Delay road project, be ready for zero toll

September 13, 2013



New Delhi, Sept. 12: Motorists will not pay any toll for the period by which a private contractor widening a national highway overshoots the deadline, says a proposal sent to the cabinet for approval.

It adds that the toll will be slashed by 25 per cent from the day the widening project starts till the day the deadline arrives.

The proposal by the Union road transport and highways ministry comes after motorists complained about having to pay for driving on highways damaged by ongoing construction of lanes parallel to them. The move is also aimed at prodding the contractors to finish projects on time.

A toll is now charged only on highways with four or more lanes, but there is no exemption if some of the lanes are under construction. For instance, a private contractor can start charging toll on a two-lane highway from Day One of the project to build two additional lanes.

Contractors, therefore, lack an incentive to finish work on time. Widening a four-lane highway, on the other hand, brings no additional toll because it’s the length of a national highway and not its width that determines the rate.

“If a contractor is widening a four-lane road, he cannot charge a higher toll after completing the project — so why should he bother finishing it?” a ministry official said.


“Besides, the contractors fund the projects with the toll they collect instead of investing fresh money. The pace of the project, therefore, slows down since it depends on the trickle of the toll instead of a big capital investment.”

Under the proposed policy, motorists will pay 75 per cent of the toll while a two-lane or four-lane road is being widened. If the project is unfinished when the deadline arrives, they will pay nothing till construction is complete.

If the new policy is cleared, the government too will have to pull up its socks because bureaucratic tardiness is also a factor in highway projects getting delayed. Acquiring land and getting clearances from the environment and other ministries is the government’s responsibility.

“We have decided that tenders will not be floated for any project till 80 per cent of the required land is acquired,” the official said.

The proposed policy provides for a steeper penalty for overloaded vehicles and, unlike now, allows a higher toll on expressways (which don’t allow pedestrian crossings and have no traffic intersections) than on other national highways.

After much debate with the Planning Commission, which wanted the expressway toll to be several times higher than the highway toll, the ministry has proposed that the expressway toll will be 1.25 times the highway toll.

The ministry had been working on this policy for the past one year. The “zero toll” clause for exceeding the deadline owes to the new minister, Oscar Fernandes.

If the policy is approved soon, it will apply to the contracts to be awarded this financial year for the construction of at least 2,500km of roadways. The last toll policy was framed in 2008; the one before it in 1997.


Most highway projects are now awarded on a build-operate-toll mode. A private contractor spends his own money to build or widen a road and collects toll on it for an agreed period of 15 to 25 years. A portion of the collections goes to the National Highway Authority of India.


Highlights of the proposed national highway toll policy


• Toll for a four-lane road can be charged on wo-lane highway the day widening starts

• No financial disincentive for private contractor for project delay


• Only 75 per cent of the toll can be charged from Day One of project till deadline

• If deadline exceeded, zero toll till project is complete




IRB withdraws from Mumbai Trans Harbour Link Project

August 5, 2013

By ET Bureau |


Maharashtra’s ambitious Rs.9630 crore Mumbai Trans Harbour Link (MTHL) project will have one less bidder as IRB infrastructure developers’ ltd has decided to withdraw from the bidding process. IRB has written a letter to the MMRDA and the Chief Minister of Maharashtra saying they have decided to withdraw from the MTHL project because of bad experience on some other infrastructure projects in the state.In the letter Virendra Mhaiskar Chairman IRB has said, “We deeply regret to inform you that we are unable to participate in the bidding process of the project and the reasons are beyond the boundaries of this project. Unfortunately the experience that we have had in one of the infrastructure projects in Maharashtra in the city of Kolhapur has shattered our confidence to invest in the urban infrastructure projects especially in the state of Maharashtra.”

The central government has sanctioned the Viability Gap Funding (VGF) of Rs.1920 crore for the Rs.9630 crore MTHL which will connect South Mumbai to Navi Mumbai directly. Many Indian and international companies participated in the pre-qualification bids for the MTHL. The Mumbai Metropolitan Region Development Authority (MMRDA) had shortlisted 5 consortia M/s. CINTRA – SOMA -SREI, M/s. Gammon-OHL Concessions-G.S. Engineering, M/s. GMR-L & T Ltd-Samsung, M/s.IRB-Hyundai and M/s.Tata Realty and Infrastructure Limited-Autostrade-Vinci Concessions.

The MTHL is expected to carry more than 62,000 passenger car units in the year 2019 and an annual growth of about 5% is estimated. MMRDA has also undertaken a few additional corridors to facilitate the anticipated traffic dispersal.


IRB Infra subsidiary in concession agreement with NHAI for four laning project on DBFOT basis

March 28, 2013

IRB Infra subsidiary in concession agreement with NHAI for four laning project on DBFOT basis



IRB Infrastructure Developers Ltd has informed BSE that Company’s wholly-owned subsidiary Company viz. IRB Westcoast Tollway Pvt. Ltd, (“SPV”) has executed Concession Agreement with NHAI for the project of Four Laning of Goa/Karnataka Border to Kundapur section of NH-17 from Km 93.700 to Km 283.300 in the State of Karnataka under NHDP phase IV on Design, Build, Finance, Operate and Transfer (Toll) Basis (the “Project”).The Project is to be executed on DBFOT pattern with a concession period of 28 years. Scope of work involves upgradation of existing section of NH-17 between Goa/Karnataka Border and Kundapur from existing 2 lane highway to 4 lane highway. Estimated project cost is approx. Rs. 2600 crores and the construction is to be completed within 910 days from the appointed date. The SPV will get tolling rights on NH – 17 upon completion of construction. The grant sought by the SPV from NHAI is Rs. 536.22 crores.Source : BSE

Govt to finalize new model for bidding road projects soon

February 20, 2012

The Road Transport and Highways ministry will shortly finalize a new model to be used for bidding out 20,000 km of two laned highways worth Rs 50,000 crore that it plans to build during the next five years.

Under the new EPC (Engineering Procurement Construction) model, projects would be awarded on a turn key basis. The ministry will specify the project requirement including its cost and pay the entire amount to the lowest bidder at one go. It differs from the earlier EPC model, which was executed on item rate basis, where the ministry separately tendered and billed for every item of expenditure.

The old system was infamous for cost escalation, time overruns and too much official interference.

At a meeting on Monday attended among others by CP Joshi, road minister and Montek Singh Ahluwalia, Planning Commission deputy chairman, some of the sticky provisions of the EPC document including the duration of defect liability period (DLP), subcontracting clauses, bonus to be given to contractors for early completion of projects, etc. were discussed.

“It was decided to sort out all issues within the next fortnight and get the final EPC document approved by the Inter Ministerial Group by month end,” said a official.

The duration of DLP had become a major bone of contention between the plan panel and the road ministry. While the ministry wanted the DLP of 5 years, the plan panel has decided on two years. “The ministry has finally come on board on the issue,” said a official.

Another issue involves subcontracting by the developer. While the ministry wants that not more that 50% of the total length of the highway can be sub contracted, the plan panel wants it to be 70%. The plan panel also wants a bonus of upto 5% of project cost for the contractor for early completion. However, road ministry wants the bonus clause to be deleted.

The model document, which is being prepared by the plan panel, has already undergone six revisions.

The ministry presently adapts two other models for awarding highway projects –BOT (toll) where a developer builds roads and recovers investment through toll collection during the contract period which usually runs upto 20 years and BOT (annuity) where the developer builds the roads and the government pays it in installments.



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

July 31, 2008

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.


NHAI awards five projects for six-laning

February 23, 2008

NEW DELHI: The National Highways Authority of India (NHAI) awarded five projects of six laning under National Highway Development Programme phase V aggregating to a length of 882 kilometers worth Rs 10,912 crore.

The Chennai-Tada on National Highway 5 and Chilkaluripet-Vijaywada on National Highway 8 are among first batch of projects which have been awarded on new Model Concession Agreement (MCA) approved by Committee of Infrastructure, Brahma Dutt Secretary Union Surface Transport Ministry told reporters here on Friday.

Other projects are Gurgoan-Kotputli-Jaipur and Surat-Dahisar on National Highway 8 and Panipat-Jalandhar on National Highway 1. Stating that these sections of six-laning are under Golden Quadrilateral (GQ) and North-South Corridor Dutt said the response to the six-laning projects under Build-Operate-Terminate model have so far been tremendous.

“The negative grant has been changed to revenue share model in the new MCA under which the five projects have been awarded. None of the successful bidders have asked for any grant from NHAI,” Dutt said.

Instead of demanding grant, they have all quoted for sharing of revenue with NHAI, he added. For instance Larsen & Tubro-ECC who won the Chennai-Tada project have offered to share 17 per cent of the revenue.

Dutt also pointed out that these projects have been able to attract foreign direct investment. Except for Chennai project whose bid was won by Indian infrastructure major all other successful bidders had equity participation from foreign companies.

Centre had approved seven phases of National Highways Development Programme at an estimated cost Rs 2,42000 crore. Of this under phase V, total 6500 kilometers of existing four-laned National Highways have to be widened to six land through BOT basis following Design Build Finance and Operation (DBFO) model.

L&T wins Rs4.2bn road project in TN

February 22, 2008

This order is part of the five road-widening proposals worth Rs109.1bn cleared by the Government. L&T will convert a 43.4-kilometer four-lane road into a six-lane one

Larsen & Toubro Ltd. (L&T) has bagged an order worth Rs4.2bn for converting a 43.4-kilometer four-lane road into a six-lane one in Tamil Nadu, Brahm Dutt, Secretary for Road Transport & Highways, said in New Delhi today. This order is part of the five road-widening proposals worth Rs109.1bn cleared by the Government.

A consortium of Emirates Trading Agency LLC and KMC Constructions Ltd. won a Rs19bn contract to widen 225.6 kilometers road in Haryana and Rajasthan, Dutt said. IRB Infrastructure Developers Ltd. and Deutsche Bank AG won a Rs17bn contract for a project covering 239 kilometers in Gujarat and Maharashtra.

A group comprising Malaysia’s IJM Corp. and Infrastructure Development Finance Ltd. (IDFC) bagged a Rs6.75bn order for a project in southern India. Spanish construction group Grupo Isolux Corsan SA won a Rs27.5bn contract to widen a 291-kilometers road stretch between Haryana and Punjab, Dutt said.


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