We have $1 tn infrastructure deficit: FM

April 22, 2013

Washington, April 21, 2013

India has a $1 trillion infrastructure deficit over the next five years, finance minister P Chidambaram has told the World Bank, which wants private sector participation to bridge the funding gap.

Chidambaram met World Bank president Jim Yong Kim yesterday (Saturday) morning on  the sidelines of the annual Spring meeting of the International Monetary Fund and the World Bank.

 At a public event in Washington along with UN secretary general Ban Ki-moon, Kim stressed on the importance of private sector participation on meeting such a massive funding need.

“I just met with the finance minister of India this morning, and he told me that, in India, they have a $1 trillion infrastructure deficit just for the next five years,” Kim said.

“So, all of the official development assistance combined won’t even meet half of India’s infrastructure development needs. So, we’ve got to get the private sector involved,” he said.

Chidambaram is in Washington to attend the annual Spring meeting of the International Monetary Fund and the World Bank.

No further details of Chidambaram’s meeting with Kim were available.

“Now, at the World Bank Group, we have the International Finance Corporation, and specifically what they do is they say, ‘We want to be sure that private investment, in infrastructure in ports, in roads, in telecommunications actually has the greatest development impact’”.

“So, our team at IFC, if–they get extra credit, they get better evaluations of the investments they make and the investments they bring in actually have a development impact,” Kim said.

He said the World Bank has zero tolerance for corruption.

“You have to have an absolute zero tolerance for corruption, and that’s exactly the way we’ve done it,” he said, as he referred to Bangladesh where the Bank had to suspend work on a bridge and, in the process, debarred a company.

“We just did that, and it was the longest debarment in our history. They are now prohibited for working on any of our projects for 10 years, and you have to have a complete, zero-tolerance approach and that is what we do in the World Bank Group,” he said.

Source- http://www.hindustantimes.com

Smooth rides in store: Jaya promises better roads in 3 yrs

August 29, 2011

CHENNAI: The government is planning to spend Rs 2,400 crore on upgrading roads over the next three years.

Chief minister J Jayalalithaa told the assembly on Friday that the state would convert 963km of state highways into double-lane roads and 3,700km of major district roads to intermediate-lane roads. “Give us time and see the changes in three years,” she said to thunderous applause from the treasury benches.

The government will take up major road projects under a Build Operate and Transfer (BOT) basis with private participation. In the second phase of the Tamil Nadu Road Sector project, 2,500km of roads under the highways department will be improved at a cost of Rs 5,000 crore, Jayalalithaa said. Financial support will come from the World Bank, she said.

Source: timesofindia.indiatimes.com

World Bank asks NHAI to look for new models

August 23, 2011

Upset with delays in the implementation of highway projects, the World Bank has asked the National Highways Authority of India (NHAI) to look for alternative ways of awarding highway contracts to private companies.

Till now, funding from the World Bank for the National Highway Development Project has been confined to EPC (engineering, procurement and construction) projects costing over Rs 4,000 crore. In an EPC project, the government gives a contract for road construction on an outright payment to whoever quotes least cost.

NHAI is currently awaiting a response after it invited expression of interest. “As part of transaction assistance,” points out a senior NHAI official, “the World Bank has asked us to invite EoIs from consultants to select new mode for implementing highway projects.”

EPC projects have witnessed a lot of delays — some even stretching beyond seven years, when completing a road project normally takes three years. The World Bank customarily withdraws fund for a project that has not been built in seven years, leaving the project funding to NHAI.

Analysts feel that availability-based model would be suitable for India, as it is a large country and no one-size fit solution can be implemented for all. “Globally,” says Arvind Mahajan, executive director of consultancy firm KPMG, “the models are availability-based, depending on the conditions prevalent. And all these models are derived out of the basic model prevalent. NHAI has also experimented various models and a availability-based approach would be the best.”

Others feel that delays in the past is what makes the World Bank find issues with the EPC model. Notes National Highways Builders Federation Director General M Murali.“A hybrid model, with features for BOT (build operate transfer) annuity and BOT (toll) will be the best model for such projects.”

BOT (annuity) mode envisages a private company building the road and the government paying to the company in instalments every six months.

The maintenance of the road is also not the job of the road developer. In BOT (toll), a road developer builds the road and recovers the money through toll collection. The company is allowed to collect toll to recover the investments made during a period called concession period and can range up to 25 years.

The World Bank, apart from funding for developing highways, also fund the VGF (viability gap funding) payments and annuity projects. VGF is done in a BOT (toll) project to make it financially viable.

Source: business-standard.com

Work on ECR project resumes

December 2, 2007

It was suspended due to heavy rain

Project expected to be completed by March 2009 Estimated cost: Rs.2,160 crore

PUDUKOTTAI: Work on the World Bank-funded East Coast Road (ECR) project, which remained suspended for about a month following sharp showers in the coastal parts of the district, resumed recently.

Being a coastal belt with estuaries, rivulets and the Vellar, the major river of the district, the work involves construction of culverts and minor bridges at several places in the 36-km-long stretch. Work on construction of a minor bridge or culvert has been undertaken every couple of km between Kattumavadi and Kottaipattinam, about 70 km from here.

Authorities of the Tamil Nadu Road Sector Project (TNSRP), which is executing the Rs.2,160-crore project of laying the 742-km road from Arcot to Tuticorin, suspended the work as a vast stretch of newly laid and levelled earth on the ECR stretch turned slushy at places such as Kottaipattinam, Kattumavadi and Manamelkudi. The overflowing water from the culverts brought all work to a grinding halt.

The project, which started in February 2004, is expected to be completed by March 2009. Of the total outlay of Rs.2,160 crore, a sum of Rs.1,148 crore will be utilised to upgrade the ECR, TNSRP sources told The Hindu. The upgrading work includes strengthening of the earth and ensuring technical stability of the area to suit the huge volume of heavy vehicles. With the receding of rain water, work resumed last week, the sources said.

The project is being executed through meticulous planning, covering a stretch of 387 km between Arcot and Tiruvarur and 355 km between Nagapattinam and Tuticorin.

Source:  hindu.com

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