September 26, 2014
In a novel exercise, the Centre and states have decided to join force to set up a mechanism to fast-track stalled infrastructure projects. The proposed ‘joint mechanism’, to be headed by Cabinet secretary Ajit Seth and comprising chief secretaries of concerned states, aims at expediting the implementation of projects that have a cumulative investment potential of nearly Rs 10 lakh crore.
To fix the responsibility for delays in various projects, Prime Minister Narendra Modi has directed the formulation of a database on major contracting firms entrusted to supply equipment and raw materials for different projects and upload their details in the procurement portals of concerned Union ministries and state-run companies.
While electronic procurement is gradually becoming the norm in most government procurement, the concerned Union ministries should focus on making the suppliers accountable for untimely delivery, the Prime Minister has said.
The government has decided that the mechanism would also be web-based for online resolution of issues. Currently no known mechanism exists to coordinate execution of projects between the Centre and the states.
On fast tracking the ongoing projects, the government has intensified the monitoring of progress, as key projects such as roads, airports and electricity generation are way behind their annual targets.
The Planning Commission, which the Prime Minister wants to be dismantled, has cautioned that while much less money is being spent for giving facelift to infrastructure development, even the pace of execution of various projects is also tardy.
Seth had already told an industry delegation in December last year that about 255 projects are stalled entailing an investment of nearly Rs 10 lakh crore, but considering that the previous UPA government was on its last leg, not much headway could be made.
The bad loans of public sector banks led to their gross non performing assets increase by nearly four times from March 2010 (Rs 59,972 crore) to March 2014 (Rs 2,04,249 crore), according to the Economic Survey of the finance ministry.
In a presentation to Modi on September 10, the Plan panel cited that the Airports Authority of India (AAI) has invested only Rs 162 crore during the April-August period against a targeted expenditure of Rs 934 crore for 2014-15.
While the AAI is yet to declare airports in Bhopal, Indore and Raipur as international airports, it has still not identified four airports to be developed along with private partnership in the first five months of 2014-15. Portraying a dismal picture for the railways, the presentation said it only 450 km of new lines were constructed in 2013-14, but has managed to construct only 39 km out of a targeted 300 km during the first five months of 2014-15. It achieved only 36 km of gauge conversion and electrified only 97 kms.
In the roads sector, construction of 1,860 kms of roads awarded against targeted 8,500 kms and 178 km of highways tolled against targeted 3,730 km. In the electricity sector, the country added capacity of 8,318.47 MW during these months as against the targeted 17,830.30 MW. Coal output was 220.52 million tonne during the period against targeted 630.25 MT.
Source:The Indian Express
July 16, 2014
Stalled highways projects worth Rs 1,80,000 crore will be rolled out in a month’s span after ironing out hurdles like delays in land acquisition and green nods, Road Transport and Highways Minister Nitin Gadkari said.
Blaming the previous regime for award of projects “without acquiring even 10 per cent of the required land” and causing hardships for road sector, Gadkari also announced that steps were on to launch new projects worth 2 lakh crore soon.
“As many as 189 projects with a cost of Rs 1,80,000 crore are stuck due to problems in land acquisition, delays in forest and environment clearances, non-transfer of defence land and hurdles in rail overbridges… hurdles will be removed by August 15 and work will start on these,” Gadkari said addressing a summit on Highways by PHD Chamber.
In a significant shift of policy, he also said that public private partnership (PPP) model was not feasible at present for award of road projects due to a host of issues “created by the previous government” and that schemes will be bid out on engineering, procurement and construction (EPC) mode.
“Projects were bid out by previous government without even 10 per cent of the required land acquisition. Work could not start on the project where financial closure took place two years back. Banks withdrew financial closure…PPP mode is not possible now. We will work on EPC model for a few years,” he said.
Unlike PPP model where the private sector has to fund the road building, in the EPC model, the Government funds a highway, with private firms designing and building the road.
Gadkari said, “DPR (detailed project report) will be ready soon for projects worth Rs 2 lakh crore after which steps would be taken for forest and environment clearance and land acquisiton…after two years roads and port sector will help India’s GDP to grow at least by 2 per cent.”
Eleven projects under PPP by previous regime which are stuck for two years will be rolled under EPC, Gadkari said A Committee for such projects has been constituted by Prime Minister Narendra Modi under his chairmanship to fast track the road projects, he said.
Road sector alone accounts for Rs 2,40,000 crore NPAs by banks besides Rs 3,60,000 crore NPAs by power sector, he said adding he would soon be holding meetings with bank officials in this regard. After clearing the backlog, Road Ministry will aspire to build 30 km of roads a day, he said. He said work was on projects worth Rs 21,000 crore in Jammu & Kashmir and Rs 15,000 crore in the North East while hurdles for Rs 40,000 crore worth of projects were removed recently.
Gadkari said financing of road projects may not be a problem as the government is
willing to allow foreign investors to buy stake in a Corporation formed by Road Ministry. “We are holding talks with some nations and have offered 26 per cent stake in the Corporation in lieu of funds to the tune of Rs one lakh crore,” Gadkari said.
Also he said that an ambitious plan to lay gas, optical fibre and power transmission lines along the one lakh km national highways was planned to generate revenue for the government. Gadkari said public amenties are proposed to be constructed every 50 Km on National Highways and 2000 such facilities will be constructed housing malls, restuarants etc.
To make toll collection process at the national highways easier and more transparent, he said the government will roll out RFID-based electronic toll collection across at least 350 toll plazas in three months.
“For this, a RFID chip-embedded sticker will be put on the vehicles and money will automatically get deducted at the toll plazas, through which the vehicles will pass through,”he said adding the department has inked a pact with ICICI bank in this regard.
Solar panels would also be fitted on these toll plazas. Besides, trees would be planted across NH lengths and all these steps are expected to result in employment to about 10 lakh youth. Gadkari also said that concrete roads which last longer than bitument and were cost-friendly will be built. He said use of ethanol will be promoted in a bid to cuton huge Rs 6 lakh crore import bills on petroleum, gas and crude.
Also a new Bill for Motor Vehicle Act was in the making in consultation with the prevailing laws in six advanced nations – UK, US, Canada, Brazil, Japan and Singapore, Gadkari said. On ports and waterways sector, he said inland navigation is proposed to be started soon on Ganga river stretch besides building airport like terminals on its banks.
Dredging will be done at 12 major ports to increase the 12 metre draft to 18 metres besides creation of dry ports for such states without sea.
July 15, 2014
Giving a major push to better road connectivity and tourism, Rajasthan Chief Minister Vasundhara Raje announced the Budget for 2014-15 presented in the Assembly on Monday.
The total Plan outlay for the budget is Rs 69,820 crore, an increase of 72 per cent as against the last budget. The estimated revenue surplus stands at Rs 737 crore and the fiscal deficit at Rs 20,186 crore, which is 3.52 per cent of the Gross State Domestic Product (GSDP). The estimated budgetary deficit for the year 2014-15 is Rs 3,151 crore whereas the total revenue Receipts are estimated to be Rs 1,06,125 crore and the estimated revenue raised by the State is likely to be Rs 40,655 crore –18 per cent higher than the previous fiscal year.
Ms Raje also announced the setting up of a Rajasthan State highway authority for laying 20,000 km of State Highways. Six roads of 1,000 km would be developed as east-west corridor. To be developed under public-private partnership (PPP) mode, contracts would be given on the basis of output and performance-based roads construction system. “There will be penalty and incentives for builders as per the performance,” she said. All nationalised routes would be de-nationalised in a phased manner and the bus stops will be constructed with latest amenities.
Taking on the previous Congress government for initiating work on metro in hurried manner for political gains, Ms Raje said an amount of Rs 3,000 crore had been invested for laying a 12- km-long metro line. Economically, the Jaipur Metro is not feasible proposition and the same amount could have been utilised for laying 110 road over-bridges and 5,000 km of road across the State, she said.
Source: The Hindu
December 24, 2013
Alexander Korablinov, RIR
Indian officials ask Freight Forwarders’ Association of India to conduct a dry run to study the feasibility of using a road route between Iran and Azerbaijan, according a report on Mint.
India, which is exploring a free trade agreement with the Customs Union of Russia, Belarus and Kazakhstan, is pondering over using a road link between Iran and Azerbaijan, to get easier access the markets of Russia and former Soviet republics, Mint said on its website.on Monday. India’s commerce ministry has asked the Freight Forwarders’ Association of India (FFAI) to conduct a dry run to study the feasibility of using the road route between Rasht in Iran and Astara in Azerbaijan, the paper said.“We are trying to completely explore the route through a cost benefit analysis,” the paper cited an anonymous Indian commerce ministry official as saying. “The idea is to use the infrastructure as it is present today. The plan to build the rail is going on separately.” The official told the paper that FFAI would submit a report on the feasibility of the route by February or March.
For the last six months, India has been trying to persuade Iran to build the 165-kilometre missing rail link between Rasht and Astara, but no concrete agreement has been reached.
“It is very important to keep India economically engaged in the region because there is a lot of untapped potential,” Ram Upendra Das, a senior fellow at Research and Information System for Developing Countries told the paper. “Irrespective of our economic relationship with other countries, this would be a new region to expand our trade.”
The paper added that India faces a growing imbalance in its trade with Russia, with the latter maintaining a $2.2 billion trade surplus as for 2012. That figure is unlikely to come down in 2013, although it is widely believed that Russian exports to India have fallen this year.
December 3, 2013
Road ministry wants to include the economic affairs secretary in the board of NHAI to help fast-track decision making on road projects
New Delhi: The road ministry wants to include the economic affairs secretary in the board of the National Highways Authority of India (NHAI) to help fast-track decision making on road projects by removing a layer of approvals required from other ministries, two officials familiar with the matter said, requesting anonymity.
The road ministry has floated a cabinet note with a proposal to enlarge the NHAI board and empower it to decide on issues such as conversion of project models when bids fail. Currently, the board includes secretary, Planning Commission; secretary, expenditure (ministry of finance); and secretary, road transport and highways; as part-time members, in addition to the chairman and five members of NHAI who are full-time members.
“Since a lot of the PPP (public-private-partnership) projects have failed to get bids between last year and this year and now we have the Prime Minister’s approval to bid those projects as EPC (engineering-procurement-construction), to fast-track the approvals to change the mode of bid, we have proposed in a cabinet note that the NHAI board be enlarged and be given the power to make this decision,” said one the officials mentioned above.
“The note has been sent to various ministries for comments and is likely to be sent for cabinet’s nod soon,” said the other official cited above.
In a 11 November review of the infrastructure sector, Prime MinisterManmohan Singh allowed the road ministry to pursue the EPC model after private firms shunned PPP projects.
“The NHAI board is already a high-powered board. In-principle steps to strengthen the board to take project-specific decisions are welcome,” said Pranavant, director at consulting firm Deloitte Touche Tohmatsu India Pvt. Ltd. He uses a single name. “The board should be given the mandate to accord project-specific approvals like mode of implementation.”
November 25, 2013
OUR BUREAU| NEW DELHI
IIFCL opposed to the NHAI and Road Ministry stance that the exit norms for highway developers should be relaxed.
Highway developers should not be allowed to exit from projects till the highway stretches are constructed, a senior India Infrastructure Finance Corporation Ltd (IIFCL) official said.
This stance of IIFCL’s, which has disbursed around Rs 9,300 crore for road projects, is important in the backdrop of the Highway Ministry taking a re-look at the exit clause for highway projects.
IIFCL has sanctioned (net) about Rs 18,000 crore for road projects. It is the largest loan segment for the infrastructure financier. “Do not allow a developer to exit till construction has been done,” Sanjeev Ghai, Chief General Manager, IIFCL said, speaking at a traffic technology conference.
PROPOSAL ON TABLE
The Highway Ministry is reviewing a proposal to allow developers to sell their stake and exit from projects before they are permitted to underthe terms of the contract with the National Highways Authority of India.
At present, there are different rules regarding exit of road developers from their projects, depending on the year in which they had bagged the project. If the project was bagged after 2009, the exit norms are easier. But, for projects awarded before 2009, the norms are tighter and do not allow developers to sell stake before some years of operation.
The NHAI and Road Ministry had earlier taken a stance that the exit norms for highway developers should be relaxed. But, the Cabinet approved a proposal which allowed for lender substitution, something that has not taken off.
This is because highway developers raised concerns, saying, among others, that with the forming of a new special purpose vehicle, the income tax benefits of a 10-year infrastructure project are not transferred to the new developer who acquires the project.
“Senior lenders are unwilling to substitute during construction,” said Anand Kumar Singh, CGM, NHAI.
Mukesh Kumar, Vice-President, Infra Group, SBI Capital Markets, said that stake sale should be allowed between highway developers.
November 19, 2013
Mihir Mishra : New Delhi,
The finance ministry has approved plans by the road transport and home ministries and the department of information technology to implement safety improvement measures for women under the Nirbhaya Fund.
“The plans by ministry of road transport and highways and home affairs and department of information technology have been selected by the finance ministry,” said a senior road transport ministry official. The approvals came in a meeting chaired by the finance minister this month.
This fund, to be spent on providing security to the women across the country, was announced by finance minister P Chidambaram in Budget 2013-14.
The official further said that the road transport ministry’s approved plan, includes installing cameras and global positioning system (GPS) in buses and other modes of public transport.
“The recordings by cameras and GPS will be monitored real time. We also plan to closely work with the police to ensure their intervention in case of detection of any untoward incident. The plan is to implement these in cities with population over 1 million,” he added.
The intercity buses plying in Delhi have GPS system installed and any change in route is detected by the control centre, where it is monitored.
“We also have to decide on the number of control centres that is going to be opened. Whether we open it in all cities or key cities is a decision that needs to be taken,” he added.
The plan by the department of information technology is to come up with a watch, pen or mobile with a panic button to send out distress signals. The home ministry’s plan is to develop a system to ensure tracking accidents as early as possible.
The Nirbhaya Fund was name after Nirbhaya, a pseudonym given to the victim of the gang rape that took place in Delhi on December 16, 2012.
October 24, 2013
By ET Bureau |
China is already working on ambitious highway-building projects linking coastal Myanmar to Yunnan and it makes great sense to link the highway from India with this. That way, trade would open up between eastern India all the way to landlocked southern China, Myanmar and Thailand. India should also negotiate with Bangladesh for this highway to pass through its territory.
That way, instead of terminating traffic and commerce in the northeast, the highway could run all the way to Kolkata. Once there, it would be easy to link the East-West Corridor with the India-Myanmar-China-Thailand highway.
Immense trade potential could open up if, say, Pune is connected to Kunming via one long, continuous highway. Along the way, goods can also be dropped off in markets in Bangladesh, the north-east, Myanmar and on to Thailand.
Southern Asia is among the world’s least-integrated regions. It was not always thus. Before Partition, south and south-east Asia was a closely networked hub of commerce and services. In the 1930s, the British built a road between Burma and southern China.
During WWII, American general Joe Stilwell built another one from Ledo in Assam to Kunming, to supply Chinese fighting the Japanese. The Stilwell road, too, should be revived, repaired and used extensively to boost trade and commerce between India, China and south-east Asia.
October 16, 2013
YASHODHARA DASGUPTA, ET Bureau
NEW DELHI: A week after the government approved a bailout of the highways sector and set up a committee that will draft its details, developers told Prime Minister Manmohan Singh that the rescue plan shouldn’t end up being similar to what they described as the “flawed exit policy” that has failed to attract takers.
The committee headed by C Rangarajan, chairman of the Prime Minister’s Economic Advisory Council, is expected to give its recommendations on the premium restructuring in a month. The final decision will be implemented by the highways ministry after it is approved by finance minister P Chidambaram.
“The guidelines for the rescheduling of the premium for the highway projects are required to address the concerns raised by the sector as a whole, otherwise it will not only defeat the purpose of the policy but also not help in the revival of the road sector,” the National Highway Builders’ Federation (NHBF) said in its letter to Singh. “In the past it is a known fact that because of the flawed exit policy for the road sector announced by the government, it has not been able to attract even a single investment.”
The road developers sought a reduction in costs they have to pay for deferring the premium. According to the Cabinet note sent by the highways ministry, which included suggestions of the finance ministry and the Planning Commission, developers need to pay 12 per cent on the premium as well as a penalty of up to 0.5 per cent of the total project cost in case the default was attributed to them. The concessionaires would also have to give a bank/corporate guarantee to the extent of the maximum difference between the premium promised at the time of bidding and that under the revised payment schedule, according to the cabinet note.
The NHBF letter, also sent to Chidambaram, Rangarajan and roads minister Oscar Fernandes, argued that deferral of premium payments should be allowed at a 9.75 per cent discount rate, the rate at which Cabinet last year allowed telecom operators to stagger spectrum fee payments. NHBF explained that “the proposal of highway sector’s deferment of premium is similar to telecom sector on contract terms and conditions on period of contract and cost involved…”
“A case for some form of relief can be made and the 12 per cent rate needs a relook in the current context.The situation in some sense is similar to the telecom sector relief because they too were going through stress at the time,” said Arvind Mahajan, partner at KPMG, who added that both sides needed to make some sort of concessions. “Many companies involved in projects are highly leveraged. They are also facing execution challenges because of delays on part of NHAI and escalation in project cost,” Mahajan said.
NHBF has argued against the penalty clause saying the viability of most of these projects were eroded because of delays in environmental clearance, land acquisitions, a ban on the procurement of aggregates and so on. NHBF has also opposed the corporate or bank guarantee clause saying most concessionaires are either undergoing corporate debt restructuring and are over-leveraged or bankers are not willing to lend to them.
October 10, 2013
By PTI |
NEW DELHI: The Road Transport and Highways Ministry has asked the state governments to form high-level committees to take steps for reducing road accident fatalities that have increased consistently in recent years.”All the state governments are requested to constitute High Level Committees headed by the Chief Secretary to take stock of the road safety scenario in their States and the measures required to be instituted at the State level to reduce road accident fatalities,” the Ministry said in a missive to states.
A total of 4,90,383 road accidents were reported by all states/Union Territories (UTs) in 2012, of which 1,23,093 were fatal accidents.
“The number of persons killed in road accidents were 1,38,258 i.e. an average of one fatality per 3.5 accidents. The proportion of fatal accidents in total road accidents has consistently increased … we have to go a long way before we can rest,” the Centre has said.
Citing China’s example for curbing accidents, it has asked states to ensure that its various wings, including Transport, Health, PWD, Police, Justice, Education and Finance worked in close coordination in view of “strategy for ensuring road safety being multi-pronged.”
Unless special arrangements are put in place to ensure close coordination and accountability, realising the full potential of individual sectoral responsibilities and the goal of road safety is not possible, it said.
It also asked the states to tighten noose round the necks of liquor shops violating norms.
The states have also been requested to ensure that licences for liquor shops are not given along National Highways and in case of drunken driving to strictly enforce Section 185 of Motor Vehicles Act, 1988 which provides for punishment of imprisonment or fine or both for the offence of drunken driving.
It also asked states to set up highways patrol on the pattern of Maharashtra stressing such dedicated police force can bring down accidents and ensure safety.
Maharashtra has a designated police force for highways. A Traffic Engineering Unit under it analyses the causes of accidents and suggests preventive measures, it said while asking states to emulate this model.
Although National Highways constitute only about two per cent of the total road length they account for 29.1 per cent in total road accidents and 35.3 per cent in total number of persons killed in road accidents.
The Ministry said in view of manifold increase in road traffic during last few years “It is very much necessary to regulate the traffic movement.”
India has 33 lakh km of road network, of which about 79,000 km is the National Highways.