Roads of trouble

April 7, 2014

RAHUL PRITHIANI

Over the past couple of years, traffic growth on national highways has slid precipitously, in conjunction with the economy and industrial production. A view of National Highway 7, one of the busiest National Highways in South India with a total length of 472 km. File Photo
The Hindu Over the past couple of years, traffic growth on national highways has slid precipitously, in conjunction with the economy and industrial production. A view of National Highway 7, one of the busiest National Highways in South India with a total length of 472 km. File Photo

Road developers are in a tizzy as both debt-servicing ability and returns of national highway projects have come under severe strain as the economics has gone haywire because of low traffic, execution delays and cost overruns.

Over the past couple of years, traffic growth on national highways has slid precipitously, in conjunction with the economy and industrial production. An analysis of traffic growth across 15 national highway projects that have been operational for over three years revealed that overall traffic growth, estimated at 7-8 per cent between fiscals 2008 and 2011, slumped to 3-4 per cent in 2012 and to 2-3 per cent in 2013. In fiscal 2014 too, the traffic growth has been weak due to sluggish economic activity.

The culprit was commercial vehicle traffic, whose slowdown overshadowed a healthy 15 per cent average growth in passenger vehicle traffic during this period.

Special purpose vehicles

This deteriorating trend is also mirrored in the revenues of a dozen special purpose vehicles (SPVs) operating under the build-operate-transfer (BOT) model. Revenues of these SPVs have grown by about 12 per cent in the past couple of years. During this period, toll rates rose by 8-9 per cent per annul as these are linked to the wholesale price . But poor traffic growth negated most of the benefits.

The scenario is unlikely to improve much in the near-term. Road traffic has high correlation with industrial growth . While we expect IIP to recover in fiscal 2015 to about 4 per cent from the decadal low of about 1 per cent it hit in fiscal 2014, it will remain well below the long-term average.

Consequently, commercial vehicle traffic growth will be lacklustere and overall traffic growth on national highways will languish at 3-5 per cent in fiscal 2015. As almost the entire operating costs in a road project are fixed in nature, any variation in the traffic, especially during initial years, has a significant bearing on the project returns.

Slow traffic growth on national highways is not the only problem plaguing developers. Base traffic (in the first year of a highway’s operation) has been much lower compared to the NHAI draft project report estimates. To be sure, developers would have done their own math on traffic, including expected leakages and exempt vehicles, before bidding, yet they will be concerned about how wide off the mark the original estimates were.

Compounding these problems for road developers are delays and the resultant cost overruns. Of the 78 BOT projects completed between fiscals 2000 and 2013, more than three-fourths or 61 projects faced delays, with the average time overrun at 10.5 months. The situation has only worsened in the last couple of years. Execution hasn’t begun for about 33 projects awarded in fiscal 2012 .

The double whammy of lesser-than-expected traffic and cost overruns has severely impaired the debt-repayment ability of developers. For five of these projects, the average debt-service coverage ratio during the first five years of operations is estimated to be less than one. This means equity infusion is essential to ensure timely servicing of debt, especially since tying up for additional debt will be difficult in the current scenario. Returns for these road projects are also expected to be 8-14 per cent, much lower than the 22-26 per cent returns based on NHAI traffic and cost estimates.

The above-mentioned scenario is representative of most road developers. Clearly, road developers are being buffeted by problems from all sides and have very limited room for manoeuvre. Recently, the government offered some respite by relaxing exit norms and allowing for premium deferment in the case of stressed projects. However, it might turn out to be a case of too little, too late.

The author is Director, Crisil Research, a division of Crisil

 

Source- http://www.thehindu.com/ 

NHAI approves compensation package for land acquisition

March 13, 2014

SPECIAL CORRESPONDENT

Development of NH bypass from Kazhakuttom to Karode

 

The National Highways Authority of India (NHAI) has granted approval for a compensation package for acquiring land from Kottukal village for the development of the 43.62-km NH-66 bypass from Kazhakuttom to Karode on the Kerala-Tamil Nadu border.

The NHAI decision comes at a time when the NHAI has invited a Request for Proposal (RFP) for converting a 26-km stretch of the NH-66 bypass from Kazhakuttam to Mukkola into a four-lane road.

The NHAI’s invitation for the RFP was following the delay in handing over land for the 17.62-km stretch of the road up to Karode.

Official sources said the NHAI orders were issued on Thursday on the basis of the report given by the Competent Authority Land Acquisition (CALA).

A sum of Rs.78.60 crore would be given by the NHAI as compensation to the landowners in the Kottukal village.

Official sources said the authority would come out with an approval for the other four villages in the 17.62 km stretch once the CALA submitted the report.

The order issued by the DGM (LA & Coord), NHAI, Prag Ghosh said the compensation rates were indicated by the State on the basis of the sales statistics for similar adjoining land as on the date of publication of the statutory 3A notification on March 22, 2012, and July 13, 2013.

The rates fixed by the NHAI were Rs.8,464/sq m for dry land with PWD road access, Rs.7,618/sq m for dry land with Panchayat road access, Rs.6,671/sq m for dry land without road access, and Rs.5,925/sq m for wet land.

The local project director of the NHAI was also asked to ensure that the land was transferred into the NHAI’s possession and simultaneously mutated in the name of the government after the compensation money was deposited with the CALA.

Tharoor’s intervention

Describing it as an important day for the people, Union Minister of State for Human Resource Development Shashi Tharoor said it would bring relief to the people who were suffering for more than four decades.

With this, Mr. Tharoor said the final step for reaching the actual payments to the beneficiaries had been completed. “After receiving the payments, the land owners could go in appeal for additional compensation under various arbitration processes”, he added.

BOT project

The Public-Private Partnership Appraisal Committee of the Union government has given nod for the first 26 km of the project to be taken up on a public-private partnership mode at a cost of Rs.577.95 crore.

The entire 43.62 km stretch will cost Rs.1,170 crore.

The 43.62-km stretch from Kazhakuttam to Karode is part of the 212-km NH-66 (old NH-47) bypass project of the NHAI from Thuravur that began in 1974. It is part of the National Highway Development Project Phase III.

The 22-km first phase, from Kazhakuttom junction to Kovalam junction, was converted into a two-lane 15 years ago. Land has been acquired for a four-lane stretch and to the extent of 45 metres along the bypass on the Kazhakuttam-Chakka-Eenchakkal-Kovalam stretch.

 

Source- http://www.thehindu.com/

Work on Port-Maduravoyal Elevated Corridor Resumes

March 13, 2014

By C Shivakumar – CHENNAI

Photos

Work going on at Spurtank Road, in the city on Monday | Albin Mathew
Work going on at Spurtank Road, in the city on Monday | Albin Mathew

The much delayed Chennai Port-Maduravoyal elevated corridor project may be completed in another 30 months as the National Highway Authority of India (NHAI) resumed the work on Monday.

The work to clear way for the vehicles to ply in the area along the Cooum river has been started on Spur Tank Road, NHAI Chief General Manager (Technical), Tamil Nadu and Kerala, Chinna Reddy, told Express.

It may be recalled that following a High Court order on February 20, 2014, Reddy has stated that the work would start within three months. “But with the manpower and machinery at our disposal, the work has started with immediate effect after consultations,” Reddy said, adding, he expected to finish the project in the next 30 months.

Initially, NHAI is looking at laying the foundation along the Cooum. “One ground of land was cleared and the work began at around 11 am,” said an official at the site.

The construction of pile caps along the river stretch has been a bone of contention between the State government and the NHAI. The project hit a roadblock on March 2012 after the Water Resources Department issued a ‘stop work’ notice saying the alignment of the corridor along the banks of the Cooum had deviated from the original plan.

The biggest challenge for the NHAI is to get the slums vacated on the stretch. “There are a number of places where the slums have to be evicted by the State and the land has to be handed over to the NHAI,” said Reddy.

Other Projects

Reddy said the State government was yet to constitute land acquisition units for the 262-km Bangalore-Chennai Expressway that will run through Tamil Nadu, Andhra Pradesh and Karnataka. He said other states have already set up the units.

He also said Rs 1,000 crore road improvement project in 300 kilometres across the State would be taken up under Engineering Procurement and Construction scheme after there were no takers for Build Operate Transfer (BOT) process.

The project would be carried out in the stretch linking Madurai, Rameswaram, Karaikudi, Thanjavur and Chidambaram.

Source-http://www.newindianexpress.com/

NHAI awards first BOT project in a year, paves way for more

March 13, 2014

Timsy Jaipuria | New Delhi |

 SUMMARY -After a gap of over a year, the government is set to award a highway project in the build

After a gap of over a year, the government is set to award a highway project in the build, operate and transfer (BOT) category in what marks its effort to revive the public-private partnership (PPP) model in the sector. According to sources, the first PPP project of this fiscal in highways will soon be awarded to Mumbai-based IRB Infrastructure Developers for widening a 98.72-km stretch between Solapur and Yedeshi in Maharashtra to four lanes.

However, the project, estimated to cost R972 crore, would be supported by viability gap funding (VGF) of 19% by the National Highways Authority of India (NHAI). Many stranded PPP projects in the sector were awarded on promises of high premium payments to the authority. “Given the poor response to the BOT projects these days, IRB’s proposal appeared to be better than what the NHAI had expected,” said a senior government official, asking not to be named.

Inability to meet toll revenue targets had forced investors like GMR, GVK and Ashoka Buildcon to quit their PPP projects in the highways sector and caused delays in other projects. Termination of projects awarded on the promise of high premiums to NHAI by the most prominent investors has resulted in renegotiation of premiums worth R98,000 crore payable over 20-30 years. Policymakers have since shifted focus to the conventional engineering, procurement and construction (EPC) projects, and not one new PPP project has been awarded in the sector this fiscal.

The details of the premium recast will be as per the Rangarajan panel’s recommendations, which is expected soon.

The number of new PPP projects awarded in the sector peaked in 2011-12 at 6,491 km and has since come down to 1,116 km in 2012-13.

In September this year, the Cabinet Committee on Economic Affairs had given its approval for widening the Solapur-Yedshi section of National Highway 211 in Maharashtra under the National Highways Development Project (NHDP) Phase IV on a design, build, finance, operate and transfer pattern.

While no new PPP project has been awarded this fiscal, one project was re-awarded — six-laning of the 122.88-km Barwa-Adda-Panagarh section of NH2 to IL&FS Transportation Networks in May.

Both the road ministry and NHAI have attributed the sluggish investor interest in PPP projects to not only the economic slowdown and resultant difficulty in meeting toll collection targets but also several loopholes in the model concession agreement. Developers had been vocal about financial stress, non-availability of land and uncertainty over securing environmental clearances as among various reasons behind not showing interest in bidding. Similarly, the government had also decided not to launch any bid without having all statutory clearances in place. This, according to senior officials, was the reason behind the poor awarding scenario in the current fiscal.

After the Solapur-Yedshi stretch, the government is likely to bring out another bid for a four laning project in Rajasthan, which is at a nascent stage. If this project also takes off, it will be the second project awarded on PPP mode in the current fiscal.

NHAI has a modest target to award 125 km on BOT mode this fiscal, while the target for EPC projects is set at 1,875 km. The ministry has revised its target for total awards by all agencies from 9,000 km last year to 5,600 km this year, including the 2,000 km to be awarded by NHAI.

IRB undertakes development of various infrastructure projects in the road sector through several special purpose vehicles. The company, along with its subsidiaries, has constructed, operated and maintained around 8,000 lane km of road length so far. The aggregate size of all its BOT projects (completed and under execution) is around Rs. 17,055 crore.

 

Source- http://www.financialexpress.com/

NHAI awards first BOT project in a year, paves way for more

December 24, 2013

Timsy Jaipuria | New Delhi

 

 

After a gap of over a year, the government is set to award a highway project in the build, operate and transfer (BOT) category in what marks its effort to revive the public-private partnership (PPP) model in the sector. According to sources, the first PPP project of this fiscal in highways will soon be awarded to Mumbai-based IRB Infrastructure Developers for widening a 98.72-km stretch between Solapur and Yedeshi in Maharashtra to four lanes.However, the project, estimated to cost R972 crore, would be supported by viability gap funding (VGF) of 19% by the National Highways Authority of India (NHAI). Many stranded PPP projects in the sector were awarded on promises of high premium payments to the authority. “Given the poor response to the BOT projects these days, IRB’s proposal appeared to be better than what the NHAI had expected,” said a senior government official, asking not to be named.

Inability to meet toll revenue targets had forced investors like GMR, GVK and Ashoka Buildcon to quit their PPP projects in the highways sector and caused delays in other projects. Termination of projects awarded on the promise of high premiums to NHAI by the most prominent investors has resulted in renegotiation of premiums worth R98,000 crore payable over 20-30 years. Policymakers have since shifted focus to the conventional engineering, procurement and construction (EPC) projects, and not one new PPP project has been awarded in the sector this fiscal.

The details of the premium recast will be as per the Rangarajan panel’s recommendations, which is expected soon.

The number of new PPP projects awarded in the sector peaked in 2011-12 at 6,491 km and has since come down to 1,116 km in 2012-13.

In September this year, the Cabinet Committee on Economic Affairs had given its approval for widening the Solapur-Yedshi section of National Highway 211 in Maharashtra under the National Highways Development Project (NHDP) Phase IV on a design, build, finance, operate and transfer pattern.

While no new PPP project has been awarded this fiscal, one project was re-awarded — six-laning of the 122.88-km Barwa-Adda-Panagarh section of NH2 to IL&FS Transportation Networks in May.

Both the road ministry and NHAI have attributed the sluggish investor interest in PPP projects to not only the economic slowdown and resultant difficulty in meeting toll collection targets but also several loopholes in the model concession agreement. Developers had been vocal about financial stress, non-availability of land and uncertainty over securing environmental clearances as among various reasons behind not showing interest in bidding. Similarly, the government had also decided not to launch any bid without having all statutory clearances in place. This, according to senior officials, was the reason behind the poor awarding scenario in the current fiscal.

After the Solapur-Yedshi stretch, the government is likely to bring out another bid for a four laning project in Rajasthan, which is at a nascent stage. If this project also takes off, it will be the second project awarded on PPP mode in the current fiscal.

NHAI has a modest target to award 125 km on BOT mode this fiscal, while the target for EPC projects is set at 1,875 km. The ministry has revised its target for total awards by all agencies from 9,000 km last year to 5,600 km this year, including the 2,000 km to be awarded by NHAI.

IRB undertakes development of various infrastructure projects in the road sector through several special purpose vehicles. The company, along with its subsidiaries, has constructed, operated and maintained around 8,000 lane km of road length so far. The aggregate size of all its BOT projects (completed and under execution) is around Rs. 17,055 crore.

 

Source-http://www.financialexpress.com

NHAI Told to Pay Up for Acquisition

December 24, 2013

By Express News Service – CHENNAI

 

The Madras High Court has directed the National Highways Authority of India (NHAI) to pay the compensation amount due to an octogenarian woman, whose land was acquired for widening road near Tambaram. Justice S Manikumar, who gave the direction, pointed out that the woman is now over 80 years old. The NHAI has not paid any money for the land taken over from her five years ago.

As right to property has been recognised by the Supreme Court as a human right and considering the age of Siriyapushpam, her legitimate right to seek compensation for the land acquired must be paid, the judge said. The judge hoped that the authorities would implement the directions of this court in letter and spirit within the stipulated time.

Siriyapushpam’s land measuring 165 sqm in Irumbuliyur near Tambaram was notified for acquisition by the NHAI in 2008 for widening, maintenance, management and operation of NH 45. As she was not given any compensation for more than five years, she filed the present petition.

NHAI’s counsel informed the bench that Rs 43 crore has been sanctioned. The TN government counsel told the court that the special district revenue officer (land acquisition) would determine the amount for disbursal to the persons concerned. He also requested the court to specify time limit for completion of the process. Justice Manikumar, stipulating that necessary compensation amount should be deposited not later than one month, said persons such as Siriyapushpam should receive their compensation as expeditiously as possible. He directed the government counsel to communicate the court’s order to the authorities for ‘prompt implementation’.

 

Source-http://www.newindianexpress.com

Proposed green road to Bangalore gathers pace

December 24, 2013

DEEPA H. RAMAKRISHNAN

NHAI to get permission for road to pass through elephant reserve

The National Highways Authority of India (NHAI) is in the process of getting clearance from the National Board of Wildlife, for 8 km of the proposed Chennai-Bangalore Expressway.

The green field project road will pass through 7 km of the Royal Elephant Reserve in Andhra Pradesh, and about 300 metres of the Mahimandalam forest in Vellore district.

Officials at NHAI said that after having made changes in the alignment, they needed about 67 acres of land in the elephant reserve.

“Under the earlier alignment, the road cut across the forest in four locations but that has been brought down to just one location now,” explained an official.

The Union ministry of environment and forests (MOEF) had recently asked the NHAI to identify routes used by elephants so that underpasses could be built for vehicles. “The project consultant has already studied and suggested two underpasses. We have also requested the district forest officer, Chittoor, to look at our proposal,” the official said.

The MOEF had also asked the NHAI to explore the possibilities of utilisation of fly ash in embankment construction, to look at the possibility of cooled mix technology instead of the regular hot mix and for details of water bodies along the alignment of the project.

“These are all under preparation presently and we are likely to get MOEF clearance in a year’s time by when land acquisition is likely to be completed,” the official said.

The six-lane, access-controlled road will be 262 km long and require around 2,600 hectares of land. The expressway, which has been proposed under the National Highways Development Project, will pass through Tamil Nadu, Andhra Pradesh and Karnataka and take the Kolar, Chittoor route.

On completion, it will be an alternative to the two existing roads to Bangalore – the one passing through Kolar and Chittoor and the Hosur, Krishnagiri and Walajapet route.

Governmentt, NHAI resolve differences over highway

December 23, 2013

TNN |

 

JAIPUR: Finally, after being at loggerheads for several months on various issues regarding widening of Jaipur-Gurgaon stretch of national highway (NH-8), the state government andNational Highways Authority of India (NHAI) has reached a consensus on two major impediments. NHAI received an estimate for the relocation of two high-tension power (HTP) lines on Wednesday, while the state government handed over the land at Sanjay Van to the authorities.
After dilly-dallying for 20 months, the Jaipur Vidyut Vitran Nigam Limited (JVVNL) has given the total costing for the relocation of two HTP lines from Jaipur bypass. The JVVNL will roughly take two months for processing the tender and another two months for shifting it after which NHAI is expected to start construction in the patch.

NHAI is examining the estimate and clarification submitted by the electricity board and is likely to take final decision on it soon. The issue was pending with the Jaipur discom for past many months leading to a delay in widening the stretch. However, after a team of engineers went to Japan to study the technology for transfer of lines, the JVVNL has agreed to initiate the work.

In another major breakthrough, the state government provided land to the concessionaire for carrying out work at Sanjay Van. Earlier, the government was demanding construction of a boundary wall from the developer in lieu of handing over the forest land, which NHAI rejected. It maintained that a payment of Rs 1.15 crore has already been made to forest department as a part of compensation. After intervention from the officials of NHAI and state government, the issue was finally settled.

“Our efforts are on to remove all hindrances for all the national highway projects in the state including important linkage between Delhi-Jaipur. I am hopeful that most of the issues will be sorted out soon and inconvenience caused to commuters will be reduced to minimum possible extent,” said AK Mishra, chief general manager (technical-NHAI), Rajasthan.

Jaipur: After locking horns for several months on various issues in widening of Jaipur-Gurgaon stretch of national highway (NH -8), the state government and National Highway Authority of India reached a consensus on two major impediments. NHAI has received an estimate for the relocation of two high tension power (HTP) lines on Wednesday while state government has handed over the land at Sanjay Van to the authority.

After dillydallying for 20 months the Jaipur Vidyut Vitran Nigam Limited has given the total costing for the relocation of two HTP line from Jaipur bypass. The JVVNL will roughly take two months for processing the tender and another two months for shifting it after which NHAI is expected to start construction in the patch.

NHAI is examining the estimate and clarification submitted by the electricity board and is likely to take final decision on it soon. The issue was pending with the Jaipur discom for the past many months leading to delay in widening of the stretch. However after a team of engineers went to Japan to study the technology for transfer of lines, the JVVNL has agreed to initiate the work.

In another major break through, the state government provided land to the concessionaire for carrying out work at Sanjay Van. Earlier, the government was demanding construction of a boundary wall from the developer in lieu of handing over the forest land, which NHAI rejected. It maintained that a payment of Rs. 1.15 cr has already been made to forest department as a part of compensation. After intervention from the officials of NHAI and state government issue was finally settled down.

“Our efforts are to remove all hindrances for all the national highway projects in the state including important linkage between Delhi-Jaipur. I am hopeful that most issues will be sorted out soon and inconvenience caused to commuters will be reduced to minimum possible extent” said AK Mishra, chief general manager (Tech), Rajasthan.

Collectors Asked to Expedite Land Acquisition for NH Projects

December 16, 2013

By Express News Service – ROURKELA

 

Faced with inordinate delay in land acquisition and rehabilitation of people to be displaced by upgradation of NH-143 and 520 running through Sundargarh, Keonjhar and Deogarh districts, the National Highway Authority of India (NHAI) has taken up the issue with respective Collectors to expedite the process.

Sources said NHAI regional officer LP Padhi, who wrapped up his two-day visit on Saturday, along with other NHAI officials, met Sundargarh Collector Bhupendra Singh Poonia and his Keonjhar counterpart BP Sahoo requesting them to expedite land acquisition process.

He also discussed various issues related to NHAI concessionaires.

An NHAI official said besides land acquisition, they are facing problems in getting permission for felling trees. Besides, the forest land diversion proposals are moving at a snail’s pace.

After a meeting at Rajgangpur, Sundargarh Collector said the land acquisition process is in compensation disbursement stage for NH-143 which is to be four-laned from Birmitrapur to Rajamunda. He assured of removing the hurdles for NH-520 passing through Koida and Lahunipara blocks of Bonai sub-division.

NHAI Manager (Technical) MM Sahu said the NH-143 stretch of around 88 kms from Birmitrapur to Rajamunda would be four-laned while the remaining stretch of around 37 kms from Rajamunda to Barkote in Deogarh district would be two-laned.

The Birmitrapur-Barkote Tollway Ltd, a subsidiary of NHAI concessionaire Gammon Infrastructure Ltd, would execute the project at an estimated cost of ` 778.6 crore and the project includes second Brahmani bridge at Rourkela, Sahu said. It would be completed on design, build, finance, operate and transfer (DBFOT) basis.

Regarding the NH-520 project, NHAI Manager (Technical) Debabrata Kundu said they have apprised Keonjhar Collector of delay in the project and he has assured of necessary support.

Kundu further said of 96 kms stretch from Rimuli to Rajamunda, running through Keonjhar and Sundargarh districts, around 84 kms would be four-laned and remaining 12 kms two-laned.

Source-http://www.newindianexpress.com

After four lives lost, NHAI wakes up to highway gaps

December 16, 2013

Agency: DNA

Anuj Ismail

Conducts a safety audit; to repair 6 major bridges between Dehu Rd and Satara

After several lives were lost in highway accidents, the National Highway Authority of India (NHAI) has finally woken up to the risk factors for highway commuters. They are in the process of sending a safety audit report to New Delhi before starting repair works on six major bridges — from Dehu Road to Satara — which are unsafe for commuters and require urgent repairs.

The revelation comes in the wake of tragic death of four employees of an advertisement firm based in Pune early last month. The driver of the car missed the gap between the bridges on near Nira river and their car plunged into the river. The spot likes 70 km from Pune on Pune-Satara Road.

The PS Toll Roads, a subsidiary agency of Reliance Infra, had submitted a letter to NHAI on November 25. The letter stated that urgent repairs, including crash barriers and fencing were required at various places on the stretch. Taking note of the letter, NHAI swung into action and asked two other companies to carry out the safety audit report.

NHAI project director Rajesh Kaundal, said, “Following the report submitted by Reliance we asked RH Associates and a third party safety consultant to conduct a safety audit. They will submit a detailed report soon. Once we receive the data, we will send it to our head office in New Delhi.”

“Our safety consultants are also looking into the contract with Reliance and see what repairs works they should carry as per the tender. We have to get in principal approval for the work. Along with that we also need finance for the work. Once we get the final approval from our head office we will start the work,” Kaundal added.

The NHAI sent the report of the financial implication to their head office last week. They will be send a detailed report for the in principal approval by the end of next week. The authorities claimed that the groundwork will only start next year.

Source-http://www.dnaindia.com

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