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By 2022, govt to lay 18,637km of expressways

NEW DELHI: The government has drawn up an ambitious target to lay 18,637km network of brand new expressways by 2022. These high-speed, access-controlled roads will be of the four-lane and six-lane variety with 3,530 km to come up in the next three years.

The highways ministry is ready with a Master Plan for the National Expressway Network. The new target of expressway length was projected after receiving observations from 11 states including Madhya Pradesh, Bihar, Gujarat, Karnataka and Uttar Pradesh. Earlier, the final draft report prepared by the highways ministry had proposed to develop 17,661 km of expressway network.

The expressways network will not be an upgraded national highway network but will be developed entirely as greenfield projects. These will preferably be built with three-metre high embankments and will have service roads along the stretches where there is a need. Officials said there was an urgent need to develop expressways network as road transport would remain the mainstay for sustaining the economic momentum of the country.

“The existing arterial network cannot meet the latent and the emerging demands for connectivity and accessibility while ensuring the desired level of safety,” said a senior ministry official.

As per estimates, the construction cost per km would be Rs 14 crore in case of 4-lane and Rs 20 crore in case of 6-lane expressways excluding land acquisition and other expenses. A recent presentation made before the top brass of National Highways Authority of India (NHAI) and the ministry also mentioned that while majority of identified stretches would be built on build-operate-transfer (BOT) mode, stretches which were unviable could be developed on annuity basis.

The Master Plan document has also phased the expressway development programme for 2012, 2017 and 2022 and this has been done on the basis of financial viability, relative traffic intensity along various corridor segments, network comprehensiveness, connectivity warrants and relative economic potential of each proposed project.

The ministry is already in the process of preparing a draft for creation of a National Expressways Authority of India (NEAI) on the lines of NHAI and the highway regulator has also got an exclusive wing for the expressway as a stop-gap arrangement.

Source: timesofindia.indiatimes.com

No state consent, NHAI goes ahead with four-laning of highway section

Without taking the state government on board, the National Highways Authority of India (NHAI) has already decided to go ahead with the four-laning of the 80-km Muzaffarnagar-Hardwar section of the Delhi-Dehradun corridor.

The state government has not yet given its consent to the State Support Agreement for a 21-km stretch, which falls within the state. The rest falls in Uttarakhand.

The bids for the project were invited in September and had to be opened on October 9. But the Highway Authority had later thought of abandoning the project as the state government had refused to sign the State Support Agreement. They have now decided to go ahead with the project.

“The 9 bids received for this project were opened on Wednesday. A contractor for the project will be finalised within a week,” said M K Jain, Project Director.

“The state government has not sent any letter of consent on the State Support Agreement. But the Highway Authority is going ahead with the project,” added Jain.

According to him, the four-laning of the highway will start from June next year. About 70-hectare would be required for 21-km stretch in the state.

“Land has been earmarked. A proposal has been sent to the authorities for approval on notification of land acquisition. The notification will be issued within a week,” said Jain.

The Muzaffaragar-Hardwar section will be four-laned on built, operate and transfer (BOT) basis under the National Highways Development Project (phase-III). The project will cost Rs 900 crore. The Detailed Project Report has also been prepared.

The state government had refused to sign the State Support Agreement as it wants to develop an expressway along the Upper Ganga Canal from Noida to Hardwar which will also open a passage for Uttarakhand from UP and Delhi. Jain said if the State Support Agreement was signed, the state government had to assure that no alternative expressway — Upper Ganga Canal Expressway — would be developed parallel to Highway Authority’s highway, leading to a competition.

“Since the agreement has not been signed, the state government is free to develop its own expressway,” said Jain.

The eight-lane Upper Ganga Canal expressway, popularly known as Hindon Expressway, will stretch from Noida to Hardwar through Muzaffarnagar and Roorkee. Mumbai-based firm called Infrastructure Leasing & Financial Services Limited (IL&FS) is conducting the feasibility study of the project and are likely to submit the report by next month.

Source: expressindia.com

Update on NHAI expressways projects

It is reported that, with access controlled expressways attracting massive investments, ministry of road transport & highways has decided to conduct the feasibility study for more such expressways and construction companies eyeing the access controlled expressway projects of National Highways Authority of India are likely to get investment opportunities for at least 4 such projects spread over 495 kilometer over the next few months. They are1) 70 kilometer Chandikhol Jagatpur Bhubaneswar – INR 761 crore2) 47 kilometer long Delhi Hapur – INR 474 crore3) 198 kilometer long Vijayawada Elluru Rajamundri – INR 1,602 crore4) 180 kilometer long Delhi Agra highway – INR 1,918 croreThe feasibility reports for these projects are already completed and the work is likely to be awarded in about 6 months. These projects are for widening the current 4 lane highways into 6 lanes and operating them for certain durations. Companies would have to bid competitively for these projects on a revenue sharing basis. Thus companies would have to bid on the extent of toll revenue that they are ready to share with the Government if they are allowed to operate the roads. Since these highways are already 4 lane stretches, the road operators can start toll collection even during the project construction phase from an appointed date, mutually decided by NHAI and the road operator. The toll revenues will be routed to an escrow account.Recently, NHAI has awarded 4 such mega projects of 882 kilometer length, which are likely to cost an estimated INR 10,912 crore. From the NHAI perspective, these projects have emerged as money spinners, with companies willing to foot the entire construction cost and part with 2% to 48.06% of their revenues in the initial leg of the project. At the end of the concession period, which is about 12 to 15 years duration, the winning firms have agreed to part with 12% to 59% share of toll revenues.The feasibility reports for another 10 projects of similar nature are under preparation. They are1) 315 kilometer long Kishangarh Udaipur stretch – INR 2,205 crore2) 235 kilometer long Udaipur Ahmedabad – INR 1,645 crore3) 190 kilometer long Varanasi Aurangabad – INR 1,330 crore4) 184 kilometer long Nellore Chilkaluripet – INR 1,288 crore5) 148 kilometer long Krishnagiri Walajapet – INR 1,036 crore6) 145 kilometer long Pune Satara – INR 1,015 crore7) 85 kilometer long Ludhiana Chandigarh – INR 595 crore8) 80 kilometer long Belgaum Dharwad – INR 560 crore9) 56 kilometer long Samakhiali Gandhidham – INR 392 crore10) 55 kilometer long Indore Dewas – INR 385 croreThe ministry has also decided to conduct the feasibility study for 4 such expressways between Delhi and Meerut, Chennai and Bangalore, Vadodara and Mumbai and Dhanbad and Kolkata. Source: http://steelguru.com 

NHAI projects Rs 28,000 cr expenditure

The National Highways Authority of India (NHAI) has projected an expenditure of Rs 28,000 crore for 2008-09 to complete its ongoing projects and the new projects announced under the National Highways Development Project (NHDP). To meet this projected expenditure, the authority is in advanced stages of talks with the Asian Development Bank (ADB) for a loan of Rs 400 crore. This is in addition to the Rs 1,900 crore it is expecting from multilateral institutions through the central government’s budgetary allocation. Rs 14,000 crore is expected to be contributed by the private sector through public-private partnerships (PPPs) while Rs 7,000 crore is projected to come from fuel surcharge. Besides, the NHAI is planning to refloat the 54 EC tax-free capital gains bond for 2008-09 with a ceiling of Rs 3,700 crore. NHAI officials say the new 54 EC tax-free bonds will be launched once the Finance Act is passed in Parliament. In the current financial year, the NHAI has managed to mop up more than Rs 200 crore through the 54 EC bonds. Officials expect it to mop up nearly Rs 300 crore by the end of the current financial year. Didar Singh, member (finance committee), NHAI, said: “We are quite comfortable with our financial position to meet all the requirements of the various projects under implementation.” Some ongoing projects that are expected to be completed in 2008-09 include the 56.25-km Garhmukteshwar-Muradabad expressway, the 32-km Chennai bypass, the 15-km Chennai-Ennore expressway and the 14.35-km Jawaharlal Nehru Port (phase-II) project. In 2005, the Committee on Infrastructure had prepared a comprehensive plan envisaging a mammoth investment of Rs 2,20,000 crore under the NHDP on concessions or contracts to be awarded by 2012. According to the plan, projects under second, third and fifth phases of the NHDP are expected to be completed by December 2012, while concessions or contracts for fourth, sixth and seventh phases would be awarded by December 2012 and work completed by December 2015. Source: http://www.business-standard.com 

EXPANSION OF NH-9 IN ANDHRA PRADESH

Four-laning of National Highway (NH)-9 in Andhra Pradesh is being taken up in a phased manner. Hyderabad-Machillipatnam section of this NH is being taken up for four-laning by National Highways Authority of India (NHAI) on Build, Operate and Transfer(BOT) basis under National Highway Development Project(NHDP) Phase-III. Four-laning in a length of 31 km from Hyderabad to Sangareddy is in progress on BOT basis. These works are targeted for completion by December, 2011. Consultancy services for examining the viability of 4/6 laning of Sangareddy-Zaheerabad section of this NH on Design, Build, Finance and Operate(DBFO) pattern is under progress. Further action in this regard will depend upon the outcome of the said study. This information was given by the Minister of State for Shipping, Road Transport and Highways, Shri K.H. Muniyappa in a written reply in the Lok Sabha today.  Source: http://pib.nic.in

NHAI likely to issue contracts for 10,000km of highways soon

These contracts will be a part of phase III and phase V of the government’s highway project New Delhi: The United Progressive Alliance government wants to award, in the next few months, contracts to build up to 10,000km of national highways, equal to almost 70% the 14,500km of national highways on which similar contracts have been issued since 2000.Long Road Ahead (Graphic)The decision to award the contracts, worth at least Rs70,000 crore, comes with the general election likely to be held either late this year or early in 2009, although an official at the agency that regulates the highways sector in India claimed that this was because procedural issues related to the contracts had now been “ironed out”.The official at the National Highways Authority of India, or NHAI, added that since 2000, when the country’s National Highways Development Programme or NHDP was launched, the regulator had awarded contracts for the construction of 14,500km of highways worth around Rs80,000 crore and that work on 8,500km had been completed.The contracts that will be issued are part of phase III and phase V of NHDP and involve upgrading existing national highways into four-lane and six-lane ones. Five of the seven phases of NHDP involve upgrading existing highways.The stretches will first be offered to private companies to be developed under the ‘build-operate-transfer’ model where the companies will build the highways, operate them and collect toll for a certain period of time, and transfer them to the government at the end of a certain period of time called the concession period. In case this fails to draw bids, the projects will be offered on the ‘engineering-procurement-construction’ method, where private companies build the roads for a stipulated fee but will not have any stake in the project.“Detailed project reports are being created for these stretches and they are expected to be awarded in the next few months,” said a senior government official, who did not wish to be identified. “There was a lull in award of projects because the policy was being ironed out. But now that things are falling into place, you will see more and more projects on offer,” the official added.For almost a year, NHAI has gone slow in awarding projects.“Till now we were waiting for ironing out procedural issues such as preparation of the new model concession agreement and setting up a two-stage bidding process. Those matters have been taken care of now. And now the only serious impediment in the way of awarding these contracts is clearing of the toll policy,” said an NHAI official.The toll policy is to be cleared by the law ministry and this could take a couple of months, the official added.Analysts however said that while the agency was capable of awarding 8,000km of construction a year, exactly how much would get done depends on a number of factors including a legal challenge to the government’s bid process.The National Highways Builders Federation, an industry body, filed a suit in January against guidelines issued by the finance ministry and ratified by the Prime Minister’s committee on infrastructure that favour bidders who have executed large projects. The norms, reported by Mint on 28 December, cap the number of bidders at six, with some individual exceptions.“There are three factors that could affect the process (of awarding contracts),” said Kuljit Singh, a partner with the transaction advisory services practice of audit and consulting firm Ernst and Young Pvt. Ltd.“Technical detailed project reports usually take a while to prepare. Also, things generally slow down a little in an election year. Also, depending on what the court finds (in the case where the National Highways Builders Federation has challenged NHAI’s bidding norms), the process could be affected,” he added.Source: http://www.livemint.com 

NHAI starts work on Rs6,672 cr expressway

The expressway itself will be 400km long and will cost around Rs16.68 crore per km New Delhi: The National Highways Authority of India, or NHAI, has started preliminary work on awarding its biggest contra-ct yet, worth Rs6,672 crore, for an expressway between Vadodara in Gujarat and Mumbai.Gujarat is among the most industrialized states in the country and a major hub for petrochemical and chemical companies. Mumbai is the country’s financial and commercial capital and is also home to India’s busiest port. The Vadodara-Gujarat route is a busy one in terms of freight traffic.Last year, NHAI awarded two contracts to IRB Infrastructure Developers Ltd and Larsen and Toubro Ltd (L&T) to upgrade stretches of highway between Bharuch and Surat and Vadodara and Baruch, respectively. These stretches are part of the existing highway between Mumbai and Vadodara that runs parallel to the proposed expressway.Officials in NHAI admit that traffic on the route is growing at a scorching pace.“We were always aware that an expressway would be built between Mumbai and Vadodara,” said V.D. Mhaiskar, chairman and managing director of IRB Infrastructure.The expressway itself will be 400km long and will cost around Rs16.68 crore per km. The largest contract awarded before this by NHAI was for Rs2,500 crore to build a highway between Panipat and Jalandhar, according to A.V. Sinha, member (technical), NHAI.NHAI, the regulator for the Indian highways sector and the entity responsible for the award of contracts to build roads, will appoint a consultant for the project and decide on other contours of the expressway by July. The call for bids will come after that and the expressway is expected to be completed by 2015.As is the case with most NHAI projects, the expressway will be built on a build-operate-transfer (BOT) basis wh-ere a private developer builds the road, operates it for a certain period, and then transfers ownership to the state.“The expressway will charge around 30% more in toll rates and, so, not all vehicles would shift to the expressway (from the highway),” said Sinha.The stretches owned by the IRB and L&T consortia are currenly being upgraded and are expected to be completed by July 2009.“There is a revenue share agreement between NHAI and us that if traffic exceeds 108,000 vehicles per day, we share that with the authority. By the time this expressway is built, we would have reached that mark,” Mhaiskar said.Mhaiskar estimated current traffic in the Bharuch-Surat stretch at between 60,000 and 70,000 vehicles per day.Source: http://www.livemint.com

Uttar Pradesh govt plans five more expressways

Combined length of 1,400km proposed; roads will be in vicinity of highways being developed by NHAI

The Uttar Pradesh government is planning five more expressways in the state even before it signs the concession agreement for the Rs40,000 crore Ganga Expressway project awarded in January.

And yet again, just as in the case of the Ganga Expressway, the proposed highways are coming up in the vicinity of the highways being developed by the National Highways Authority of India, or NHAI, the roads regulator.

“We will not approach the Centre for any kind of assistance in funding. As in the case of the Ganga Expressway, we will raise resources for these projects by leveraging land,” said an official, who was involved in the planning of the Ganga Expressway project as well, but did not wish to be identified.

Country roads: The Greater Noida expressway. UP had awarded the tender for the Rs40,000 crore Ganga Expressway project, which will connect Greater Noida with Baflia, to Jaypee Infratech Ltd in January. (Madhu Kapparath / Mint)

The tender for the Ganga Expressway project, which will connect Greater Noida with Ballia, was awarded to Jaypee Infratech Ltd in January. The concessionaire is expected to be leased around 7,000ha of land for commercial development in order to construct the expressway.

Jaypee had sought land worth Rs293.55 crore for property development along the expressway in order to construct the expressway.

The five proposed expressways will have a combined length of around 1,400km.

“We do not have a clear idea as to how much land will be required to be set aside for these projects, but we will be able to work out those details only after a few months,” the same official said.

The proposed expressways include the Greater Noida-Saharanpur-Dehradun (in partnership with the Uttarakhand state government) stretch apart from Jhansi-Lucknow, Lucknow-Gorakhpur, Agra-Kanpur-Lucknow and Farrukhabad-Kotdwar expressways.

The proposal for these projects is being developed by the state public works department. “First we will seek environmental clearance for these projects and then the proposals will go to the state cabinet for approval,” the official said.

Planning Commission member Anwarul Hoda said that the apex planning organization in the country has not yet been informed about the state’s plans to go in for more expressways. “We have not been told about these projects,” he said.

Earlier, the Planning Commission had held discussions with the UP administration on the Ganga Expressway project in order to see whether the project linked up with existing highway networks in the state. It gave the go-ahead despite the overlap with the highways being developed by NHAI.

“Tolling on these roads will barely pay for operations and management expenses,” said a consultant with a project management company, who did not wish to be quoted. “Remember, these roads are along the same alignment as existing NHAI national highways, which means traffic is going to be shared. So, the capital cost recovery will come from the land component only. If you are in the business of building highways, then why do you need all this land.”

Source: http://www.livemint.com

A capital cost of capacity

Demand is growing faster than anticipated. And there is such dearth of infrastructure that new capacities will be absorbed promptly

Last month, the showpiece urban transportation project, the 28km Delhi-Gurgaon expressway was inaugurated. Another big-ticket project, Bangalore International Airport Ltd, is set to begin operations in March. In the case of the expressway, traffic on the first day was what was projected for 2013. In Bangalore, the passenger traffic will cross 11.3 million—a number initially projected for 2015—by the end of the year. In both cases, capacities for the first year are inadquate.

Clearly, the project planners in both instances got their projections quite wrong. But, if one steps back, a more complex picture emerges. The most obvious fact is that demand is growing faster than anticipated. And there is such dearth of infrastructure that new capacities will be absorbed promptly. In contrast, China seems to be a case of excess capacities.

Another factor being debated is that this is not a simple case of an owner-operator failing to anticipate traffic. Any entrepreneur would see the obvious and plan for it. Instead, it is argued, given the cost of capital, one shouldn’t expect anything different. Our real interest rate—corrected for inflation—is about 7%, probably among the highest in the world. Hence, the entrepreneur’s action would be an error of commission—to minimise project risk.

The other side of the coin is that the pricing of public services is subsidized, largely to ensure that the less well off can avail the benefits. In other words, far more people can afford to consume these services than otherwise. While not making a case for leaving out these segments, there is need to strike a correction.

The reason is simple.

Subsidized consumption, like other political largesse, comes at a fiscal cost. Not only does this push up the cost of capital, it also—since government borrowings inevitably expand money supply—stokes inflationary pressures, hurting the very people that the government set about protecting. In China it is the opposite, where fiscal profligacy subsidizes investment.

Both extremes are unsustainable. Given India’s mixed socio-economic demography, there is a case for revisiting subsidized consumption. A good beginning would be if the political parties arrive at a consensus that ensures bad economics will no longer be passed off as sensitive politics.

A precedent exists. Gujarat, in the early 1990s, had come out with a document detailing an all-party commitment to structural reforms in the state. That no doubt underlines the economic success of the state over the past decade.

Source: livemint.com

State government refuses to reveal land rates for Ganga Expressway

Lucknow, February 28 The state government today refused to inform the assembly the rates of compensation for land acquisition in the Ganga Expressway project.Parliamentary Affairs Minister Lalji Verma maintained that compensation will be according to the agreement between the farmers and developers.But he refused to clarify if the price offered will be the circle rate, market rate or a mutually negotiated rate.The government also refused to reply why the farmers in Agra — whose land is being acquired for the Taj Expressway Project — were being forced by the administration to accept a compensation of Rs 2-3 lakh per hectare, when the market rate was over Rs 40 lakh per hectare.Raising the issue during the Zero Hour, RLD member Dharm Singh alleged that the farmers were brutally beaten up by the police PAC when they went to meet the divisional commissioner to lodge their protest on February 24. He also alleged that the farmers are being pressurised by the local administration and police to accept the cheques.Denying any incident of lathicharge on farmers in Agra, Verma, however, did not comment on the compensation rate.Earlier, the minister had assured the assembly that work on the ambitious Rs 40,000 crore Ballia-Greater Noida Ganga Expressway will start only after getting the No Objection Certificates from different departments — environment, pollution board, forest and Archaeological Survey of India (ASI).He said the developer had been directed by the government to get the NOCs before commencing work. “The condition is there in the agreement made with the developer,” he added.The minister also contradicted the Opposition claim that over 21 lakh trees will be felled for the project. “There is no question of cutting down a large number of trees. Besides, the mega project will free over 3.40 lakh hectares of land from the grip of floods,” he underlined.Answering a question on industrial development in the state, the minister said between March 2004 and March 2007, investment amounting to Rs 5555.30 crore has been flowed in.Without giving details, he said 347 big and medium industrial units had been set up in that period.Asked how the government will meet the target of Rs 5 lakh crore investment in the next 5 yrs, he said bad law and order in the past was the chief reason behind the dismal progress of investment. Source:  http://www.expressindia.com

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