• Home
• About
• Contact

Subscribe

Top Categories:
• BOT
• CEN 278
• Construction
• DDA
• Investment and Finance

GMR consortium wins Hungund-Hospet highway project

The consortium of GMR Infrastructure (Q,N,C,F) and Oriental Structural Engineers (OSE) has won the prestigious Hungund-Hospet highway project on a build, operate and transfer (BoT) basis through the international competitive bidding route.

GMR Group will hold 51% equity in the consortium and 49% will be held by OSE. The consortium received the Letter of Award from National Highways Authority of India (NHAI) on Feb. 08, 2010. This is ninth highway project of GMR Group after successfully completing six projects as per schedule. Two projects measuring 211 kms are currently under development.

The project measuring 99 kms on NH-13 with an estimated project cost of Rs 17 billion entails designing, engineering, finance, procurement, construction, operation and maintenance of four laning of the Hungund Hospet section in the state of Karnataka. This will ease traffic congestion and provide a tremendous boost to trade and commerce in the state. Apart from reduction in travel time, this development is expected to improve safety levels for travelers since it will be built to world-class specifications.

Several national and international consortia participated in this bidding process in which GMR Group-OSE Consortium was adjudged as the preferred bidder. The project will be implemented through a special purpose vehicle (SPV) set up by the Group which will be signing the concession agreement with the NHAI for a period of 19 years. All activities leading to the concession agreement signing have been initiated.

Commenting on the significance of the project, Srinivas Bommidala-business chairman (Urban Infrastructure and Highways) of GMR Group said, “The project is of strategic importance to us since it provides vital link in the movement of major industrial and tourist traffic across Karnataka. We are delighted to be a part of this development and are keen on ensuring that the project caters to the needs of multiple stakeholders.“

GMR Group had entered the highways business in 2001 by winning two projects with benchmark annuity offer. It has even received an early completion bonus from the NHAI for completing the Tambaram-Tindivanam project in Tamilnadu ahead of schedule. Today, the group has a balanced portfolio of four annuity and four toll projects (toll operations for three projects have already commenced) totaling 630 kms across the length and breadth of the country. All six projects have been completed as per schedule and two are currently under developmental stage.

Shares of GMR Infrastructure declined Rs 0.5, or 0.89%, to trade at Rs 55.55. The total volume of shares traded was 845,260 at the BSE (1.29 p.m., Tuesday).

Source: myiris.com

Sadbhav Engineering Secures Road Project in Karnataka from NHAI

Sadbhav Engineering Ltd has announced that the Consortium led by the Company has been awarded the project “4 laning of Bijapur – Hungund Section of NH-13 from km 102.000 to km 202.000 in the state of Karnataka on Design, Build, Finance, Operate and Transfer (“DBFOT”), Toll basis under NHDP Phase-III (Package No. NHDP-III/BOT/KNT/05)” from The General Manager (Tech), National Highways Authority of India (Ministry of Road Transport and Highways) G-5&6, Sector-10, Dwarka, New Delhi-l10075 in the name of Joint Venture known as ‘SEL-MCL Consortium’ in the ratio of 77:23 respectively.

The proposed total cost of development of the said project stands at Rs. 1225.00 Crores. The Concession Period of the project is 20 (twenty) years including construction period of 910 Nine Hundred and Ten) days from the “Appointed Date”.

The stock was trading at Rs.1245, up by Rs.37.25 or 3.08%. The stock hit an intraday high of Rs.1294.80 and low of Rs.1215.

The total traded quantity was 5230 compared to 2 week average of 1222.

Source: Equity Bulls

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.

CCI approval for 561.89 km of highways in five states

On 9 January 2010, the Cabinet Committee on Infrastructure (CCI) approved road projects worth Rs 6,151.94 crore for upgrading nearly 561.89 km of highways in Maharashtra, Gujarat, Karnataka, Goa and Rajasthan.

The projects include expanding existing four-lane section roads into six-lanes of the Golden Quadrilateral (GQ) scheme in Maharashtra, Gujarat and Rajasthan (totalling 439.02 km). The projects include the 140.35-km Pune-Satara section on NH-4 in Maharashtra; the 56.16-km Samakhiali-Gandhidham section on NH-8A in Gujarat; and the 242.51-km Udaipur-Ahmedabad section on NH-8 in Rajasthan and Gujarat.

The GQ projects to be implemented on DBFOT basis are estimated to cost Rs 4,279.94 crore. While the concession period for the NH-4 and NH-8A projects is 24 years, the NH-8 project’s concession period is 30 years. All these projects have the construction period of 912 days.

Further, the CCI has accorded its approval for the implementation of the 122.87-km-long section of four/six-laning of Maharashtra/Goa border to Goa/Karnataka section of NH-17 in Goa on a DBFOT and BOT basis. The project cost is Rs 1,872 crore with a concession period of 23 years and construction period of 1,095 days.

Backward-bending policy to take toll

The B K Chaturvedi committee has suggested ways for expeditious financing and implementation of the National Highways Development Project (NHDP). It has rectified problematic rules concerning the exit policy, bid security, security to lenders, request for qualifications (RfQ) and request for proposal (RfP). These belated measures will surely make highway projects more attractive for investors.

However, some other recommendations bear unmistakable signs of fear psychosis, perhaps caused by the reduced private investment in highways during 2008-09. The decline was largely due to two reasons: the detrimental and mid-course changes made in RfQ and RfP rules, and the economic downturn. But in a typical panic-driven response, the committee has confused symptoms with the causes. Thus, it has introduced some questionable changes in the model concession agreement (MCA) for tolled projects. Conversely, several crucial issues have been ignored.

To put arguments in perspective, recall the pre-August 2008 scenario: 9%-plus growth rate, upbeat credit and financial markets, and bullish investors scrambling for projects to invest in. During 2006-07, more than 60 highway projects attracted private investment. In fact, there was a shortage of well-structured projects on offer.

The extant rules regarding the viability gap funding (VGF) and termination of contract posed no threat to the attractiveness of highway projects. Yet, the committee has targeted these rules to implement investors’ wishlist. Under a BOT-toll contract, an investor is granted the right to charge toll from users.

There are two main justifications for this concession: investors provide upfront funding for projects, alleviating the taxpayers’ burden, and bear the construction, maintenance and commercial risks. VGF grant is provided to make a socially-desirable but unprofitable project attractive for an investor. The underlying objective is not, and should not be, to add to the upfront financing — that is for the private sector to do. Limited funds are available for VGF. The MCA rules allow VGF up to 40% of the project cost; 20% during construction phase and the rest during maintenance phase.

In contrast, the committee has offered the entire grant during construction phase itself, and has reduced
it to a mere cost-sharing device. Further, compared to what would have been possible under the earlier rules, now the grant requirement of fewer projects will be met with. So, at least in the short run, fewer grant-dependent projects will take off.

Besides, an investor can borrow 20% of project cost at concessional rates from the IIFCL, a public sector company. Indeed, excluding the profit margins, an investor can meet up to 70% of cost just using grants and other funds raised by public sector entities. Simply put, what was to be the investor’s responsibility has been passed on to the taxpayer, undermining the rationale of VGF as well as toll contracts. Moreover, an investor is reimbursed 90% of due debt if the contract gets terminated. So, the new rules are likely to create moral hazards during construction phase and later.

Under MCA rules, if actual traffic turns out to be less (greater) than predictions, the concession period is increased (reduced) proportionately. If traffic increases beyond the designed capacity, to avoid congestion, the concessionaire is required to widen the road at his cost. These rules imply that road users get satisfactory service, and the investor and the taxpayer share the unanticipated losses (gains) arising from traffic-risk. In contrast, under the new rules, if the government asks for capacity expansion on account of high traffic, it will have to compensate the investor. Moreover, the contract period cannot be reduced. So, the event of traffic exceeding the designed capacity has become lucrative for the investor. It would ensure them unexpectedly high profit.

Source: economictimes

Roadblock to four-laning as ryots reject Govt of

VIJAYAWADA: The much-awaited widening of Hyderabad-Vijayawada National Highway No.9 project is likely to be delayed for another three to four months as farmers on either side of the highway are not agreeing to part with their land.

The GMR Infrastructure Ltd has bagged the 181-km long road project worth of Rs 1,200 crore on a BOT basis through international competitive bidding and its works are scheduled to begin in January, 2010 after completion of the land acquisition process by Dec, 2009.

However, with the Government intending to acquire land at half its market value, many farmers are not interested in handing over their valuable land for the expansion work.

The 181-km four-laning work on Hyderabad-Vijayawada National Highway would be taken up from 40th km near Malkapuram in Nalgonda district to 221-km mark at Nandigama in Krishna district. For this, a total of 1,053 hectares land would be required in 53 villages in Nalgonda district and 13 in Krishna district.

According to a senior officer in the National Highways Authority of India (NHAI), the Government which is scheduled to complete the land acquisition process by the first week of December, has so far acquired not even 50 percent of land from the total of 1,053 hectares.When revenue authorities visited the land to be acquired at Nakirekal and Chityala in Nalgonda district and Jaggayyapet in Krishna district some days ago, they experienced a stiff resistance from landowners.

According to local people, the market rate of land in the villages surrounding Nandigama is Rs 15 lakh per acre and Rs 20 lakh per acre in Nandigama town. However, the Government is willing to acquire the land by paying amounts not exceeding Rs 6 lakh per acre.

Source: expressbuzz.com

By 2022, govt to lay 18,637km of expressways

NEW DELHI: The government has drawn up an ambitious target to lay 18,637km network of brand new expressways by 2022. These high-speed, access-controlled roads will be of the four-lane and six-lane variety with 3,530 km to come up in the next three years.

The highways ministry is ready with a Master Plan for the National Expressway Network. The new target of expressway length was projected after receiving observations from 11 states including Madhya Pradesh, Bihar, Gujarat, Karnataka and Uttar Pradesh. Earlier, the final draft report prepared by the highways ministry had proposed to develop 17,661 km of expressway network.

The expressways network will not be an upgraded national highway network but will be developed entirely as greenfield projects. These will preferably be built with three-metre high embankments and will have service roads along the stretches where there is a need. Officials said there was an urgent need to develop expressways network as road transport would remain the mainstay for sustaining the economic momentum of the country.

“The existing arterial network cannot meet the latent and the emerging demands for connectivity and accessibility while ensuring the desired level of safety,” said a senior ministry official.

As per estimates, the construction cost per km would be Rs 14 crore in case of 4-lane and Rs 20 crore in case of 6-lane expressways excluding land acquisition and other expenses. A recent presentation made before the top brass of National Highways Authority of India (NHAI) and the ministry also mentioned that while majority of identified stretches would be built on build-operate-transfer (BOT) mode, stretches which were unviable could be developed on annuity basis.

The Master Plan document has also phased the expressway development programme for 2012, 2017 and 2022 and this has been done on the basis of financial viability, relative traffic intensity along various corridor segments, network comprehensiveness, connectivity warrants and relative economic potential of each proposed project.

The ministry is already in the process of preparing a draft for creation of a National Expressways Authority of India (NEAI) on the lines of NHAI and the highway regulator has also got an exclusive wing for the expressway as a stop-gap arrangement.

Source: timesofindia.indiatimes.com

Bumps in road funding to be eased

NEW DELHI: The government is exploring ways to improve flow of funds to developers executing road projects by making funding of such projects
attractive for financial institutions, including insurance companies.

The panel on highway development, headed by the Planning Commission member BK Chaturvedi, is now working on the second part of its report on expediting work on the ambitious National Highways Development Project (NHDP).

“We have sorted out funding issues of the NHAI through cess and government guarantees, at least for one year. Now we have to look at the issue of financing of people who are building the roads,” Mr Chaturvedi said in an exclusive chat with ET.

The government has already accepted Chaturvedi panel’s recommendations on relaxing the norms for public-private projects (PPPs) in the road sector, continued funding of National Highways Authority of India through road cess collection and government guarantee for its borrowings.

The government has set a target of constructing 7,000 km of road annually, which translates into building 20 km of roads a day. It is planning to hand out contracts for nearly 12,000 km of highways to private developers in the next one year.

“We are examining what kind of safeguards are required to make insurance companies lend to road projects,” he said, adding that they would want the government to share risk and also give guarantees that the debts would be repaid.
The panel is still in the process of collecting information from the industry and other parties concerned and hopes to finish its report by January-end.

The government has decided to guarantee NHAI’s borrowing for the current year. The financing of NHAI in the years to come is yet to be decided. “ The empowered group of ministers set up on road financing will look at how the funding requirements of NHAI will be handled in the following years,” Mr Chaturvedi said.

Although NHAI does involve the private sector to fund projects through the build operate and transfer (BOT) mode of finance, it has its own financing needs as well.

NHAI has to invest in all projects carried on EPC or cash contract basis, which is the standard financing format in the North East and J&K where private players are not too keen to take risks because they are commercial unviable in these areas.

NHAI has to make some investments even in projects that are handed out to private road developers through the build operate transfer (BOT) basis to the extent of making them commercially viable, through what is called viability gap funding.

It has to pay an annual annuity to developers under the BOT annuity option and provide capital grant to increase viability of projects under the BOT toll option where private developers are allowed to collect toll for recovering costs and earning profits.
Source: economictimes.indiatimes.com

No state consent, NHAI goes ahead with four-laning of highway section

Without taking the state government on board, the National Highways Authority of India (NHAI) has already decided to go ahead with the four-laning of the 80-km Muzaffarnagar-Hardwar section of the Delhi-Dehradun corridor.

The state government has not yet given its consent to the State Support Agreement for a 21-km stretch, which falls within the state. The rest falls in Uttarakhand.

The bids for the project were invited in September and had to be opened on October 9. But the Highway Authority had later thought of abandoning the project as the state government had refused to sign the State Support Agreement. They have now decided to go ahead with the project.

“The 9 bids received for this project were opened on Wednesday. A contractor for the project will be finalised within a week,” said M K Jain, Project Director.

“The state government has not sent any letter of consent on the State Support Agreement. But the Highway Authority is going ahead with the project,” added Jain.

According to him, the four-laning of the highway will start from June next year. About 70-hectare would be required for 21-km stretch in the state.

“Land has been earmarked. A proposal has been sent to the authorities for approval on notification of land acquisition. The notification will be issued within a week,” said Jain.

The Muzaffaragar-Hardwar section will be four-laned on built, operate and transfer (BOT) basis under the National Highways Development Project (phase-III). The project will cost Rs 900 crore. The Detailed Project Report has also been prepared.

The state government had refused to sign the State Support Agreement as it wants to develop an expressway along the Upper Ganga Canal from Noida to Hardwar which will also open a passage for Uttarakhand from UP and Delhi. Jain said if the State Support Agreement was signed, the state government had to assure that no alternative expressway — Upper Ganga Canal Expressway — would be developed parallel to Highway Authority’s highway, leading to a competition.

“Since the agreement has not been signed, the state government is free to develop its own expressway,” said Jain.

The eight-lane Upper Ganga Canal expressway, popularly known as Hindon Expressway, will stretch from Noida to Hardwar through Muzaffarnagar and Roorkee. Mumbai-based firm called Infrastructure Leasing & Financial Services Limited (IL&FS) is conducting the feasibility study of the project and are likely to submit the report by next month.

Source: expressindia.com

Next Page »

NHAI's First ETC(Electronic Toll Collection) PLAZA

Latest Headlines

• Job Vacancies
• GMR consortium wins Hungund-Hospet highway project
• Sadbhav Engineering Secures Road Project in Karnataka from NHAI
• HCC arm bags 3 NHAI orders
• New ISO specification for ETC systems
• IVRCL Infra bullish on BOT road projects
• CCI approval for 561.89 km of highways in five states
• Backward-bending policy to take toll
• Knowledge Base: Tolling Operational Manager IQ Test
• Roadblock to four-laning as ryots reject Govt of

Copyright © 2007 Indian Tollways · Log in

Visitors: