WASHINGTON: In a boost to India’s 100 smart city programme, the US will help India in developing three such cities apart from joining hands with civil society and authorities to provide clean water and sewage facilities in 500 cities in the country.
The three cities are Allahabad, Ajmer and Visakhapatnam. This announcement was made after the talks between Prime Minister Narendra Modi and President Barack Obamahere yesterday.
While presenting the Budget for 2014-15, Finance Minister Arun Jaitley had said the Prime Minister has a vision of developing 100 smart cities as satellite towns of larger cities and by modernising the existing mid-sized cities.
“With development reaching an increasingly large number of people, the pace of migration from the rural areas to the cities is increasing,” Jaitley had said.
Wounding up his whirlwind five-day US visit yesterday, Prime Minister Narendra Modi “thanked” America and called his trip a highly “successful and satisfactory” one.
Mihir | New Delhi |
SUMMARY–Road transport ministry is looking at a slew of options, including a two per cent surcharge on the sale of land for residential purposes along the expressway.
To part-finance the cost of constructing the 265-km Delhi-Jaipur expressway project, the road transport ministry is looking at a slew of options, including a two per cent surcharge on the sale of land for residential purposes along the expressway.
The funds collected by way of the surcharge, according to the proposal, will be routed to the Central government and used subsequently for the purpose of constructing the expressway.
“Our estimates show that this surcharge will give us around Rs 4,700 crore, which will fund a large part of our project cost. If you exclude the cost of land acquisition, the project is estimated to cost around Rs 7,000 crore,” said a senior road transport ministry official.
He further explained that any residential project along the expressway will need entry and exit points for its traffic and this surcharge will be a payment for providing that exit to those residential colonies.
The Delhi-Jaipur expressway is the first expressway project that the Central government hopes to work on. The other expressway projects in the pipeline are the Delhi-Meerut, Mumbai-Vadodra and Eastern Peripheral expressways.
This proposal, along with others, will be discussed by an Inter-ministerial Council headed by the road secretary and have members from the finance ministry, Planning Commission and the National Highways Authority of India (NHAI).
The other proposals include developing the expressway by funding the shortfall through a viability gap funding, allowing the company developing the project rights to collect tolls also on the Delhi-Gurgaon expressway and Delhi-Jaipur highway after their concession period is over and government funding the construction of the project.
“Allowing the expressway company to collect toll on the other highway connecting Jaipur will also take care of the competing highway issue. Enabling the expressway concessionaire to collect toll on these highway should not be a problem, as we will put a clause in the bid document for Delhi-Jaipur expressway,” said the official. He added that the concession period for Delhi-Jaipur will end in 2023 and Delhi-Gurgaon is set to end by 2024.
According to current estimates, the Delhi-Jaipur expressway would not be able to break even in terms of total traffic that would use it. It is estimated that the expressway will cater to a traffic of 25,000 passenger cars daily but requires 42,000 passenger cars to break even.
The NHAI had raised a question on the viability of the project and said that it was neither feasible through toll nor through government funding. It had also said that private companies would not be interested in getting into a high-cost expressway project at this juncture.
NEW DELHI: Private highway developers, who are struggling to get finances for projects, are likely to impact government’s target of awarding 9,500 km during this fiscal. With only 600-odd km road stretches awarded during the first half of the financial year, now even senior National Highways Authority of India (NHAI) officials are conceding that they can award not more than 5,000 km till March, 2013.
At least 23 road projects awarded last year have missed their timeline to tie up funds. NHAI gives six months to contractors to get funds from banks and financial institutions for all build, operate and transfer (BOT) projects.
India will soon raise Rs.10,000 crore ($1.9 billion) through a public debt issue for funding its ambitious national highways project, union Road Transport and Highways Minister C.P. Joshi said Wednesday.
“The finance ministry has allowed us to raise Rs.10,000 crore through debt bonds for funding construction of highways across the country,” Joshi told reporters on the margins of a trade event.
The state-run National Highway Authority of India (NHAI) will raise the fund through tax-free infrastructure bonds within a month. “The proposed fund-rising will be sufficient for the highway projects under execution. We will raise more funds as we go for more such projects,” Joshi said after unveiling the sixth international construction equipment industry trade fair Excon 2011 on the outskirts of this tech hub.
In the budget for this fiscal (2011-12), Finance Minister Pranab Mukherjee made a provision for the first time to allow NHAI to raise funds as government’s share of financing the roads sector.
Though the highway authority planned to raise the amount through private placement earlier, rising interest rates had forced it to opt for the public issue.
The proposed fund will be used to partly finance highway projects to be executed on build, operate and transfer (BOT) basis and for viability gap funding through which the government pays to make the projects viable financially.
Under the BOT model, the winning bidder will build the highways and the government will pay in installments.
The authority has awarded till date 59 projects covering a distance of 7,994 km that is estimated to cost a whopping Rs.60,000 crore (Rs.600 billion).
“To achieve the target of building 20 km of road a day set by the prime minister (Manmohan Singh), the highway authority has to award 7,300 km for every three years consecutively,” Joshi pointed out.
Admitting that only 4,600 km was awarded during this fiscal, Joshi said the target of 20 km per day would be met by 2014.
“We have not been able to achieve 20 km per day but we are confident of doing it before the next general elections,” Joshi added.
President Kibaki points to a map of the Lamu-South Sudan-Ethiopia corridor project at the KICC in Nairobi on July 26 as PM Rail Odinga and Transport minister Amos Kimunya look on. Photo/STEPHEN MUDIARI
A Chinese company has expressed interest in financing the construction of Lamu Port and its related infrastructure.
The firm, JS Neoplant Company Limited of Shanghai, has said it is “ready, able and willing” to undertake the massive project whose cost had been estimated at US $16 billion (Sh1.4 trillion).
According to the communication, the six components of the project include a sea port straddling some 750 acres of land with 10 container terminal berths and three bulk cargo terminal berths, an oil jetty and an international airport with a 2,000 person-per-day capacity on 10 daily flights.
Other components are a three-limbed 1.4m gauge railway line for high speed trains: the limbs are Lamu-Isiolo-South Sudan (1,400km); Nairobi-Isiolo-Moyale-Addis Ababa (1,596km) and Lamu-Mombasa (350km).
The pipeline too had three phases: South Sudan border-Lamu-Isiolo (1500km); Nairobi-Isiolo-Moyale-Addis Ababa (1400km) and a branch to link Lamu to the existing Mombasa/Kampala pipeline.
The project also includes three stretches of highway: Lamu-Isiolo-South Sudan border (1400km); Nairobi-Addis Ababa (1596km) and Lamu-Mombasa (320km).
A fibre optic cable running along the highway completes his gargantuan regional project.
Last month, President Kibaki gave an indication of the impending commencement of the construction work with a promise to undertake a ground-breaking ceremony “soon”.
“The feasibility study for Lamu Port and supporting infrastructure is now complete… I look forward to soon undertaking the ground-breaking ceremony for the project,” point he said in Mombasa a week ago when he visited the town to open this year’s Agricultural Society of Kenya show.
President Kibaki mandated Kenyan ambassadors to aggressively market the proposed second transport corridor that would serve Ethiopia and South Sudan.
Several countries including Canada, Germany, China, Japan and United Arab Emirates have made inquiries since the government declared its intention to construct the corridor about three years ago.
The corridor has immense political and economic potential and will open up large sections of the country’s North Eastern and Eastern provinces that have for years enjoyed scant attention in terms of business opportunities.
“I urge you to focus some energy on promoting investment in this project in your respective areas of accreditation, as it is expected to play a major role in catalysing Kenya progress towards the achievement of the economic goals,” Mr Kibaki told the ambassadors.
Japan Port Consultants has completed a one-year feasibility study on the development of the port and Lamu-South Sudan-Ethiopia Transport corridor.
With the anticipated entry of South Sudan and even Sudan into the East African Community, estimates put unrestricted demand of cargo rising by more than 32 million tons per annum – far above what Mombasa Port alone can handle.
South Sudan has always relied on Port Sudan in Sudan to the north.
The Ethiopian market, the other target, is currently served by Djibouti port. Lack of good roads connecting Kenya and Ethiopia, with a population of 80 million, has hampered the trade between the two nations.
Ethiopia’s dependence on imported goods has meant that Djibouti port handles 98 per cent of Ethiopian traffic which is about 85 per cent of all the traffic in through the port.
NEW DELHI, NOV 22: The Centre is likely to stop financing future highway projects on a build-operate-transfer (BOT) annuity basis because the entire traffic risk falls on National Highways Authority of India (NHAI) or the government that collects the toll.
NEW DELHI, NOV 1: Road sector projects seem to be on the fast track with the public private partnership appraisal committee (PPP-AC) clearing nine road projects in its second meeting on Wednesday.
The consortium of Soma Enterprise Ltd., a leading infrastructure developer with Nagarjuna Construction Co. and Maytas Infra Pvt. Ltd., today announced that financial closure on the Rs.765 crore Elevated Toll Expressway Project on Bangalore – Hosur Section of NH-7 (from Km 9.5 to Km 18.5) on BOT basis has been achieved. Out of the Rs.765 crore, Rs.600 crore of debt has been raised from a consortium of banks, led by Canara Bank. The consortium will operate the expressway for a period of 20 years. The special purpose vehicle formed for this project is Bangalore Elevated Tollway Ltd.
Driven by infrastructure spending, the demand side for construction companies remains robust. The key to success will lie in their ability to ramp up resources and capitalise on order flow.
Compound Annual Growth over 3 Years (%)
Indicative OPM across segments (%)
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Infrastructure has been the new market mantra the past two years. While private equity investors showed keen interest in infrastructure/construction companies, a number of mutual funds also jumped on to this booming bandwagon, investing a chunk of their assets in the sector. An annualised revenue growth of 30-40 per cent over the past three years and an average order size of three-four times the revenues also seem to justify this newfound enthusiasm.