, location of bus stop, and trip planner.

“The Delhi Transit Bus Info application will be available both on the Internet and on android-based devices. Bus passengers can either go on to the DIMTS website www.dimts.in and click on ‘Bus information for orange-coloured Delhi transit buses’ or view the application on the beta version ‘Delhi Transit Bus Info’, which can be downloaded from Google Play Store,” said a DIMTS statement.

Stating that “the beta version of the application is currently available for devices working on the android platform,” the statement said: “It will be extended to other platforms like iOS, Blackberry and Symbian.”

The application is currently available for only orange-coloured Delhi ransit or cluster buses, except for the trip planner feature, which gives data on DTC bus routes also. However, DIMTS added that the information for DTC-operated buses for the rest of the features will be integrated into the application soon.

Under the project, bus users will also be able to give their feedback on the system through a feedback form that is available both on the website as well as the phone application. DIMTS has launched the test version to invite a candid feedback from the public and further improve the application.

Source - http://www.thehindu.com

Written by ITW Editor · Filed Under Traffic Management, Transport

BRTS better than Metro Rail: Ex-Mayor of Bogota

July 29, 2013

STAFF REPORTER

BUSES A BETTER BET: The BRT Corridor at Sheikh Sarai Area in New Delhi. The former Mayor of Bogots says this is a better option than Metro rail. File photo

(The HinduBUSES A BETTER BET: The BRT Corridor at Sheikh Sarai Area in New Delhi. The former Mayor of Bogots says this is a better option than Metro rail. File photo)

Though work on the Metro Rail project has already commenced in the city, former Mayor of Bogota, Enrique Penalosa, said that a Bus Rapid Transit System (BRTS) could cater to larger number of passengers.

Speaking at an interactive session on people-centric urban transport held at the Anna University here on Friday, Mr. Penalosa said that most metro rail projects were highly expensive and only sought to cater to sections of the public who patronised private transport. They were not mass transport systems. Batting for the Bus Rapid Transit System and Dedicated Bus Lane Systems, he said such schemes could ensure speedier transit and reduce congestion on city roads as it could replace cars and two-wheelers.

He stressed that building high-speed transport corridors and highways had not solved the traffic problem of any city. “In cities such as Boston, highways built at the cost of several billions of dollars, are being demolished now as residents find that they create more traffic jams and reduce road space for other purposes.”

As President of the Institute for Transportation and Development Policy (ITDP), an international organisation promoting environment-friendly transportation, Mr. Penalosa is advocating governments of developing countries to introduce BRTS and popularising non-motorised forms of transport such as cycling for affordable and sustainable transportation in cities. “Transportation policy must address how to reduce private vehicle use in any city,” he said.

Vikram Kapur, member secretary of the Chennai Metropolitan Transport Authority, made a presentation on the transport projects lined up for the city, in which he referred to the upcoming Metro Rail project as the future lifeline of the city. He spoke of developing radial transportation corridors in the city as the future course of action to improve transportation in the city.

In a presentation, Shreya Gaddepalli of ITDP showed how the BRTS system had already gained popularity in Ahmedabad.

Source-http://www.thehindu.com

Written by ITW Editor · Filed Under BRT

BMTC’s hopes ride on JNNURM funding

July 29, 2013

ANIL KUMAR SASTRY

The Bangalore Metropolitan Transport Corporation (BMTC), which is going through rough times, is hopeful of strengthening its fleet with funding under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) transition phase 2013–14.

It also wants to create substantial infrastructure to meet the growing transportation needs of Bangalore by constructing bus depots, workshops and bus stations, with central assistance.

The BMTC has submitted a proposal of Rs. 1,046 crore to the Union Ministry of Urban Development seeking funds under the JNNURM. While many corporations are yet to prepare proposals, the BMTC is ahead of its counterparts and is hopeful of getting the funding early.

The proposal includes procuring 2,150 buses and creating infrastructure to expand the BMTC’s reach, according to P. Ravi Kumar, Principal Secretary, Transport Department.

Mr. Kumar told The Hindu that for tier-1 cities, the Centre would bear 35 per cent of the project cost while the State government would bear 15 per cent; the rest would be borne by the BMTC.

BMTC Managing Director Anjum Parvez told The Hindu that 550 air-conditioned buses, including articulated ones, are proposed to be procured under the funding. These buses would be operated on busy corridors, including Whitefield Road and Hosur Road.

Mr. Parvez said the BMTC proposes to construct 15 depots, two divisional workshops and 14 commuter amenity centres, which will be smaller to the present travel and transit management centres (TTMCs), under funding from the JNNURM. With the exponential growth of the BMTC, the two existing central workshops, one at Shanthinagar and the other at K.R. Puram, were found to be too inadequate to undertake proper maintenance of buses, he said.

With mounting operation costs due to frequent hike in diesel prices and with the BMTC having incurred a Rs. 147-crore loss in 2012–13, the funding is likely to offer a breather.

Source- http://www.thehindu.com

Written by ITW Editor · Filed Under JNNURM, Urban Development

‘Smart cities under JNNURM-II’

July 29, 2013

Press Trust of India : Sun Dec 16 2012,

India’s new cities may soon boast of several smart features like IT-enabled transport and carbon neutral status.

“Under Jawaharlal Nehru National Urban Renewal Mission Phase-II, every state will have at least one smart city,” urban development minister Kamal Nath said at FICCI’s 85th AGM.

He said the new cities, particularly those with population of half a million to one million, will have a host of IT-enabled services, like transport and other utilities.

Nath also mooted creation of a special municipal cadre to ensure that local bodies have dedicated staff to carry out plans specific to the urban areas.

Source - http://www.indianexpress.com

Written by ITW Editor · Filed Under Default, JNNURM, Urban Development

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