March 6, 2014
India is set to commence a new Rs62.84bn ($1bn) project to increase the Eastern Peripheral Expressway of National Highway Number NE-II to six lanes in the states of Haryana and Uttar Pradesh.
The total cost of project includes the cost of land acquisition, resettlement and rehabilitation and other pre-construction activities.
The project covers the districts of Sonepat, Faridabad and Palwal in Haryana and Baghpat, Gautam Budh Nagar and Ghaziabad in Uttar Pradesh.
The project will ease congestion on Delhi roads, which are crowded by trucks and buses. It will also lower pollution levels in the city.
It will also increase generate employment opportunities for local labourers for project activities.
The project was approved by the Cabinet Committee on Economic Affairs (CCEA), and will be executed under a design, build, finance, operate and transfer (DBFOT) model in build, operate and transfer (BOT-Annuity) mode of delivery.
The latest project follows a major national highway widening project approved by CCEA in Haryana, under the government’s flagship road development programme.
The widening project includes four-laning the Kaithal Rajasthan border section of National Highway-152/65 (NH-152/65) in Haryana under National Highways Development Project (NHDP) Phase IV.
December 24, 2013
The government proposes to reschedule premium obligations of the developers of some of the financially-stressed highway projects that are under various stages of execution or are abandoned by the developers owing to various reasons.
The government move comes in the backdrop of near stagnation or a lack of progress in implementing a majority of the 53 projects for developing 6,415 km of highways, awarded during the UPA’s second term.
While a majority of these are stuck due to financial reasons, some 4,000 km of projects where construction is yet to start the reasons are mainly regulatory roadblocks or non-availability of land.
The National Highways Authority of India (NHAI) has awarded these projects on a design, build, operate basis and developers have secured the right to collect tolls on the basis of the premium they offered to pay.
December 23, 2013
Regulatory delays, rising cost, drying up of bank funding are major worries
The Government’s proposed premium rescheduling package may help financially-strapped highways projects already under various stages of execution.
But it is unlikely to help much if the aim is to jump-start over 4,000 km of projects where construction is yet to start.
There are three main reasons for this.
The first is project delays, for which the Government’s own tardiness in giving environmental and forest clearances, and making available encumbrance-free land to developers, are partly responsible.
In fact, GMR Infrastructure cited precisely the above factors while issuing termination notice on the National Highways Authority of India (NHAI) for six-laning of a 556-km stretch from Kishangarh to Ahmedabad via Udaipur in January.
Even the idea of premium rescheduling — wherein developers could postpone these payments even while keeping their net present value over the entire concession period unchanged — was floated almost a year ago when GMR itself proposed it to preserve the viability of the single largest project awarded during the UPA regime.
The NHAI Board had even approved GMR’s proposal in March. But no decision has since been taken.
But delays in regulatory clearances have led to increased projects costs. That constitutes the second reason why mere premium rescheduling may not help.
Delays equal Cost
The last two years have, moreover, seen road construction costs rise by an average of 10 per cent a year. Prices of bitumen have gone up sharply. The same is true for diesel, cement, and labour costs, even if to a lesser extent. “For a project costing Rs 2,000 crore, construction costs have gone up by Rs 200-250 crore a year,” claimed Sudhir Hoshing, CEO-Roads Business at Reliance Infrastructure Ltd.
Besides, toll revenues have slowed. The highway projects in which developers bid aggressively by offering to pay high premiums were all awarded prior to 2011-12 when the Indian economy was clocking 8-9 per cent growth. Most of them are today unviable.
The third reason is drying up of bank funding.
Banks — mainly State Bank of India, Canara Bank, Syndicate Bank, Punjab National Bank, Oriental Bank of Commerce, Bank of India and ICICI — have outstanding exposure of Rs 1,31,000 crore to the road sector as of March 31, 2013. Increased project costs and slowing toll collections have now made them cagey about lending.
“Even for projects that achieved financial closure in 2012, banks insist on doing fresh due diligence. They are re-evaluating if the projects are feasible and whether the promoters are willing to put in additional equity,” said a senior NHAI official.
That being the case, the Government may have to go beyond premium rescheduling to even partially compensate developers for increased project costs on account of regulatory delays.
The most optimistic scenario, according to an infrastructure analyst, is of 10-12 out of the 53 premium-based projects being revived by the proposal now under consideration.
The only other alternative before the Government is to cancel projects that are heading nowhere and re-invite bids. “They may not fetch the kind of attractive premiums that developers had committed earlier. But we those know those premiums will anyway not accrue,” the analyst pointed out.
December 23, 2013
Press Trust Of India : New Delhi,
The highways ministry expects projects worth over Rs 1 lakh crore, which have been stuck for long, to start moving from next month as a concrete decision on the rescheduling of premium paid by developers is expected by the end of this month.
“I am hopeful that highway projects worth over Rs 1 lakh crore would be on stream next month onwards. The report of C Rangarajan Committee on premium rescheduling is likely to be accepted by month-end,” road transport and highways minister Oscar Fernandes told PTI.
The government has constituted a panel, headed by Prime Minister’s Economic Advisory Council C Rangarajan, to look into the issues pertaining to bailout of highway developers. The government had approved a proposal in October for the postponement of premium payments by highway developers and has referred the matter to the Rangarajan panel.
The move is likely to provide relief to a large number of players such as GMR, GVK and Ashoka Buildcon.
Their projects have been facing delays on account of high premium — the payment made by developers to the National Highways Authority of India under the BOT mode.
The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls.
December 18, 2013
Shalender Kalra, Hindustan Times | Nahan,
After a probe into the alleged irregularities in the widening of the Kumar Hatti-Nahan road project, the quality and design wing of the Public Works Department (PWD) has reportedly given it a clean cheat.
During his visit to Sarhan on September 17, Himachal Pradesh chief minister Virbhadra Singh had ordered PWD superintendent of engineer (SE) to conduct a probe into the 75-kilometre-long World Bank-aided project, which is expected to come up at the cost of Rs. 142 crore.
Sources placed with the PWD said following the CM’s order a team headed by the SE (quality and design) inspected the road and collected samples of the materials used.
The probe report further stated that the work was carried out as per the parameters set by the detailed project report (DPR).
When asked, PWD SE (quality and design) BB Bhardwaj confirmed that the quality of the construction was found satisfactory, adding that the collected samples also passed the lab test.
He further said the construction of the road was in progress according to the DPR.
However, RIDC official Naresh Sharma said it was just rumour that the work was not being done properly and the norms were violated.
Arguably, the project entails an environmental cost – as many as 11,606 trees were laid down for the widening of the road.
In all, 33 months have been granted to Delhi-based Som Dutt Builders to finish the project, which was over in July 2012. The Road Infrastructure Development Corporation (RIDC), the executive agency of the project, has fixed a fresh deadline of March31st, 2014 for the completion of the project.
The issue of the shortcomings in the widening of the road was also raised in the Himachal Assembly a few months back. Now the road has been declared fit for plying the traffic within the speed limit of 40-45 km per hour.
The villagers had also raised their objection to narrow turns of the road.
December 18, 2013
BDA waiting for GoI approval to borrow Rs. 3,800 cr. from Japanese aid agency
The peripheral ring road (PRR) project of the Bangalore Development Authority (BDA), which has witnessed endless delays on account of litigations and fund crunch, is all set to take off now with the help of foreign funding.
Speaking to The Hindu on Tuesday, BDA Commissioner T. Sham Bhat said that the Japan International Cooperation Agency (JICA), a multinational aid agency, had come forward to assist the PRR project with a soft loan of Rs. 3,800 crore.
The proposed 65-kilometre, 75-metre-wide road will connect Tumkur Road with Hosur Road via Doddaballapur Road, Bellary Road, Old Madras Road and Sarjapur Road.
Mr. Bhat said that the cabinet had approved the proposal and that it was being scrutinised by the Union government. “The Chief Secretary [Karnataka] has informed us that the Union government is satisfied with the proposal and will grant permission within 10 days,” he said, expressing hope that the memorandum of understanding (MoU) with JICA would be signed in a month.
When asked why the BDA, which is already saddled with massive debts, is borrowing further, Mr. Bhat said that JICA had offered them an extremely attractive low interest loan. “They approached us and no other Indian bank or aid agency came forward,” he said.
The acquisition of 1,900 acres for the PRR project is complete, Mr. Bhat said, as a result of a High Court order that set aside objections to the notifications. The cost of the PRR project is Rs. 5,800 crore of which the BDA has already incurred an expense of Rs. 2,000 crore towards compensation to land losers.
December 17, 2013
By Express News Service – BANGALORE
Chief Minister Siddaramaiah, who is on a two-day visit to Delhi, met Union Urban Development Minister Kamal Nath on Monday and sought funds for various highway projects being undertaken in the state.
According to official sources, during Siddaramaiah’s over half-an-hour meeting with the Union minister he submitted a memorandum on the projects which were being taken up in the state under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) and National Highways Authority of India (NHAI).
He also met Union Health Minister Gulam Nabi Azad and conveyed concerns of the arecanut farmers following an affidavit submitted by the Health Ministry to the Supreme Court supporting the ban on areca.
Later, Siddaramaiah told reporters that the Centre has not submitted any affidavit suggesting the SC to impose ban on the use of arecanut.
“We also brought to the notice of the Union Health Minister the medicinal properties of areca,” he said.
Higher Education Minister R V Deshapande, Urban Development Minister Vinay Kumar Sorake, Congress MPs H Vishwanath and R Dhruvanarayan and MLAs S R Mahesh and Chikkamadu were also present.
December 17, 2013
The impact of economic slowdown is getting reflected in the latest bids of National Highway Authority of India for the rights to collect tolls from the toll plazas of public-funded stretches.
However, there are some exceptions.
Traffic on national highways indicates the economic activity of a region, and toll is collected from the road users.
Out of 17 stretches put on auction, response was received for 14 till Friday.
Based on the bids for these 14 stretches, NHAI will receive four per cent less amount next year, because only six stretches have received higher offers than the preceding year.
These six stretches include four in Uttar Pradesh and one in Andhra Pradesh.
The bid process involves firms quoting a fixed amount of money to NHAI to bag the rights to collect tolls for a period of one year from road users using a particular NH stretch, which could have one or more toll plazas.
The bidder who quotes the highest amount bags the bid.
Explaining the variation in bids, an NHAI official said, “Traffic surveys don’t capture local issues such as resistances to paying tolls. So, in some areas, there are lower bids.
There was no response to three bids. “In these bids, the existing contracts will be extended by three months,” the source added. The broad trend of drop in traffic is being seen in most highway projects. The toll levels being charged from users will be the same.
They will be revised upwards from April 1, linked with 60 per cent of the WPI inflation and 3 per cent simple interest rate. “When the toll rates go up, the bidders will pay extra to NHAI proportionally,” said the official.
This is the first time that NHAI has done the entire bidding process for toll collection rights for public funded projects – right from annual qualifying bids list to financial bid submission – happened online.
Earlier, such bidding process was followed for highway project awards and for operating maintenance transfer contracts.
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.
December 13, 2013
ITANAGAR: The Union ministry of road transport and highways has approved the construction of 6,418 km of road under Phase A and the Arunachal package of the Special Accelerated Road Development Project-North East (SARDP-NE), minister of state for road transport and highways, Sarvey Sathyanarayana has said.”Of the 10,141 km stretch to be developed under the project, 6,418 km have been approved by the Centre for implementation under Phase A of SARDP-NE and the Arunachal package of roads and highways, while a detailed project report has been sought for the remaining 3,723 km under Phase B of the programme,” the minister explained when questioned by Lok Sabha member Takam Sanjoy, official sources said on Wednesday.
The minister informed that Phase A and the Arunachal package should be completed by March 2017. While conceding that delays in land acquisition, obtaining environment and forest clearance and poor mobilization by contractors have affected timely completion of infrastructure projects in the northeast, the minister assured that non-performing contractors have been debarred from participating in future works.
“The ministry has posted one additional director general for the northeast region at Guwahati, who will be assisted by three chief engineers posted at Guwahati, Agartala and Itanagar, to expedite the formalities before construction,” he added.