Sternon launches Phase 2 of ‘Magic Hills’ NRI project in Navi Mumbai
April 12, 2008
Awarding of contract for the Mumbai-Navi Mumbai, 22-km iconic bridge to the Anil Ambani-led consortium pushes realty prices.
Dubai-based Sternon Group has launched the second phase of its NRI project ‘The Magic Hills’ in Navi Mumbai, as plans for the much-awaited 22-km sea bridge linking the Mumbai metropolis to Navi Mumbai have finally started taking shape.
Navi Mumbai, the planned city that had long suffered due to lack of fast-track connectivity to the Mumbai metropolis, has got the biggest boost in recent history following the awarding of the contract for an ambitious trans-harbour bridge to an Anil Ambani-Hyundai consortium, spurring greater interest among Non-Resident Indian (NRI) investors in Navi Mumbai real estate.
According to Sternon Group, which is developing the NRI mega-project ‘The Magic Hills’ on Mumbai-Pune Expressway in partnership with Mumbai-based Garnet Construction, the real estate market is extremely upbeat following the new development. Sternon Group recently commenced work on the first phase of Magic Hills Residences which was sold out, and has now launched the second phase.
“For several years, there was just talk of a fast-track sea link between the highly congested Mumbai metropolis and the satellite city of Navi Mumbai. Now, that need is being fulfilled through a world-class trans-oceanic bridge that will reduce the commuting time between the twin cities to mere 30 minutes, instead of two hours at present,” said Hussaini F. Nalwalla, Managing Director, Sternon Group.
“The immediate impact of the news is that real estate prices have begun to climb higher, making Navi Mumbai one of the hottest investment destinations in India. We have now launched the second phase of Magic Hills Residences to offer global NRIs another chance to be part of Navi Mumbai real estate boom,” added Nalwalla.
The Sewri-Nhava Sheva bridge is India’s answer to China’s famous 36-km Hangzhou Bay Bridge. Billed as India’s biggest infrastructure project to date, it will be completed in 2013. Contract for the six-lane, 22-km trans-oceanic bridge, estimated to cost over Rs. 6,000 crores, has been awarded to the Anil Ambani-Hyundai consortium. The bridge route will provide a straight link to the upcoming Navi Mumbai International Airport, as it connects the JNPT Port and the southern part of Navi Mumbai leading to Panvel.
The iconic bridge is among the four mega-projects that are driving real estate in Navi Mumbai. The second is the Rs. 10,000 crore Navi Mumbai International Airport to be completed in 2012, boasting two runways. The third is the Special Economic Zone (SEZ) being developed by Mukesh Ambani. The fourth is the Bahrain-based Gulf Finance House’s $10 billion SEZ ‘Energy City India’ spread across 1,600 acres, to be completed in five years.
On the real estate scene, most of the land in Navi Mumbai has been snapped up by builders and developers for townships, five-star hotels and commercial complexes. The Hiranandani Group recently launched ‘Panvel Residential’, a massive complex, which will be part of the mixed-use Panvel Commercial Township.
“For NRIs looking for a sound investment or a second home in India, Navi Mumbai undoubtedly represents a highly attractive option,” said Nalwalla. “Realty analysts are of the view that the Mumbai-Pune Expressway, with easy access to hills stations like Lonavla and Karjat, as well as boom-town places like Pune and Goa, is set to be the hottest investment destination.”
Sternon’s ‘Magic Hills’ is a residential cum commercial project, located close to the Navi Mumbai International Airport. The promoters have recently acquired additional land, taking the total area to 750 acres. The second phase offers villas, row-house and plots, as well as high-end villas for upmarket investors and home-seekers. The future phases of the project will have commercial, IT and educational complexes.
Source: arabianbusiness.com
Mumbai sea link banks on ultra-high traffic flows
February 23, 2008
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
February 21, 2008
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
February 20, 2008
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
December 19, 2007
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
December 17, 2007
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
December 4, 2007
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
Cial has non-metro, foreign airports on radar
November 21, 2007
It plans to participate in the modernization of the 35 airports in the country, apart from the overseas projects
New Delhi: Cochin International Airport Ltd (Cial), the company that built the new international airport at Kochi, India’s first to be built by a private sector firm, is looking to build airports in India and in other countries in an effort to tap growing demand for airline infrastructure in many parts of the world.
Cial plans to participate in the modernization programme of 35 non-metro airports in the country and also wants to build airports in Sri Lanka, Ghana, Angola and Papua New Guinea, according to S. Bharat, managing director, Cial.
Cial was promoted by the Kerala government, financial institutions, airport service providers, non-resident Keralites and a group of entrepreneurs.
The single largest shareholder in the company is the state government with 35% of the paid-up capital.
Bharat added that Cial is in talks with an international finance company and a technical partner to promote a new company that will handle these projects.
Cial’s overseas plans come at a time when international airport operators such as Singapore’s Changi Airport International (CAI), Airport Company South Africa Ltd, Fraport AG and other leading players from Mexico, Turkey, Paris and Germany are looking to partner with Indian companies to bid for airport projects in the country. Singapore’s CAI had floated a joint venture company with Tata Realty & Infrastructure Ltd, a subsidiary of the Tata group for the airport modernization projects in India.
If it wins any of the projects to build airports outside the country, Cial will be following in the footsteps of Bangalore-based GMR Infrastructure Ltd, the lead partner in the consortium that runs Delhi International Airport, which will be developing Sabiha Gokeen International Airport (SGIA) at Istanbul, Turkey. GMR’S partners in this project are Malaysia Airports Holdings Berhard and Limak Insaat Sanavi San Ve Tic A S Turkey.
Bharat confirmed Cial’s overseas aspirations.
“The government of Sri Lanka has invited us to study the possibilities of building an airport there. We have got offers from Ghana, Angola and Papua New Guinea. Cial’s team will shortly visit those countries,” he said.
Cial plans to take up overseas airport projects on a build-operate-transfer (BOT) or build-own-operate (BOO) basis. Under the BOT model, the developer constructs and manages a project for a specified time before handing it over to the government; in the BOO model, the developer continues to operate the project with a local partner.
“The funding of these airport projects would be done by a special purpose company formed under Cial,” Bharat said.
He declined to name the international partners citing confidentiality agreements.
“We are also looking at bidding for the ongoing airport projects within India as we can make airports at lower cost,” Bharat added. The Cochin airport was built at a cost of Rs315 crore including the cost of land.
A government committee on infrastructure, headed by Prime Minister Manmohan Singh, has estimated that India will need to spend more than Rs40,000 crore in developing airports between 2006-07 and 2013-14. Of this, an estimated Rs31,100 crore is expected to come from public-private partnerships.
The ministry of civil aviation has decided to modernize and upgrade 35 non-metro airports across India.
Besides, the government is also planning to build greenfield airports at Navi Mumbai (Maharashtra), Kannur (Kerala), Hassan and Gulbarga (Karnataka), Ludhiana (Punjab), Greater Noida (NCR), Paykong (Sikkim), Cheithu (Nagaland) and Chakan (near Pune, Maharashtra).
“At a time when current airport modernization programmes envisage spending at least Rs5,000 crore for a single project, Cial had built a world class product on a very modest budget. Cial can cash in on its expertise in the upcoming non-metro airport projects,” said a Mumbai-based aviation analyst, who does not want to be identified because he is not authorized to speak to the media.
Reliance Energy Ltd(REL) to hive off infrastructure projects
November 12, 2007
NEW DELHI: In a bid to separate the power and infrastructure projects, Reliance Energy Ltd. (REL) has now decided to transfer all its infrastructure projects to a separate wholly-owned subsidiary.
The REL board had already given its approval to the proposal.
The move comes hot on the heels of REL deciding to hive off its power generation business as a separate company — Reliance Power Limited (RPL).
RPL has filed a draft red herring prospectus with the Securities and Exchange Board of India (SEBI) for an initial public cffering (IPO) of around Rs. 12,000 crore.
The decision to hive off infrastructure portfolio to a new subsidiary comes in view of the increasing portfolio of the company on this account in recent months.
REL is developing highways for the National Highways Authority of India (NHAI) under the build-own-transfer (BOT) scheme.
It is involved in five National Highway projects in Tamil Nadu, covering a length of 400 km at a cost of Rs. 3,100 crore. In addition, it is pursuing road projects, including the proposed Rs. 5,000 crore Western Freeway sea-link project connecting Worli and Nariman Point in Mumbai and the Rs. 6,000-crore Jaipur Ring Road project.
On the real estate side, the REL-led consortium had emerged as a winner for developing a business city in Hyderabad with an estimated investment of Rs. 6,500 crore. The city will be built in 77 acres, which will include a 100-storey trade tower. It has also bagged the metro rail project in Mumbai that involved the development and operation of a fully-elevated metro rail.
The total cost of the project is around Rs. 2,500 crore. It has also bid for line 2 of the Mumbai metro elevated track between Mankhurd and Charkop with an estimated investment of Rs. 6,500 crore. The company is also bidding for the Rs. 6,000 crore Mumbai trans-harbour link.
Source : The Hindu
IRB Infrastructure to tap market with 5.1 crore share float
October 4, 2007
MUMBAI: Another infrastructure to realty developer has sought the market regulator’s permission to tap the capital markets.
IRB Infrastructure Developers Ltd has lined up 5.1 crore share equity offering of Rs 10 each through 100 per cent book building process.
IRB Infrastructure was formed to fund the capital requirement of the IRB Group’s initiatives in the infrastructure and construction sectors. It has extensive experience in roads and highways and is working on build/own/transfer projects like the Mumbai-Pune Expressway and Bharuch-Surat section of National Highway 8. It has also diversified into real estate development.
As a part of its business strategy, the company now proposes to invest in its subsidiary IDAA and make prepayment and repayment of its existing loans and the subsidiaries through the net proceeds.
In January 2007 it formed a consortium with Deutsche Bank AG Singapore Branch to jointly bid for certain road infrastructure projects.
The Hong Kong branch of Deutsche Bank, Jade Dragon (Mauritius)-a subsidiary of Goldman Sachs, and CPI Ballpark Investments of Merrill Lynch each hold 3.85 per cent stake in IRB Infrastructure.
Deutsche Equities India and Kotak Mahindra Capital are book running lead managers to the issue.