IRB commences construction on Goa/Karnataka Border to Kundapur BOT Project

March 13, 2014

India Infoline News Service/

The company has also executed concession agreement with NHAI for another BOT project

IRB Infrastructure Developers Ltd (“IRB”), one of the largest BOT road developers in India, announced that it has commenced construction on Goa/Karnataka Border to Kundapur BOT Project. The company has also executed concession agreement with NHAI for another BOT project viz. Four Laning of Solapur to Yedeshi section of NH-211.

Goa/Karnataka Border to Kundapur BOT Project is being implemented by the wholly-owned subsidiary of the company viz. IRB Westcoast Tollway Pvt. Ltd. This SPV has now received an Appointed Date in terms of the Concession Agreement executed with NHAI. The project involves four laning of NH17 from Km 93.700 to Km 283.300 in the State of Karnataka. The project cost of the company is approximately Rs. 2,639 crores and the concession period is 28 years. Construction period for the project is 910 days. IRB has sought Rs. 536 crores as viability gap funding from NHAI. The SPV has already achieved financial closure and tied up project finance of Rs. 1,406 crores from a consortium of public sector banks.

IRB has also informed that it’s another wholly-owned subsidiary viz. Solapur Yedeshi Tollway Pvt. Ltd. has executed concession agreement with NHAI for the project of four laning of Solapur to Yedeshi section of NH-211 in Maharashtra. The estimated project cost is approximately Rs. 1,500 crores. IRB has sought Rs. 189 crores as viability gap funding from NHAI for the project. Concession period is 29 years for the project and construction period is 910 days.


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IRB Infra preferred bidder for Rs 1,500-cr road project

December 18, 2013

Company has emerged as a preferred bidder for the project of four laning of Solapur to Yedeshi section of NH-211
Press Trust of India  | New Delhi 

IRB Infrastructure Developers Ltd today said it has emerged as a preferred bidder for a Rs 1,500-crore road project in Maharashtra.
“The company has emerged as a preferred bidder for the project of four laning of Solapur to Yedeshi section of NH-211…In the State of Maharashtra,” the company said in a filing to BSE.The project, to be executed on design, build, finance, operate and transfer (DBFOT) pattern, falls under phase four of the national highways development programme, the company said.

The construction period of the project is fixed at 910 days and the company has sought Rs 189 crore as viability gap funding (VGF) from National Highways Authority of India.

VGF is typically provided in competitively bid projects. Under VGF, the central government meets up to 20 per cent of capital cost of a project being implemented in public private partnership (PPP) mode by a central ministry, state government, statutory entity or a local body.

“The concession period is 29 years,” the company added.


National Highways Authority of India resumes toll road projects with IRB contract

December 18, 2013

 Place: New Delhi | Agency: DNA

Ashutosh KumarAshutosh Kumar

IRB Infrastructure Ltd has emerged as the preferred bidder for Rs 1,500 crore highway development contract for four-laning of the 98.7 km stretch between Solapur and Yedeshi in Maharashtra from the National Highways Authority of India (NHAI).

A senior NHAI official said, “With the drying up of appetite for the toll-based projects in the last one year, the government had skewed its contract awards towards normal engineering, procurement construction (EPC) basis. Projects like this give an opportunity for asset development in addition to the growth in size for developers.”

The toll project, coming after a gap of almost a year, will be developed on a design build finance operate and transfer model by IRB.

IRB has sought a viability gap funding (VGF) of Rs 189 crore — about 12% of the capital cost of the project — from the NHAI.

In the toll model of the highway funding, the government offers VGF, or upfront grant, to developers, capped at 40% of the project cost. The developer raises the remaining amount in a 60:40 debt equity ratio.

IRB plans to develop the Solapur-Yedeshi section in 910 days. The concession period for this project is 29 years, which means IRB will retain the right on toll revenues from the project for 29 years before transferring the asset to the government.

This project will add up to the companies’ present construction order book of Rs 5,050 crore, which is to be executed in the next two to three years.

The company has 18 toll projects, of which 16 are operational.



IRB urges India to offer up new highways for bidding

December 3, 2013



The helper of a driver rests on top of his parked truck along a busy highway on the outskirts of New Delhi June 15, 2012. REUTERS/Adnan Abidi/Files

(The helper of a driver rests on top of his parked truck along a busy highway on the outskirts of New Delhi June 15, 2012.) 

(Reuters) – The chairman of India’s largest road construction firm IRB Infrastructure Developers Ltd (IRBI.NS) urged the government to invite companies to bid to build and operate dozens of new highways, a step regarded as crucial to economic growth.

India sees ramping up the construction of new roads, power plants and ports as crucial to making its businesses more internationally competitive and lifting economic growth out of its worst slowdown in a decade.

But the private sector’s efforts to build new projects have been derailed by problems ranging from coal and gas supply shortages in the power sector to a throttling bureaucracy and a lack of bank funding in the roads sector.

IRB needs to win new government contracts in order to reverse two consecutive falls in quarterly net profit, Chairman Virendra Mhaiskar told Reuters.

Mhaiskar, who until this year was in the Forbes India list of the country’s 100 richest people, said the state-run National Highways Authority of India (NHAI) should offer up for bidding 20-30 highways previously awarded to companies but which failed to take off.

He said in a phone interview he would like to make bids for new projects worth up to 40 billion rupees in the next 3-6 months to prop up an order book that has shrunk to 70 billion rupees from about 84 billion in May.

“Profit growth will entirely depend on new orders,” Mhaiskar said. “Because if they’re going to exhaust our order book pipeline, then the challenge on the profit remains.”

Bank of America-Merrill Lynch and Angel Broking say IRB is in a strong position to pick up new orders and both have a “buy” rating on IRB’s stock. However, BoA-ML in November cited a slowdown in new project orders as a concern.

IRB, India’s largest road construction firm by market value, posted a 12 per cent drop in net profit to 1.1 billion rupees in the July-Sept quarter, compared with the same period last year. Its net debt to equity ratio is 2.55:1.


India awarded under 2,000 km (1,240 miles) worth of new road construction contracts in the last fiscal year, which ended in March, against a target of 9,500 km (5,900 miles).

“We have seen very little orders getting announced by the NHAI in the last whole of the year. So that remains a prime concern,” Mhaiskar said.

“We understand their views as well, that they feel that there is sluggishness and they may not get a good response. But the point is: one needs to keep the good work going,” he said.

The NHAI chairman did not respond to a request for comment.

The government has pushed a public-private-partnership (PPP) construction model in which developers bid for projects in exchange for sharing some of the revenue with the state – a way of getting investment without emptying the public purse.

Besides delay in awarding government projects, an economic slowdown and various mining bans in India mean there are fewer cars and trucks than there might have been on the roads to pay tolls – eating into companies’ revenues.

Two of India’s best known infrastructure companies, GMR (GMRI.NS) and GVK (GVKP.NS), have moved to exit high-profile road projects. In response, the government is working on a formula to ease the payments that companies have to pay to the state in exchange for operating highways.

Recent projects have been designed mainly on a model known as “build-operate-transfer” (BOT), where companies build and own highways for a fixed period before handing them over to the government.

“These days bankers have become more cautious in lending to road BOT projects. They want 80 percent of the land in possession before the financial closure of the project could be achieved,” said Viral Shah, an analyst at Angel Broking. (Editing by Sumeet Chatterjee and Pravin Char)



IRB Infra: On the road to recovery

November 20, 2013

Jitendra Kumar Gupta  | 

 For the September quarter, IRB reported 11.1 per cent annual growth in revenues at Rs 939 crore


Better-than-expected numbers for the quarter ended September have turned analysts positive on IRB Infrastructure Developers, among India’s largest road construction and operating companies.

Both better execution of ongoing projects and strong growth in revenues from the BOT (build-operate-transfer) segment aided the performance. The growth momentum is expected to remain good, backed by revenues from the construction segment and the toll business, in which new projects will go on stream in the coming months.

Analysts believe valuations are reasonable and, therefore, there is room for appreciation. At Rs 90, the stock is trading at about five times its FY15 expected earnings and offers a dividend yield of 4.5 per cent, which is attractive considering the return on equity of about 18 per cent.

For the September quarter, IRB reported 11.1 per cent annual growth in revenues at Rs 939 crore and similar growth in operating profit at Rs 422 crore. The construction business, which accounted for 71 per cent of the consolidated revenues, recorded 11 per cent year-on-year growth, aided by better execution in the case of projects such as the Ahmedabad-Vadodara, Pathankot-Amritsar and Jaipur-Deoli ones. The company’s BOT revenues increased eight per cent, largely aided by new projects going on stream, which added to toll collections. Existing projects saw a slowdown in traffic, reflecting various economic woes, especially the fall in mining activity.

“Growth has certainly slowed, but with geographical advantages, we are still able to show good growth. For instance, the Surat-Dahisar and Mumbai-Pune projects, which account for 70 per cent of the toll collections, have seen traffic growth of about five per cent,” said chairman and managing Director Virendra D Mhaiskar.

While a recovery isn’t likely soon, given the tapering industrial and economic growth, analysts are hopeful. “Despite near-term concerns, we believe IRB is one of the best plays in India’s infrastructure story, with a stable balance sheet, high operating cash flow and a matured road portfolio,” said Mangesh Bhadang, who tracks the company at Quant Global Research.

Part of the concerns will be eased if the company sustains the pace of execution and adds more projects to its portfolio. It has already started toll collection in the case of the Jaipur-Deoli and IRDP Kolhapur projects, while the Amritsar-Pathankot project is expected to be commissioned by December.

Incrementally, these projects will add to the overall toll collections in the coming months and support growth. That apart, the company is sitting on an order book of Rs 5,053 crore, 1.85 times its FY13 construction revenue, providing medium-term revenue visibilities. This provides some relief, given the industry is going through a difficult phase because of the slowdown in project-awarding, the coming elections, lower traffic growth, execution issues and funding.

“Projects have been stuck for different reasons but now, reforms are taking place. Things have (been) delayed for 18-20 months. But again, since more clarity is emerging, the process of bidding will commence soon,” said Mhaiskar.

When the situation improves, IRB is well equipped to grab the opportunity, given its strong balance sheet and expertise in the business. From FY14, the company is expected to generate operating cash of Rs 1,000 crore annually, against Rs 945 crore in FY13. With such cash flows and assuming a 70:30 debt-equity ratio, the company can fund projects worth Rs 3,000-3,500 crore every year.

In Rs cr FY2013 FY2014E FY2015E
Net sales 3,687 3,772 4,191
% change 17.7 2.3 11.1
Adj.Net profit 557 485 502
% change 12.2 -12.9 3.5
EBITDA (%) 44.3 45.1 45.3
EPS (Rs) 16.7 14.6 15.1
P/E (X) 5.3 6.1 5.9
P/BV (X) 0.9 0.8 0.7
RoE (%) 18.2 14.2 13.4
OB*/sales (x) 2.4 3.1 3.5
Order inflows 2,595 3,384 3,574
% chg 30.4 5.6
Source: Angel Broking, * denotes order book 


Bangalore: Oscar asks IRC to build maintenance-free roads

October 25, 2013

From Our Special Correspondent
Daijiworld Media Network – Bangalore


Bangalore : Union Minister for Road Transport and Highways Oscar Fernandes has asked the Indian Roads Congress (IRC) to work towards providing maintenance-free roads in the country by utilizing the Rs 2500 crore funds earmarked for maintenance to be utilised for construction of new roads.

Roads across the country, including in the constituencies of senior ministers like the Union Home, Finance and himself were in pathetic shape, he said.

“When technology (for maintenance-free roads) is available, why should it not be implemented,” the Minister asked the road engineers at a regional workshop jointly organised by IRC and Karnataka Public Works Department here on Thursday.

Fernandes said the National Highway Authority of India (NHAI) has not been able to take up state highways which are recommended by the State Government due to the land acquisition problems.

The State government has asked the NHAI to take up several state highways (4300 km), including Bangalore-Mysore, for upgradation and maintenance.

He said the NHAI would be ready to take up road up-gradation of state Highways to national highways if there opportunities for further widening of roads and land acquisition. There was no provision for the land acquisition in many state highways.

Difficulties in the acquisition of forest lands have also come in the ways for taking over of state highways by NHAI.

“If the State government sort-out land acquisition problems, we are ready to take up upgradation of road projects,” Fernandes said.

Due to land acquisition problems and road safety issues, upgradation of a national highway connecting Kozhikode in Kerala with Kollegal in Karnataka via Mysore has been delayed.

The State government requested to Centre to take up upgradation of 212 km of road at a cost of Rs 518 crore. But no one firm has come forward to take up the project, he said.


Toll turmoil: Ministers likely to meet Prithviraj Chavan today

October 24, 2013



KOLHAPUR: Home minister R R Patil, along with two of his cabinet colleagues from Kolhapur, is likely to meet chief minister Prithviraj Chavan on Wednesday and discuss with him the controversy and people’s unrest related to the collection of toll from vehicles on inter-city roads.The meeting in all likelihood is possible to be held before the scheduled meeting ofthe cabinet.”We were planning to meet the chief minister today (Tuesday) after his meeting with Youth Congress workers. However, due to his busy schedule, he could not give us time. Now, we are planning to meet him tomorrow (Wednesday) before the cabinet ministers’ meeting. We will also meet deputy chief minister Ajit Pawar. We will discuss with them the situation in Kolhapur and would urge the chief minister to conduct a meeting with those opposing the toll,” labour minister Hasan Mushrif said.

Patil, Mushrif and minister of home Satej Patilhad earlier said they would talk to the chief minister and try to resolve the row, The Kolhapur Anti-Toll Committee (KATC) has been opposing the government’s decision to collect toll on the inter-city roads.

“It’s inconsequential whether the meeting with the CM is held or not. We will continue opposing collection of toll in the city. Our activists have been appealing to the commuters not to pay toll at Shiroli, Puikhadi and Phulewadi toll plazas. People from Kolhapur, having vehicles with MH 09 numbers, are refusing to pay the toll and responding to our call,” said Niwas Salokhe, the convener of KATC.

In the meantime, Karvir Kamgar Sangh, a workers’ union affiliated to the All India Trade Union Congress, presented a memorandum to assistant labor commissioner office, demanding an inquiry into the IRB Company’s registration or licence under Bombay Shops and Establishment acts. Besides, the union asked the office to investigate if the company was following the set of 11 laws for the workers. “The memorandum was submitted to Suhas Kadam, the assistant labour commissioner. Our office has assured an inquiry,” said Mangesh Sawant, a senior labour department officer.

IRB Company started collecting toll from October 17 after the high court directed the state government and district police administration to provide protection to the toll plazas in the city.


Protesters disrupt toll collection across Kolhapur

October 18, 2013



KOLHAPUR: Collection at the nine toll plazas across the city was disrupted on Thursday as members of the Kolhapur Anti-Toll Committee (KATC) staged protests and formed human chains to stop road construction company, Ideal Road Builders (IRB), from taking the charges from road users.The toll collection resumed at two plazas after protesters dispersed in the afternoon but was suspended again after they returned.

In September, the Bombay high court had directed the district police to provide security at the toll plazas. Official sources said around 700 policemen, along with 150 security personnel from the State Reserve Police Force, were deployed at sensitive points in the city and at all the nine toll plazas.

A senior Kolhapur police official said the IRB employees had been instructed by their superiors not to take any action against the protesters during Thursday’s agitations. “Several senior leaders from all political parties participated in the protests and we felt it was not advisable for the IRB staff to collect toll,” he said.

A couple of hundred protesters, most of them from the rural parts of the district, had gathered at the Shiroli toll plaza. Addressing the protesters here, N D Patil, veteran leader and president of the Peasants and Workers Party, said, “The state government has deployed a huge police force to crush this agitation. But we will not be deterred by this. We will not allow the IRB to collect toll.”

The other toll plazas are located at Shiye, Kagal Naka, Sarnobatwadi, Phulewadi, Kalamba, Puikhadi, Uchgaon and R K Nagar.

Chandradip Narke, Shiv Sena MLA from Karvir, led the protest at the Phulewadi toll plaza, which was burnt down during the agitation in May 2013. Around 600 people participated in the protests here.

“People from the rural parts of the district, who commute to the city everyday, have been severely inconvenienced by the toll collection. The poor from the rural areas should not be made to pay toll for roads that are meant for people living in the cities. Despite the issue being raised in the legislative assembly, the state government has kept silent on this issue. Toll has been imposed on Kolhapur due to a nexus between some of the ruling leaders and the IRB,” Narke alleged.

Sadashiv Mandalik, MP, said, “The toll collection process, if allowed, will go on for 30 years according to the agreement. We should try to resist every attempt to collect toll.”

KATC member Baba Indulkar demanded the arrest of the IRB employees, saying they were supporting “illegal work” carried out by the company. “We had filed a criminal complaint against the IRB, which is responsible for the poor quality of roads and for posing a danger to people’s lives. If the police do not arrest them, the public can do so and hand them over to the police. We arrested Vijay Patil, an employee at the Kagal toll plaza, and handed him over to the police inspector of Rajarampuri,” he said.

When several protesters dispersed after 1 pm, the IRB employees started collecting toll at Kagal (from 10 vehicles) and Uchgaon (three vehicles). However, when the protesters got wind of this, they returned to these plazas and the toll collection was discontinued.

Meanwhile, the IRB has issued a public notice, stating that toll collection would be beneficial for the development of the city. The notice states that the company had moved the Bombay HC due to delays in toll collection because of protests by some city-based organizations, who had “spread misconceptions” about the IRB project.

The IRB notice reads: “Toll collection is important since the internal roads of the city will be maintained for the next 30 years through the revenue earned in this process. The HC had given its directive after it studied our stand; we have completed over 95% of the road construction work. The company has submitted a Rs 25-crore bank guarantee with the district collector as a security deposit for completing the remaining 5% of the work.”

Timeline of the agitation

July 2008: Agreement between Kolhapur Municipal Corporation, Ideal Road Builders and Maharashtra State Road Development Corporation to construct 49.99 km of roads in the city at an expense of Rs 220 crore

November 2008: Agitation by social workers on the issue of utility shifting

January 2011: IRB claims completion of construction of the roads

December 2011: State government floats gazetteer allowing IRB to collect toll

January 2012: KATC opposes the state government’s order. Three weeks of mass agitation is followed by the burning down of booths at seven of the nine toll plazas

March 2012: State government constitutes a three-member committee to check the quality of roads built by IRB

December 2012: Chief secretary of state Jayantkumar Banthia allows IRB to collect toll

March 2013: The committee submits its report to the state government

April 2013: KATC opposes the report and gears up for agitation, burning down three toll booths across the city

May 2013: The state government revokes the stay on the proposed toll collection

May 25, 2013: KATC once again launches agitations. Protest at Shiroli toll booth, heavy lathicharge by police administration. Violent mob vandalises three toll booths at Shiroli, Phulewadi, Bawda

July 7, 2013: The anti-toll committee organises a rally against the state government’s decision to revoke the stay on toll

September 26, 2013: The HC directs the district police administration to provide security to IRB for toll collection

October 17, 2013: KATC forms human chain across the city to stop the toll collection

Police on alert to douse anti-toll fire

October 17, 2013

Vivek Waghmode, TNN |

KOLHAPUR: The city has come under a thick security blanket with police making elaborate arrangements to avoid any untoward incident during Thursday’s protests by the Kolhapur Anti-Toll Committee in protest against the government’s decision to go ahead with collection of toll on the inter-city roads.

Around 700 policemen with 150 sub-inspectors and inspectors, three officers in the rank of the deputy superintendent and a one company of State Reserve Police Force have been deployed at the vulnerable points, including nine toll plazas, in the city.

Superintendent of police Vijaysingh Jadhav on Wednesday said, “According to the high court’s order, we will provide protection to the IRB Company for toll collection. There are nine toll plazas in the city and the police will be deployed at all the booths from Thursday. Our duty is to maintain law and order and we are well prepared. We will arrest anybody trying to violate law and order situation or create any kind of disturbance that may affect law and order situation in city. Those arrested will be kept at Yerawada jail because the two jails in the district Kalamba jail and a sub-jail at Bindu chowk are full to their capacity.”

He had called a meeting of all police officers and asked them to take strict actions against those trying to trespass or loiter around toll plazas in groups. The district administration has already issued prohibitory orders and Jadhav has asked the police to take action against anybody violating the directives.

The Bombay high court had directed the state government and the district administration to provide police protection to M/s IRB Kolhapur Integrated Road Development Company to start toll collection in the city.

The IRB had filed a writ petition (6646/2013) in the high court to seek an appropriate writ, direction and order and direct the state government and the police department to provide adequate protection for toll collection. The court asked the state government and the police department to ensure protection at each toll plaza and all other establishments under the Kolhapur Integrated Road Development Project.

A high court bench of Justice V M Kanade and Justice S C Gupte passed the order on September 26 and has scheduled the next hearing on October 21.

The police, in a letter dated May 23, 2013, had expressed their inability to provide immediate police protection, because a large police force would be required for the purpose.





IRB Infrastructure commences operations on Jaipur-Deoli toll project

October 10, 2013

By PTI |

IRB Infra today announced it has commenced operations on its Rs 1,733-crore Jaipur-Deoli build-operate-transfer (BOT) project.
(RB Infra today announced it has commenced operations on its Rs 1,733-crore Jaipur-Deoli build-operate-transfer (BOT) project.)


MUMBAI: IRB Infrastructure Developers   today announced it has commenced operations on its Rs 1,733-crore Jaipur-Deoli build-operate-transfer (BOT) project.Implemented by its wholly-owned special purpose vehicle called IRB Jaipur Deoli Tollways, the company has begun partial toll collection from September 27, a statement said.

The company had and sought viability gap funding of Rs 306 crore from the National Highways Authority of India ( NHAI). The concession period for the project is 25 years.


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