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Road Ministry adopts new technology standard for electronic toll collection

RFID technology:The Chairman, Expert Committee on Electronic Toll Collection Technology, Mr Nandan Nilekani, submitting the report to the Minister for Road Transport and Highways, Mr Kamal Nath, in the Capital on Friday.

Toll booths on National Highways will adopt the passive RFID technology standard – ISO 18000 6C — for electronic toll collection (ETC) system, based on the recommendation of a committee set up for this purpose, headed by Mr Nandan Nilekani, Chairman, Unique Identification Authority of India (UIDAI). The recommendations have been adopted by the Highways Ministry.

In the ETC system, vehicles will have tags on their windscreens – where amounts can be pre-loaded (just like prepaid SIM cards for phones) – and when the vehicles pass through NH toll lanes with tag readers, the toll amount would automatically get debited. This will pave the way for setting up of ETC system across the NH network.

EARLIER ATTEMPTS
Since last four years or so, attempts of National Highways Authority of India (NHAI) to adopt any technology standard for this project had been thwarted by companies which had competing technology of ETC. This standard was chosen because of many factors. For instance, for vehicle owners, the cost of adopting this technology will be much lower compared to other standards; it has been used in many countries in the last one decade. Also, there are multiple vendors such as Neology, Intermac, Motorola, Sirit, Alien and Invango, who operate in this space.

For the system to work, the user vehicles need to buy tags and have them attached to the windscreen; the toll booths require a tag reader; and a central toll clearing house has to be set up which will take care of all reconciliations between various road developers. For instance, between two points of travel, a commercial vehicle might cross five tolling booths – two of which are operated by the NHAI and three by three different private concessionaires. The clearing house operator will ensure that the amount debited from the vehicles’ on board unit (tag) at each of these toll plazas is credited into the concerned owner/operator of the highway stretch on a real time basis. As more vehicles adopt the ETC, the toll revenue leakage can be contained to a large extent.

COST
“There are about 147 toll booths on the NH network, out of which about 100-odd are operated by NHAI and remaining by private developers,” Mr V.L. Patankar, Member-Technical, NHAI, said. Each reader will cost about Rs 2 lakh. Each NH toll booth will have at least two lanes (one on each side) with tag readers. NHAI or the operating concessionaire is likely to bear the cost of setting up tag readers at its toll plazas though the Union Highway Minister, Mr Kamal Nath, said he expects the system to be “self-financing”. It is also not clear as to who will fund the clearing house operator. At present, two NH stretches have ETC options –Delhi-Gurgaon Expressway and Bangalore-Electronic City elevated highway.

THE WAY FORWARD

The committee has recommended that a system integrator for ETC design and implementation be there, and hiring of a consultant for the financial bidding and vendor selection. An authority has to be set up to operate central system. Also, the committee has said that a high penalty system should be worked out to handle violators – vehicles who try to pass through the plaza without enough funds.

The National Institute for Smart Government – an eGovernance Innovation Library in IIT Delhi – is likely to help the Road Transport Ministry in the initiative.

TIMELINE/OTHER APPLICATIONS

Mr Nath said the process of setting up the ETC systems should be initiated in 18 months. He added that he will talk to SIAM to ensure that vehicles are sold with pre-fitted tags. Mr Nilekani added that with ETC in place, the card can by used by various other operators such as parking owners, state highway concessionaires, etc., for payments. Mr Nilekani also said that a public portal should provide data on vehicle traffic on highways and toll plazas.

Download ETC Report

Source:
mamuni@thehindu.co.in
thehindu.co.in

Variable Message System – The Applicability

Variable message system is actually “Advance Traveler’s Information System”

The concession agreement condition specifies, that the concessionaire should made available “Variable Message” as detailed below:

“Variable message signs shall be provided at minimum of six locations to guide and forewarn the users of the traffic and weather condition on highways. These messages can be varied from the control centers based on data received through surveillance system, highway patrolling censors etc. the locations shall be decided for their maximum utilities to the users”

Although in the concession agreement it is termed as “Variable message” it commonly known as “Advance traveler’s information Systems “in other parts of the world

In this connection I would like state that in any contract the concessionaire has about 65 km length of road in his control

Hence how he can give provide desired information which should include the following

Pre-trip travel information
En route driver information
Route guidance
Traffic control information
Smooth and uninterrupted traffic flow
Enhance road safety
Real time information and guidance to users
Emergency assistance round the clock
Alerts for abnormal road and weather conditions
Reduced journey time and inconvenience

Some of the typical messages to be displayed are indicated below:

Accident Ahead, Road Closed, Take Diversion;
Accident Ahead’ followed by some typical messages like Expect Delays’, Merge Right’, Merge Left’, ‘All Traffic Exit’ can be displayed.
Maximum Speed:—————kmph
Construction Work, Road Closed;
Signal Ahead;
Sharp Curve Ahead;
Congestion Ahead;
Bad weather conditions like ‘Heave Fog Ahead’, ‘Poor Visibility Ahead;
Trucks use Left Lane;
Watch for Stopped Traffic;
Watch your speed;
Watch for Falling Rocks: (In the case of landslide prone areas);
Two lane bi-directional carriageways);
No Mobile When Mobile; etc

Hence it is necessary the concessionaire should be able to share information with adjacent Projects to inform the user actual happenings which will help them to any immediate action.

At the present any Concessionaire has only about 65 KM of project. Any information generated within the project length is of little us to the user as thereafter there may be some hazards which the user will never know

In the event if the concessionaire shares “sensors” & related information with other concessionaires (adjacent) than the “variable Message” displayed will be of real use not only the road user but also the every Concessionaire as the “overloaded” trucks can easily be caught

M S V Ramu
Profession – Contracts Manager
E-mail : msvramu@yahoo.com

Now that the Toll Industry has had a few years of maturity. What is the summary of expections from Toll Collection System from a concessionaire’s point of view.

(This needs an in-depth analysis on broad parameters. However I have tried to analyze few problems associated with toll roads.)

M S V Ramu
Profession – Contract Manager
Date: May 4, 2010
E-mail: msvramu@yahoo.com

Introduction: with a need a build good infrastructure and lack funds available to finance these Highway project government has undertaken to built highway on Public Private Partnership either toll based or annuity based.
The private developers who bids and undertake constructions of Highway on toll basis needs to implement a through pertinent “risk” management system with the help of the government to mitigate all the risks that come with development.

To understand the various consequence of “tolled” roads there needs to through study to undertaken which is not my purview at the moment. Hence I dwell over some of these consequences based my exposer these projects.

Toll based Highways:
The idea of “Toll based” highways was imported into India from experiences of others countries like Europe, Malaysia or North America. The model “Concession Agreement” was drafted by the Government to suit India needs.

The toll categories of roads are those wherein there are sufficient traffic which can be tolled by the Concessionaire and recoup the investment made him and also make profit. In the event there are not enough tollable traffic to recoup the investment made, it will be offered on annuity basis or with VGP (Viability gap funding) by the government.

The tolled based roads wherein the Government grants private developer specific rights to design, finance, construct operate and maintain the roads. The developer called “Concessionaire” develops covers the investment costs and carry commercial risks since he relays on operation revenue from the tolls remunerated. At the end of the concessional period the road reverted back to government at no extra charges. However if the estimated revenue does not materialize during Concession period the Concessionaire may have to negotiate the concession period (as in other countries) which is yet to happen in India as we are just starting!

In south America there is method of bidding known as “Least Present Value” wherein the winning bidder is the one who asks for “smallest Net Present Value” and period of the concession period ends when the present value of revenue equal to winning bid. This model has not been tried in India.

Risk management in “Toll based” Concession

In the present circumstances the Concessionaire undertakes risks to constructs road which is generally divides normally into three parts:

1. Certainty – decision maker know exactly the outcome
2. Uncertainty – here the decision maker does not know the risks due to non availability of any data
3. Risks – are those which can be determined by statistical terms and can be analyzed but it differs from uncertainty

In risk management all the risks are quantified and analyzed and decision taken by the Concessionaire to mitigate the same by way of disciplined approach to critical situation

Developmental risk involves “Land Acquisitions” needed for the project. This is one of the biggest risk faced by the Indian developers as most of the times project gets delayed due non-availability of Land. NHAI does not meet the contractual requirements specified in the Concession agreement thereby causing unnecessary hardship to concessionaire. This risk falls under “uncertainty” which can not be quantified

Financial Risk: Soon after award of Project, the Concessionaire needs to raise the necessary capital required for execution project

There are two major risks involved:

1. Ability to raise the finance and make financial close as required by the Concession agreement.
2. High interest rate during the currency of concession period (due to floating interest charged by lenders) – mitigation of this risk in extremely important).

Construction risks

Whether the construction undertaken by the Concessionaire himself or by other contractor there are many risk involved

1. Poor performance of the contractor
2. Different site condition which normally experience contractor many not have thought off which is problematic and end up in high cost due additional items of work to be executed.
3. High price escalation of all the inputs of construction – Example: steel pricing going through roof last year.

All above risk has to be born by the Concessionaire which needs proper approach in the initial stages itself

Operational risks

Operation risk involves mainly the following

State support agreement – needs to signed by the concerned state and they shall support the collection of tolls which important to the concessionaire. NHAI who are promoters of the project should take full responsibility in getting the agreement signed with Concessionaire as Concessionaire can not exert any pressure on the states

Toll Level: the estimated toll level uncertainty during pre-bidding stages can lead to inaccuracies in revenue estimation which the Concessionaire has based his bid. Hence this risk needs to shared by the NHAI

The traffic volume projected in financial model may not materialize as it completely depends on economic growth projected during pre-bidding stage

Any fall in traffic volume will automatically bring down the IRR value projected. Expert estimate that 10% drop in volume of traffic will result in reduction of 1-7% – 1.9% percent reduction in IRR.

Toll collection
The Concession agreement does give any standard specification for the installation of tolling equipment. This has resulted in haphazard manner the tolling equipment being installed by the different Concessionaire. This needs to change. For example a RFID card issued at New Delhi should also hold good down south. By such an arrangement the road user can travel effortlessly any ware in India.

The technology used by the Concessionaire needs to be streamlined on all India basis for all Concessionaire.

Toll fee: The price escalation of “toll/Fee” charged by the Concessionaire is based on all India WPI index. This is incorrect as in some states it may be very high. In my opinion there should be “Toll Regulator” on all India basis to regulate toll based on each state WPI or any other base model

HTMS: Here there is no comprehensive approach. For example the “variable message system” is limited to one project length only! This also needs an all India approach.

Suggestion: at the moment there are so many “Toll” based road are in operation and also on the horizon. All the toll based roads owners are “Special purposed vehicle” promoted by the concessionaire.

So why not a “over the counter” stock listing be arranged of these SPV and listed in Stock exchanges which can also traded in F&O section. I am sure this arrangement will automatically will mitigate many risks and also give scope for improvement in roads as the Concessionaire would like increase the traffic by enhancing the many amenities for road users.

Thanks for taking time for reading this articles.

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

NHAI brings down rent for wayside amenities

The National Highways Authority of India (NHAI) has brought down its annual rent to 1 per cent from 10 per cent for building wayside amenities on highways across the country.

The roads authority is now seeking rent at one per cent of the cost of the land per annum for the first year. Thereafter, an additional one per cent will be added every year with the rent being capped at 10 per cent.

NHAI plans to develop through private participation an amenity at every 50 km on highways. They would include parking lots, snack bars/restaurants, toilets, restrooms for short stay, first-aid centres, telephone booths, petrol pumps/minor repair shops (optional), kiosks for sale of miscellaneous/sundry items, landscaping and space for spreading awareness on government welfare programmes.

NHAI had earlier received three bids for 29 projects it had put up for tendering. The authority then decided to relax the criteria. The lease period for the projects has also been doubled to 30 years to make them more profitable and attract more bids.

Among other changes, NHAI has relaxed the pre-qualification norms. Any private participant with only a year of experience can apply for building the wayside amenities. Earlier, private participants required to have an experience of five years.

The authority had not found takers for 26 wayside amenity projects even after four-five attempts. To make the projects viable, NHAI has now hired consultants to find potential sites along the East-West and North-South corridors. The field officers of NHAI have also been directed to identify at least one site for development of comprehensive wayside amenities.

Source: business-standard.com

Gayatri Projects bags contract from NHAI

Construction firm Gayatri Projects today said it has bagged a road project worth Rs 602 crore from the National Highways Authority of India (NHAI).

The company has bagged the contract for six laning of 45 km stretch on Indore-Dewas national highway on build, operate, transfer (BOT) basis, Gayatri Projects said in a filing to the Bombay Stock Exchange (BSE).

“The company has agreed to pay a premium of Rs 24.10 crore to the NHAI annually and has a right to collect toll on the existing four lane highway through its SPV,” it said.

Shares of Gayatri Projects were trading at Rs 385 on BSE, down 1.52 per cent from its previous close.

Source: mydigitalfc.com

Gayatri Projects bags contract worth Rs 602 cr from NHAI

MUMBAI: Construction firm Gayatri Projects today said it has bagged a road project worth Rs 602 crore from the National Highways Authority of India (NHAI).

The company has bagged the contract for six laning of 45 km stretch on Indore-Dewas national highway on build, operate, transfer (BOT) basis, Gayatri Projects said in a filing to the Bombay Stock Exchange (BSE).

“The company has agreed to pay a premium of Rs 24.10 crore to the NHAI annually and has a right to collect toll on the existing four lane highway through its SPV,” it said.

Shares of Gayatri Projects were trading at Rs 385 on BSE, down 1.52 per cent from its previous close.

Source: economictimes.indiatimes.com

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

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

New ISO specification for ETC systems

A newly published ISO Technical Specification harmonises the requirements for electronic fee collection (EFC) systems on roads subject to toll charges. It will facilitate mobility between different road networks and help to ensure reliable data collection and correct charging.

ISO/TS 12813:2009, “Electronic fee collection – Compliance check communication for autonomous systems”, will help to ensure the optimal use of on-board equipment (OBE) interfacing with satellite positioning to collect the data required for charging for the use of roads in an autonomous mode, without relying on dedicated road-side infrastructure.

The standard defines the requirements for using dedicated short range communication (DSRC) between on-board equipment and an interrogator for the purpose of checking compliance of road use with a local toll regime. This will enable checking of non-national vehicles and thus enable cross border enforcement of non-compliant vehicles.

The scope of the Electronic Fee Collection (EFC) standards relates to EFC charging systems and information exchanges over the interfaces. The standards focus on the interface between the on-board and the roadside equipment, but also deal with the ‘Information data flows between operators’. The standards primarily cover EFC systems based on Dedicated Short-Range Communication (DSRC); Cellular Network / Global Navigation Satellite Systems (CN/GNSS), and Integrated Circuit Card (ICC) technologies.

The standards suite includes not only ‘requirements’ but also associated test procedures, in order to support conformity evaluation of EFC on-board and roadside equipment. It also includes security guidelines that can be useful in the preparation or evaluation of security requirements.

ISO/TS 12813:2009, Electronic fee collection – Compliance check communication for autonomous systems, was jointly developed by ISO technical committee ISO/TC 204, Intelligent Transport systems and CEN/TC 278, Road transport and traffic telematics.

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