TEXT-Fitch affirms SNBTPL ‘s bank loans at BBB-(ind)

April 16 – Fitch Ratings has today affirmed SEW-Navayuga Barwani Tollways Pvt Ltd.’s (SNBTPL) senior long-term project bank loans aggregating INR5,474m at ‘BBB-(ind)’, and subordinated bank loans of INR300m at ‘BB+(ind)’. The Outlook is Stable.

SNBTPL enjoys an 18-year concession from National Highways Authority of India [NHAI.UL] (NHAI, ‘AAA(ind)’/Stable) to design, engineer, build, finance, construct, operate and maintain on a Build, Operate and Transfer (BOT) basis an 82.8km road stretch on the National Highway 3 (NH-3) in the state of Madhya Pradesh. The estimated cost of the project is INR7.9bn, with the scheduled commercial operations date (COD) in May 2011.

The affirmations follow SNBTPL’s reasonable progress over the last year in achieving different project milestones during the critical construction phase. Fitch does note however that the company is slightly behind plans. The entire right of way (ROW) required for the project is reportedly in the company’s possession, with the exception of a three-km stretch of forest land; however, first-stage approvals have been received from the forest department.

As of March 2010, the project has received equity infusions (61.3%), and has been drawing down on term loans – 58% of senior debt and 57% of sub-debt – as per schedule.

The ratings are constrained by the residual completion risk, although a fixed-price construction contract with SEW, whose terms mirror those in the concession, offer protection. Base-case debt service coverage metrics are extremely modest and vulnerable to various deep stress tests Fitch performed. A three-year tail in the concession allows the banks to restructure the loans, if necessary. Some liquidity support is available in the form of a fully-funded debt service reserve account (DSRA), equivalent to three months’ principal and interest payment.

Fitch has factored into its rating the operational track record and financial strengths of the sponsors. This includes the credit enhancement value of their undertaking to finance the cost and time overruns, to replenish the senior and subordinated DSRA and to provide unconditional and irrevocable bank guarantees if event project cash flows are inadequate to create the DSRA. Additionally, SEW has executed a letter of undertaking to the senior to infuse INR100m, after the COD, to augment debt payment capacity and to inject additional funds in case operations and maintenance expenses exceed the base case projections submitted to the banks.

The agency believes that the road has long-term economic potential, and that its locational advantage should have a beneficial impact on tollable traffic. Also, it is situated on the highway that represents the shortest distance between Mumbai and Agra.

SNBTPL is a 74:26 JV between SEW infrastructure Ltd (SEW, ‘AA-(ind)’ / Stable) and Navayuga Engineering Constructions Ltd (NECL). Following inter-se adjustments among the sponsors, SEW has increased its equity stake in the project to 74% from the 51%, resulting in a reduction in NECL’s holding to 26%.

Applicable Criteria available on Fitch’s website at www.fitchratings.com: “Rating Criteria for Infrastructure and Project Finance”, dated September 29, 2009.

Source: in.reuters.com

17 states pledge cooperation for highways projects

New Delhi, April 13 (IANS) Seventeen states and the union territory of Chandigarh Tuesday assured support to the centre for timely execution of highways projects in the build, operate and transfer (BOT) mode.

The governments of Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Haryana, Himachal Pradesh, Jharkhand, Maharashtra, Madhya Pradesh, Manipur, Meghalaya, Nagaland, Punjab, Rajasthan, Tripura, Uttarakhand, West Bengal and the union territory of Chandigarh signed the State Support Agreement (SSA) with the ministry of road transport and highways.

The agreement was countersigned by the National Highways Authority of India (NHAI).

For the development of highways, support of the state governments is essential in the matter of land acquisition, removal of encroachments, shifting of utilities, rehabilitation and other local law and order related issues.

“The SSA aims at formalising the cooperation arrangement with the state governments to the implementation of the extensive programme of development of national highways on public-private-partnership (PPP) through the NHAI,” an official statement said.

Five states — Karnataka, Kerala, Goa, Puducherry and Sikkim — will also sign the SSA soon, it said.

However, Uttar Pradesh has indicated its desire to withdraw from the SSA it signed earlier.

“Discussions are going on with the government of Uttar Pradesh to resolve the matter,” the statement added.

Source: sindhtoday.net

‘Continuous rule changes hit highway award schedule’

The roads and highways sector needs many more government initiatives, Virendra Mhaiskar, chairman and managing director of IRB Infrastructure Developers, tells Sanjay Jog. Edited excerpts:

The (Union) Ministry of Roads and Highways plans to award 18,581 km of road projects in 2010-11. Do you expect hectic bidding?
Yes, we do.

Another 33,130 km of NHAI (National Highways Authority of India) projects are yet to be awarded. How fast can this be done?
It may be possible to award these over 12 -18 months. However, environmental clearance to these projects may be an impediment. What needs to be done now is to concentrate on the actual award process, without bringing further regulatory changes. The continuous regulatory changes have badly affected the award schedule.

IRB has bagged all projects on tolls, with average grant at 36 per cent of the project cost (maximum permissible is 40 per cent).
IRB will continue to focus on toll-based BOT projects. However, we are not averse to bidding for annuity-based BOT projects. Depending on the viability of the projects, we will bid.

And, the challenges in project implementation?
The key challenge now appears to be getting environment clearance. We fear delays on this account. The Panaji to Goa-Karnataka border project, for which bids were opened in mid-June last year and for which LOA was issued in January this year, is yet to receive environment clearance. On our part, we are on the verge of achieving financial closure for the project.

Any comment on the government’s recent initiatives in this regard?
The recent initiatives are welcome and will go a long way in bringing investor confidence.

How will the norms to restrict players with more than three projects without financial closure from new bids be helpful?
Although the norms appear very strict, it will surely help to bring out the serious bidders and the non-serious ones. It will avoid hoarding of projects and result in improved implementation.

There have been delays in award of projects by NHAI. Will the recent reforms see action?
The recent reforms have surely resulted in improving the appetite to bid for the projects. However, execution capability in the country is finite and its building up will take some time. These capabilities, we believe, cannot be imported.

To complement the National Highways Development Programme, the government proposes to develop the Expressway Authority of India for implementation of expressway projects of 18,637 km, for completion in phases till 2022. What’s your opinion?
Work surely needs to start on the expressway programme. However, whether this needs a separate expressway authority is a question. It has the potential to create further red-tapism, because of multiplicity and connectivity issues concerning highways.

As a developer, what further initiatives are needed to make project implementation hassle-free?
State support is very important. The minister has been keen to have all the states signing the state support agreement for faster implementation of projects. But, some progressive states are yet to sign.

Do developers face problems in availability of finance for toll or annuity projects? There has been increasing opposition on toll recovery. How could this be tackled?
The liquidity in the market as of now is sound. However, the RBI will have a tough job on hand in the coming year, ensuring availability of liquidity for infra projects and managing the government borrowing programme. If a mechanism is devised by the government which would allow pension funds and insurance funds to participate in the debt programme for infra projects, this would take considerable pressure off the banking system.

On toll recovery, we have not seen any opposition where the facility is well-maintained and saving on operating cost to the user is visible. However, there is an intention of the government to go ahead and toll two-lane roads. This may trigger toll opposition, as these roads would offer very little cost-saving to the user.

What are IRB’s expansion plans?
We intend to concentrate on our core competence of highway development and will concentrate on growing our portfolio of 5,100 lane-kms. We will also concentrate on improving our execution capabilities.

Source: business-standard.com

HCC arm bags 3 NHAI orders

HCC Infrastructure, a 100 per cent subsidiary of Hindustan Construction Company (HCC) has bagged three projects by National Highways Authority of India (NHAI) to develop three contiguous sections of nearly 256 km in length between Bahrampore and Dalkhola on NH-34 in West Bengal on a BOT (Toll) basis.

The special purpose companies, which will be implementing these projects under HCC, will get a capital grant of Rs 1,033 crore during the construction period, according to HCC’s official spokesman. In the wake of these contracts HCC’s order book position has move up by nearly Rs 2,860 crore, he said.

The first BOT contract entails the development of the existing two lanes to four lanes in the Baharampore and Farraka section of NH-34 (103 km) on a design, built, finance, operate and transfer (DBFOT) basis. The second BOT contract includes the development of the existing two lanes to four lanes on the Farraka and Raiganj section of NH-34 (103 km) on a DBFOT basis.

The third BOT contract involves the development of the existing two lanes to four lanes on the Raiganj and Dalkhola section of NH-34 (50 km), also on a DBFOT basis. The HCC spokesman said that the little over one year old HCC Infrastructure has also crossed the Rs 5,000 crore mark in terms of assets under management (AUM), following these orders. HCC Infrastructure’s portfolio now stands at Rs 5,500 crore with 6 BOT road projects.

Source: mydigitalfc.com

IVRCL Infra bullish on BOT road projects

IVRCL Infrastructure and Projects Ltd said it has received a Rs 1,550 crore BOT (Built Operate Transfer) road project in Madhya Pradesh from the National Highways Authority of India (NHAI). The concession will be for 25 years and the project will be completed in 30 months.

“The 155-km long road project will be executed by a special purpose vehicle owned by IVR Prime. The road construction will be taken up by IVRCL Infra,” said Mr E. Sudhir Reddy, the chairman of IVRCL Group.

“With this, IVR Prime has BOT projects — confirmed and lowest bidder — worth Rs 10,000 crore,” he said adding that the company expects to win six BOT projects by this year end.

The project, which is a part of National Highway 59, involves design, engineering, construction, development, finance, operation and maintenance of the road that runs between Indore and Ahmedabad.

Mr Reddy said that the debt-equity of 5:1 would be used to fund the project. “The equity component will be raised through internal accruals and raising debt will not be difficult for us,” Mr Reddy said.

Following the road transport and highways minister, Mr Kamal Nath’s target to build 20 km road every day by April 2010, the NHAI has put the process of awarding contracts on the fast track. “We are currently doing 9 km a day and would be in a position to scale up to 20 km a day by April-May 2010,” Mr Nath had said recently.

Recently, the government had approved road projects worth Rs 6,152 crore in five states for upgrading nearly 562 km of four-lane highways into six lanes.

Mr Nath had also coined the idea of issuing infrastructure bonds to raise money from non-resident Indians on the lines of the Resurgent India Bonds issued in 1998 and the India Millennium Bonds issued in 2000.

Reliance Infra bags Rs 590crore Jaipur project

New Delhi: Reliance Infrastructure, the Anil Dhirubhai Ambani Group (ADAG) company, has won the Rs 590 crore Jaipur-Reengus highway project in Rajasthan from the National Highways Authority of India (NHAI).

The project is expected to be completed by 2011.

The company is currently implementing road projects worth Rs 4,500 crore and aims to increase its road portfolio more than four-fold to over Rs 20,000 crore by 2012.

Reliance Infra bagged the Rajasthan project on the basis of the lowest quote for grant at Rs 103 crore. The upgrade work of the 53 kilometre stretch will be implemented on a build operate and transfer (BOT) basis for a concession period of 18 years, including the construction period. After completion of the project, the company will earn toll through the remaining period before handing over the project to NHAI.

“Jaipur-Reengus contract is the seventh road project won by Reliance Infrastructure. With this, the company would be committing more than Rs 4,500 crore for the road sector. We are planning to increase the total road project portfolio over Rs 20,000 crore by 2012-13,” Lalit Jalan, CEO, Reliance Infrastructure, said in a statement.

The deal is likely to be signed in a month and the construction will begin soon thereafter. The group has a market capitalisation of around Rs 1,50,000 crore, and net worth of over Rs 64,000 crore. Also, the operating cash with the group is to the tune of Rs 13,000 crore.

The company’s two Tamil Nadu projects became operational last week. The projects, Namakkal-Karur and Dindigul-Samynalore, are worth Rs 763 crore and span 96 kilometres.All the remaining road projects are expected to be operational by March 2011.

Also, Reliance Infra is bullish on the infrastructure growth in the country.”Infrastructure will be a major source of revenue for us and we will bid for most of the projects being planned in the country,” Jalan said.

It is undergoing the tendering process in projects worth around Rs 50,000 crore. The company has achieved financial closure for the Rs 2,356 crore first phase of Mumbai Metro project and has also bagged the Rs 11,000 crore second phase of the project to develop a 32 kilometre stretch for a concession period of 35 years.

Source: dnaindia.com

Nath promises overhaul of road & highway sector

In what could be seen as strong indications of an overhaul in the working of road transport and highway sector, new minister Kamal Nath on Friday made it clear that he would go for wholesome changes in the ministry to put road construction back in top gear.

After taking charge of the ministry, Nath said his focus would be on implementation of projects on the ground rather than making big plans — a clear indication that the sector will get a major boost.

“Sadkon ko napi jaati hai, plans ko nahin (roads are measured and not the plans). Lot of thought has been given to planning in the past two years. Now we have to deliver. Performance is evaluated on the basis of kilometres of roads that are built. Now our agenda is of change. The system has to be overhauled so that work on the ground happens. Planning has to be delivered on roads,” he told reporters.

Nath, who was shifted from commerce and industry to road transport and highways, said he was “excited” about his new portfolio. He said he was looking forward to a challenge and he had got one.

On highway projects under public private partnership (PPP) model finding lukewarm response from private developers, the minister said, “Models which are not working have to be done away with and we need to adopt models which can attract investors. Moreover, just awarding the work is not just enough. We have to ensure progress is made on the ground.”

Spelling out his approach to bring the key infrastructure sector back on track, the minister said he was looking at structural changes in the system and procedures to make it result oriented. “Some of the old regulatory frameworks relating to transportation like multiple permit and Motor Vehicles Act have to be looked at from new perspectives. Old laws have to be amended,” he said.

Ministers of state Mahadev Khandela and R P N Singh also assumed charge on Friday.

Source: timesofindia.indiatimes.com

Nath promises action on roads

Once the high-profile commerce minister making India’s voice heard at global trade fora, Kamal Nath is now tasked with putting the country’s teetering highway projects on track. The surface transport ministry had drawn criticism for slippage in project implementation and delay in awarding contracts , but the new minister says actions will speak for themselves . Excerpts from an interview:

What will be the key focus areas of the new government?

In the past, there has been enough planning. Now thoughts have to be transformed into action. We have to ensure that the system and platforms are workable. Performance has to be measured not in terms of plans, but actual work. Things have to be looked at in a new way. In a few weeks, a new model will be found so that India can build the highest number of road kilometres. We have to see that all the outlays are utilised. A successful plan is that which is converted into action.

There have been talks of roads as a stimulus to the economy…

The greater the outlay on construction of roads, the greater the impetus to the economy. If you look at the development of countries like China, Japan and those in Europe, it is all based on their roads and other major infrastructure. There could be better airports but without good roads it doesn’t help much. Along with highways, rural roads too have to be given proper attention.

Earlier, there were delays on the part of the government… but a big hurdle was the paucity of cash owing to the impacts of the financial slowdown, which too delayed project implementation…

We will meet all the states in a month’s time to remove the bottlenecks . Some old regulatory frameworks on transportation such as multiple permit and others have to be reviewed . We are looking at new models . We will look at new ways of capital inflow.

Source: economictimes.com

Kapsch TrafficCom delivers 30,000 transponder units for the Eazy Pass electronic toll system in Ireland

Kapsch TrafficCom AG has secured an order for the first Eazy Pass electronic toll system in Dublin. The company has satisfied the particularly demanding criteria of Eazy Pass and is to supply 30,000 transponder units (or tags for short) to Ireland. Eazy Pass will be used on the new M50 toll route in Dublin. The system will also allow barrier-free driving throughout Ireland. Eazy Pass enables electronic payment at all Irish toll stations, without the need to stop.

The latest order for Kapsch TrafficCom comes from Ireland. The Kapsch TrafficCom subsidiary Kapsch TrafficCom Ltd. is to supply 30,000 transponder units to Dublin. These will be used in the first electronic toll system Eazy Pass on the new M50 toll route in Dublin. Eazy Pass is now also accepted on the N4/N6 Kilcock-Kinnegad, N8 Fermoy Bypass, Dublin Port Tunnel, East-Link and M1 Dundalk Western Bypass. Within the scope of this order, Kapsch will supply transponder units for passenger cars and tags for goods vehicles.

“We have worked with Kapsch TrafficCom since we pioneered electronic tolling in Ireland. Kapsch is our principle technology supplier and a real key partner. We are therefore very pleased that Kapsch TrafficCom has been able to meet our requirements in order to support us in what is a particularly important step towards the expansion of electronic tolling in Ireland,” explains Dermot MacEvilly, CEO of Eazy Pass.

Vienna, 12th September 2008

For further information:
Brigitte Herdlicka
Public Relations & Sponsoring
Kapsch Group
Phone: +43 (0) 50 811 1705
A-1120 Vienna, Wagenseilgasse 1
E-mail: brigitte.herdlicka@kapsch.net
www.kapschtraffic.com
www.kapsch.net

Kapsch TrafficCom delivers Toll Systems for Urban Motorways in Bangkok

Kapsch TrafficCom impresses yet again with a new project in Asia: The company is constructing modern toll systems for three of the largest motorways in Bangkok. Kapsch TrafficCom Sweden will be working with two Thai companies under the joint venture FKS. The order for more than 55 kilometres of motorway in total will be completed in August 2009. Its worth is estimated at 8.5 million euros.

As from autumn 2009, visitors to Bangkok will be escorted on their journey into the centre of the city by Austrian toll equipment. For Kapsch TrafficCom was able to notch up an order recently to fit out three large motorways in Bangkok. More specifically, the company will install the system by order of the Expressway & Rapid Transit Authority of Thailand (EXAT), in cooperation with the two Thai companies Fatima Group and Smart Traffic Co Ltd – as FKS Joint Venture. The Chalerm Maha Nakhon Expressway (consisting of three sections with a total length of 27.1 kilometres), the Chalong Rat Expressway (six-lane with a length of 18.7 km) and the Ramindra Outer Ring Project (with a total length of 9.5 kilometres) are set to be equipped with toll systems.

“Kapsch TrafficCom has repeatedly been successful in Asia. By replacing the 8-year old equipment and upgrading the electronic toll system, the flow of traffic on these three motorways will be sped up and traffic jams will to a large extent be avoided. This was possible primarily because of the extensive expertise of our employees and due to our many years of experience on the Asian market”, declares Erwin Toplak, Member of the Board, Kapsch TrafficCom AG.

The contract to set up the largest electronic toll system to date and a central system for registering and guiding traffic comprises altogether 80 lanes. The new infrastructure will include 100,000 CEN DSRC compatible transponders, 100,000 non-contact smart cards and other equipment (i.a. server equipment, a network and a CCTV video camera system). The system will be completed in autumn 2009 and comprises an order volume of approximately 8.5 million euros.

Kapsch TrafficCom is an international supplier of innovative road traffic telematics solutions. Its principle business is the development and supply of electronic toll collection (ETC) systems, in particular for the multi-lane free-flow (MLFF) of the traffic, and the technical and commercial operation of such systems. Kapsch TrafficCom also supplies traffic management systems, with a focus on road safety and traffic control, and electronic access systems and parking management. With more than 140 reference projects in 30 countries in Europe, Australia, Latin America, in the Asian/Pacific region and in South Africa, and with almost 12 million on-board units (OBUs) and nearly 11,000 equipped lanes, Kapsch TrafficCom has positioned itself among the leading suppliers of ETC systems worldwide. Kapsch TrafficCom is headquartered in Vienna, Austria, and has subsidiaries and representative offices in 20 countries.

For further information:
Brigitte Herdlicka
Public Relations & Sponsoring
Kapsch Group
Phone: +43 (0) 50 811 1705
A-1120 Vienna, Wagenseilgasse 1
E-mail: brigitte.herdlicka@kapsch.net
www.kapschtraffic.com
www.kapsch.net

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