NHAI set to award over 1,600 km road projects under EPC route

December 10, 2013

Mihir : New Delhi,

The National Highways Authority of India (NHAI) is set to award road projects of over 1,600 km under the Engineering, Procurement and Contract (EPC) route in the next few months, an indication that momentum is picking up in the sector that has been under pressure in recent times.This is part of the 2,500 km of projects earmarked by the authority for awards this year.

“We have already received bids for five projects covering 502 km and the response is good. The number of bids these projects have received range from as low as 4 to 12. We are satisfied with the response under the EPC,” said a senior NHAI official.

In addition, the NHAI has also called bids for another 225 km and are preparing bids for projects covering 800 km.

The official added that these projects will act as a booster for the slowdown-hit infrastructure companies, who are not showing interest in projects under public-private partnership (PPP).

NHAI had to shift its focus from awarding under EPC after projects offered under PPP mode failed to attract takers. The authority did not find any takers for 20 “viable” projects put up for bids during the current fiscal.

Projects under EPC are virtually risk-free for the contractor, as the government funds the construction. Under this mechanism, the contractor has to quote the cost of constructing or upgrading the road section, and if the bid is accepted, the government funds the project.

The official added that the authority has enough cash to fund these projects under EPC during the current fiscal.

“Money is not an issue during the current fiscal, as these projects would require only 15 per cent of the total project cost during the year. Also, we do not have to acquire a large amount of land because these projects are to be built on the existing alignment and land required will already be in place,” said the official.

With the award of 2,500 km under EPC, NHAI would be able to able to improve its award tally for the current fiscal.

The authority managed to award only 800 km of projects in 2012-13.

During the current fiscal, NHAI has awarded projects covering 859 km so far – a substantial portion under EPC. The road transport ministry has awarded projects covering 463 km.



BIDS RECEIVED for 5 projects covering 502 km

THE average number of bids received range from 4 to 12

BIDS are being called for projects covering 225 km, and preparations are underway for an additional 800 km

The award target for projects under EPC is 2,500 km

859 km of road projects have been awarded in this fiscal



Govt to set up infra trust funds to spur investments

September 24, 2013

Road Ministry to award 6,500 km of projects on EPC basis in 2013-14

The Union government is looking to set up an infrastructure trust fund, similar to real estate investment trusts in countries such as Singapore, by November to spur investments in the infrastructure sector.

India’s infrastructure sector has been struggling for the past few years due to lack of investments as banks have been wary of lending due to policy constraints.The government is looking to improve investments in the sector even as the parliamentary elections are less than a year away.

Under the infrastructure trusts, the underlying revenue of a projectwill be transferred to a trust, which will issue units to investors, including foreign investors who want to buy the units.

“A major reason why some PPP (public-private partnership) projects in the infrastructure sector have run into problems is that many private partners did not price the risk in projects over a 25-year time frame. We are looking to set up an infrastructure trust fund in two months to ensure long-term management of projects,” said Arvind Mayaram, secretary, department of economic affairs.

Mayaram added the government was looking to develop the corporate bond market and encourage the Employees’ Provident Fund Organisation (EPFO) to invest in infrastructure projects.

Meanwhile, in a move to boost investments in the road sector, the ministry of road transport and highways is also looking to award close to 6,500 km of road projects through the engineering, procurement and construction (EPC) mode in 2013-14.

“We are planning to award 6,500 km of road projects on the EPC basis this year,” said Vijay Chhibber, secretary, ministry of roads.

The ministry has been actively looking to award projects on the EPC basis for the past few years as a number of projects have been struggling since they were awarded on the build-operate-transfer (BoT) model. The ministry will also award three major expressway projects by the end of the year, according to Chhibber.

The move comes at a time when the road ministry has been able to award only 1,400 km of road projects against a target of 9,500 km in the last financial year.

Under the EPC model, the government spends the entire money required to build roads unlike the BoT mode, where the constructor builds a project and charges a toll on the same.

The ministry has also said an independent road regulator will be in place before the end of the year and the authority is expected to play an adjudicatory role and advice the government on existing road projects in addition to working on the toll mechanism in the country.

“There have been contrarian views on a road regulator and we think we need a road regulator’, Chhibber said.

Road projects in the country have been held up since the past few years due to various reasons, including the Delhi-Gurgaon Expressway. The government had awarded close to 3,055 km through the EPC mode in 2005-06, but has since managed to award less than 500 km through the EPC route. Meanwhile, BoT projects continued to perform better during the years and the ministry managed to award more than 6,400 km in 2011-12 alone.

Meanwhile, the government is also looking to set up a fund to promote debt and equity investment in the infrastructure sector. “There will be greater deepening of the equity and bond markets for financing the infrastructure sector in the next few months,” Mayaram said.

The government is also looking to set up an International Trust Fund where the underlying revenue of a project will be transferred to a trust which will issue units to investors, including foreign investors who want to buy the units, he added.


Delhi Metro Rail Corporation awarded IMS certification for operation, maintenance

September 2, 2013



NEW DELHI: The Delhi Metro Rail Corporation(DMRC) has been awarded Integrated Management System certification which is in accordance with international standards.

The certification and audit body from KBS Certifications Services assessed the IMS in Delhi Metro and found it to be in accordance with the requirements of the standards of International Organisation for Standardisation (ISO) and the International Occupation Health and Safety Assessment (OHASAS) series.

“It has been found that DMRC is in accordance with the ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007 standards,” a DMRC spokesperson said.

The scope of this certification entails Operation & Maintenance of Line 2 comprising 34 Metro Stations from Jahangirpuri – HUDA City Centre Metro corridor.

This also includes the Khyber Pass and Sultanpur depots catering to the operational and maintenance requirements of the Rolling Stock (Metro Trains) on the line.

ISO certification implies fulfilment of Quality Management System (QMS) in achieving customer satisfaction for passenger service while OHSAS demonstrates the conscious determination of the organisation to safeguard its employees and the environment from harmful incidents and potential hazards within an organisation.

Earlier this year, the O&M Wing of Delhi Metro had adopted ISO 50001-2011 Energy Management System (EnMS) which provided a framework for developing strategies that help organisations to effectively manage their energy use.




Brihanmumbai Municipal Corporation bags ‘The Best City Pavilion Award’

June 17, 2013

Bhavika Jain, TNN |

MUMBAI: The Brihanmumbai Municipal Corporation (BMC) has bagged ‘The Best City Pavilion Award’ at 11th Municipalika International Exhibition held in Delhi.

The civic body had set up a stall in the exhibition, at which details about BMC’s projects were given.

According to the civic officials, information about health, education, water supply, environment, hospitals, solid waste management, roads and other projects was exhibited in the stall.

The exhibition received tremendous admiration from the other civic bodies who had participated in the same competition.

The BMC has set up its kiosks with posters and digital photos of the various successful schemes undertaken by the civic body. A live model of rain water harvesting, powerpoint presentations of the new technologies being used by the BMC were also given at the kiosks as a part of information exchange.


Highway contractors line up for government funded projects

October 22, 2012

NEW DELHI: Highway contractors, who have been facing a financial crunch, have lined up for road projects to be built with 100% government funding. In the past two weeks, at least 50-60 companies for each such project on engineering-procurement-construction (EPC) have applied for pre-qualification to bid for these works.

Initially, National Highways Authority of India (NHAI) has identified eight such projects in Rajasthan and the second set of such works in Uttar Pradesh would be out soon. “All types of road construction companies including the big ones like L&T, GMR and Gammon have applied for pre-qualification. We expect good response when financial bidding starts,” a senior NHAI official said.

All the eight projects in Rajasthan are in the range of Rs 200 crore to Rs 500 crore. Officials said the projects have been designed in a manner where contractors won’t get more than 10% profit in executing these works.

Industry insiders said that response for such projects is much more since companies don’t need to raise loans from banks. Moreover, the risk of EPC projects is with the government. “You will get back the entire amount. All responsibilities of clearances are with government. There is no need to invest from your pocket whereas in the build-operate-transfer (BOT) projects, getting loan has become difficult,” a private contractor said.

National Highways Builders Federation ( NHBF) secretary general M Murali said EPC projects will get more takers since financing BOT projects has become difficult. “In the past couple of years, interest rate has increased from 8.5% to 15%. Banks have become stringent. Moreover, how can you get at least Rs 2.1 lakh crore finance that you need to execute 7,500 km highways work for three continuous years,” he added.

NHAI officials feel contractors in the BOT segment will come for good projects. In fact, after almost a six-month lull, NHAI received two bids for a BOT-Toll project last week. The four-laning of 154 km Salasar-Haryana border project costing Rs 601 crore was cleared by the Cabinet last week. NHAI officials said while the government had set 33% viability gap funding (VGF) for this project, one of the bidders quoted 27% VGF. GR Infra and Galfar Infrastructure are the two bidders for this project.

“EPC is certainly less risky for contractors. Medium and small players, who were earlier sub-contractors, would take more projects. But we feel the big players will eye viable BOT projects since greater risk can bring more revenue,” a highway ministry official said.


Source: http://timesofindia.indiatimes.com/

3,000 km of 2-lane roads a lifeline for smaller builders

May 14, 2012

The National Highway Authority of India (NHAI), the government-backed autonomous manager of highways, plans to build one-third (or 2,800 km) of this fiscal’s target of 8,800 km long of road network in the form of two-lane roads on cash contracts.

JN Singh, member-finance of the NHAI, said, “As most of the two-lane roads lack heavy traffic, the projects would be awarded on EPC (engineering procurement and construction) or cash contract basis rather than on BOT (build-operate-transfer) or BOOT (build, own, operate and transfer) basis.”

The two-lane projects, therefore, may not attract big BOT developers that covet only mega highways that yield higher margins.

So, smaller road construction firms ravaged by stiff competition, margin pressure, high interest cost and stretched balance sheets may find the cash contracts manna from heaven.

For, the two-lane projects may entail work orders worth up to Rs15,000 crore.

A report by Merrill Lynch said pure road contractors such as IVRCL and NCC could benefit.

Agreed Pankaj Kumar, senior analyst at KJMC Capital Market
Services. This fiscal, he said,
could prove to be a good year for BOT players-cum-road contractors such as IVRCL, HCC, Nagarjuna Construction. But pure BOT developers may find the going tough.

Last fiscal, the NHAI awarded 35 projects. All were for four-lane or six-lane roads, and 23 projects garnered premium status, fetching Rs24,200 crore in net present value (NPV) for the NHAI. (NPV is the difference between the present value of cash inflows and outflows.)

Singh said projects this fiscal would not fetch such huge NPV. Value of orders will also decline due to shift to two-lane orders.

The NHAI will fund the two-lane projects with capital raised from tax-free infrastructure bonds.

Land acquisition and annuity projects should not pose a problem as it had raised Rs10,000 crore last fiscal through bonds.

It has also received approval for an additional bond issue of Rs10,000 crore this fiscal.
Besides, a recent report by Motilal Oswal Securities said the NHAI rakes in Rs9,200 crore in cess, Rs3,000 crore in toll collections and Rs3,000 crore in premium, which would help it in meeting recurring EPC obligations and annuity projects.

The report also stated that intense competition in the road sector is likely to ease due to challenging macroeconomic environment and with established players committing their capital to large infrastructure projects.

The road sector may see consolidation as aggressive bidding, lower-than-expected tariffs, rising funding cost and execution delays have considerably lowered returns on projects, the Motilal report added

Source: www.dnaindia.com

At 8,000 kms, Road Ministry awards 57% more work in FY12

April 3, 2012

NEW DELHI: Road ministry has ended the year on a high as it has awarded 62 projects covering 7,957 kms in the current fiscal, 57% higher than the previous year. The government is all set to achieve its earlier announced target of building 20 kms of road per day by 2013-14, as it has completed construction of 2,250 kms road in 2011-12, in comparison to 1,784 kms in the previous year.

In 2011-12, National Highways Authority of India(NHAI) has awarded 49 projects of 6,491 kms and the ministry awarded 13 projects for 1466 kms through state agencies. In all, 62 projects of 7,400 kms have already been awarded as against the target of 7,300 kms.

Some of the projects awarded have offered premium to the government and is likely to result in additional revenue generation of Rs 30,400 crore during the concession period.

“We want to accelerate this achievement further in 2012-13. We are confident of achieving the target of 8800 kms, said CP Joshi, Union Minister of Road, Transport and Highways. Joshi added that bids for 1,500 kms are either under evaluation or due in April,2012.

In the recent bids, which opened on March 28 and March 30, NHAI received a phenomenal response with road project developers providing premium on seven projects that would earn Rs 6,451 crore whereas one project sought a premium.

Companies like L&T, Sadbhav Engineering and IVRCL were amongst some of the successful bidders for 8 projects entailing highway development of 1,144 kms, having an estimated cost of Rs 11,500 crore. IVRCL will provide the highest premium at Rs 145 crore. “The bids are far better than what we had anticipated. Even the single project which asked for grant, it was much lesser than our estimates,” said an NHAI official.

These companies have opted to provide premium to the government, instead of taking viability gap funding. The government provides VGF or grant to the project developers for ensuring viability of the projects.

L&T won two bids and thus would be completing the full stretch from Gujarat border to Amravati. This road connects Hazira port -Surat to Paradip and eventually Kolkata.

In addition, 3 projects in NHAI of 318 Kms. and 5 projects in the Ministry of 664 Kms. i.e. 982 Kms. in all, bids have been received, which are under evaluation and decision is to be taken soon. It is possible that the government may award a few hundred kms if some of these projects are cleared tomorrow.

Source: http://economictimes.indiatimes.com

Gayatri Projects to form 100% arm for Orissa road project

September 12, 2011

The project is to be executed on a BOT (Toll) basis on DBFO Pattern under NHDP Phase III as per the Letter of Award sanctioned by the NHAI, Gayatri Projects said.
Gayatri Projects Ltd. said on Tuesday that its Board of Directors has accorded its consent for incorporation a Wholly Owned Subsidiary called Sai Maatarani Tollways Ltd. for executing the four-laning of Panikoili— Rimull section of NH-215 in Orissa.

The project is to be executed on a BOT (Toll) basis on DBFO Pattern under NHDP Phase III as per the Letter of Award sanctioned by the NHAI, Gayatri Projects said.

Source: http://www.indiainfoline.com

NHAI awards Rs 2,815 cr project to GVK

August 18, 2011

With private companies growing interest in the road sector, the National Highways Authority of India (NHAI) today awarded a Rs 2,815 crore contract in Madhya Pradesh to infrastructure player GVK that will fetch it an annual premium of about Rs 190 crore for 30 years, more than the total project cost.

With this award, the income to NHAI would be over Rs 870 crore per annum from four projects which it bid out within last few days.

“We have successfully awarded Rs 2,815 crore project in Madhya Pradesh for four-laning of Shivpur-Dewas section to GVK Transportation. NHAI will get a premium of Rs 189.9 crore per annum on this for 30 years, with a provision of an increase of five per cent every year,” a senior Road Ministry official told PTI.

The 330 km-project will be built under phase IV of the National Highways Development Project (NHDP) on BOT (build, operate and transfer) basis on DBFOT (design, build, finance, operate and transfer) pattern.

GVK was selected out of 14 major bidders that included players like GMR, Gammon, Essar and Punj Lloyd, the official said, adding that the “contract was proposed to be bid out on 15 per cent viability gap funding (VGF).”

The development comes close on the heels of NHAI bidding out its first mega project — Kishangarh-Udaipur-Ahmedabad at Rs 636 crore annual premium for 26 years to Bangalore-based GMR Infrastructure on July 29.

Further, the highway authority, which awarded projects worth over Rs 12,000 crore in the last four days, got about Rs 50 crore premium on Hospet-Bellary stretch in Karnataka and Orissa border-Aurang section.

Highways developers bid premium if they find the project lucrative; the private companies are confident that the toll revenue accruing to them would be more than their total cost.

Earlier, NHAI virtually used to provide grants on schemes to road developers to make the projects viable.

NHAI has announced to award 59 projects– involving 7,994 km, with a total cost of about Rs 60,000 crore– this fiscal.

India has a network of 3.3 million km roads out of which national highways constitute only 70,548 km. To augment it, the government plans to build 35,000 km of roads by 2014.

Source: business-standard.com

Kapsch TrafficCom AG is awarded two prizes

June 22, 2009

Press Release

Kapsch TrafficCom AG is awarded two prizes: important award for innovative traffic telematics solution in the USA and the Stock Exchange Prize in Austria

Kapsch TrafficCom AG was recently awarded by the well-known US traffic organisation, ITS merica for an innovative traffic telematics solution. ITS America awarded the “5.9 GHz Dedicated hort Range Communications (DSRC) Smart Road Technologies for Traffic Safety and Mobility” by Kapsch with the “Best Innovative Practice” prize. Specifically, the prize was awarded for the innovative Kapsch implementation of forty 5.9 GHz DSRC toll portals in New York City and New York State. Kapsch TrafficCom has been active in the USA since 2008. The ITS America award once again underscores the leading position of Kapsch TrafficCom as an internationally active vendor of innovative traffic telematics solutions.

“The ITS Award is the most important prize of its type – only this programme honours the most innovative, efficient and influential achievements in the industry worldwide”, explains Erwin Toplak, Management Board Member of Kapsch TrafficCom AG. “We are pleased that this coveted award honours our performance in the field of 5.9 GHz DSRC networks for improving the safety, reliability and
infrastructure of US roads”.

Kapsch TrafficCom has been active in the USA since 2008. In the previous year, the company completed the testing of a 5.9 GHz DSRC telematics test station in the vicinity of Denver, Colorado, with impressive success. Kapsch TrafficCom received the latest award for its innovative implementation of forty 5.9 GHz DSRC telematics stations in New York City and New York State in a demonstration installation. These telematics stations communicate with on-board units, which are located in the vehicles and contribute to improving traffic safety, mobility and environmental compatibility. The architecture used enables the operation of more than 20 applications from the fields of safety, mobility, toll payment and toll information. The 5.9 GHz DSRC system from Kapsch TrafficCom was introduced at the ITS America Annual General Meeting 2009, which was held from 1 – 3 June 2009 at the Gaylord National Convention Center.

“With 5.9 GHz DSRC, intelligent transport solutions achieve a new technological dimension that significantly increases the benefit for the user”, says Scott Belcher, President of ITS America. “Kapsch is the driving force when it comes to launching high-performance 5.9 GHz DSRC applications for safety, mobility and payment infrastructure on the global markets. As traffic services in the USA are continuously gaining in importance, we expect improved transport infrastructure to provide the market with more safety, among other things”.

At about the same time, Kapsch TrafficCom achieved second place in the Small and Mid Cap Prize category of the Vienna Stock Exchange Prize. This prize evaluates companies that are listed on the ATX Prime Index and distinguish themselves particularly positively with regard to criteria such as reporting, investor relations and technical market factors.

Kapsch TrafficCom is an international provider of innovative traffic telematics systems. Kapsch TrafficCom develops and supplies mainly electronic toll systems (Electronic Toll Collection – ETC), especially Multi-Lane Free-Flow (MLFF) ETC systems, and offers the technical and commercial operation of these systems. In addition, Kapsch TrafficCom offers traffic management solutions that focus on traffic safety and traffic influencing, electronic access control systems and parking space management. With more than 220 customer references worldwide in 36 countries on all five continents, with a total of more than fourteen million OBUs and nearly 12,000 equipped road lanes, Kapsch TrafficCom has positioned itself among the global market leaders of ETC systems. Kapsch TrafficCom has its headquarters in Vienna, Austria, and has subsidiaries and representative offices in 22 countries.

Vienna, 19th June 2009

For further information:
Brigitte Herdlicka
Public Relations & Sponsoring
Kapsch Group
Phone: +43 (0) 50 811 1710
1120 Vienna, Am Europlatz 2
E-Mail: [email protected]