Big-ticket infrastructure projects in sight, all roads lead to PPPs

July 11, 2014

ENS Economic Bureau

Govt allocates Rs 37,880 cr for NHAI; sets a target of constructing 8,500 km of highways.

The road sector got a major boost on Thursday as the government announced it would invest Rs 37,880 crore for the National Highways Authority of India (NHAI) and set a target of constructing 8,500 km of highways in the current financial year.

In his budget speech, Finance Minister Arun Jaitley said steps would be taken to encourage the private sector to partner with the government in executing big-ticket infrastructure projects. As a key step, he said, an institution called 3P India would be set up with a corpus of Rs 500 crore to help execute public private partnership (PPP) projects. For project preparation, NHAI would set aside Rs 500 crore, he said.

Setting an ambitious target of constructing 8,500 km of highways this fiscal, Jaitley said of the Rs 37,880 crore to be invested for highways, Rs 3,000 crore would be spent in the Northeast alone. He announced initiation of work on select expressways in parallel to the development of industrial corridors.

Jaitley said India has emerged as the largest PPP market in the world with over 900 projects in various stages of development. PPPs have delivered some iconic infrastructure like airports, ports and highways, which are seen as models for development globally. But considering the weaknesses of the PPP framework and rigidities in contractual arrangements, there is a need to develop more nuanced and sophisticated models of contracting and develop quick dispute redressal mechanism.

Stating that the Pradhan Mantri Gram Sadak Yojana, which began under the tenure of NDA-1, “had a massive impact” in improving access for the rural population, Jaitley said, “It is time to reaffirm our commitment to a better and more energetic PMGSY under the dynamic leadership of Prime Minister Narendra Modi. I propose to provide a sum of Rs 14,389 crore.”

After a dismal show in 2012-13, the Union Road Transport Ministry had scaled down its projects award target by nearly half to 5,000 km 2013-14. It could award less than 2,000 km projects in 2013-14. In 2012-13, the ministry was barely able to award 15 per cent of the targeted 9,500 km of highways on account of a number of factors, including delay in clearances and equity crunch by developers.

“The road sector constitutes a very important artery of communication in the country. The sector had taken shape from 1998-2004 under NDA-I. The sector again needs huge amount of investment along with debottlenecking from maze of clearances,” Jaitley said.

Arguing that metro projects have helped in de-congesting cities, he said Rs 100 crore has been earmarked in the budget for metro projects in Lucknow and Ahmedabad.

A National Industrial Corridor Authority, to be headquartered in Pune, would be set up with a corpus of Rs 100 crore to coordinate the development of the industrial corridors, with smart cities linked to transport connectivity, he said.

Saying development of ports is critical to trade, he said 16 new port projects are proposed this year. He announced allocation of Rs 11,635 crore for development of outer harbour project in Tuticorin for phase I.

Jaitley announced a new scheme to develop airports through PPP and hiked allocation for the Civil Aviation sector by over 11.4 per cent to Rs 9,474 crore.



Roads of trouble

April 7, 2014


Over the past couple of years, traffic growth on national highways has slid precipitously, in conjunction with the economy and industrial production. A view of National Highway 7, one of the busiest National Highways in South India with a total length of 472 km. File Photo
The Hindu Over the past couple of years, traffic growth on national highways has slid precipitously, in conjunction with the economy and industrial production. A view of National Highway 7, one of the busiest National Highways in South India with a total length of 472 km. File Photo

Road developers are in a tizzy as both debt-servicing ability and returns of national highway projects have come under severe strain as the economics has gone haywire because of low traffic, execution delays and cost overruns.

Over the past couple of years, traffic growth on national highways has slid precipitously, in conjunction with the economy and industrial production. An analysis of traffic growth across 15 national highway projects that have been operational for over three years revealed that overall traffic growth, estimated at 7-8 per cent between fiscals 2008 and 2011, slumped to 3-4 per cent in 2012 and to 2-3 per cent in 2013. In fiscal 2014 too, the traffic growth has been weak due to sluggish economic activity.

The culprit was commercial vehicle traffic, whose slowdown overshadowed a healthy 15 per cent average growth in passenger vehicle traffic during this period.

Special purpose vehicles

This deteriorating trend is also mirrored in the revenues of a dozen special purpose vehicles (SPVs) operating under the build-operate-transfer (BOT) model. Revenues of these SPVs have grown by about 12 per cent in the past couple of years. During this period, toll rates rose by 8-9 per cent per annul as these are linked to the wholesale price . But poor traffic growth negated most of the benefits.

The scenario is unlikely to improve much in the near-term. Road traffic has high correlation with industrial growth . While we expect IIP to recover in fiscal 2015 to about 4 per cent from the decadal low of about 1 per cent it hit in fiscal 2014, it will remain well below the long-term average.

Consequently, commercial vehicle traffic growth will be lacklustere and overall traffic growth on national highways will languish at 3-5 per cent in fiscal 2015. As almost the entire operating costs in a road project are fixed in nature, any variation in the traffic, especially during initial years, has a significant bearing on the project returns.

Slow traffic growth on national highways is not the only problem plaguing developers. Base traffic (in the first year of a highway’s operation) has been much lower compared to the NHAI draft project report estimates. To be sure, developers would have done their own math on traffic, including expected leakages and exempt vehicles, before bidding, yet they will be concerned about how wide off the mark the original estimates were.

Compounding these problems for road developers are delays and the resultant cost overruns. Of the 78 BOT projects completed between fiscals 2000 and 2013, more than three-fourths or 61 projects faced delays, with the average time overrun at 10.5 months. The situation has only worsened in the last couple of years. Execution hasn’t begun for about 33 projects awarded in fiscal 2012 .

The double whammy of lesser-than-expected traffic and cost overruns has severely impaired the debt-repayment ability of developers. For five of these projects, the average debt-service coverage ratio during the first five years of operations is estimated to be less than one. This means equity infusion is essential to ensure timely servicing of debt, especially since tying up for additional debt will be difficult in the current scenario. Returns for these road projects are also expected to be 8-14 per cent, much lower than the 22-26 per cent returns based on NHAI traffic and cost estimates.

The above-mentioned scenario is representative of most road developers. Clearly, road developers are being buffeted by problems from all sides and have very limited room for manoeuvre. Recently, the government offered some respite by relaxing exit norms and allowing for premium deferment in the case of stressed projects. However, it might turn out to be a case of too little, too late.

The author is Director, Crisil Research, a division of Crisil



Jammed-up roads-Open, accountable system needed to settle disputes with developers

December 24, 2013

 Business Standard Editorial Comment  |   New Delhi  


India’s highway-building programme is in crisis. This is partly due to its very ambitious scale, which means that public funds are not adequate to meet the programme’s demand for capital, given the swiftness with which roadsneed to be rolled out. There are other reasons as well. The crisis is also caused by the government’s inability to design auctions that eliminate unrealistic bids and delays that, in some cases, are a direct outcome of tardy clearances and regulatory hassles. The road sector’s problems have also arisen because the government’s private sector partners failed to take into account the effect a growth slowdown would have on their revenue, or were too ambitious in their forecasts. Thanks to a combination of these factors, not even a single build-operate-transfer (BOT) project was awarded in the first six months of the ongoing financial year, indicating the degree to which the private sector has soured on road-building. Basically, nobody wants to touch it.

In October, the government set up a panel under the chairman of the Prime Minister’s Economic Advisory Council, C Rangarajan, to figure out if there was a way out of this conundrum. The panel had some difficult decisions to take. In particular, many existing highway concessionaires wanted to defer the premiums that were due to the National Highways Authority of India, or NHAI, under the BOT system. The premium, which can range from Rs 3 crore to Rs 680 crore a year, is to be paid out over 20 to 25 years, increasing by five per cent every year. The total premium due over the next few decades is Rs 1.5 lakh crore. But the fact that revenues have not matched estimations means that many companies are grumbling about having to pay out. The government, meanwhile, alert for once to the concern that the private sector is trying to feather its own nest at the expense of the public exchequer, may reportedly want to cut off the payment of dividends by road-building companies – usually special purpose vehicles, or SPVs – to their parent company as long as premiums to the NHAI are still outstanding. Another possibility that the Rangarajan panel is considering is reducing the upfront payment of premiums for the next few years by a fixed proportion – 75 per cent, in fact. The NHAI has already argued for a low discount rate and against penalties for private developers.

It is certainly true that the private sector must stay involved in road-building in India. The government cannot pay for everything. And something must be done to enable stalled projects to move forward. However, an arbitrary and opaque mechanism is a very bad idea; nor should the private sector be allowed to dictate terms. The government must take account of the fact that just giving into demands for renegotiation sets up a severe moral hazard problem, and that it also renders past auctions unfair and future auctions problematic. Thus, two criteria should be front and centre in the final decisions taken by the government. First, the mechanism for dispute settlement should be transparent, consistent and independent. Second, it should not unduly benefit the private sector. In fact, there should be clear penalties – regardless of the request from the NHAI – for anyone who has delayed a project. This should include the government, since in some cases private developers have suffered because the government has sat on clearances for five years. Transparency and financial accountability are essential to clean up India’s vital roads sector.



India’s PPP dream for roads turns sour

December 5, 2013

Manu Balachandran  |   New Delhi  

Govt not to award BOT projects to pvt firms this year



The road transport & highways ministry, after failing to get an encouraging response from the private sector, has decided to shelve its plan to bid out highway projects on a ‘build, operate and transfer’ (BOT) basis, at least for this financial year. The ministry will now award 5,000 km of road projects under the ‘engineering procurement and construction’ (EPC) model, signalling an end to the country’s ambitious plan to partner with private companies in the roads sector.

The ministry, looking to award 2,800 km of projects, worth Rs 27,000 crore, through the BOT route during the first six months of the financial year, had also planned to conduct roadshows abroad to attract foreign investments in the sector. But, in the wake of a slowdown in the economy and a lack of funding, private companies chose not to bid for these projects.

The government had embarked on a massive public-private partnership (PPP) regime over the past decade and awarded to private companies a number of projects, some of which have now run into financial problems. “We have no plans of awarding BOT projects this year and we hope the environment will be better next financial year. But that does not mean an end to BOT projects. As of now, we are looking to award 5,000 km of road projects through the EPC route,” Road Secretary Vijay Chhibber told Business Standard. He, however, did not give details of the number of projects to be awarded.

According to industry estimates, the government will now have to spend about Rs 40,000 crore to develop roads through EPC. Unlike the BOT model, the government funds the entire project under EPC and a developer undertakes the necessary construction work. BOT requires a private-sector developer to raise and invest money for the construction of roads at its own risk, while the National Highways Authority of India (NHAI) acquires land for the project. Given an economic slowdown, the government could not award close to 20 projects during the current financial year under BOT.

“We had set a target of 9,000 km for the year; we need to keep the projects moving. We decided to move on to the EPC route as the BOT projects were struggling. There is also a proposal to embark on roadshows abroad to attract investments; we will tap a number of countries,” another road ministry official said.

A number of road projects, including the Delhi-Gurgaon and Delhi-Jaipur expressways, that were awarded during a privatisation drive, have led to problems between the government and concessionaires, raising serious concerns over the BOT model. In addition, the private companies have also been seeking the government’s intervention to get rescheduled the premium they owe NHAI. Calculated on the basis of future flow of traffic, a premium is the amount a developer pays NHAI as it believes the returns through toll from the project would be higher.

The finance ministry is now awaiting recommendations of a C Rangarajan-headed committee, set up to decide on the quantum of premium to be rescheduled. The government is also considering a proposal to set up by next year a road regulator to address a host of issues faced by private road developers.

Industry experts and officials say the absence of a single-window clearance is one of the main reasons for investors to stay away from the country’s BOT projects. Often, projects take close to five years before work finally starts. This is mainly because of land acquisition hurdles and delays in environmental clearances. This year, the road ministry had to scrap seven projects, worth Rs 3,000 crore, due to land acquisition issues in Kerala and Goa.

Experts also point out that the consultants appointed by NHAI are also to be blamed for a number of BOT projects being affected. According to officials, while the Delhi-Jaipur expressway was being planned, the consultants engaged by NHAI proposed that 80 bypasses be constructed, though the actual need was of 124.

“Consultants should be made answerable to the government. They do not provide a complete picture and the concessionaire struggles because of that. As far as EPC projects are concerned, the government came up with the idea of PPP route since they could not fund all projects. Now, they are going back to the EPC mode and, in the current economic scenario and the fiscal deficit facing the government, we are not sure how they will be able to fund the projects”, said M Murali, director-general, National Highway Builders Federation.


World-class roads only by next December

November 25, 2013

TNN  |

BANGALORE: The upgradation of selected roads under Tender SURE ( Specification for Urban Road Execution) is a welcome move for citizens fed up with potholed stretches. However, they may have to wait till December 2014 for some activity on the ground.

BBMP commissioner M Lakshminarayana on Saturday said under the first phase of Tender SURE, Chennai-based NAPC Ltd has got the contract to take up seven roads. “It’s expected to complete them by December-end 2014. These are Museum Road, Cunningham Road, Commissariat Road, St Mark’s Road, Mallya Hospital Road, Residency Road and Richmond Road,” he added.

On the sidelines of an interaction on ‘Transforming Bangalore with Tender SURE’ organised by Jana Urban Space Foundation, the BBMP chief said they need at least Rs 600 crore to develop all 45 roads selected under the project. These roads promise long durability compared to existing asphalted roads. Also, these roads will have uniform footpaths, utility ducts, cycle tracks, bus bays, parking space and dedicated hawkers’ zone, he added.

Roads for better life

Swati Ramanathan, chairperson, Jana Urban Space Foundation said that getting road rights was the starting point of addressing the quality of life. “Tender SURE takes a holistic approach to road design and it’s all about getting the urban road right,” she added.

Biocon chief Kiran Mazumdar-Shaw, also president B.PAC, said Tender SURE roads will lead to better inter-agency coordination and avoiding constant rework as service providers are enrolled as stakeholders to achieve a consensus on the final design.

Roads and money

BBMP chief M Lakshminarayana said the state government has granted Rs 200 crore, of which Rs 100 crore has been released for road development. “But it costs much more. It’s expected to be more than Rs 600 crore for 45 roads. It’ll take another three years to complete all these 45 roads. BBMP has to bear the rest of the expenses. For this reason, we’re taking these roads in a phased manner,” he added.

Lakshminarayana said in the second phase, 11 roads have been identified and tenders for them have been floated. These include JC Road, KH Road, Nrupatunga Road, KG Road, Church Street, Commercial Street, Jayanagar 11{+t}{+h} Main, Basaveshwaranagar Main Road, Raja Ram Mohan Roy Road etc, he said.



Plan roads to increase mobility, not vehicles

November 22, 2013

Amit Bhattacharya


Transport is at the heart of urban development and economic activity. However, the current urban transport paradigms, which favor auto-mobility and generate multiple social, economic and environmental impacts, are not sustainable. It is well-documented that in India, close to 1.5 lakh people die every year due to road traffic accidents and a majority of them are pedestrians and cyclists. About 6 lakh premature deaths take place in the country annually on account of air pollution and about 4 lakh people die every year due to physical inactivity, which is directly linked to a sedentary lifestyle. Apart from these, there are issues around climate change, energy security (dependency of importing fossil fuel) and others, all of which are directly linked to the way we plan our cities for habitation. That in turn is directly linked to the transportation system of our cities and towns.One on the easiest but counterproductive ways of solving the transportation problem is by expanding road capacity, i.e. road widening, constructing flyovers, etc. However, globally, it has been recognized that this is not the solution to traffic congestion because it encourages motorized movement in the city, leading to more congestion. In California, between 1973 and 1990, every 10% increase in road lane-kilometres led to a 9% increase in vehicle kilometres travel (VKT) within a four-year period. Usually, it’s a matter of time before newly improved roads become congested again, a phenomenon known as “the rebound effect”.

Numerous empirical studies and analyses of real world case studies have shown that new road capacity usually induces traffic in direct proportion to the amount of new road space. In fact, different studies have shown that a large portion (50-100%) of the new roadway capacity is absorbed by induced traffic after three years of operation. Therefore, solving transportation problem by expanding road capacity is like solving an obesity problem by stitching bigger clothes or solving a heart problem with repeated bypass surgeries.

The answer to these problems lies in our own policies. India’s National Urban Transport Policy (NUTP) recognizes this and recommends that the focus be on moving people, not vehicles. It calls for promoted investment in public transit and non-motorized transport. One way to effectively achieve the NUTP goals is with the Avoid-Shift-Improve (ASI) framework:

Avoid or reduce growth in unnecessary travel while maintaining or enhancing economic and social opportunities for interaction through better land-use planning

Prevent the shift of trips from non-motorized transport and public transport to individual motorized modes

Improve the operations, energy and carbon efficiency of each mode

A comparison of Los Angeles and Stockholm shows sharp differences in the way people move and its impact on fatalities and health. In Stockholm, vehicle kilometers travelled are less than half while walking and cycling trips are almost seven times higher than in Los Angeles. Furthermore, Stockholm experiences one-sixth the pedestrian fatalities and one-tenth the pollution on a given workday.

Most cities in India are at an initial stage of development with a growing regional economy. They have a great opportunity to integrate their transport systems and land-use in a manner consistent with the ASI principles. If implemented, they will not need major and much more expensive changes later on, as is the case with industrialized nations. There is also a need to sensitize people and policy-makers around sustainable transportation and any development is this regard, like the recently launched Raahgiri Day movement in Gurgaon, will contribute significantly in making our cities more livable.

The writer is head of urban transport, EMBARQ India

We are adding 17 km of roads every day: Oscar Fernandes

November 18, 2013

Interview with Union Minister for Road, Transport & Highways


The road ministry is on target to set up a road regulator before the next Parliament session is over. In an interview with Manu BalachandranOscar Fernandes, Union minister for road, transport and highways, talks about funding and other issues affecting the sector and the means to tackle them. Edited excerpts:

The prime minister on Monday reviewed the progress in the sector. Are all the projects on track?

We have reviewed the progress of projects and are on track as far as the number of projects are concerned. We are adding 17 km a day and that was the original target set by the ministry. The main concern is we are not finding bidders for new projects. Recently, when we invited bids for a number of projects, we were disappointed to find (that there were) no takers.

Private players have raised concerns about their participation in the road sector. How are you looking to address them?

First, there were some concerns about premium rescheduling. The finance ministry has set up a committee under C Rangarajan to decide on the premium to be paid and the terms and conditions for rescheduling. We will wait for its recommendation and then take a final decision. The government has also relaxed the exit norms for developers in road projects. The National Highway Authority of India (NHAI) has also been very actively acquiring land, since banks do not fund projects to private sector if 90 per cent of the land is not acquired. We have speeded up acquisition and this year we have achieved double of what we had acquired last year.

The Northeast is strategically important to the country. But, developers and officials say projects there do not take off due to lack of security.

That isn’t true. We have an accelerated programme and I have been personally visiting the states to assess the pace of projects. On Sunday, I was in Tripura to evaluate a project. But the main problem is funding.

Banks are not willing to lend to projects, but the roads ministry and NHAI have been doing whatever we could to provide that. There is a plan to go abroad and showcase development prospects in India’s road sector. But, even if overseas companies are willing to invest, we have to ensure that land is acquired and various clearances are received. So, at this point, we are trying to ensure that the ingredients are in place. We will ensure that land acquisition and environmental clearance for projects are on track to make the sector lucrative.

Are we likely to see a road regulator in place this year? There are also talks about a proposed policy on auto recall after the General Motors incident?

With regard to the road regulator, we have a draft bill ready and are keen on passing it during the coming Parliament session itself. Road projects are often spread over a 20-25-year period and there might be various concerns that might be raised during the period. The regulator will essentially look at pre- and post-construction work and will look into areas such as contract dispute resolution. As far as vehicle recall is concerned, I do not think there is a need for any policy. Vehicle companies should take the effort to inspect the product and ensure quality before marketing the product. But that is the responsibility of the company and the government should not be party to that.

When can we expect a decision on Quadricycles?

A technical committee is currently studying all the concerns that were raised from various quarters. We can take a decision only after they come out with a report.



Old roads, new highways

October 25, 2013

(AP Other way round: From the Indian point of view, opening more routes is important as it will help create a stronger political consensus for better ties. At the Integrated Check Post at Attari near Amritsar, a line of Pakistani trucks).


India and Pakistan must use the strong peace sentiment on both sides of the border to develop better trade ties


What war could ravish, commercecould bestowAnd he returned a friend, whocame a foe       -Alexander Pope


The India-Pakistan relationship is a complex one, dominated by excessively polarised discourse. Over the past decade or so, one point has become evident. First, strong constituencies for peace between both countries have emerged along the border regions, be they Rajasthan-Sind or the two Punjabs. The enthusiasm with which people responded to Confidence Building Measures (CBMs), such as the Munabao-Khokhrapar train service and bus services connecting Delhi and Lahore and Amritsar-Lahore, are a reiteration of this point. It is a different matter, of course, that logistics issues have prevented both these initiatives from being a success.While in the case of the Punjab, opening up trade at the Wagah-Attari route and setting up the Integrated Check Post have got businessmen on both sides of the Radcliffe Line interested, some logistics issues persist. There is also a desire to open the Hussainiwala (Ferozepur)-Ganda Singh route, which was active before the 1971 war. This will be relevant especially in the context of the potential for petroleum trade between both countries, since the Bhatinda oil refinery, inaugurated in April 2012 by the Indian Prime Minister, is only 100 km from Hussainiwala. With the politics of Punjab being dominated by the Malwa belt, and the current Deputy Chief Minister, Sukhbir Singh Badal, being an MLA from Ferozepur, support for opening up this route is only likely to increase. The leather industry, which contributes 5.4 per cent of overall export earnings, will also benefit from the same trade route as Kasur city, adjacent to Ganda Singh and 60 km from Lahore, is a hub of tanneries in Punjab.Makes business, political sense

In Rajasthan-Sind, while the train service is chugging along, trade through the Munabao-Khokhrapar route is yet to open, though there is strong support for it. This route too could come in handy for petroleum trade, since gas has been discovered at Barmer.

Opening up these two borders would make sense from the business point of view, and come in handy politically for a number of reasons. North India will benefit more through land trade vis-à-vis Pakistan.

Currently, trade is only allowed through the Wagah-Attari land route; other road links are ignored. Barki road connecting Lahore-Patti, the Kasur-Firozpur roads at the Ganda Singh border, the Sahiwal/Pakpattan road link with Fazlika, Head Sulemanki and Multan borders, have the potential to enhance Punjab-to-Punjab trade manifold.

In the Pakistan context, Ganda Singh strengthens the pro-trade constituency in Punjab. In fact recently a delegation from Indian Punjab met Prime Minister Nawaz Sharif, who was enthusiastic about the idea. Apart from this, opening up the Raj-Sind border would assuage feelings in Sind, especially for those who believe Punjab will benefit from India-Pakistan trade while other States will be left behind.

If one were to look from the Indian side, opening more routes is important since this will help create a stronger political consensus for better ties. While Punjab is already ruled by the Shiromani Akali Dal, an ally of the Bharatiya Janata Party (BJP), Rajasthan too could get a BJP government in the aftermath of the December Assembly elections. In addition to this, by opening up the Rajasthan-Sind border, businessmen from neighbouring States such as Madhya Pradesh and Gujarat which are BJP-dominated would also benefit. Currently, traders from Madhya Pradesh have to go all the way to the Wagah route.

Existing as well as new markets have the potential to achieve the highest targets. The existing market, worth $13 billion, comprises smuggling and personal baggage. Therefore, the legalisation of trade would help the government of Pakistan earn revenue in the form of import duties. The key to the economic success of a country is promoting regional trade. However, Pakistan’s regional trade is less than five per cent of the total. Millions of dollars can be earned if more trade routes are opened.

Land over sea

A study carried out in 2006 estimated that over 80 per cent of firms are forced to trade through the Karachi-Mumbai sea route, even if they are located in the border station of Amritsar. Similarly, the Sind-Rajasthan border can connect Rajasthan and Gujarat with Sind, which has huge potential to enhance trade between both countries by the land route. The Munabao-Khokhrapar rail route can lessen the burden on the Karachi-Mumbai sea route, which is the most common, formal trade route between India and Pakistan. It will also save time and money as the sea route requires cargo ships to touch a third-country port before bringing in goods.

The Pakistan Army, being a strong and influential stakeholder, can be brought into the loop as it has a vested interest in the economic structure. This way, India-Pakistan business and people-to-people contact may be enhanced, and stringent visa policies may get relaxed.

(Tridivesh Singh Maini is a New Delhi-based columnist, and Usman Shahid, a Lahore-based journalist and researcher.  )



Rs. 1,000 cr. to repair rain-damaged roads in Karnataka

October 24, 2013


Shimoga - Mandagadde road was blocked due to Tunga flood. File Photo: Vaidya
The Hindu : Shimoga – Mandagadde road was blocked due to Tunga flood. File Photo: Vaidya


Public Works Department to take up work next month

The Public Works Department (PWD) will spend Rs. 1,000 crore to repair rain-damaged State highways and major district roads in the State.

Road repairs will be taken up from next month, Public Works Minister H.C. Mahadevappa told presspersons in Bangalore on Tuesday.

Action plan

He said that officials are preparing an action plan and they will submit it to the Finance Department for release of funds. About 1,000 km of main district roads and 177 km of State highways have suffered damage, he said.

The Minister said that road repair work would be completed by the end of February next year. The department had taken up repair work on 3,000 km of State highways in the first phase and work was nearing completion. Roads were damaged on account of heavy rain during the monsoon.

To a question, the Minister said that the government had cleared arrears of Rs. 250 crore owing to road and building contractors and another Rs. 850 crore would be paid soon.


The Indian Road Congress and the Public Works Department have decided to hold a two-day regional workshop on promoting usage of new technologies, material, techniques and equipment in road construction, here from Wednesday.

The workshop will be held at Palace Grounds (Gayatri Vihar) and Union Minister for Road Transport and Highways Oscar Fernandes will release a souvenir. Mr. Mahadevappa will preside over the event. President of Indian Roads Congress Kandasamy and Secretary-General Vishu Shankar Prasad will participate.

Experts will shed light on evolving technologies in the construction of roads and bridges. Engineers and experts will deliver lectures on ‘Retro-reflective material for road safety signage’ and ‘Processed steel slag as alternate aggregate for flexible pavements’ and other related issues.

Daniel Berger, Director, Quality, Research and Development, Orafol Europe GmbH, Ireland, and other experts had been invited to the workshop, Mr. Mahadevappa said.

There would be an exhibition on the usage of manufacturing and slag sand in civil construction, application of new technologies, material, techniques and equipment and application of nanotechnology in civil constructions, he added.



MOU signed between India and China on cooperation in roads and road transportation

October 24, 2013

MOU signed between India and China on cooperation in roads and road transportation





Bejing: The Ministry of Road Transport and Highways of the Republic of India and the Ministry of Transport of the People’s Republic of China, herein after referred to as the ‘Participants’,


Recognizing the significant mutual benefit that can be derived by the Participants from cooperation on roads and road transportation matters;


Recognizing the common objective of developing and promoting safe, efficient, cost effective and sustainable road transportation systems;


Recognizing the importance of roads and road transportation in the economic development process of each Participant country, within their respective national policy framework;


Have reached the following understanding:
Article 1
Principles and Objectives of Cooperation
1. Under the framework of this Memorandum of Understanding (‘Memorandum’), the Participants will undertake cooperation on the basis of equality, reciprocity and mutual benefit.
2. The purpose of this Memorandum is to establish a long-term and effective relationship of communication and cooperation in Roads and Road Transportation.


Article 2
For the purpose of this Memorandum,
a. ‘Road ‘ means the National Highways of the respective countries.
b. ‘Road Transportation’ means transportation of both passengers and goods by road but excludes urban transport.


Article 3
Areas of Cooperation
The Participants will cooperate in the fields of roads and road transportation in the following areas:
a. Exchange and sharing of knowledge and cooperation in the areas of transportation technology, transport policy, for passenger and freight movement by roads;
b. Planning, administration and management of road infrastructure, technology and standards for roads/highways construction and maintenance;
c. Sharing of information and best practices for developing road safety plans and road safety intervention strategies, and outreach activities aimed at reducing deaths and injuries resulting from road accidents, through:
(i) Exchange and sharing of knowledge in Intelligent Transport System;
(ii) Sharing of information and best practices on increasing vehicle safety oversight, and safety fitness framework for the vehicle testing and certification system;
d. Sharing of knowledge and best practices in user fee (toll) related issues; including the modern system, technologies and methods of levying of user fee and collection including Electronic Toll Collection System;
e. Sharing of information in areas of improved technologies and materials in road and bridge construction, including joint research;
f. Sharing the experience on contractual frameworks, financing and procurement issues, particularly related to Public Private Partnerships (PPP) mode;
g. Any other area of bi-lateral cooperation, mutually agreed by the Participants.


Article 4
Ways of cooperation
1. The cooperation under this Memorandum will be carried out through the following ways:
a. Consultations at expert level about specific cooperation issues upon the requests of the Participants;
b. Organizing exchange visits for technical experts;
c. Organizing technical exchanges by way of joint organization of workshops/ seminars/conferences, etc;
d. Exchange of relevant technical materials in accordance with the provisions of the respective laws and regulations and information of policies, laws and regulations;
e. Mutual provision of information relating to transport infrastructure construction projects in their own country;
f. To undertake relevant scientific and technical research in the institutes from both countries including joint research in the identified areas of cooperation.
g. Any other method of cooperation as mutually agreed upon.
2. Whenever necessary, the Participants will discuss and jointly determine the detailed arrangement of the cooperation activities specified in Paragraph 1 of this Article.


Article 5
1. Coordination Organizations:
International Cooperation Wing of the Ministry of Road Transport and Highways of the Republic of India and Department of International Cooperation of the Ministry of Transport of the People’s Republic of China will carry out the coordination of activities under this Memorandum;
2. Implementation Mechanism:
a. The Participants agree to constitute a Joint Working Group (JWG) to oversee the implementation of this Memorandum and to identify specific cooperation activities and services under this Memorandum.
b. The JWG will deal with all questions related to the implementation of this Memorandum and resolve the difficulties that might arise in the course of implementation of this Memorandum.
c. The members of this JWG will be nominated by the Participants. The JWG will meet, as per mutual agreement, alternately in China and in India.
d. Where possible and appropriate, the Participants will facilitate the involvement of other institutions and organizations in the cooperation activities under this Memorandum, both in the government and private sectors.


Article 6
The Participants agreed that each government shall bear its own administrative costs for the implementation of this Memorandum. Specific financial procedures will be negotiated for certain cooperation activities as needed. Any contract or separate detailed arrangements for such activities will be jointly determined by the Participants.


Article 7
1. The Participants agreed that prior approval shall be sought of the other participant before the use of any publicity or presentational material by any of the Participants and executive agencies as are allowed to participate under Article 4 of this Memorandum.
2. Scientific and Technical information of a non-proprietary nature derived from the cooperative activities conducted under this Memorandum may be made available to the public through customary channels and, in accordance with, the normal procedures of the Participants, and other governmental entities involved in the cooperative activities.


Article 8
Information and documentation received by either of the Participants as a result of cooperation under this Memorandum within their respective regulatory and legislative framework will not be given to a third party without the prior written consent of the originator. The Participants accept that either Participant may be subject to legal obligations concerning the disclosure of information relating to this Memorandum within their respective regulatory and legislative framework but will nonetheless ensure the other Participant is informed prior to any disclosure subject to the provisions for ‘Confidentiality’ under this Memorandum, wherever applicable.


Article 9
Any dispute about the interpretation or application of this Memorandum will be resolved by consultations between the Participants, and will not be referred to any national or international tribunal or third party for settlement. If the Participants are unable to resolve the dispute, either Participant may terminate this Memorandum in accordance with Article 11 or such shorter period as may be decided between the Participants.


Article 10
Nature of the Memorandum
1. This Memorandum is not legally binding on either of the Participants.
2. This Memorandum will not generate any public/international law obligations for the Participants.
3. All activities developed under this Memorandum are subject to existing laws and regulations of the respective country of the Participants, and to the availability of necessary funds and resources.


Article 11
Entry into Force, Validity, Termination, Interpretation and Amendment
The Participants agree to the following provisions:


1. Entry into Force : 
This Memorandum shall enter into force on the date of its signature and will remain valid for a period of five years and shall be extended by another five years, upon their mutual written consent, at least six(6) months before expiry of the validity of this Memorandum.


2. Amendment to the Memorandum: 
This Memorandum may be amended by mutual written consent of the Participants. Any amendments thereto shall enter into force on the date of signing of such consent.


3. Termination Provision: 
a. The Memorandum may be terminated by either of the Participants at any time by giving sixty (60) days advance written notice to the other Participant.
b. Unless otherwise agreed in written form, the termination of this MOU shall not affect the validity of any ongoing project or activity implemented in accordance with this Memorandum.
c. The Participants will determine how the outstanding matters should be dealt with on the basis of mutual consultation.



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