October 31, 2013
The World Bank has approved a $500 million loan for the National Highways Inter connectivity Improvement Project in India to improve the national highway network’s connectivity with economically lagging and remote areas.
The project will focus on three low-income states – Rajasthan, Bihar and Orissa – and on less developed regions in Karnataka and West Bengal, a press release from the Bank said.
The release said that, In recent years, there has been an increasing recognition of the importance of improving transport connectivity in remote and economically lagging areas which do not fall under the National Highways Development Programme (NHDP).
“Some 43% of the primary highway network, also known as the non-NHDP network, has been identified for development. Considerable stretches of the non-NHDP network requires strengthening and upgradation, and suffer from connectivity gaps. Substantial portions of these roads are intermediate or single-lane highways and have poor traveling conditions,” it said.
“Over the years India’s core highway network has seen significant improvement. However, over 40% of thenetwork suffers from major connectivity gaps and requires better maintenance and upgradation. These roads often serve as the primary or the sole transport link to several remote and economically lagging regions. By providing better connectivity and strong institutions, the project will help states achieve fastersocial and economic benefits,” said Mr Onno Ruhl, World Bank Country Director for India.
The National Highways Interconnectivity Improvement Project, approved on October 29, will upgrade and widen about 1,120 km of existing single/intermediate lane National Highways to two-lane in Bihar, Orissa and Rajasthan and in less developed regions of Karnataka and West Bengal.
Other key components of the project include enhancing the institutional capacity of the Ministry of Road Transport and Highways (MoRTH) to better manage the highway network.
Recognizing that road safety is a critical issue in the country today, the project will strengthen road safety management systems with the objective of reducing fatalities and serious injuries from road accidents in the country.
“Road safety in India continues to be a major concern. Road accident death rate in India is ten times the levels seen in the European Union and is costing the economy an estimated 3% of the GDP on an annual basis. This project will focus on road safety by strengthening capacity, improving data collection and training,” Mr Ruhl added.
The project will focus on improving road accident data collection and analysis at central and state levels through implementation of the Road Accident Database Management System (RADMS) in project states; strengthen road safety capacity at the central level; and focus on training.
“The project will contribute to economic growth both locally in the project area and at the regional level by removing barriers to connectivity. It will develop priority highways within the non-NHDP network; implement a range of contracting and institutional reform measures; and will have specific interventions for process improvements, network monitoring and management, and updating of standards and specifications, with particular emphasis on road safety,” said Mr Pratap Tvgssshrk, senior transport specialist and the project’s task team leader.
Overall the project will help road users have improved access to highways and transport services and benefit from the savings in travel time and transportation costs. Other expected positive outcomes of the project include improved access to a larger number of economic opportunities, better health services, better access to higher levels of education, and improved road safety.
The loan, from the International Bank for Reconstruction and Development (IBRD), has a 5-year grace period, and a maturity of 18 years, the release added.
October 29, 2013
Abhinav Garg & Dipak K Dash, TNN |
“The operator is receiving money but not accounting (it). We found that the handheld devices with which they collect toll during peak hours are not connected to the main server for escrow accounts. Same is the case with extra toll booths they set up. This money was not accounted for,” senior advocate Sandeep Sethi, representing NHAI, claimed before Justice Manmohan Singh.
Sethi said once the survey findings were filed in HC and a show cause notice on underreporting of traffic issued to the private operator,Delhi-Gurgaon Super Connectivity Ltd (DGSCL), “our revenue for September, collected in October, increased by Rs 60 lakh.”
The KPMG survey, which has been refuted by DGSCL, had claimed underreporting of vehicles causing a daily revenue leakage to the tune of Rs 15.58 lakh during August 2012 and July 2013.
When Justice Singh asked if the authority was open to “finding a cure” to the dispute if, for arguments sake, the operator was willing to refund the amount allegedly siphoned, Sethi replied in the negative. “All that is now history. We can’t repose our faith in the operator. We have learnt from our mistakes,” the counsel said, making it clear that NHAI was not interested in a settlement with the firm.
On being further prodded by the court, the counsel claimed despite interventions by various authorities, commuters continue to suffer as DGSCL has not implemented reforms nor is it trying to improve traffic flow. Answering the court’s apprehension on the future of the toll plaza if it sanctions termination of the contract, NHAI indicated it will operate it till it finds a suitable replacement. The court will hear DGSCL’s defence on Friday.
“We have strongly refuted the KPMG survey findings and would take this up in the court as well in the next hearing,” the DGSCL spokesperson said. “The survey was done manually which is prone to human error and did not employ scientific and automated vehicle classification and counting (AVCC) system as stipulated in the concession agreement and neither did it correctly account for exemptions and run-throughs of traffic.”
Regarding the variation of toll revenues across months, the spokesperson said traffic volumes and revenues in the festive months of September and October were always higher than the holiday and monsoon months of July and August.
October 29, 2013
Aneesha Mathur : New Delhi,
The National Highways Authority of India (NHAI) on Monday informed the Delhi High Court that the concessionaire of the Delhi-Gurgaon expressway had misrepresented the revenue collection from the toll booths.
“My fingers have been burned,” Senior Advocate Sandeep Sethi, who is representing NHAI, said, while telling the court that his client had asked KPMG in July to carry out an independent verification of the daily traffic and toll booth collections, after “developing apprehensions that the concessionaire was misreporting collections”.
NHAI had issued a showcause notice to the concessionaire, Delhi Gurgaon Super Connectivity Limited (DGSCL), after the auditor had reported inaccuracies in revenue figures.
During arguments, Sethi also alleged that after the showcause notice was issued, NHAI’s share of revenue from the toll booths had risen from Rs 1.22 crore in August to Rs 1.82 crore in September. “The revenue share for the NHAI jumped by 60 lakh,” Sethi said.
The NHAI had filed a criminal complaint against D S Constructions, DGSCL’s parent company, earlier this month, accusing the concessionaire of cheating and causing wrongful loss by under-reporting traffic at the 32-lane toll plaza.
Sethi also argued that despite an agreement between NHAI and D S Constructions, the concessionaire had refused to let NHAI staff man the booths.
Contending that the concessionaire should be “substituted with another eligible entity”, Sethi told the bench of Justice Manmohan Singh, “NHAI, as a receiver of the property, will run the toll business, until the time it identifies, evaluates and finalises a substitute concessionaire.”
The HC was hearing arguments on a plea filed by D S Construction against a notice issued to it by NHAI on December 7, 2012, to terminate the concession agreement which permitted the private company to run both the toll booths and the expressway.
NHAI had also accused concessionaire Delhi Gurgaon Super Connectivity Limited (DGSCL) of fraud, claiming that the company had re-financed the project without NHAI’s approval. The highway authority had also accused DGSCL of failing to improve services at the 32-lane toll plaza.
October 25, 2013
By YASHODHARA DASGUPTA, ET Bureau |
NEW DELHI: The National Highways Authority of India board has approved engineering and construction firm L&T’s plans to set up a business trust in Singapore and list six toll road projects on theSingapore stock exchange that could raise up to $1 billion.The business trust will be set by the firm’s subsidiary L&T Infra Development Projects Ltd (IDPL) and the parent company can offload its equity in these six road projects to the trust, persons familiar with the matter told ET.The trust will have to form a special purpose vehicle, which will float or issue units to investors on these assets through an initial public offer. The trust will then issue debt instruments in the form of debentures to the SPVs undertaking these highway projects, said the persons, who did not wish to be named.
This will be implemented as a policy measure so that other developers looking at a similar route can follow suit, they said.
“Infrastructure stocks on the Indian stock market are not doing too well whereas the Singapore stock market is and they have mature investors who can handle long-term investments. While this will be subject to many factors including the Singapore stock exchange allowing it, if it is successful it will be a positive development since other developers can use it as an additional source of funding for their projects,” said Abhaya Agarwal, partner-infrastructure and PPP at consulting firm EY.
The six road projects include the Rs 1370 crore Krishnagiri-Walajahpet project in Tamil Nadu which is under implementation and five other completed projects including the Vadodara-Bharuch, Palanpur-Swaroopganj, Krishnagiri-Thopur projects and the Panipat elevated corridor.
The business trust model is similar to REIT or real estate investment trust model which offers revenue-generating real estate to investors.
A spokesperson of L&T told ET, “The company does not comment on market speculation.” L&T IDPL did not respond to the questionnaire sent by ET.
The NHAI board’s approval is subject to certain checks and balances which it has said the company must follow including that the company must get a legal opinion on the matter and the interest rate at which the trust lends to the SPVs must not be more than the interest rate it pays to its current lenders. In addition, the foreign exchange risk must be borne by the trust, it has specified.
“Road projects are public assets and in any case of equity transfer of more than 15%, it has to be approved by NHAI. Also, refinancing or changes in debt structure have also to be approved by us,” said an official familiar with the matter.
October 23, 2013
The National Highway Authority of India (NHAI) today told the Supreme Court that the company which was given the contract for constructing the 291-km Panipat-Jalandhar highway had not done complete work even on one square inch of the road.
Arguing before a Bench comprising Justices Gyan Sudha Misra and Pinaki Chandra Ghose, senior counsel Indu Malhotra said though the company, Soma Isolux, was claiming that 70 per cent of the work was over on the Rs 4,500 crore project, no stretch of the highway was ready with all the layers laid as specified in the contract.
Malhotra made the statement while responding to a query by the Bench on the distance between the toll plazas at Karnal and Ambala and the completed stretch of the six-lane highway.
Strongly opposing the company’s plea for shifting the toll plazas to different locations, NHAI disputed the contractor’s logic behind the move. The company was claiming that shifting was necessary to plug leakage of toll revenue arising from vehicles bypassing the plazas, but the real reason was to bring vehicles from additional areas under the purview of toll collection and earn as much as Rs 1,000 crore more every year, the authority said.
The additional areas sought to be covered by the company had not been taken into account while finalising the terms of the bid for awarding the contract for the project, the NHAI argued. Had it been taken into account, the terms would have been quite different.
However, the Bench wanted to know as to why the authority had inserted a clause in the contract with a provision for shifting of the toll plazas and subsequently granted in principle consent as well.
The NHAI said the approval was subject to endorsements by an independent engineer and the Centre, which decided the toll. The independent engineer and a safety expert had rejected the plea for shifting the plazas three times, citing financial implications and safety.
The NHAI also maintained that while accepting the contract the company had agreed to run the three toll plazas at the pre-existing places. Further, the company has been collecting toll from May 2009 even before beginning work on the project and earning about Rs 304 crore a year since then. The arguments remain inconclusive.
The company has come to the SC challenging the HC verdict cancelling the contract. The SC stayed the HC verdict on June 12 and allowed the company to go ahead with the work. But NHAI today contended that the construction work was at a standstill with the company insisting on shifting the plazas before resuming the project.
October 21, 2013
MANGALORE: Travelling on bad roads and most of us would probably mutter and curse the authorities concerned under our breaths. But not S S Khazi, city-based advocate and a permanent resident of Someshwar-Uchil, who promptly served notices on them and also sought damages for the agony that he is forced to undergo for being forced to travel on such roads. The road in question is the Talapady-Pumpwell stretch of National Highway 66.His daily travel from Someshwar to the city, some 15-km away where his office is located, proved to be an excruciating experience for this advocate. His grouse is the fact that the bad condition of the road is the failure on part of the National Highways Authority of India, ministry of road transport and highways and Navayuga Udupi Tollway Pvt Ltd that is carrying out four-laning of this stretch to ensure optimal upkeep of the road during construction.
Khazi pointed out that since the last three years, maintenance and repair work on the NH is almost non-existent and even the repair work carried out is shoddy at most places.
The work on four-laning that started in 2010 is crawling, Khazi said, adding that the “repairs” carried out has resulted in more bouncy and dangerous surface. The condition of the road has also prevented him from using the car, Khazi said, pointing out to the difficulty that emergency and public transport vehicles face in traversing this stretch.
Taking umbrage to assurance given by NHAI official that the people can experience beautiful four-lane road in next six to eight months, Khazi said the immediate concern is non-maintenace of the old road. Demanding that all concerned make the highway motorable, Khazi sought a compensation of Rs 5 lakh for failing their legal duty or risk further civil and criminal proceedings. He also sought Rs 5,000 as cost of the legal notice.
October 19, 2013
NEW DELHI: A month after National Highways Authority of India moved a proposal to suspend tolling on the Gurgaon-Jaipur stretch, the authority’s board is likely to consider the plan on Tuesday. The board has representation from highways and finance ministries besides the Planning Commission.Sources said the proposal was included in the agenda since the road transport and highways ministry had advised NHAI to first take the matter to the board. The ministry was of the opinion that suspension of toll till expansion work was completed would impact finances of the project and the issue should be considered in detail by the board. “Once the board approves the proposal, the matter will be referred to the highways ministry for order,” a source said.
NHAI in its earlier note to the ministry sought in-principle approval to suspend toll on all delayed projects where tolling was allowed even during construction phase. It had cited the example of the Gurgaon-Jaipur stretch of NH-8 where widening work missed several deadlines. TOI had run a series of articles highlighting commuters’ woes, who not only pay toll but also face traffic jams.
NHAI had said that in case private developers fail to maintain the stretches properly and miss completion targets despite land availability, the authority was empowered to take over the stretch and collect toll. But since this would not bring relief to road users, who would still have to pay toll for travelling through substandard and congested stretches, NHAI suggested stopping toll collection as a deterrent for consistent defaulters. “Since the contract agreement does not have a provision of suspending toll, we have sought permission from the ministry. This is a public interest issue,” an NHAI official had told TOI. Among other works that have missed several deadlines is the Panipat-Jalandhar six-laning project.
October 16, 2013
Mangalore, DH News Service
38 houses will have to be demolished if NHAI acquires 60-metre land for 4-laning from NITK to Pavanje
Rashtriya Heddari Bhoo Swadeena Santhrasthara Horata Samithi-Mukka office-bearers have opposed the move of the National Highway Authority of India (NHAI) to acquire 60 metre land for the proposed work on four-laning of the National Highway 66 from NITK to Pavanje.
Addressing a press meet here on Tuesday, Samithi Vice President Ramachandra M G said that if the NHAI goes ahead with the acquisition process, then 38 houses situated on the eastern side of the road in Mukka Pete will lose their houses. “We had approached Union Minister for Surface Transport Oscar Fernandes to urge him to direct the NHAI not to acquire 60 metre land for the road. The residents residing on the eastern side of the road in Mukka had parted their land for road from Mukka-Pavanje in 1968 and 1972. Now, the authorities are laying only 15 metre road. At the same time, 28 to 30 metre land is already available with the government. Inspite of it, by violating the rules, the government has passed gazette notification for the land acqusition for the third time.”
He exhorted the authorities to take note of the written directions given by the previous government to restrict the land acquisition to 45 metres for the four-laning of the road in Mukka and act accordingly.
“As per the rules, the road should be widened equally on either sides from the central line. However, owing to vested interests, from Mukka-Padredwara, the authorities have changed the central line and amidst protest from the residents, have laid a road that passes in front of houses. Now, citing reason for shortage of space for service road, the authorities are hell bent on acquiring additional land,” he said. Samithi President K Mahabala Rai said, “engineers are citing the reason of alignment for changing the central line. There is no direct connection between Pavanje bridge and the present road. By making curves, the authorities have given scope for accidents on the highway,” he alleged.
Similarly, owing to the change in central line, land belonging to Sri Sathya Dharma temple and Kotyan Moolasthana will be acquired. The NHAI authorities have failed to make use of the available road for widening and laying service roads.
The samithi members have urged the authorities concerned to uniformly restrict the right of acquisition of land for the NH-66 widening. Though the highway passes through three states, all the three are following different rules. It is 30 metre in Kerala, 45 metre in Goa and 60 metre at a few places in Karnataka.
“We are not against development or widening of roads. However, the authorities should maintain uniformity and follow the guidelines while widening the roads,” said Rai.
In protest against the acquisition process, the Samithi members will hold a padayatra from Pavanje bridge to NITK on October 17. The road will be blocked for five minutes on the occasion. A petition will be submitted to the DC.
October 11, 2013
The Cabinet on Tuesday approved a proposal for postponement of premium payments that highway developers have to pay to the NHAI in build, operate and transfer (BOT) projects.
(RP Singh, Chairman NHAI )
Our view is that anything beyond debt service and the operation and maintenance (O&M) should come as premium. RP Singh Chairman NHAI The National Highways Authority of India (NHAI) will decide on the rescheduling of premium payment for road projects in a week or two.
Speaking to CNBC-TV18, RP Singh, chairman, NHAI says the company’s board will meet next week to decide on on the quantum of discount to eligible road builders. The Cabinet on Tuesday approved a proposal for postponement of premium payments that highway developers have to pay to the NHAI in build, operate and transfer (BOT) projects.
The Cabinet on Tuesday approved a proposal for postponement of premium payments that highway developers have to pay to the NHAI in build, operate and transfer (BOT) projects.
Below is the edited transcript of Singh’s interview to CNBC-TV18.
Q: On what principles will you decide who will get the rescheduling of their premium?
A: I am yet to get the exact formulation and we have to see what is the final decision on this. But one thing is clear that it will apply to all the projects which are stretched and the board will decide.
Q: Since you have been neck deep in this and you know the troubles of the sector best. What might be the principles on which approximately the board will decide to reschedule?
A: We are not clear of the exact contours. The crucial thing will be what is going to be the discount rate. I am not very clear about it whether it’s 12 percent or 10 percent.
Q: We understand finance ministry said 12 percent and developers want 10 percent. So, it will be your board to decide the discounting?
A: Board will not decide. It will be the decision of the government. They are likely to form a committee which is going to go into other aspect. There are some condition which we were not willing to accept because we thought it will be a sub optimal solution.
The committee will give a decision with a period of week or one week or two weeks perhaps after that the board will go into the individual cases as to what are the cases which deserve this kind of rescheduling. So, our view is that anything beyond debt service and the operation and maintenance (O&M) should come as premium.
October 8, 2013
Dipak K Dash, TNN |
Out of these total projects work has started in the case of 17 stretches. Though all these months the road transport and highways ministry had been taking up the issue of only 23 projects where work is yet to start, the Cabinet Secretariat has received a supplementary note from the ministry. IRB had been raising the demand of extending the rescheduling scheme to all premium projects awarded post April 2010.
Premium is annual upfront payment that developers give to NHAI during the entire contract period in the case of lucrative projects.
Sources said the ministry has sought Cabinet’s approval for providing relief to road developers who have either started or are yet to undertake expansion work on project which are under “stress”. They added the stressed projects would be decided by the NHAI Board, which has representatives from highways and finance ministries besides the Planning Commission.
The ministry has proposed three options for Cabinet’s consideration. Sources said that the first proposal is to scrap all the 23 yet to start projects. Second option is to allow rescheduling of premium so that developers can take up work. The third option is to extend the relief to all premium projects.
The logic behind the third option is that those who have taken up work should not be penalized for going ahead while in many such cases the toll revenue have fallen due to bad economic condition.
Economic growth has direct relation to the toll revenue on roads.