Japan keen on Bangalore-Chennai highway project

The Government of Japan on Thursday evinced interest to build the proposed Bangalore-Chennai expressway.

Japan’s Minister for Land, Infrastructure, Transport and Tourism (MLITT) Takeshi Maeda, during his meeting with the Union Road Transport and Highways Minister C P Joshi here, said the country is keen on executing the project, especially with a Japan-based company being involved in preparing a detailed project report.

Speaking to reporters after the meeting, Joshi said: “We told them (Japan government) that we have a very transparent system, where you have to enter into the bidding process.

If Japan government is interested in taking up the project on government to government (G-G) basis, then you have to discuss it at the higher level.”  The project could be discussed at the Prime Ministerial level, he added.

However, G-to-G negotiations might deprive Indian entrepreneurs the opportunity to participate in the bidding, as projects are straightaway given to a country and would be executed by companies from there.

In the highways sector, 100 per cent foreign direct investment (FDI) is allowed and the Japanese companies can also tie-up with domestic companies to bid for the project, the Minister said. Currently, Egis-Secon, a private company, is preparing the Detailed Project Report (DPR) expected to be ready by March 2012.

“After getting the DPR, the government will decide how to implement the project -whether to go for competitive bidding or adopt any other method,” the minister said.

The expressway, first of its kind in the country, will be built with public-private participation on build-operate-transfer (BOT) basis.

The 100 per cent access-controlled road would cut down travelling time between Bangalore and Chennai to just three hours from the current five to six hours.

As per the proposal, the expressway will have six lanes and vehicles can travel at a speed of 120 km per hour.

The proposed road will run parallel to the existing National Highway–4 and pass through Kolar, Palamaner, Chittur and Ranipet.

Source: deccanherald.com

Vinayak Chatterjee: The high road to efficiency

For a historically capital-starved and infra-deficient nation, we have rightfully been obsessed with asset creation in the public-utility space. Little emphasis has been paid, however, on the maintenance of these assets or the delivery of pre-determined service levels from these assets. Take, for example, our roads and highways. Highway users continue to be a frustrated lot in spite of massive investments in this sector. Waiting-time at toll-plazas, safety aspects, ride quality and haphazard lane-management continue to bedevil even newly constructed roads.

Highway operators must eventually get prepared for regulatory raps as well as individual and “class action” litigation for failing to provide desired levels of service. They will have to wake up to the reality that toll cannot be charged merely for the privilege of being allowed to use a particular stretch of road. The “purchase consideration” inherent in charging a toll has to come bundled with the commitment of a smooth ride at a designated average speed, with full consideration of safety and highway amenities. Failure to ensure this should attract penalties and damages.

In this cauldron of frustrations and rising aspirations, it is interesting to note that the responsibility for operations, maintenance and tolling (OMT) is gradually shifting from the developer or the contractor group to independent and professional OMT service providers. Simultaneously, the focus is also shifting from merely reducing capital expenditure to optimising life-cycle cost, as well as, providing an accountable delivery of services.

My friend and colleague, Vivek Rastogi, who has a deep knowledge and insight on these issues, likes to draw out lessons from Brazil’s experience.

Brazil, with emerging-economy demographics much like India, has faced similar challenges in highway operations. Brazil embarked on its public-private partnership (PPP) highway development programme a decade ago. Its journey in developing national highways on a build-operate-transfer (BOT) basis has been equally successful. The operations and management (O&M) for these highways started the same way as where India is today — a toll revenue leakage as high as 25 per cent, below par patrolling and unsatisfactory maintenance and traffic management.

What is remarkable is that in the last 10 years Brazil has improved the O&M performance to reach close to world standards. There are four main reasons for this success:

An independent governance and regulatory body: the Brazilian Agency for Land Transportation (ANTT) was set up in 2001 to monitor the performance of concessionaires. ANTT sets aggressive service-delivery standards. These include mandatory electronic tolling, patrolling every 90 minutes, fixing pot-holes in 24 hours and replacing damaged safety signals in three days. It has a monthly monitoring mechanism for each concession. Any major gaps in performance are severely penalised. Electronic tolling accounts for 60 per cent of the collections. This has significantly improved the productivity for heavy transport vehicles and also resulted in more accurate toll collection. There is a strong and time-bound legal support for issues affecting the concessionaire. Users paying toll are answerable to the legal system and these cases are closed within 30 days. Major accidents and erring drivers are also referred to the same legal set-up. This level of processing is possible since the legal set-up directly reports to ANTT. The police is extremely responsive and officers are actually stationed in the control rooms of the concessionaire. This support from the police has helped the concessionaires in reducing revenue leakage to near-zero levels.In essence, Brazil has created a virtuous circle in which concessionaires have near-100 per cent toll collection and thereby have adequate funds and motivation for O&M. They have strong legal and police support to ensure this is an ongoing process. In case they do not deploy adequate funds or do not perform activities in a timely fashion, the regulator ANTT has the stick ready. The same is the case in other developed countries with large PPP highway development programmes — such as Portugal, Spain and Malaysia.In contrast, India has a vicious circle – one that reduces the value and impact of the new asset – and this, unfortunately, starts from the design and construction phase. Sarkari authorities often “under-design” to reduce project costs and sometimes to save “viability-gap” funding. The under-provisioning of service-lanes, under-passes and pedestrian facilities are simply obstinacy to recognise genuine consumer needs. The state also often abdicates its role in removing encroachments and ensuring hassle-free right of way. Many Indian concessionaires have their roots in the construction business. They enter BOT highway projects for the construction revenue and not for operating a long-term asset. As a result, profit maximisation during construction is often in conflict with the desired asset lifecycle longevity. The concessionaire has little legal or police or state support to make all users pay. This is one of the reasons 20-30 per cent leakage in toll collection is not uncommon. These three aspects – poor design parameters, short-sighted development and collection difficulties – together create a financial pressure on the concessionaire. This is the start of the slippery slope — a story with which we all are very familiar across most Indian roads. The resultant poor O&M of roads leads to more headaches and accidents. Similar to ANTT of Brazil, the National Highway Authority of India (NHAI) is currently performing the role of setting O&M requirements in the concession agreements and monitoring implementation. The NHAI role in follow-up and corrective action often lags intent, leading to the known “chalta-hai” attitude. Is there hope for the Indian highways? Yes. There are well known, implementable solutions. However, most of these are systemic solutions requiring states and NHAI to play a bigger coordinated role: NHAI needs to be strengthened for O&M supervision and related penal action. The authority should go to the extent of displaying the service levels on the road and invite comments from users of the highway. In case of continued low service levels, either the toll rate could be reduced or NHAI should appoint a third party to manage the O&M of the highway. State governments need to find an effective mechanism for providing better police support. A separate legal tribunal for highway-related cases should be considered. NHAI and the Ministry of Road Transport and Highways need to ensure the implementation of electronic tolling systems that will not only improve throughput, but also lead to more accurate toll collection. The bureaucracy will have to get used to a widely different nature of contracting. From the centuries old, lowest capital cost tender system, the bureaucracy will have to define service-level agreements and choose parties that will deliver agreed levels of service at “minimum” cost to the citizen.With  all these in place, the romance of a long-road journey can surely be brought back. All we need is 21st century attitudes, technologies and systems in place.

Source: business-standard.com

 

‘No-way’ state mulls highway tax – Govt planning to levy user charges with private role in collection and maintenance

Calcutta, Jan. 4: The Mamata Banerjee government is working on a plan to levy user charges on vehicles plying on the 14 state highways in Bengal.

If the initiative is allowed to proceed unhindered, it will be a departure for a government that has been allergic to levying or increasing user charges and the first instance of decisive action from within to fight the financial crisis.

The success of the project will depend on a larger issue that is vexing Bengal: industrialisation. The more the industrial traffic, the more the state stands to earn as toll tax.

As the first step, the government is clearing the decks to set up a company under the public works department to look after all the 14 state highways, which in turn will get private players to maintain the roads.

“The company will invite private parties to maintain the roads under a build-operate-transfer (BOT) model. They will be allowed to charge toll tax to recover their investments,” said A.R. Bardhan, the state PWD secretary.

At present, the PWD spends around Rs 200 crore a year on all the 14 state highways. The state government doesn’t collect any toll tax from these highways.

The National Highways Authority of India (NHAI), however, follows the private-agency model to maintain national highways across the country. For example, the NHAI has engaged three private agencies to maintain NH2 between Howrah and Asansol. The three agencies levy toll tax at three points on the stretch — at Dankuni, Palsit and Asansol.

Senior officials at Writers’ Buildings told The Telegraph that the highway decision had been taken to ease some of the financial burden on the state government.

“The PWD spends one-third of its budgetary allocation, which comes to around Rs 200 crore, on maintaining the state highways. The pathetic state of the roads suggests that the department is facing trouble in maintaining the roads because of paucity of funds,” an official said.

As many of these highways will require re-laying, which calls for fresh investments, the government, according to the official, is banking on private players.

States like Maharashtra are also following a similar model for better maintenance and expansion of the road infrastructure.

“For example, Maharashtra has already developed a state road development corporation through which private agencies can play a role. Private agencies maintain state highways and roads and construct bridges and culverts. They are allowed to collect toll tax to recover their investments,” said a PWD official.

He added that Gujarat and Madhya Pradesh had also brought in private players for road maintenance.

The move to collect user charge on state highways has come after months of refusal by the chief minister to tax water and raise power tariff.

“It is a good sign… If she can collect user charges for use of roads, then why not levy water tax or raise power tariff?” asked a city industrialist.

Estimates drawn up by the power department reveal that the combined losses of the power utilities in this financial year will be around Rs 2,400 crore.

“We see a ray of hope in the government’s decision on levying toll tax. If the chief minister allows us to raise power tariff, our losses will come down. The question is whether she will accept the economic logic of raising power tariff,” said a senior power department official.

According to the PWD proposal, the West Bengal State Construction Corporation Ltd — with the chief minister as the chairperson and the PWD secretary as the managing director — will be set up to look after the maintenance of all the state highways.

“The company will be allowed to take independent decisions. If its board of directors approves a decision, it will not require approval from the finance department. It will expedite the projects,” Bardhan said.

PWD officials said it had been decided that a formula would be drawn up along the lines of that of NHAI to determine toll tax rates.

“We are expecting the chief minister to clear the file as soon as possible as it has been drawn up after consulting her. We will start the process of setting up the company and inviting private players very soon,” said a PWD official.

The proposal may look fetching on paper, but implementing it will mean persuading Bengal to kick some of its habits.

“The state has to ensure proper security for the agencies that will collect toll tax. The NHAI had engaged a couple of agencies for maintenance of NH31 but when the agencies tried to collect the tax in North Dinajpur, local people chased them away and dismantled the toll tax plaza,” said a PWD official.

Infrastructure analysts pointed out that drawing private players might not be easy as the companies conduct viability studies before committing investment. “It has been observed that private companies lap up high-demand roads. Unless industrial activities go up in Bengal, getting private players will be difficult,” said an infrastructure finance analyst.

PWD officials said that of the 14 state highways, only five to six have significant industrial traffic, largely driven by natural factors such as coal, stone quarries and clay.

Source: telegraphindia.com

WB’s proposed state highways authority to woo pvt investment

West Bengal’s proposed state highways authority will work to attract private investment in road infrastructure development, State Finance Minister Amit Mitra has said.

“With the state highways authority, West Bengal can undertake road projects on a Build-Operate-Transfer (BOT) basis,” Mitra told PTI.

The Mamata Banerjee-led government has proposed to create infrastructure through the PPP model, officials said.

A decision to set up a highways authority similar to the National Highways Authority of India (NHAI) is a step toward achieving goals in the road sector, sources said.

Mitra said, “The initial corpus for the authority has not yet been finalised and could be known when the proposal comes to the Finance Department.”

At present, the Public Works Department controls and maintains highways in the state. The state highway authority is likely to take over this role once it comes into place, officials said.

West Bengal has a total road network covering 92,023 km, of which National Highways comprise 2,578 km and state highways cover 2,393 km.

States like Jharkhand and Uttar Pradesh have already set up a state highways authority to improve their road infrastructure.

Source: business-standard.com

India to raise $1.9 bn debt for building highways

India will soon raise Rs.10,000 crore ($1.9 billion) through a public debt issue for funding its ambitious national highways project, union Road Transport and Highways Minister C.P. Joshi said Wednesday.

“The finance ministry has allowed us to raise Rs.10,000 crore through debt bonds for funding construction of highways across the country,” Joshi told reporters on the margins of a trade event.

The state-run National Highway Authority of India (NHAI) will raise the fund through tax-free infrastructure bonds within a month. “The proposed fund-rising will be sufficient for the highway projects under execution. We will raise more funds as we go for more such projects,” Joshi said after unveiling the sixth international construction equipment industry trade fair Excon 2011 on the outskirts of this tech hub.

In the budget for this fiscal (2011-12), Finance Minister Pranab Mukherjee made a provision for the first time to allow NHAI to raise funds as government’s share of financing the roads sector.

Though the highway authority planned to raise the amount through private placement earlier, rising interest rates had forced it to opt for the public issue.

The proposed fund will be used to partly finance highway projects to be executed on build, operate and transfer (BOT) basis and for viability gap funding through which the government pays to make the projects viable financially.

Under the BOT model, the winning bidder will build the highways and the government will pay in installments.

The authority has awarded till date 59 projects covering a distance of 7,994 km that is estimated to cost a whopping Rs.60,000 crore (Rs.600 billion).

“To achieve the target of building 20 km of road a day set by the prime minister (Manmohan Singh), the highway authority has to award 7,300 km for every three years consecutively,” Joshi pointed out.

Admitting that only 4,600 km was awarded during this fiscal, Joshi said the target of 20 km per day would be met by 2014.

“We have not been able to achieve 20 km per day but we are confident of doing it before the next general elections,” Joshi added.

Cabinet Committee on Infrastructure okays 15 highway projects

The Cabinet Committee on Infrastructure approved 15 projects for highway construction of about 1,814 kilometres at an estimated cost of Rs 15,680 crore.

The National Highway Authority Of India (NHAI) will undertake 10 projects whereas implementation of the rest of the projects would be with the Rajasthan and Madhya Pradesh state agencies.

Source: articles.economictimes.indiatimes.com

Highway investment 11% short of XIth Plan estimate

Investments in road and bridges during the XIth Five Year Plan would be 11% lower than the initial estimates on account of poor performance by the private and central sectors, according to the Planning Commission.

Railways is also set to miss the investment target during the ongoing Plan.

The revised projected investment in roads is Rs278,658 crore as compared with the initial projections of Rs314,152 crore.

“The investment from the Centre is expected to decline due to award of lower than projected road projects by National Highways Authority of India (NHAI) during the first three years of the Plan,” said a plan panel report.

In the Railways, the investment projection has been lowered to Rs200,802 crore as against the initial aim Rs258,439 crore.

“The investment by the private sector is also expected to go down due to award of a lower number of BOT (build, operate and transfer) projects in the first three years of the XIth Plan,” the report said.

A senior NHAI official attributed the development to economic recession in 2008-09.

“Highway tendering came to a grinding halt during that year as bidders turned away following a funding freeze. Out of the plans to award 45 highway projects worth around Rs60,000 crore during that year, the authority could barely manage to award eight,” the official said.

In case of Railways, the basic tenets of the public-private partnership have not been yet decided, which is delaying the mega locomotive and coach factory projects.

The downward revision of investments projections in the Railways is in both central and the private sectors.

“As per latest estimates, only Rs8,316 crore is expected by way of private investment, which is only 16.5% of original projections,” said the report.

Source: www.dnaindia.com

Highway Robbery

There is corruption beyond the 2G scam. India’s highways and road construction projects are mired in multi-million financial scandals. Ashish Khetan exposes the builder-official nexus that plagues our roads

IN THE 2G scam proceedings before the Supreme Court and the trial court, the Central Bureau of Investigation (CBI) has been variously caricatured by both the complainants and the accused as the Congress Bureau of Investigation, the Confused Bureau of Investigation and Central Bureau of Imagination. It’s an undeniable fact that when it comes to bringing to book the high and mighty, the track record of the country’s so-called premier investigating agency has been dismal. The Bofors scam, the Babri Masjid demolition case and the anti-Sikh riots cases are only some of the sensitive cases that ran aground because of the CBI’s biased and subservient approach towards ruling politicians.

“Will the case be over in seven years? Seven months down the line we have seen paper book after paper book being filed, rolled-up chargesheets filed, witness after witness being called. This has been going on without a trial for months together now,” a Bench comprising Justice GS Singhvi and Justice HL Dattu quipped on 14 October while hearing the bail application of the 2G scam accused. The court wanted to know from the CBI how long it planned to continue with the investigation.

Many believe — perhaps justifiably so — that but for the sustained judicial activism of the SC Bench comprising Justice Singhvi and Justice AK Ganguly, former telecom minister A Raja would have still been in Sanchar Bhawan while Swan Telecom Director Vinod Goenka, Unitech Managing Director Sanjay Chandra and DB Realty promoter Shahid Balwa would have still been jet-setting.

But what about those cases of graft that are not being monitored by the court? After all, telecom is not the only ministry afflicted by the malaise of corruption. The Ministry of Road Transport and Highways, particularly its apex agency for development of national highways — the National Highways Authority of India (NHAI) — has been mired in a spate of allegations of corruption and crony capitalism. Because of rampant corruption, poor planning, inefficiency in execution, cost overruns and inordinate project delays, the very objective behind creating NHAI, which was to take national highways to global standards and thus work as an engine for economic development, has been defeated. In a statement issued on 18 October, the Associated Chambers of Commerce and Industry (ASSOCHAM) estimated the economic loss due to bad condition of roads at over Rs 30,000 crore per year. In August 2010, the road transport ministry told the Rajya Sabha that out of 441 projects undertaken by the NHAI since its inception, 299 (67.80 percent) had been delayed, resulting in massive cost and time overruns.

THE ROT within the  NHAI first came to the fore when, during the NDA rule in 2002, a NHAI engineer, Satyendra Dubey (later murdered under mysterious circumstances) wrote to then prime minister Atal Bihari Vajpayee blowing the whistle on the rampant corruption and crony capitalism prevailing in the ministry.vOver the past three years, the CBI has received over 100 complaints, some anonymous and some official, alleging a deeprooted nexus between officials in the NHAI and the road transport ministry and various private developers. It is alleged that crores of rupees are routinely paid as kickbacks to procure highway development contracts, manipulate bid documents, rig the tendering process, inflate project costs, avoid penalty for delays in execution, shoddy construction and for the officers to look the other way while private firms collect toll much before the highways got completed. Each complaint spoke about a specific project running into hundreds of crores and gave details about the irregularities and graft involved.

But out of over 100 complaints of corruption received, all of which were about the projects awarded during Kamal Nath and his predecessor TR Baalu’s tenure, the agency in its wisdom saw merit in just three. It registered cases of regular offence and then carried out raids and made arrests. Two of these cases were registered in December 2009, and one was registered in May 2010. But shockingly, in none of these three cases has the CBI so far filed even a single chargesheet.

Ironically, in two out of the three cases, the 2G Supreme Court Bench judge Justice Singhvi’s younger brother SS Singhvi was named as the main accused. It was alleged that Singhvi, while he was posted as chief general manager of NHAI’s Chennai regional office, entered into a conspiracy with two private infrastructure companies — Indu- Navayuga Infra Pvt Ltd and Madhucon Projects Ltd — and by abusing his official position allowed the companies to collect massive amount of toll even though road construction was far from complete. The CBI had alleged that Singhvi’s act allowed the contractor to make illegal gains and put the lives of those using the incomplete highway at risk. Irregularities in toll collection constitute a big area of corruption in the management of national highways.

But surprisingly, over a year after the FIRs were registered against Singhvi, the CBI in February this year filed a wishywashy closure report in one out of the two cases, saying the FIRwas a ‘mistake of fact’. The report, a copy of which is available with TEHELKA, is full of baffling non sequiturs. It concludes by saying that the agency could not find any ‘mala fide’ intention in Singhvi’s conduct but at the same time recommended “suitable action” to be taken against him by the NHAI for showing undue haste in granting sanctions to the contractor. The agency didn’t spell out what it meant by ‘suitable action’. However, while closing the case, the agency curiously chose to keep the second case open. The modus operandi of the scam alleged in both cases was exactly the same. Till date, the CBI has not concluded its investigation in the second case.

THE THIRD case registered by the CBI against the NHAI is even more curious. It involved the alleged rigging of the Rs 2,500 crore tender to build a 174 km highway connecting Nagpur in Maharashtra to Betul in Madhya Pradesh. Sometime in the month of April 2010 while the tendering process for the project was still on, the CBI got a specific tip-off that the bid was going to be rigged in favour of a company named Oriental Structural Engineers Pvt Ltd (OSEPL). The CBI conducted a preliminary inquiry and found enough merit in the allegations. The agency, after seeking necessary approvals from the Ministry of Home Affairs, started tapping the telephone lines of a few top company executives and two senior NHAI officials. A few weeks of tapping yielded incriminating evidence of the builder-official nexus. As informed by the complainant, all other bidders except OSEPL were eliminated at different stages of the tendering process before the tender was finally awarded to it.

A tale of Two roads
• Multi-crore scams involving two highways in which the builder-official nexus has been exposed.
• The CBI has acted on three complaints and registered cases of regular offence. Two were registered in December 2009 and the third in May 2010. So far, the agency has not filed a single chargesheet.
• SS Singhvi, brother of Supreme Court judge GS Singhvi, is the main accused in two of the three cases. Singhvi was posted as chief general manager of NHAI’s Chennai regional office at the time
• It was alleged that as CGM, Singhvi had entered into a conspiracy with two private infrastructure companies — Indu Navayuga Infra Pvt Ltd and Madhucon Projects Ltd — wherein he abused his official position and allowed the companies to collect toll even though the work was miles from completion.
• The NHAI had entered into a concession agreement with Hyderabad-based Madhucon Projects Ltd for construction and maintenance of the highway from Karur to Dindigul and improvement and maintenance of the road from the start of Karur Bypass to the end of the Bypass on NH-7 in Tamil Nadu on Build, Operate and Transfer (BOT) basis.
• According to the agreement, the company was entitled to collect toll for 20 years after completing the work by 16 April 2009. Misusing his official position, Singhvi allowed the contractor to start collecting the toll, which was about Rs 1.5 lakh per day, at a time when the work on the highways was far from complete.
• The third scam in which the NHAI is involved is the alleged rigging of the Rs 2,500 crore tender to build a 174 km highway connecting Nagpur in Maharashtra to Betul in Madhya Pradesh.
• Acting on a tip-off, the CBI found that the tender process for the project was rigged in favour of Oriental Structural Engineers Pvt Ltd (OSEPL). The agency found that all bidders except OSEPL were eliminated at different stages of the tendering process.
• A year-and-a-half later, the CBI has still not concluded its investigation. The NHAI awarded the Rs 2,500 crore contract to OSEPL.
• Only five out of 17 firms made it past the pre-bid technical qualification stage. According to the CBI, tenders of four companies, including Larsen & Toubro were rejected on frivolous grounds.

In the initial stages at least, the agency showed firm intent and moved fast to register an FIR. On 26 May, the agency carried out simultaneous raids at the offices of NHAI and OSEPL. Two senior NHAI officials and two top executives, including OSEPL’s managing director, were arrested and sent to jail. According to an official press release, the sleuths had found a whopping Rs 2.87 crore in cash at the homes of the two NHAI officials. But more than a year-and-a-half later, the CBI has not yet concluded its investigation nor has it filed its first chargesheet. As a result, the accused are out on bail, going about their usual business. More shockingly, despite the FIR in which the CBI had laid down the modus regisoperandi in great detail, and the subsequent raids and arrests, the NHAI went ahead and awarded the Rs 2,500 crore contract to the same company with which it is alleged to have entered into a conspiracy. When the award was contracted, Kamal Nath was the surface transport minister.

If you thought this wasn’t bad enough, consider the following. A few months after the FIR was registered, the CBI wrote several letters to then Cabinet secretary KM Chandrashekhar and the road transport ministry seeking sanction to investigate the then member (Projects) SI Patel, as the investigation had yielded prima facie evidence suggesting Patel’s involvement in the alleged rigged tender. Patel was an IAS officer of the additional secretary level and thus prior permission from the ministry was required before the CBI could move against him. But Nath steadfastly refused the CBI the necessary sanction, frustrating its attempts to go to the depth of the conspiracy. A helpless CBI then wrote to the government to at least transfer Patel from NHAI. Last November, Patel was repatriated to his parent cadre of Gujarat.

Repeated attempts to seek an official response from the office of NHAI Chairman AK Upadhyay and also the authority’s official spokesperson Vishnu Darbari proved to be futile. A senior NHAI official, speaking on condition of anonymity, justified the decision to give the contract to OSEPL, saying that signing the concession agreement was perfectly logical since the firm was the lowest bidder and a letter of award had already been issued when the CBI registered the case.

According to a contractor, at every stage of a project, one has to bribe officials. From getting monthly bills cleared to clearances of quality control to completion certificates, the contractor has to give a certain percentage of the money cleared to officers in charge. At least 3-5 percent of the cost of every project is paid in bribes, they allege. In some cases, the contractors pay kickbacks to the NHAI engineers and overseeing consultants and inflate the project cost many times over. The officers pass the cost overruns on some pretext or the other.

The NHAI has often been rapped by the CAG for irregularities in project execution and cost overruns. Three years ago, the CAG estimated a revenue loss of Rs 384.25 crore to the exchequer because of the irregularities in two major national highways. The same CAG report also blamed the NHAI for faulty preparation of detailed project reports (DPR) in many projects, resulting in cost overruns. But unlike its report on the 2G spectrum sale, which led to a political storm, the CAG’s adverse observations about NHAI’s poor functioning and losses estimated in different projects have caught little attention.

The CBI had alleged that Singhvi allowed the contractor to make illegal gains and put the lives of those using the highway at risk

Many in the industry see the past five years of UPA as one of policy stalemate within the road transport ministry. “I’d not like to comment on individual ministers but the fact is that there is rampant corruption in the NHAI,” says a senior Planning Commission official on condition of anonymity. “The system of checks and balances has clearly failed to tackle this menace. The CBI also has proved to be completely ineffective in nailing the culprits. Either they don’t understand the modus operandi or they just lack the capabilities to investigate sophisticated and institutionalised corruption like that which prevails in the NHAI.”

Or is it the case that the agency is afraid that if these investigations are taken to their logical conclusion, many more heads in the UPA may roll? People who are aware of the details of the investigation told TEHELKA that like the Niira Radia tapes, the tapped phone conversations between top NHAI officials and owners of OSEPL carry incriminating statements which, if placed in the public domain, are bound to embarrass an already scam-ridden government. Whatever its reasons, the fact is that with no court or special body to monitor it in NHAI-related matters, the CBI seems to be unwilling to carry the ball.

Reacting to the charges, CBI spokesperson Dharini Mishra told TEHELKA, “The CBI had registered two cases against SS Singhvi on 9 November 2009. The allegations in both cases were similar, which was abuse of official position to cause pecuniary advantage to private persons. In the case pertaining to Madhucon, the CBI filed a closure report u/s 173 (2) (i) of CrPC and it was accepted by the court. The second case is still under investigation.” When contacted, Singhvi refused to comment.

CBI files closure report in one case against Singhvi, keeps the second case open

On 10 December 2009, the CBI carried out simultaneous day-long raids at Singhvi’s offices and premises in three cities — Chennai, Delhi and Jaipur.

The CBI told the media that it was a multi-crore scam and that they had seized several documents and details of assets worth over Rs 1 crore from the possession of Singhvi and his family. The CBI disclosed that the searches at Singhvi’s posh Shyam Nagar residence had yielded documents of a 400-sq yard plot at Jagdamba Nagar on Ajmer Road purchased for Rs 25 lakh, besides Rs 4.70 lakh in cash and gold weighing around 500g. “A large number of bundles containing NHAI office files were found stacked in the basement. We have also seized passbooks of 30 bank accounts and details of two bank lockers of Singhvi in Chennai. A large quantity of Indian and foreign liquor was also recovered,” a CBI spokesperson had told the media.

Raids were also carried out at the residence and office premises of private contractors at Samayapuram, Aravakurichi and Tiruchendur in Tamil Nadu and in some places in Andhra Pradesh. The CBI also claimed to have seized several highend mobile phones and laptops, which they claimed were allegedly gifted to Singhvi by private contractors. Consequently, the agency registered two cases against Singhvi, one for the alleged favours to a private firm named Madhucon and another with regard to Indu Navayuga Infra Pvt Ltd. On various occasions in the past, Madhucon had been issued official warnings by the NHAI for shoddy and delayed work. But on each occasion the company managed to evade penalties or blacklisting.

In the case involving Singhvi registered by the CBI, the crux of the matter is as follows: The NHAI had entered into a concession agreement dated 20 April 2006 with Hyderabad-based Madhucon Projects Ltd for (i) design, engineering, construction, development, finance, operation and maintenance of the stretch from Karur Bypass to Dindigul (68 km) and (ii) improvement, operation and maintenance of the 13 km Karur Bypass on NH-7 in Tamil Nadu on Build, Operate and Transfer (BOT) basis. The validity of the agreement was for a period of 20 years, which means the company was entitled to collect toll for 20 years after completing the contracted work. But Singhvi, by misusing his position, the FIR alleged, allowed the contractor to start collecting the toll, which was about Rs 1.5 lakh per day, at a time when work on these highways was far from complete.

Over a year after the FIRs were registered, the CBI filed the closure report in this case. The report was first filed before the principal sessions judge, Chennai, on 24 February this year. In March, the judge returned the report and asked the investigating officer (IO) P Rama Mohana Rao, a deputy SP with the CBI, to submit the report along with statements of witnesses recorded by the agency. On 29 March, the IO resubmitted the report along with the witnesses’ statements. On the same day, the judge passed the order saying, “Reasons stated therein are convincing. Hence the FIR is closed.” However, a quick read of the report reveals glaring gaps in the CBI’s investigation. The report, running into over 70 pages, leaves several key questions unanswered and the suspicious circumstances surrounding the act unexplained. The judge clearly erred by not asking the agency pertinent questions seeking explanations about the glaring lacunae in its investigation and closed the case in unjustifiable haste. The CBI’s final report made the following arguments justifying the closure of the case:

THE INDEPENDENT consultant in-charge of the project, a foreign firm named Egis Bceom International, issued the provisional certificate of completion after which the contractor started collecting the toll (The NHAI has independent consultants monitoring projects).

The certificate was issued after due consultation with and approval from the NHAI. At the time of issuing the provisional certificate, the work on the highway was not over but it was still issued in accordance with a provision provided in the agreement by which the contractor could be given permission to collect toll if most of the work was over and what remained was only minor work that would not hamper the commercial use of the highway.

Singhvi only passed on the request proposal from the consultant to issue the provisional certificate to NHAI headquarters and accordingly permission came from officials in Delhi and not from Singhvi.

Since the FIR alleged that Singhvi had given permission to collect toll and this could not be substantiated by the investigation, the agency sought to close the case.

However, the CBI failed to give any justification for the following irregularities in the entire process of giving the permission of toll collection, which even in its extremely limp report it has found to be improper:

The deadline for the contracted work was 16 April 2009. But as late as August 2009, the work was far from over. On 25 August, the NHAI regional office, Chennai wrote a letter to the project director, NHAI, Karur, and sought the reasons for delay in project completion. Subsequently, on 1 and 2 October, discussions over delay were held in the office of the project director. This shows that at least till these dates, Singhvi was unhappy with the progress of construction.

From 17 August 2009, the contractor was requesting the consultant for issuance of provisional completion certificate. A consultant is required to issue such certificate only after he is satisfied that the work on the main highway is complete and it could be thrown open for vehicular movement. Such a certificate is issued after due consultation with and permission from the NHAI. But the proposal is initiated by the consultant and first vetted by the regional CGM, who in this case was Singhvi, who in turn forwarded it to the NHAI headquarters in Delhi. Clearly, it’s the consultant and CGM who held the key for the issuance of any such certificate as the NHAI headquarters would go by the advice of its CGM. In this case, the consultant was a foreign firm and the person in charge was a foreign national, Ian Pragnell. Despite repeated requests from the contractor, Pragnell refused to initiate any such proposal.

However, when on 1 October 2009, Pragnell went on leave and his place was taken by his deputy Viswanatha Rao, the latter initiated the proposal for provisional completion certificate hitherto denied by Pragnell. Rao sent the proposal to NHAI Project Director M Thangamani. It was received by the project director on the same day, who, for his part, did not waste another day in forwarding it to Singhvi. Along with this proposal, a list of both work pending on the main highway and some minor work was annexed. As per rules, such a proposal could only be moved if the main carriageway is ready for use. But Singhvi overlooked this fact and forwarded the proposal to NHAI, Delhi, with an assurance that all pending work on the main carriageway would be completed by 20 October. The proposal was duly approved and permission to collect toll granted.

In the meantime, Pragnell came back from leave and shot off a letter dated 12 October saying that the acting team leader’s move to initiate the proposal for provisional certificate was unjustified. He said that upon his return, he visited the site and found many parts of work far from complete. He also said that the assurance given by his deputy in his absence that all pending work would be completed by 20 October was unrealistic. But the CBI in its closure report has claimed that this letter, both the fax and posted copy, were received by Thangamani, not by Singhvi’s office. The CBI has not bothered to nail Singhvi on the fact that even if Pragnell’s letter did not reach him, surely the project director would have informed Singhvi.

The contractor started collecting the toll from 5 November 2009, but failed to finish the work on time. The consultant recommended the imposition of a total penalty of Rs 5.95 crore for the delay. At the time the CBI filed the closure report, the NHAI had not realised the penalty.

From the above-mentioned facts, which are part of the CBI’s own closure report, it’s quite clear that the agency has left gaping holes in its own investigation. Besides, the report does not even talk about the 30 bank passbooks, the papers related to various properties owned by Singhvi, the NHAI files recovered from his residence in Jaipur, the expensive mobile phones and liquor bottles which the CBI claimed it recovered during the raids. It’s also silent on the other case in which a similar modus operandi of illegally allowing the contractor to collect the toll was alleged.

A senior NHAI official speaking on condition of anonymity told TEHELKA that toll collection is a mega scam within the NHAI. “Every day, the government loses at least Rs 1 crore to private contractors by way of illegal tolling,” he says.

The agency taps into phones, carries out raids and arrests, Seizes crores of rupees of cash but finally fails to file a chargesheet

On 26 May 2010, the CBI arrested two senior NHAI officials — a Chief General Manager named SK Nirmal and a General Manager, Nitin Jain — and two senior executives from OSEPL, including its Managing Director KS Bakshi. The arrests were made after extensive raids at the homes and offices of all the accused. All four were produced before a designated CBI court in Delhi following which the court sent them to CBI custody for five days. The accused were subjected to sustained interrogation and were later sent to judicial custody. They remained in jail for over 50 days before being granted bail. In fact, the accused managed to secure the bail because of the CBI’s inability to file the chargesheet within the stipulated 60 days of the arrest.

TEHELKA found that as many as 17 firms had participated at the pre-bid technical qualification stage. But only the following five firms made to the final stage of the bid:
1) SEL-GDCL-GKC Consortium
2) Oriental Structural Engineers Pvt Ltd – Continental Engines Ltd
3) Shapoorji Pallonji & Co Ltd
4) IL&FS Transportation Networks Ltd
5) Soma Enterprises Ltd

The CBI FIR, a copy of which is available with TEHELKA, says that Nirmal and Jain rejected the offer of four companies, including Larsen & Toubro, at the prequalifying stage on frivolous grounds. It further says that in order to eliminate potential competitors, both got issued a new circular No. 54/2010 on 2 April 2010 specifying that only those applications would be considered that were submitted with original documents and thereby eliminated four bidders — Valecha Engineers, Nagarjuna Construction Company, Transstroy and Reliance Infrastructure. “During the processing of the present tender, the ground for disqualification was submission of scanned documents but during the same period, the scanned documents of Transstroy were accepted at Request for Proposal stage in a different tender by the same two officers,” the FIR alleged. It concluded by saying that the two NHAI officers “used to part with key confidential and vital details of the tender process and documents and facilitated the calculation of annuity by applying financial parameters on the upper side so that the firm can fetch maximum financial benefits and subsequently awarded the contract to OSEPL.”

Now, a year-and-a-half later, the CBI is yet to conclude its investigation. The CBI spokesperson failed to respond on the status of the case at the time of going to press. On the other hand, VC Verma, Director, OSEPL, told TEHELKA that though the project was still with them, the construction work had not yet commenced because of lack of environmental clearance.

A mix of corruption, inefficiency and red-tapism is crippling our roadways. There is an urgent need to give some of our collective time and attention — that is devoted by the media, courts and constitutional bodies — to issues other than the 2G scam.

Source : www.tehelka.com

NHAI to seek bids for 4,000 km highways in the next fiscal year

New Delhi: The National Highways Authority of India (NHAI) will seek bids for 3,000-4,000 km of highways for operations, maintenance and tolling (OMT) contracts in the next fiscal year, said J.N. Singh, member (finance), NHAI.

This will be in addition to the 2,900 km the authority has already put on the block since August this year. Under OMT contracts, private contractors are allowed to collect tolls on the highways they maintain. These contracts are typically for a concession period of four to nine years. Contractors share a part of the revenue with NHAI as concession fee, which grows 10% annually.

At least 80 companies have participated in bids this year, according to Ernst and Young. These include Relcon Infraprojects Ltd, IRB Infrastructure Developers Ltd, Oriental Structural Engineers Pvt. Ltd, Gayatri Projects Ltd and HDPL Infrastructure Ltd, according to the consultancy’s data.

“The highways in question are those that were laid in the 1990s on a build-operate-transfer (BOT) basis, and whose concession periods have ended,” said M. Murali, director general, National Highways Builders Federation (NHBF), an industry lobby. Under BOT financing, a private developer finances, builds the road and maintains it for a specified period in exchange for rights to levy tolls.

Murali, however, said NHAI is unlikely to seek bids for 3,000-4,000 km to private contractors. “The figure should be in the range of 2,000 km, as that is the road length that is going off concession next year.” NHAI simplified the bidding process this year by allowing companies to submit documents just once in a calender year, instead of asking them to submit these separately for each project.

Mint reported on 2 February 2009 that private developers could be allowed to maintain NHAI’s highways.

When B.C. Khanduri was highways minister (from 2000-2003), the authority had engaged ex-servicemen as toll collection agents on stretches maintained by the agency.

NHAI’s Singh said discrepancies in revenue collection had occurred over time.

By offering contracts for bids, the government will get a fixed income from private contractors, said Murali of NHBF.

“The profit or loss, as the case may be, would be borne by the contractor,” he said.

Abhaya Agarwal, executive director, Ernst and Young, said awarding maintenance contracts to private contractors is beneficial for NHAI as it typically leads to timely execution of projects.

Agarwal said the process enhances private participation in the sector, thereby increasing competitiveness as bidders either seek a lower grant or offer a higher concession fee.

Source: livemint.com

Nearly $40 million to be poured into highway projects

HUNTSVILLE — Huntsville and parts of Walker County will see nearly $40 million in highway improvements over the next few years.

The Texas Department of Transportation has several projects in the works that will improve the safety of Huntsville roadways.

Highway 19 construction has been ongoing for months and is running smoothly, according to David Stephens, area engineer for Walker, Madison, Leon and Freestone counties.

“I’m tickled to death,” he said. “These are a lot of necessary projects.”

TxDOT partnered with the city of Huntsville on the Highway 19 project, with the city giving $150,000 for aesthetics and a signal on Highway 75 and Boettcher Drive. That project is expected to cost $15.3 million.

“Highway 19 is going well,” Stephens said. “The dry weather is causing a lot of people grief, but it’s really improving the production for Smith and Co., the contractor.”

Most of the on and off ramps have been roughed in along Highway 19, except for those entrances and exits that have traffic. Most of the beams have been placed for the Bearkat Boulevard bridge and the Highway 75 bridge.

“Bearkat is going to really be nice,” he said. “We worked with the city on it and tried to make some changes on it so it looks a lot nicer. It’s really kind of the main entrance to the college.”

There will be Texas stars integrated into the bridge columns for aesthetic purposes.

“We’re trying to make things prettier,” Stephens said. “There will be an exit ramp like there is now, but there will also be a frontage road that continues past Bearkat.”

Highway 30 underpass

The next major project residents will notice is a change to the Highway 30, FM 1791 intersection. There’s a red light for the FM 1791 portion and a blinking yellow light for Highway 30 travelers. Starting this month, contractors have bid on building an overpass that will be the new FM 1791.

Highway 30 travelers will no longer have to worry about someone pulling out in front of them from the farm-to-market road.

“We should start in the winter, then it’s about a 24-month project,” Stephens said. “It’s going to improve safety a great deal. What we’ll do is have frontage roads on either side that will be about where the existing lanes are. If you’re driving on Highway 30, you won’t have to cross any traffic. You will still have to stop on 1791.”

Stephens said this project was needed for safety reasons, and as such, was awarded through the TxDOT safety program.

“Projects compete statewide for a limited amount of safety money,” he said. “We did have a fatality where someone went through that stop light and hit another car. It’ll be a really big improvement.”

There will be a U-turn lane so anyone needing to go back into town will have that ability.

Interstate 45 Frontage

A contract is set to be awarded this month for frontage road construction along Interstate 45 in Huntsville. This project is expected to cost $8.7 million and will relocate entrance and exits ramps all along I-45 in the city.

Construction will stretch northbound from in front of Charlie’s Used Cars down to exit 118. There will be a new entrance ramp in front of El Chico Mexican Restaurant. The ramp at La Quinta Inn will be an exit ramp as opposed to an entrance ramp. There will be a new entrance ramp past Wiesner of Huntsville. The current exit 118 will be rebuilt further south.

“The whole goal is now that Huntsville has grown, we’re trying to keep as much traffic out of the signals as we can,” Stephens said. “We’ll have entrance ramps before signals and exits after the signals.”

On the southbound ramps, construction will start at FM 1791 and extend to Bob Luby’s Seafood. The frontage road will remain much the same, but will be reconstructed. The southbound exit 118 (south of the interchange of Highway 75), will be rebuilt further south.

“We’re basically going to modernize it so it’s more of a high speed entrance ramp,” Stephens said. “We  will not touch the ramp in front of the Holliday Unit.”

I-45/75/1791 Intersection

A $2.5 million project clustered around the intersection of Highway 75 North, I-45 and FM 1791 will have a major change on traffic backup in the area.

The process is expected to begin in August of 2012. Just after the Texas Department of Public Safety office, there will be a separate U-turn lane that will go between the bridge columns and the abutment on the south side of the existing road.

There will be a connector road for I-45 stretching from just in front of  Kate Barr Ross Park and cutting across Texas Department of Criminal Justice property.

“That’ll be a big improvement there,” Stephens said. “We’ll move the signal near the DPS office up to where 75 is now. We’ll do away with the (cross through street). If you’re wanting to go to the TDCJ BOT complex, you will be able to do that without going through a signal on the west side of the Interstate.”

Stephens said traffic studies were conducted of the area to determine the best way to alleviate traffic during mornings and afternoon rush hour.

“We’re really hopeful that it’ll be a great improvement,” he said. “One of the big things – if you’re going north and you want to go to the BOT, there will be a dual left turn movement. That should improve things a great deal there.”

City Projects

City Manager Bill Baine said the city is looking into ways to connect Spur 59 with FM 1791, creating a cross street that would help travelers heading to the TDCJ BOT complex.

“The idea would be to provide a safe way for local citizens to bypass the head-on truck traffic,” Baine said. “We want to facilitate people commuting to TDCJ headquarters.”

Source: http://itemonline.com

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