Indian government has finally realized the importance of road sector

Huge opportunities are unfolding in the Indian road sector. This means most Indian infrastructure and construction companies will benefit from the announcement of new orders or projects in the long run.

Also, a large number of these projects are on Build Operate and Transfer (BOT) and annuity basis, which means the companies will have a steady flow of cash through annuity or toll. This development spells good news for investors who can make full use of this golden chance and earn high returns in the long run.

WHY NOW?

The question that may cross your mind is why now? Ever since Kamal Nath took over as the Union minister for roads and transport, the Indian road segment has taken a new turn. He created various milestones since he was given this portfolio.

The most important announcement he made was the construction of the national highway at the rate of 20 km per day to expedite the achievement of National Highway Development Programme (NHDP) targets. This is significantly higher than the current execution rate of about 6 km per day. The ministry has also been working towards faster clearances related to procedures, land acquisitions and other formalities.

CREATION OF FUNDING

Kamal Nath is aware of the fact that improved road network in the country would not just lead to better connectivity but would also lead to increased energy efficiency in transport operations. He also travelled across different countries on road shows to international investors to highlight opportunities and potential in the Indian road sector.

Through these measures, the government has and will be able to rope in huge investments needed for the sector from international and national long-term investors.

Earlier it was difficult to raise money for more than five years or so as money was available only for a short period. However, now that the corporate debt market is developing, long-term investors like pension funds, mutual fund houses, insurance companies and even banks are coming forward to provide long-term capital. Most road projects, particularly the BOT ones need huge long-term investments in the form of debt and equity to fund them.

INCREASING VIABILITY

In terms of the less viable projects, the government increased the viability gap funding (VGF) or grant to 40% from 25%. Formerly, the grant used to be given after the completion of the project. But now it is handed over at the beginning of the project. In this manner the construction of the project does not get delayed for want of funds.

The government is also working on creating innovative ways of structuring non-viable projects like allotment of land, which can be monetized by developers so that the returns on investments are reasonable.

Other aspects like increasing the role of private players through public private partnership (PPP) and awarding of projects on BOT basis would mean that private players now have a bigger role to play in the construction of viable road projects.

A LONG WAY TO GO

India currently has about 33 lakh km of road network spread across the country. This is the third largest network in the world. But, in terms of density and quality of roads, India still lags behind many developed and developing countries of the world.

In relation to our population, the country’s roads are about 3 km per 1,000 persons, which is significantly lower than the world average of about 7 km per person. In terms of quality, about 80% of our roads are in a poor condition and require huge investments for repair, renovation and increase in the number of lines.

Majority of India’s roads are single line in spite of increasing traffic and congestion. Even the conditions of our existing roads are so bad that India’s logistical cost as a percentage of total production cost is considered to be about twice the world average of 7%.

No wonder due to the poor road infrastructure, India is ranked 87th in the world on the basis of quality of roads, which is very low and considered to be the biggest hindrance for economic growth as envisaged by the government for the coming years.

Surprisingly, within this vast network of roads, only about 2% is accounted for by national highways and a very minuscule part is accounted for by express highways, which is very critical considering that about 40% of the total road traffic is handled by national highways.

The slow transportation of goods has also affected the movement of goods among states, delaying exports and imports of the country. Especially, in the case of transportation of perishable goods like milk, vegetables and flowers among other things, which are procured from the hinterland takes so much time that they become stale or get destroyed before they can actually reach the end consumer and the export market.

This leads to wastage of goods due to the delay in reaching the markets. Express road connectivity to the main ports of the country and to major cities is very important to improve trade volumes and discover better prices for farm goods.

WHAT IS CHANGING?

The government has realized the importance of better roads in the country so that it can support the growth of the economy in the coming years. Roads are critical for any economy, especially a growing economy like India with a large population and different topographies.

The role of roads is of paramount importance for commercial and economic activities in the country. In India, passenger traffic is growing at about 12% per annum, while cargo traffic is growing over 15%, which will continue to rise as economic activities improve along with the increase in foreign trade.

India’s foreign trade is growing at 10-12 % and there is an immediate need to connect all the major ports of the country. The government has taken the first step in this direction. Under the NHDP (phase II), the government will connect major ports and build freight corridors, which will connect many states from the eastern part of India to western India.

In phase III of the NHDP, all major capitals will be connected with highways. Also major cities and points that could not be connected in phase II will be connected with better road infrastructure. Besides, plans are afoot to improve and connect rural India to major cities of the country soon.

EASING HURDLES

Most of these plans are not just on paper. In fact the government has already awarded projects to achieve this goal. The government formed the BK Chaturvedi Committee, which presented its findings and suggestions to make progress in the sector.

Based on the findings of the committee report, several changes have been incorporated and more importantly, the government is seriously working on the recommendations, which are quite innovative and provide solutions to various problems that the companies have been facing.

Changes have been incorporated with regard to land acquisition, which is the biggest problem for construction of roads in the country.

Now, NHAI will work along with the state governments for facilitating land acquisition and all state governments have been directed to coordinate for the same. NHAI now awards road projects only after 80% of the land has been acquired.

FEW SPEED BREAKERS

Tackling delays in approvals, decision-making, faster resolution of disputes and coordination among different departments are few other highlights of the recommendations of the committee report.

Essentially, most of the changes are already in effect and new orders are awarded to interested parties. The flow of new road orders in the last few months was the highest in the last several years. This itself speaks volumes about the commitment of the government and its intention to put things on ground.

Also, the projects which were not viable and did not attract private participation were given extra focus and restructured within time frame along with consultations of private players while changing the terms and conditions of the project. There are other measures also which have attracted private participation in road projects.

Large projects will be built on a BOT basis, which are expected to have a higher return of about 18% to 20% on investments as compared to 14% to 16% earlier. Additionally, the new guidelines that have been framed are such that once a project is awarded for a particular road, the private player is given an assurance that there will not be any competition or construction of road, which will make sure that the cash flow in terms of the collection of the toll is protected.

What is more remarkable is that the government now has experts as representatives from development agencies like the World Bank, the Asian Development Bank, who make sure that the projects are not delayed and hurdles are resolved.

These representatives keep track of projects and act as a liaison between government agencies and private parties. They also bring their experience to structure the project in such a manner that it gets executed.

QUANTUM OF OPPORTUNITY

There are different estimates about the size of the opportunity. But there is little or no doubt that the opportunity is far bigger than what it used to be a few years ago.

When we talk about 20 km per day of the construction of roads, this in itself is self-explanatory. This means that the country will have to build about 7,300 km of roads every year. This is significant as the current run rate is just about 2,500-3,000 km of roads built every year.

One could also imagine the kind of work that will now flow. For the eleventh five year plan which will end in 2012-13, about Rs 3.14 trillion will be invested as compared to Rs 1.45 trillion invested in the tenth five year plan. This is still the tip of the iceberg. India’s investment in the roads segment is expected to be in the range of Rs 10.5-11 trillion over the next decade.

In the near term, about 5,000 km of new expressways will be built and the projects will be awarded for the same. Also, NHAI has plans to award work for about 37,000 km of roads over the next three years.

Besides, under the NHDP’s different phases, the government will award work relating to the upgradation of about 55,000 km of roads over the next 8-10 years.

WHO WILL BENEFIT?

Most construction and infrastructure companies are focusing on this particular segment and their exposure has gone up in the recent past. IRB Infrastructure and IL&FS Transport Network (ITNL) are popular in the roads segment having the highest exposure to the road segment. In the case of IL&FS, the company has recently come out with an IPO and was listed recently.

ITNL is amongst the largest private sector BOT road operators in the country having integrated business model providing service for projects, from conceptualization, construction to operating and maintenance of the road projects. The company has already bagged about 19 road projects.

Apart from roads, the company is also looking for opportunities in airport segments and plans to bid for more projects in this segment. The company’s advantage is its large portfolio of BOT assets and a long experience in the sector. The company has presence across different parts of the country and has about 9,397 lane km of road projects under its belt.

IRB Infra too is a leading player in the roads segment generating almost 100% of its revenue from this segment. The well-known Mumbai-Pune highway, one of its kind in India, is operated by IRB Infra.

The company has an integrated business model having large experience in toll roads and highways sector. The company has about 1,100 km of road projects in its kitty, which is the second largest among private players in the whole of India.

As opportunities are growing, the company should be able to procure more projects and increase its current portfolio. The company will not only benefit on account of the construction of these projects but also due to the collection of toll and annuity from these projects, providing stable future cash flow.

Also most of its projects are strategically located in major traffic areas like Mumbai-Pune, Mumbai-Surat, etc. The company also won projects in other states like Rajasthan and Punjab and is gradually focusing on becoming a pan-India player in the road segment.

Source: stockmarketsreview.com

TEXT-Fitch affirms SNBTPL ‘s bank loans at BBB-(ind)

April 16 – Fitch Ratings has today affirmed SEW-Navayuga Barwani Tollways Pvt Ltd.’s (SNBTPL) senior long-term project bank loans aggregating INR5,474m at ‘BBB-(ind)’, and subordinated bank loans of INR300m at ‘BB+(ind)’. The Outlook is Stable.

SNBTPL enjoys an 18-year concession from National Highways Authority of India [NHAI.UL] (NHAI, ‘AAA(ind)’/Stable) to design, engineer, build, finance, construct, operate and maintain on a Build, Operate and Transfer (BOT) basis an 82.8km road stretch on the National Highway 3 (NH-3) in the state of Madhya Pradesh. The estimated cost of the project is INR7.9bn, with the scheduled commercial operations date (COD) in May 2011.

The affirmations follow SNBTPL’s reasonable progress over the last year in achieving different project milestones during the critical construction phase. Fitch does note however that the company is slightly behind plans. The entire right of way (ROW) required for the project is reportedly in the company’s possession, with the exception of a three-km stretch of forest land; however, first-stage approvals have been received from the forest department.

As of March 2010, the project has received equity infusions (61.3%), and has been drawing down on term loans – 58% of senior debt and 57% of sub-debt – as per schedule.

The ratings are constrained by the residual completion risk, although a fixed-price construction contract with SEW, whose terms mirror those in the concession, offer protection. Base-case debt service coverage metrics are extremely modest and vulnerable to various deep stress tests Fitch performed. A three-year tail in the concession allows the banks to restructure the loans, if necessary. Some liquidity support is available in the form of a fully-funded debt service reserve account (DSRA), equivalent to three months’ principal and interest payment.

Fitch has factored into its rating the operational track record and financial strengths of the sponsors. This includes the credit enhancement value of their undertaking to finance the cost and time overruns, to replenish the senior and subordinated DSRA and to provide unconditional and irrevocable bank guarantees if event project cash flows are inadequate to create the DSRA. Additionally, SEW has executed a letter of undertaking to the senior to infuse INR100m, after the COD, to augment debt payment capacity and to inject additional funds in case operations and maintenance expenses exceed the base case projections submitted to the banks.

The agency believes that the road has long-term economic potential, and that its locational advantage should have a beneficial impact on tollable traffic. Also, it is situated on the highway that represents the shortest distance between Mumbai and Agra.

SNBTPL is a 74:26 JV between SEW infrastructure Ltd (SEW, ‘AA-(ind)’ / Stable) and Navayuga Engineering Constructions Ltd (NECL). Following inter-se adjustments among the sponsors, SEW has increased its equity stake in the project to 74% from the 51%, resulting in a reduction in NECL’s holding to 26%.

Applicable Criteria available on Fitch’s website at www.fitchratings.com: “Rating Criteria for Infrastructure and Project Finance”, dated September 29, 2009.

Source: in.reuters.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

HCC joint venture bags Rs639-crore Andhra irrigation project contract new

Mumbai: Hindustan Construction Company (HCC) jointly with SEW Infrastructures Ltd and Megha Engineering & Infrastructures Ltd (MEIL) has bagged a Rs639-crore contract for building a barrage of around 3.5 km on river Pranahita near Tummidi Hetti village in Adilabad district of Andhra Pradesh.

HCC will have a share of Rs326.03 crore in the work being undertaken for the Pranahitha-Chevella Package-3 being undertaken by the Irrigation & Command Area Development (ICAD) department of the government of Andhra Pradesh.

The contract covers detailed investigation, preparation of designs, drawings and construction of a barrage including fixing of gates, head regulator and 500 meter long gravity canals. The project will be completed in 48 months.

The project is a part of the government’s ‘Jalayagnam’ programme, an initiative to provide immediate irrigation benefits to all underdeveloped regions of Andhra Pradesh.

Pranahitha-Chevella lift irrigation scheme will irrigate an ayacut of 12.20 lakh acres and provide drinking water to about 1,000 villages in Adilabad, Karimnagar, Nizamabad, Medak, Nalgonda and Rangareddy districts in Telangana region.

HCC is currently involved in construction of Godavari lift irrigation phase I and Phase II in Andhra Pradesh where Phase I has already been commissioned and phase II is in advanced stages of completion. In addition, HCC is currently executing four major projects in Andhra Pradesh, including the country’s first cavern for strategic storage of crude oil at Visakhapatnam, the Veligonda lift irrigation project, the Rajiv Sagar lift irrigation project and a 30 km highway of NHAI on NH-7 under north-south corridor on BOT basis.

HCC constructed the first bridge over the river Godavari at Shahgar, in Andhra Pradesh way back in the 1930s. Since then it has built several infrastructure projects, including the Godavari Barrage at Rajahmundry, the Papavinasam Dam, the Vizag Monolith & West Wall Protection and the Railway Bridge over Godavari which is the first and only bow-string bridge in India, the company said in a release.

HCC has so far constructed over 45 dams, barrages and 15 powerhouses in the sub continent, contributing to over 30 per cent of the country’s installed hydropower capacity.

Source: domain-b.com

Mumbai sea link banks on ultra-high traffic flows

Reliance Energy has quoted a concession period that has taken even MSRDC by surprise.

The Reliance Energy-led consortium’s ambitious bid, which helped it emerge the preferred bidder for the Rs 6,000-crore Mumbai Trans Harbour Link, has set a new performance benchmark in the infrastructure business.

The consortium has offered to build the 22-km six-lane bridge, which will connect Sewri and Nhava Sheva (see map), by 2013, recover the costs from revenues and hand it back to the nodal agency, the Maharashtra State Road Development Corporation (MSRDC), in just nine years and 11 months.

In technical parlance, this is known as the concession period.

To put this in context, the Mukesh Ambani-controlled Sea King Infrastructure, which was the only other bidder, quoted a concession period of 75 years.

Significantly, in 2004, MSRDC itself estimated a 35-year concession period for the sea link project. For the Mumbai-Pune expressway, the period was 30 years.

Indeed, Parvez Umrigar, managing director of Gammon, said his construction engineering company had decided to opt out of the sea link project because of the “frightening equation of risk and return”. Umrigar declined, however, to comment on the Reliance Energy bid.

So what made the Anil Ambani-controlled Reliance Energy quote a concession period that has taken even MSRDC by surprise?

Reliance Energy declined to comment on the issue.

In its 2004 study, the MSRDC had projected a traffic of 50,000 passenger car units (PCUs) a day when the bridge was completed.

But back-of-the-envelope calculations show just to break even, the Reliance Energy consortium would need a minimum of 1,09,589 PCUs a day paying an average toll of Rs150 for around 10 years.

A passenger car unit considers one truck as 2.5 passenger cars to calculate the overall traffic.

An industry expert said the operational cost for the project will be at least Rs 500 crore over 10 years.

Besides, the usual debt-equity ratio for such infrastructure projects is 70:30. Assuming a conservative 5 per cent interest rate on the debt, the interest cost for a 15-year loan would be around Rs 3,000 crore.

If the consortium wants just a 10 per cent return on its investment, the traffic requirement on the bridge would easily be around 250,000 PCUs a day — five times the MSRDC’s traffic estimate.

MSRDC, however, said the traffic demand has changed a lot since 2004 and the figure is expected to be much higher in 2013, when the bridge is operational.

“The construction of the special economic zones (SEZs) by Reliance and the new airport in New Mumbai will increase traffic demand hugely,” said Vijay Garva, chief engineer for the link at the MSRDC. He, however, did not give any fresh traffic estimates.

The MSRDC officials added that a lot of traffic on the Mumbai-Pune route would also be diverted to the bridge. The sea link will also ease pressure on the Mumbai-Pune Expressway, National Highway-4 and Mumbai-Goa Highway, where traffic is expected to increase.

The MSRDC is asking for a Rs130-crore performance guarantee to be kept with MSRDC so that the bidder sticks to the construction time schedule of five years.

Nitin Gadkare, state BJP president and former public works minister, said Reliance Energy is obviously banking heavily on the new airport at Panvel and the SEZ.

However, the calculations may go awry if any of these projects gets delayed, he said.

Gammon India, however, is not expecting an exponential rise in the traffic from south Mumbai to Nhava Sheva, which is the gateway to traffic from Mumbai to Goa and Pune. Besides, there is already a link bridge in Vashi connecting south Mumbai to New Mumbai.

Source: business-standard.com

Anil edges out Mukesh in bid

Construction of the Mumbai Trans Harbour Link, a 21-km-long inshore bridge spanning Sewree on Mumbai Island and Nhava, the second longest bridge on the earth, will commence in December next and completed in five years from then, according to Maharashtra Public Works Minister Anil Deshmukh.Mr. Deshmukh said that the bid submitted by the Anil Ambani-led consortium of Reliance Energy and Hyundai of Korea won the contract for the prestigious project, defeating the consortium of IL&FS, SKIL Infrastructure and John Laing Construction led by his brother, Mukesh Ambani.

The bids were opened on Wednesday. The project worth Rs.6,000 crore is on a BOT (build, operate and transfer) basis. The Anil Ambani consortium bagged it for they had said they would collect the toll charges from user-vehicles for nine years and 11 months while his brother’s bid had quoted toll charges for 75 years.

The successful bidder will bear the entire cost of the project and transfer it to the state after operating it for the period. Mr. Deshmukh said that the toll charges were fixed, Rs.150 for light vehicles and Rs.250 for heavy vehicles. It is estimated that 50,000 vehicles use the trans-harbour bridge every day.

But the usage would go up because of developments such as new airport, expansion of the Nhava Sheva Port (Jawaharlal Nehru Port) and SEZ. The consortiums led by the Ambani brothers were the only rivals in the final round.

Mr. Deshmukh said that the letter of acceptance of the bid will be issued in March next.

Source: hindu.com

Reliance Energy is top bidder for Mumbai trans-harbour link project

A consortium led by Anil Ambani group company Reliance Energy Ltd (REL) has emerged top bidder for the Rs6,000 crore Mumbai trans-harbour link project.Maharashtra State Road Development Corporation (MSRDC) today opened financial bids for the 25-km six-lane project. However, no confirmation could be obtained from either MSRDC or REL.

Mukesh Ambani-led Reliance Industries group was also in the race for the project to build a trans-habour link between Sewri in Mumbai and Nava-Sheva across the creek in Navi Mumbai.

Sources said the REL-Hyundai combine quoted a lower concession period for the build-operate-transfer (BOT) project of nine years and 11 months as against 75 years quoted by the Mukesh Ambani-controlled Sea King Infrastructure.

Phase-I of the project will comprise a six-lane dual carriageway linking Nhava to Sewri and Phase-II, which is expected to be added in 2015 -18, will consist of a double track rail link that will run parallel to the road link on the north side.

The Rs6,000 crore project is slated for completion in five years. The REL-led consortium can charge Rs250 per heavy vehicle and Rs120 for cars and light commercial vehicles as toll charges.

Source: domain-b.com

A K Bhattacharya: India`s infrastructure puzzle

National highways in India have seen a dramatic improvement over the last decade. Improvements are more evident in shorter stretches. For instance, Jaipur, Chandigarh and Agra are now well-connected with Delhi. Similarly, the highway that connects Mumbai with Pune can easily compare with the best anywhere in the world. This is true of many other national highways connecting major cities in southern and eastern India.

Many of these roads can be used only on payment of toll charges. Going by the available statistics on toll collections, these roads have become the preferred option for motorists and even heavy vehicle drivers. In fact, the toll charges are quite low compared to the benefits they offer to the road users. There is a clear case for raising these toll charges so that the maintenance of the roads can be ensured without any funds constraint. Not surprisingly, the National Highway Authority of India is planning to build more such toll roads connecting different cities across the country.

Yet, better highways have not led to a reduction in the total travelling time. This is ironical. If you are travelling from Jaipur to Delhi, you will take at least 45 minutes to an hour to cover a distance of about 10 kilometres within the city before reaching the national highway. Once on the highway, the journey is smooth and fast with about 250 kilometres being covered in about three and a half hours. The problem starts again once you are about to enter the city of Delhi. And depending on your final destination point, this might mean an additional travel time of a couple of hours. It is the same story if you were to travel by road from Chandigarh to Delhi.

So, national highways have made driving easy once you get out of the city. But to reach a destination, you need to travel through the city. And the bottleneck is at the entry point of the city. Nothing much has been done in any of these cities to decongest the arterial access roads. The city of Delhi may have seen more flyovers in the last few years, but the impact has been marginal because the growth in the vehicular population in the city has also been phenomenal.

Airlines should have gained from this increasing vehicular congestion at the entry points of all cities. But pause for a moment to reflect on what is happening to airport congestions in almost all the major cities, you will notice a virtual re-run of what has already happened to Indian highways. The flying time between Delhi and Mumbai is only about an hour and a half. But the wait on the tarmac (in addition to the early check-in requirements because of security reasons) before the aircraft can take off is almost half an hour. There is another 30-45 minutes of hovering in the skies before the aircraft can actually land and you can be taken to the arrival terminal building. In effect, you end up waiting for almost the same time that you take to cover the actual distance. All this is due to airport congestion. Gone are the days when once you were airborne, you could confidently estimate the time by which you would be home. Consequently, there is little to choose between taking a Delhi-Chandigarh flight and travelling this sector by car.

In any other country, the railways should have benefited from this immensely. Since most railway stations are located in the heart of these cities, there is no long wait before one can reach the final point of destination. But the irony is that the Indian Railways has failed to take full advantage of this situation. The Shatabdi trains that run on these sectors could have easily become a preferred option for those who fly or travel by road on such sectors. But the quality of service and an erratic punctuality record are major problems for the Indian Railways.

Things might change though in the next couple of years. Delhi, Mumbai, Hyderabad and Bangalore would get new or completely refurbished airports with a capacity to handle more passengers without causing congestion and delays. There might be more expressways connecting more cities. Even the Indian Railways is planning to launch faster trains to connect different cities in all the regions.

But the worries might still remain. India’s infrastructure problems arise not just from its inability to create facilities with adequate capacity. Equally frustrating is the failure of most managers of these infrastructure projects to identify the last-mile problems and fix them before they become unmanageable. Even the country’s best-managed infrastructure project, Delhi Metro Rail Corporation, is not free from this malaise. And the solution does not lie with these individual project managers. There is an urgent need for the civic authorities in each of these cities to move in tandem with the infrastructure project managers and create necessary facilities within the cities to resolve the last-mile problems and remove other bottlenecks so that the full benefits of these huge projects accrue to the people.

Source: business-standard.com

Govt planning toll on two-lane highways too

NEW DELHI: Driving on national highways is set to get more expensive with the government planning to start tolling even two-lane stretches besides intensifying the fee-collection across the golden quadrilateral (GQ).

Tolling was so far confined to four and six-lane highways and expressways where upgradation work has been completed. But soon, you would be stopping at toll plazas even on incomplete stretches of highways that link the four metros – Delhi, Mumbai, Kolkata and Chennai.

However, a major change in policy is the move to charge users for driving on two-lane highways that form nearly 55% of the national network of 66,590 km. Under the new toll policy, the ministry of road transport and highways intends to levy toll on 20,000 km of highways which are to be taken up for upgradation through the public-private partnership route.

“On a four-lane highway, a car user has to pay about 65 paise per km. Now, the plan is to provide the same quality road surface with paved shoulders on two-lane highways and have proper signages. The cost that we are proposing will be 60% of the four-lane cost (roughly 39 paise per km),” road & highways said secretary Brahm Dutt.

Source: timesofindia.indiatimes.com

Gammon inks pact with Mumbai Port for Rs 1,200-cr terminal project

CHENNAI: Gammon India Ltd has informed the BSE that Indira Container Terminal Pvt Ltd, the special purpose vehicle incorporated by the consortium of Gammon and Dragados S.P.L., on December 3 signed the licence agreement with the Mumbai Port Trust for dev eloping the Mumbai Offshore Container Terminal Project.

The project’s estimated cost is Rs 800 crore in the initial phase of three years, and Rs 400 crore subsequently, thus aggregating Rs 1,200 crore.

It is on BOT basis for 30 years, including three years of construction and equipping period, from the date of signing the licence agreement. – Our Bureau

Source:  thehindubusinessline.com

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