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Road Ministry adopts new technology standard for electronic toll collection

RFID technology:The Chairman, Expert Committee on Electronic Toll Collection Technology, Mr Nandan Nilekani, submitting the report to the Minister for Road Transport and Highways, Mr Kamal Nath, in the Capital on Friday.

Toll booths on National Highways will adopt the passive RFID technology standard – ISO 18000 6C — for electronic toll collection (ETC) system, based on the recommendation of a committee set up for this purpose, headed by Mr Nandan Nilekani, Chairman, Unique Identification Authority of India (UIDAI). The recommendations have been adopted by the Highways Ministry.

In the ETC system, vehicles will have tags on their windscreens – where amounts can be pre-loaded (just like prepaid SIM cards for phones) – and when the vehicles pass through NH toll lanes with tag readers, the toll amount would automatically get debited. This will pave the way for setting up of ETC system across the NH network.

EARLIER ATTEMPTS
Since last four years or so, attempts of National Highways Authority of India (NHAI) to adopt any technology standard for this project had been thwarted by companies which had competing technology of ETC. This standard was chosen because of many factors. For instance, for vehicle owners, the cost of adopting this technology will be much lower compared to other standards; it has been used in many countries in the last one decade. Also, there are multiple vendors such as Neology, Intermac, Motorola, Sirit, Alien and Invango, who operate in this space.

For the system to work, the user vehicles need to buy tags and have them attached to the windscreen; the toll booths require a tag reader; and a central toll clearing house has to be set up which will take care of all reconciliations between various road developers. For instance, between two points of travel, a commercial vehicle might cross five tolling booths – two of which are operated by the NHAI and three by three different private concessionaires. The clearing house operator will ensure that the amount debited from the vehicles’ on board unit (tag) at each of these toll plazas is credited into the concerned owner/operator of the highway stretch on a real time basis. As more vehicles adopt the ETC, the toll revenue leakage can be contained to a large extent.

COST
“There are about 147 toll booths on the NH network, out of which about 100-odd are operated by NHAI and remaining by private developers,” Mr V.L. Patankar, Member-Technical, NHAI, said. Each reader will cost about Rs 2 lakh. Each NH toll booth will have at least two lanes (one on each side) with tag readers. NHAI or the operating concessionaire is likely to bear the cost of setting up tag readers at its toll plazas though the Union Highway Minister, Mr Kamal Nath, said he expects the system to be “self-financing”. It is also not clear as to who will fund the clearing house operator. At present, two NH stretches have ETC options –Delhi-Gurgaon Expressway and Bangalore-Electronic City elevated highway.

THE WAY FORWARD

The committee has recommended that a system integrator for ETC design and implementation be there, and hiring of a consultant for the financial bidding and vendor selection. An authority has to be set up to operate central system. Also, the committee has said that a high penalty system should be worked out to handle violators – vehicles who try to pass through the plaza without enough funds.

The National Institute for Smart Government – an eGovernance Innovation Library in IIT Delhi – is likely to help the Road Transport Ministry in the initiative.

TIMELINE/OTHER APPLICATIONS

Mr Nath said the process of setting up the ETC systems should be initiated in 18 months. He added that he will talk to SIAM to ensure that vehicles are sold with pre-fitted tags. Mr Nilekani added that with ETC in place, the card can by used by various other operators such as parking owners, state highway concessionaires, etc., for payments. Mr Nilekani also said that a public portal should provide data on vehicle traffic on highways and toll plazas.

Download ETC Report

Source:
mamuni@thehindu.co.in
thehindu.co.in

Infrastructure sector set to receive

More bank credit will soon flow to build infrastructure in the country with the Reserve Bank of India (RBI) on Tuesday reducing the level of provision against substandard loans to the sector from 20 per cent to 15 per cent.

The central bank’s decision to treat annuities and toll collection rights under build-operate-transfer (BOT) road and highway projects as tangible securities has also come as a major relief to infrastructure companies.

Banks and institutional lenders said the move on provisioning would enable lenders to loosen their purse strings for the infrastructure sector where long gestation projects often end up with issues that are beyond the control of both the lender and the borrower.

“There are many uncertainties in the infrastructure sector. Often there are delays due to reasons such as obtaining environment clearances and delay in equipment supplies that lead to assets becoming substandard. The RBI move will definitely encourage banks to go ahead and provide more advances to the infrastructure sector since it will provide a comfort factor,” SS Kohli, chairman and managing director of India Infrastructure Finance Company (IIFCL), the government’s flagship infrastructure finance company, told Financial Chronicle.

SBI chairman O P Bhatt said the announcement on infrastructure lending would help banks to finance such projects. “The treatment of annuities as tangible securities under BOT scheme will help attract private equity and give a boost to infrastructure sector,” he added.

UCO Bank chairman and managing director SK Goel echoed the view. “RBI move will reduce the burden of banks since loans to infrastructure projects often become substandard due to technical reasons. With only 15 per cent provisioning requirement, banks will be encouraged to lend more,” he said.

CMD of Bank of Maharashtra (BoM), Allen C A Pereira, said banks have been raising concerns over project delays and asset-liability mismatches in their infrastructure portfolio.

“Infrastructure projects are long gestation projects and several times things do not work out the way it was originally planned. Therefore, there was a strong case for easier provisioning norms for substandard assets. The RBI move is to ensure that banks do not suffer,” Tourism Finance Corporation of India CMD Archana Capoor said.

According to the planning commission, projected investment in infrastructure such as ports, airports, railways, power, irrigation, water supply and sanitation during the 11th plan (2007-11) is Rs 20,54,205 crore. The huge demand for funds can be gauged from the fact that the road ministry alone plans to award projects to build around 18,000 km during this financial year worth more than Rs 1,50,000 crore. Of this, 65 per cent of projects would be on BoT toll basis, 20 per cent on annuity and remaining 15 per cent on engineering, procurement and construction (EPC) model.

However, bankers said the RBI move was not to make banks meet their overall credit growth target when of offtake to sectors such as real estate has slumped. “These issues are not linked. The slowdown in overall lending and to the housing sector may be due to other reasons. Housing loan borrowers may be adopting a wait-and-watch approach,” Pereira of BoM said.

UCO Bank’s Goel agreed: “This is purely to encourage flow of funds to infrastructure sector. Overall credit growth and trends for specific sectors cannot be linked.”

Meanwhile, infrastructure companies have welcomed the decision to treat annuities and toll collection rights under BOT projects as tangible securities, saying the decision would give private road developers easier access to funds at lower interest rates.

At present, in BOT road projects, there is nothing that can be considered as tangible asset. This is because the concessionaire has to transfer the land either to the National Highways Authority of India (NHAI) or the state government after about 30 years of the agreement. Toll collection is also uncertain and therefore treated as an intangible asset. This makes it difficult for developers to obtain loans under the secured category.

“Now that the RBI has allowed annuity and toll collection rights as tangible securities, where there are provisions to compensate the project sponsor if a certain level of traffic is not achieved, it will make banks pro-active to lend to the sector,” Issac A George, chief financial officer of GVK Power and Infrastructure, said.

In its credit policy, RBI said annuity and toll collection rights should be treated as tangible securities subject to the condition that banks’ right to receive them is legally enforceable and irrevocable.

“Most banks offer loans to road developers under secured categories. However, there are lots of provisions and agreements that the parties work out among themselves. The developers also pay a higher interest rate of up to one and a half per cent for unsecured loans. The RBI announcement will help developers to save the additional interest cost and avoid legal troubles,” said Vishwas Udgirkar, an executive director at PricewaterhouseCoopers.

The move is also expected to lower the cost of road projects. “The RBI move to treat annuities and toll collection rights as tangible securities will create a healthy market for securitisation of toll portfolio, thereby reducing the cost of road projects after construction,” said Hemant Kanoria, chairman and managing director of Srei Infrastructure Finance.

Source: mydigitalfc.com

UPA-2 road plans hit a bump

NEW DELHI: This could be an indicator of how the ambitious highway development programme has been a non-starter in UPA-2. National Highways

Authority of India (NHAI) has awarded only 17 projects for 1,574 km since January against the plan of awarding 135 projects (14,384 km) in the current financial.

A presentation made by the highway regulator at a CII conference on consulting services on Tuesday pointed to the huge gap between the projection and actual pace of award of projects in the past 10 months. As per the presentation, only 17 projects costing Rs 17,757 crore were awarded including one project on BOT (annuity). It further showed that nine more projects on BOT (toll) and two on annuity modes were under the process of award. However, information was not available on how many highway projects were awarded since the change of guard in the ministry.

NHAI officials blamed the slow pace on certain “controversial clauses” and provisions in the request for quotation (RFQ) and request for proposal (RFP) and the model concession agreement. “We had prepared a plan to award 60 projects last year but the economic downturn hit us hard and only 12-13 projects could be awarded. Many projects could not achieve financial closure even after awarding. This time it’s equally worse due to certain contractual provisions and clauses of the bid documents including the conflict of interest clause,” said a senior official.

Road, transport and highways minister Kamal Nath has already identified the interpretation of ‘conflict of interest’ as the biggest roadblock in the fast tracking of highway projects.

Transport secretary Brahm Dutt admitted on Tuesday that the award of projects was taking time while the ministry had set a target of achieving construction of 20 km highway per day.

Source: timesofindia.indiatimes.com

Government moves towards open toll system for highways

Highway users, there is good news round the corner. Soon, you will not have to stop for payment at every toll plaza.

The government is on the verge of introducing an open road tolling (ORT) system in the country, by which toll payment would become a one-time transaction per trip.

The toll fees will be deducted either from the users’ bank account, or it collected at the beginning of the journey, in the manner of pre-paid or post-paid phone connections.

The ministry of road, transport and highways (MoRTH)  will on October 31 start a six-month pilot project to test the efficacy of ORT on three stretches on the national highways.

Three systems of ORT — Active, Passive and Calm tolling systems — would be tested for suitability.

The active tolling system (a microwave tag-based system that sends or receives signals) will be tested on the Gurgaon-
Jaipur stretch. The passive system (also microwave-based, but only send signals) on the Panipat-Jalandhar stretch. The calm ORT system, an infrared-based system that sends and receives signals and works on an optical fibre network, will be tried on the Surat-Dasihar stretch.

“We will finalise a system that is best suited for India. The tests have to be very elaborate and that is why they will carry on for six months,” a senior official at the ministry, who did not wish to be named as he is not authorised to speak to the media, told Hindustan Times.

A third party will independently evaluate the three systems for suitability for use in India.

The new toll system will significantly reduce the time spent by commercial vehicles at tollbooths. For instance, a commercial vehicle plying between Delhi and Mumbai has to stop at 20 toll plazas.

On an average, there is a toll plaza every 60 km in India.

“It will be a very good thing. Separate lanes for the new toll system will result in significant saving of travel time,” said Anil K.G., resident consultant of Bangalore-based logistics company Transworld International, which runs a fleet of 150 trucks.

Source: hindustantimes.com

PROPOSAL FOR SETTING UP NATIONAL ROAD SAFETY AND TRAFFIC MANAGEMENT BOARD IS IN FINAL STAGES OF APPROVAL

THIRU BAALU ADDRESSES CONSULTATIVE COMMITTEE MEETING

The Union Minister of Shipping, Road Transport and Highways Thiru T.R. Baalu has said that the proposal for setting up of the National Road Safety and Traffic Management Board, as recommended by the Committee on Road Safety and Traffic Management, is in the final stages of approval. Similar Boards would be set up in the States also. Thiru Baalu was addressing the Seventeenth Meeting of the Consultative Committee of Members of Parliament attached to his Ministry here today.

Thiru Baalu also informed the Members that the Department of Road Transport and Highways is also contemplating constitution of a Committee of Experts to suggest a comprehensive scheme to improve the public transport system. The proposed scheme would stipulate certain reform measures to be undertaken by the States to be eligible for seeking financial assistance from the Central Government.

The Minister further informed that a ‘Working Group’ has been constituted by the Government to determine the technology for Advanced Traffic Management System, Advanced Travel or Information System and Electronic Toll collection. He said that a System is proposed to be installed for automatic traffic counting and classification to have better assessment of traffic moving on National highways. He said that these steps are being taken as part of Government’s efforts to give more emphasis on the modernisation of the toll collection system for which introduction of Intelligent Transport System (ITS) is proposed to be gradually introduced.

Thiru Baalu said that a proposal has recently been approved for creation of State and National Registers of driving licenses and registration certificates envisaging inter-linking of all Regional Transport Offices. This would enable creation of authentic database for road transport sector, ensuring transparency in the process of registration of motor vehicles and issuance of driving licenses at a total cost of Rs. 148 crore. The project period is two years. It would check issuance of fake driving licenses / registration certificates and lead to better enforcement of the provisions of the Motor Vehicles Act / Rules, he added.

The Minister also informed that to formulate a scheme for trauma care facilities across the country in general and along the National Highways in particular, his Ministry has been working closely with the Ministry of Health & Family Welfare to work out a -2- combined plan of action. For this purpose, Thiru Baalu informed that the Ministry of Health and Family Welfare has introduced a scheme for setting up of an integrated network of Trauma Centres along the GQ, North-South and East-West Corridors of the National Highways by upgrading the trauma care facilities in 140 identified State Government Hospitals at a total cost of Rs.732.75 crore during the Eleventh Five Year Plan period. Our Ministry has to supply 140 ambulances and NHAI has to provide 50 Ambulances with advanced life support equipment to identified hospitals.

Giving an account of the progress made on the National Highway Development Programme (NHDP), Thiru Baalu observed that upto February 2008, out of the 5,846 kms under the Golden Quadrilateral (GQ) Project, 4/6 laning of about 5,650 kms has been completed and works are in progress in the remaining 196 kms length. Out of about 7,300 kms length under the North-South and East-West Corridors, 4/6 laning was completed in 1,962 kms and works were under implementation in about 4,359 kms. Under NHDP Phase-III, out of 12,109 kms length, 4-laning has been completed in 330 kms and works are in progress in about 1,745 kms and under NHDP Phase-V, out of 6,500 kms length, 6-laning was in progress in about 1,030 kms.

So far 86 projects valued at Rs.29,576.94 crore have been awarded on BOT (Toll) basis. Out of these, 34 projects have been completed and 52 projects are in progress. Also, so far 25 projects valued at Rs. 9,411.88 crore have been awarded on BOT (Annuity) basis; out of which, 8 projects have been completed and 17 projects are in progress, the Minister informed.

The Members of Parliament who participated in the meeting are: S/Shri M.R. Reddy, S. Ajaya Kumar, L.R. Patil, Hari Kewal Prasad, M.L. Mandal, Tiruchi Siva and Ms. Mabel Rebello.

Source: pib.nic.in

Gayatri Projects SPVs achieve financial closure

Gayatri Projects Ltd has announced that the Company has achieved the financial closure for the Company’s following Hyderabad Outer Ring Road Projects (SPV’s) at an interest rate of 11% p.a., ahead of the stipulated time given by the Employer namely Hyderabad Urban Development Authority (HUDA).

Financial Closure of Hyderabad Expressways Pvt Ltd (HEPL) – Total cost of the Project Rs 430.96 crores: M/s. Hyderabad Expressways Pvt Ltd promoted in Consortium, by the Company as lead technical member, with 50% share holding, bid and won road project (AP-IV) for design, construction, development, finance, operate and maintain eight lane access controlled expressway under Phase II programme of outer ring road (ORR) of Hyderabad Urban Development Authority. The concession Agreement was signed on August 17, 2007. The total debt syndicated for this Project is Rs 290.90 crores.

IL&FS (IL&FS Financial Services Ltd) has syndicated entire debt and United Bank of India is the Leader of the Consortium of Lenders for the SPV.

Details of the package awarded are as follows: AP IV – from Bongulur to Tukkuguda from km. 108 to km. 121 on BOT – Annuity basis. Estimated Project Cost incl. IDC is around Rs 430.96 cr. and the project has a positive Grant of Rs 71.86 crores. HUDA will pay a semi-annual annuity of Rs 30.49 crore to HEPL during the Annuity period. The concession period door-to-door is 15 years, with. a construction period of 2 years 6 months and Annuity period of 12 years 6 Months.

Financial Closure of Cyberabad Expressways Pvt Ltd (CEPL) – Total cost of the Project Rs 501.75 crores: M/s. Cyberabad Expressways Pvt Ltd promoted in Consortium by the Company as lead technical member with 50% share holding, bid and won road project (APII) for design, construction, development, finance, operate and maintain eight lane access controlled expressway under Phase II programme of outer ring road (ORR) of Hyderabad Urban Development Authority.

IL&FS (IL&FS Financial Services Ltd) has syndicated entire debt and United Bank of India is the Leader of the Consortium of Lenders for the SPV.

Details of the package awarded are as follows: AP II – from Kollur to Patancheru from km. 12 to km. 23.70 on BOT – Annuity basis. Estimated Project Cost incl. IDC is Rs 501.75 crores and the project has a positive Grant of Rs 81 crores. Annuity – Rs 79 cr. p.a. HUDA will pay a semi-annual annuity of Rs 39.50 crore to CEPL during the Annuity period. The concession period door-to-door is 15 years, with a construction period of 2 years 6 months and Annuity period of 12 years 6 Months. The concession Agreement was signed on August 17, 2007. The total debt syndicated for this Project is Rs 376.31 crores

The Company is a pioneer in construction of National Highways, Dams, Canals, Aquaducts, Flyovers, Coal handling plants, Bridges, Railway Projects, Airport Runways, BOT Toll and Annuity Road Projects as develop and Industrial Constructions.

Source:  equitybulls.com

Evaluating toll road credits

It has been recently reported that the government of India has given its approval for six-laning of 6,500 km of national highways, including 5,700 km forming part of the Golden Quadrilateral at a total cost of Rs 41,210 crore. In terms of financing, the expectation is that private sector will commit investments of Rs 35,690 crore. Also the government, in order to accelerate implementation of highway projects of Rs 2,20,000 crore, has set a target of awarding 175 contracts for Rs 76,540 crore, all on BOT basis by March 2008. Since a number of these projects are going to be predominantly debt financed with repayments supported by toll collections, it would be timely and useful to have an analytical framework for assessing the credit quality of various types of toll roads and financing structures.

Read more

NHAI's First ETC(Electronic Toll Collection) PLAZA

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