Car parking made easy

October 10, 2011

The automated multi-level car parking facility set up in the city

More than the traffic police, shoppers visiting congested areas around Meenakshi Sundareswarar Temple in their four-wheelers can heave a sigh of relief now.

For the first time in the southern districts of Tamil Nadu, a textile showroom has provided an automated multi-level car parking facility for its customers near its outlet on East Avani Moola Street. About 40 cars of all sizes can be parked at this facility with ease.

Owing to inadequate space, it is common to see four-wheelers and other vehicles parked on the roadside, causing congestion to road users. It is a daily chore for the traffic police to pursue violators and impose fines or tow the vehicles. Ultimately, vehicles parked on the roadside resulted in shrinking of carriage space and broad roads appearing narrow.

With vehicle population growing at a rapid pace even in tier two cities such as Madurai, finding a permanent solution to the issue of parking of vehicles seemed to be a difficult proposition. In some cities, the officials (town planning and traffic police) admitted that the situation had gone out of control. “We have learnt to live with traffic congestions and moving at a snail’s pace on main thoroughfares has become the norm,” officials say.

RELIEF INDEED

“Customers coming from near and afar expressed difficulties in visiting our showroom owing to lack of parking space for their cars. Now they can heave a sigh of relief,” said R. Muruganand, Managing Director of Rajmahal, a leading textile showroom in the city. With the available space near the showroom, RR Parkon Private Limited, a leading infrastructure provider of automated multi-level car parking systems, have built the facility for the exclusive use of Rajmahal’s customers.

Speaking to reporters here on Friday, RR Parkon Director Balachandran Dharmen said that depending on the space available, the provided the right model for its clients. Giving an example, he said, in a residential apartment, where only three cars could be parked normally, they could provide space for 50 cars. “Vehicles are not only safe and parked in an organised manner, but complaints of thefts can be avoided and mischief mongers can be kept at bay,” he said.

There were various types of models. And in any given type, the vehicle could be taken out in less than 100 seconds. The operation was simple. The main advantage of mechanised car parking system was that in a small area, a large number of cars could be parked, he said.

The company was associated with some of the best names in realty business by providing innovative parking solutions at an optimum cost. The company had completed over 100 projects in many cities across the country. They were keen on taking up projects from government-owned lands on a build-operate-transfer (BOT) basis, Mr. Dharmen said.

By constructing many multi-level parking facilities, congested locations in the Temple City may soon turn to be most preferred destinations for shoppers.

Source: thehindu.com

Written by ITW Editor · Filed Under BOT, Parking

CPI: Mutually Beneficial and Double Winning China-Myanmar Myitsone Hydropower Project

October 10, 2011

On September 30, some media reported that the Myanmar government will suspend the construction of Myitsone Hydropower Project in upstream Ayeyawady River, which caused extensive attention from media both home and abroad. With many questions, we interviewed Mr. Lu Qizhou, President of China Power Investment Corporation.
Q: President Lu, lately we noticed in the media that the Myanmar government will suspend the on-going Myitsone Hydropower Project. As China Power Investment Corporation (CPI) is the main investor of this project, can you tell the public what really happened?
A: I also learnt about this through the media and I was totally astonished. Before this, the Myanmar side never communicated with us in any way about the “suspension”. Ever since CPI and Myanmar Ministry of Electric Power No. 1 “MOEP (1)” signed the MOU in December 2006, CPI has always followed the principle of mutual respect, mutual benefit and win-win result and established a Joint Venture with the Myanmar side, strictly observed the Chinese and Myanmar laws and regulations, diligently fulfilled our duties and obligations, and proceeded according to the operation mode of international BOT project. In March 2009, the Chinese and Myanmar governments signed the Framework Agreement on Joint Development of Hydropower Resources in Myanmar, explicitly supporting CPI in developing the upstream-Ayeyawady hydropower project.
We hired topnotch hydropower design institutes, research institutes, consultancies and authoritative experts in China to carry out planning, design, specific study, consultation and supervision for the upstream-Ayeyawady hydropower project. Changjiang Institute of Survey, Planning, Design and Research is responsible for the planning of upstream-Ayeyawady basin and the design of Myitsone Hydropower Project. It is also the institute that designed China’s Three Georges Project. When we proceeded with Myitsone Hydropower Project, technical documents were consulted and reviewed by authoritative organizations and experts, and passed review organized by MOEP (1). Therefore, all legal documents, including the application for approval, signing of Joint Venture agreement, business license of the Joint Venture, investment permit, concession rights and legal opinion of the Judge are all in strict compliance with procedures of Myanmar. So far, all legal supporting documents for Myitsone Hydropower Station are complete for both countries. This is to say that the upstream-Ayeyawady hydropower project including Myitsone Hydropower Station, for which CPI is responsible for development and construction, is a major project approved by Myanmar government and has strictly performed all legal procedures in China and Myanmar. In February this year, Myanmar’s Prime Minister urged us to accelerate the construction when he inspected the project site, so the sudden proposal of suspension now is very bewildering. If suspension means construction halt, then it will lead to a series of legal issues.
Q: How did CPI participate in the construction and development of Myitsone Hydropower Station in the first place? What’s the status quo of the project? If the project is suspended, what impacts will be caused?
A: Hydropower is the technologically most proven and most economic renewable energy today. The average development of hydropower in developed countries is already above 60%, 72% in America, 67% in Japan, 90% in France, 95% in Italy and over 60% in Norway. Hydropower development rate reaches 50% in China now, and is planned to reach about 75% in 2020. With a total hydropower resource of over 100GW, Myanmar is one of the few countries in the world that have abundant hydropower resources, but the current rate of development and utilization is only 2.45%, which is in extreme disproportion to the resources it possesses. In particular, as the upstream-Ayeyawady hydropower project is located near the China-Myanmar border, developing hydropower resources here not only can meet Myanmar’s power demand for industrialization, but also can provide clean energy for China. It is based on this consideration that we decided to invest in this mutually beneficial and double winning hydropower project.
Myitsone Hydropower Station that people are concerned about is the largest station in the river basin and started construction in December 2009. Currently, resettlement in the dam area of Myitsone Hydropower Station has completed, site preparations (access road construction, water supply, electricity supply, communication and site leveling) have started on full scale, on-site facilities including access road, water treatment plant and oil warehouse have taken primary form, the cross-river bridge downstream of the dam is under construction, and excavation for the main spillway and diversion system has also begun.
Since the inauguration of the Myitsone Hydropower Project, huge sum of money has been invested. If the project were suspended, the loss would go far beyond direct investment and financial expenses. There would also be tremendous amount of default claims from contractors, serious inability of electricity generation of the Construction Power Plant, huge increase of basic investment spread to other cascade power stations, and so on. As a result, the goal of completing the upstream-Ayeyawady hydropower project in time will not be achieved, causing immeasurable losses to both China and Myanmar. At the beginning of this year, Myanmar and China reached an agreement and relevant banks of both countries signed a RMB loan agreement. To guarantee repayment, the Myanmar government has secured its shares in Myitsone Hydropower Station and taken its expectant revenues as the main source for loan repayment. If the construction of Myitsone Hydropower Station were suspended, that would seriously impact the implementation of loan agreement.
In my opinion, having undergone sufficient scientific proving and fulfilled stringent legal procedures of both countries, Myitsone Hydropower Station is sure to withstand the test of history. I strongly hope that with unremitting efforts of relevant parties, this project can smoothly move forward on schedule, and mutual benefit and win-win result will become a reality for China and Myanmar.
Q: Some reports pointed out that the project will only bring economic benefits for China. What’s your comment on that?
A: This viewpoint is extremely wrong. People who hold such a wrong viewpoint either don’t understand the situation or have ulterior motives. Regarding infrastructure, it is an international practice to implement BOT mode. According to our BOT agreement, upon completion of the upstream-Ayeyawady hydropower project, CPI will be responsible for operation for 50 years, after 50 years the project will be transferred to the Myanmar government free of charge.
Either in terms of direct economic benefit or indirect profit, the upstream-Ayeyawady hydropower project will significantly boost the fast development of economy and society in Myanmar. In terms of direct economic benefit, when the several hydropower stations in upstream-Ayeyawady basin, including Myitsone Hydropower Station, are completed, Myanmar government will gain economic benefits of USD54 billion via taxation, free electricity and share dividends, far more than CPI’s return on investment during our operation period. In particular, as the design life of the project is over 100 years, when we transfer it after 50-year operation, the Myanmar government will have a fixed assets increase worth tens of billions US dollars, in addition to hundreds of billions US dollars of direct economic benefits. Of course, the premise is that US dollar is not depreciated.
In terms of indirect profits, first of all, the construction and operation of high-grade and large-capacity power station will rapidly improve the power equipment in Myanmar and cultivate a large group of professionals in power construction, operation and management. As a result, Myanmar’s electric industry will realize leapfrog development, providing strong power ensurance for its economic and social development. Second, when Myitsone Hydropower Station is completed, it will effectively control and reduce the flood peak, raise the anti-flooding standard in downstream area, and reduce life and property losses caused by downstream flood on people living on both banks. The anti-flood capability of Myitkina will be enhanced from once in 5 years to once in 20 years. Third, 750km road and a large number of hydrological, meteorological and seismic observation stations will be built for upstream-Ayeyawady project accordingly. Those infrastructures will definitely create opportunities for the local area to attract business and capital and improve people’s livelihood. Fourth, during the construction peak, more than 40,000 workers will be needed, considerably increasing local job opportunities. At present, there are altogether 2000 Myanmar workers on the construction site of upstream-Ayeyawady project, including 1400 Myanmar workers on the Myitsone Hydropower Project site. By directly participating in the construction of upstream-Ayeyawady project or providing relevant services for construction personnel, local residents have considerably improved their own economic and living conditions.
Q: Some people worry that construction of the dam will lead to such major hazards as flood and earthquake. Is there sufficient guarantee for dam safety?
A: As far as I know, in the more than 100-year history of hydropower development, no flood or destructive earthquake has ever been caused by dam construction. CPI is a responsible super-large energy enterprise with 18GW operating hydropower capacity in China. We are able to ensure the safety of dam construction. During the design and construction of Myitsone Hydropower Station, we involved topnotch experts and teams in China, who have designed more than 200 hydropower stations, including Shuibuya Hydropower Station with the world’s highest concrete face rockfill dam and Malaysia’s Bakun Hydropower Station. Repeated proving of the seismic safety evaluation of Myitsone proved the absolute safety and reliability of the project engineering scheme. The Myanmar government also organized famous consulting organizations and experts from Switzerland and Japan to prove that over and over. Both parties agreed that there was no seismic safety issue for Myitsone Hydropower Station.
The seismic design of the dam in Myitsone Hydropower Station follows the standard of fortification intensity 9, which is higher than fortification intensity 7 of Zipingbu Hydropower Station that has withstood the Wenchuan earthquake in Sichuan. To further fortify the overall seismic performance of the dam, we applied reinforced concrete grating to the top of downstream dam slope and implemented other seismic fortifying measures. In case of emergency, the surface and middle discharge orifices on the spillway can be used to rapidly lower the reservoir water level and ensure dam and downstream safety. We will build 25 digital remote control seismic monitoring stations in the reservoir area and arrange more than 700 safety monitoring instruments all over the dam in accordance with the safety monitoring standard applied to the world’s highest concrete face rockfill dam so as to keep a close eye on the dam’s working conditions during operation.
The anti-flood standard of the Myitsone dam is designed as once in 1000 years and ratified with once in 10000 years to ensure safe operation.
Q: Environmental protection has been a hot topic in hydropower development. Few western NGOs criticized that the project would seriously damage the environment. How do you respond on this?
A: I would like to ask: Did these organizations ever help Myanmar to develop economy when the Myanmar people were in most difficult situation? But now, with the slogan of ‘protecting the benefits of the Myanmar people’, these organizations are disturbing the Myanmar government to carry out economic project development to improve people’s livelihood. I don’t know what their real purposes are?!
Any human activity would cause some impacts on the environment, including power generating activities. Hydropower, thermal power, nuclear power, wind power and solar power generation would all impact the environment somehow. Striving to reduce the negative impacts caused by human activities on the environment is necessary for sustainable development. During the 100 years that the mankind develop hydropower, their awareness of environmental protection has been deepening, and their ability in that has also continuously improved with technological progress. It has become a common consensus that hydropower is the only renewable energy suitable for large-scale development now.
The Hoover Hydropower Station in America has been operating for 80 years now. It not only turns 700,000-hectare desert in western America into fertile farmland by providing reliable water source, but also creates the new city of Las Vegas. The Itaipu hydropower station jointly developed by Brazil and Paraguay has also played a significant role in the economic and social development of both countries. CPI’s successful development of cascade hydropower stations in upstream Yellow River has not only provided a great deal of economic and reliable clean energies, but also ensured non-stop flow in the middle and lower reaches of Yellow River for the past 10 years. All these projects have impacted local environment in varying degrees, but their positive effects on local economic and social development is self-evident and indisputable.
CPI attaches great importance to environmental issues during project development, and started environmental impact assessment at the very beginning of project planning.
Regarding vegetation, we entrusted over 100 experts from China and Myanmar to conduct environmental impact assessment of the basin, some of them from Myanmar NGOs. According to site investigations, native vegetation only accounts for a small part in the flooded area, and the flooded land only accounts for 1.4% of the whole basin area. Besides, protected plants that are flooded are widely distributed outside of the reservoir area, so bio-diversity will not be impacted.
Regarding intrusion of seawater, after the reservoir begins storing water, average flow will be reduced by 3.5% in flood season and increased by 16% in dry season. Therefore, there is no possibility of seawater intrusion during flood season. Meanwhile, it can also help prevent seawater intrusion during the dry season. It is also good for navigation, flood control and irrigation in the downstream.
Q: Resettlement is also a hot topic in hydropower development. Resettlement work relates directly to the subsequent living quality of the migrants. What have you done in that regard?
A：The Myanmar government attaches significant importance to resettlement for the upstream-Ayeyawady hydropower project, and has effectively led and organized the planning, design and implementation of resettlement. They solicited migrants’ opinions for several times regarding type of houses and subsidies for relocation, and eventually selected 2 resettlement locations with convenient traffic, good environment and favorable terrain for migrants from the Myitsone dam area. According to the agreement, we assisted in the resettlement work and proactively fulfilled our social responsibilities and obligations, while fully respecting local religion, ethnic customs and the wish of migrants.
The basin that upstream-Ayeyawady project is located features a typical terrain of high mountains and river valley. When the power stations are completed, flooded area only accounts for 1.4% of the whole basin area, and less than 20000 people have to be relocated because of the cascade hydropower stations in the basin.
There are 5 villages in the dam area of Myitsone Hydropower Station, totaling 2146 people of 410 households. The houses we provided for migrants are 2-storey wood-and-brick structure, and we provided each household with 100,000-Kyat living subsidy, a 21-inch color TV and other living necessities. We also reasonably subsidized migrants for their private orchids and economic forests. Compensations for the dam area amounted to billions of Myanmar Kyat and were all distributed into migrants’ hands. In order to ensure the subsequent lives of migrants, we newly reclaimed 440 acres of land, and distributed money to every household for land leveling related expenses, rice for a year, 30 kilo rice seeds and 50 kilo fertilizers. At the same time, all infrastructures such as schools and hospitals are concrete structure, and all students are provided with textbooks, uniforms and stationery. Auxiliary facilities including high-standard religious venues, police stations, firefighting and administration buildings, post offices and markets are set up, 20km concrete road is built, and steady water and electricity is supplied for communities. Resettlement has been completed now, and living standard of the migrants has been greatly improved compared with before, so they are satisfied with their current living conditions.
We will fully draw on our experience in resettlement of dam area for the resettlement in Myitsone reservoir area to make it more rational and feasible. Flooded roads and bridges in the reservoir area will be rebuilt on the principle of “equal or superior to former standard” so as to meet the traffic requirements of local residents.
We also attach great importance to long-term assistance to the migrants. We have set about planning and building animal breeding and vegetable growing bases in the basin, hire local people to provide logistic services for project construction, with the aim to create more and better jobs and ensure the sustainable development of migrants.
There are two old sayings in China. One is “seeing is believing” and the other “he is wise who is open to all opinions, but a fool who only believes what he wants”. I believe all of you will come to a just and objective conclusion with awareness of the real situation.

Source: chinadaily.com.cn

Written by ITW Editor · Filed Under china, Default

Expressway project costs shoot up to Rs 45-50 cr a km

October 10, 2011

The Union road transport ministry is finding it difficult to adopt a viable economic model for access-controlled expressways. The current cost estimates have shot up to Rs 45-50 crore per km against Rs 10 crore a km needed for six lane highways.

With such a huge investment requirement, the ministry is unsure if the build operate transfer (BOT) model for public private partnership projects (PPP) is viable. If the BOT model is adopted, the toll fees will have to be kept very high to recover the cost over a 30 year period. “State and national highways with lower toll would entice more people to use them,” a senior government official said.

The ministry has drafted a plan to construct 15,600 km of expressways by 2022 and has identified over 40 stretches for the same. The idea is to create an Indian National Expressway Network by the 13th Five Year Plan. The plan is to cover special economic zones (SEZs), industrial corridors, industrial towns and densely populated cities to raise the average distance travelled by a vehicle from 300 km per day to almost 600-800 km a day.

The BOT annuity model, where the government pays annually or bi-annually to compensate the private developers, also appears to be unviable, say officials. The reason is that such high cost of construction will entail huge public expenditure while there are other competing sectors in the economy which are vying for same allocations.

“The third model before us is the engineering procurement construction (EPC). Which is not an option here as that would again imply a huge burden on the government’s exchequer,” the official pointed out.

In developed countries, the first 50-100 km of expressways are built by the government to attract private developer. Once traffic picks up on the route, the developers build the remaining length of the expressway and is allowed to charge toll on the entire length (including the stretch constructed by the government).

The government allows this as an added incentive towards recovering the cost of construction and reaching the targeted internal rate of return.

Source: indianexpress.com

Written by ITW Editor · Filed Under BOT, Expressway, Projects

Reliance Infra’s Delhi-Agra road upgrade still in cul-de-sac

October 10, 2011

Reliance Infrastructure’s Rs1,928 crore national highway upgrade project between Delhi and Agra has been stuck over clearance from the Ministry of Environment and Forests (MoEF) for more than a year now – a development that is likely to lead to cost escalation in the project.

The 180 km project spanning Haryana and Uttar Pradesh is part of the Phase Five of the National Highways Development Programme, which envisages expansion to six-laning of 6,500 km of highway network.

The phase assumes significance as upgrade of the entire golden quadrilateral (5,846 km) to six-lane standards is a part of it.

Reliance Infrastructure bagged the project from the National Highways Authority of India (NHAI) in May 2010. The company, however, has still not been able to start construction on the road.

The project is being developed on a build, operate and transfer (BoT), toll basis. Analysts, on conditions of anonymity, peg the cost escalation at round 10% as of now.

NHAI, meanwhile, has said that the issue will be resolved in the next one month. Explaining the matter, a NHAI official said, “The clearance involves an area where a toll plaza will be coming up. The clearances happen in two stages. In the first stage, the terms of references are approved by the Union environment ministry. In this project, the MoEF has approved the terms of references four months back.”

In the second stage, public hearing takes place. It is here that the matter is stuck for Reliance Infrastructure. “The public hearing has been completed in Uttar Pradesh. In Haryana, the hearing is scheduled for October 13. Once that is done, the report will be submitted to the MoEF,” said the official.

The company has a portfolio of 11 road projects spanning 970 km, worth Rs12,000 crore. Of these, at least seven will become operational by the end of the current financial year.

Source: dnaindia.com

Written by ITW Editor · Filed Under BOT, NHAI, Reliance

Govt mulls opening all PPP options

October 10, 2011

KATHMANDU, Oct 10: The government is preparing to open all Public Private Partnership (PPP) modalities by scrapping the existing Build Operate and Transfer (BOT) modality in a bid to remove legal complications and ensure involvement of Nepali investors in the Kathmandu-Tarai Fast Track Road.

“We are weighing pros and cons of all possible modalities for executing the 76-km expressway because we can´t ensure involvement of Nepali investor under BOT as per the existing Private Financing in Build and Operation of Infrastructure Act 2006,” said a high-level source at the Ministry of Physical Planning and Works (MoPPW).

The Act has specified different options — BOT, Build Operate Own and Transfer (BOOT), Build-Own-Operate (BOO) Lease Operate Transfer (LOT), Lease Build Operate and Transfer (LBOT) and Develop Operate Transfer (DOT) — to implement the project under PPP.

“Participation of more investors, including Nepalis, will be possible once we open new investment modalities, as the Act has different options for the implementation of such mega projects under PPP,” the source added.

The MoPPW had last year called international tender inviting investors having experience of implementing six-lane highway costing at least $900 million to implement the fast track road project under the BOT system. It, however, had canceled the process of selecting bidders on March 15 as per the instruction of the parliamentary Public Accounts Committee (PAC). PAC had directed the ministry to ensure at least 10 percent domestic investment, irrespective of the experience of local investors, in the project.

PAC´s direction had contradicted with the existing Private Financing in Build and Operation of Infrastructure Act 2006 and its regulations that require investors to meet certain work experience requirements to implement projects under the BOT system. It had also directed the ministry to provide at least four months for filing tender to ensure participation of higher number of aspirant firms in the bidding process.

To implement the PAC instruction, the ministry was earlier preparing to amend the Act. It had also sought necessary instruction from the high-level Project Coordination Committee of the National Planning Commission (NPC) on the implementation of the PAC´s direction.

However, the committee did not respond to the ministry´s request.

As per the Asian Development Bank´s revised estimation of 2008, the mega project costs $800 million.

Source: myrepublica.com

Written by ITW Editor · Filed Under BOT, Nepal

C&C Constructions eyes stakes in BOT projects, hydel power sector

October 10, 2011

Mr Gurjeet Singh Johar — Ramesh Sharma

Mr Gurjeet Singh Johar, a Chartered Accountant by profession, did not have any prior experience in construction when he, with his partners, incorporated C&C Constructions in 1996.

Today, as Chairman of the Rs 1,290 crore company, Mr Johar speaks to Business Line as he hunts for acquiring stakes in BOT projects, opportunities in hydel power, and sets Rs 1,800 crore turnover target for the next 2-3 years. Excerpts:

Why did you choose this sector?

I had picked up quite a bit about doing business with my previous employers, and my partners had good construction acumen. We zeroed in on road construction. Today, we are in concessions in roads, parking, checkposts, also doing the largest power transmission job (UP Government tender).

The USP of our group is to identify areas that are difficult to access, less competition. But, we do not just limit ourselves to such jobs — we are also present in ‘mass’ areas.

What is your current debt-equity ratio? Any plans to raise debt?

It is at 1.5. We want to maintain it that level — it should not be more.

Do you get offers to offload equity?

In this market everybody wants to buy. At these prices, we would not want to do any equity transaction. We feel the company’s valuation is quite low.

Has the promoter holding gone up in the company?

There has been a creeping acquisition (In June 2011, promoters held 64.15 per cent — up from 63.43 per cent in March 2011) We are continuing to do it…There is about two per cent (more) that we could buy.

What kind of balance do you want to maintain between contract and BOT projects?

We will be both in contracting and BOT. The balance sheet can only support a certain level of BOT projects and your appetite is much bigger. Over the next few years, if I can get 25-30 per cent of the contract from my own BOT projects. We are moving to buildings, looking at power generation on hydel front.

In the construction space what is a reasonable return level?

The profit before tax (PBT) in construction should be at least 8-10 per cent range. In concession (build-operate-transfer or BOT) side, I would not do anything less than an internal rate of return (IRR) of 15 per cent. There will always be a one-odd transaction just to ensure there is business.

In a competitive backdrop do you see players offloading their stakes in projects?

I see over the next year or so a lot of BOT projects being available at discounts. I am waiting.

There have been offers…it is too early to give their names.

How do you manage risks like interest rate, inflation, etc?

When you are in construction — you could be in BOT or pure contracting. In BOT projects, one has to be very careful about interest rates and inflation. Interest rates are at their peak today. I can only hope they come down. But in construction contracts, we have pass through escalation clauses. So, we are fairly well covered.

Source: thehindubusinessline.com

Written by ITW Editor · Filed Under BOT, C&C Construction, Interviews

Buy Madhucon Projects; target of Rs 109: PINC Research

October 10, 2011

Buy Madhucon Projects; target of Rs 109: PINC Research

PINC Research is bullish on Madhucon Projects and has recommended buy rating on the stock with a target of Rs 109 in its October 3, 2011 research report.

Phase I power project to be synchronized: Phase I power project of 300MW of the 1,920MW at Nellore, AP is likely to be synchronized in a month’s time. MPL has arrangement with PTC for 100% of coal supply from 70% earlier for phase I and for phase II, PTC will supply 50% of the coal requirement.

Rate revised upward to Rs1.45/unit: The conversion rate for PTC power contract has been increased to Rs1.45/unit for Phase I and Rs1.50/unit for Phase II from earlier rate of Rs1.25/unit for phase I. This is largely due to delay in plant completion and rationalization of cost.

Dilution on card; looking at Rs16-22bn for MTHL: Madhucon is looking for dilution in Madhucon Toll Highway (MTHL) & Simhapuri Energy Pvt. Ltd. (SEL) and is actively scouting for private equity deals. The company’s internal valuation for MTHL is ranging from Rs16-22bn and for SEL is Rs30bn (including phase III).

L1 in Vijayawada-Machilipatnam road project: The company is L1 in Vijayawada-Machilipatnam project on DBFOT toll basis. The project involves four laning 63km (258 lane km) of existing section on NH9.

Orderbook at Rs62.7bn; 3.7x FY11 revenue: Orderbook continues to be strong at Rs62.7bn (3.7x FY11 revenue), largely due to internal orders of road and power. Excluding Andhra Pradesh irrigation project of Rs13bn, book to bill ratio stands at 2.9x FY11 revenue.

“We revise our target price to Rs109 from earlier Rs141 due to a) increase in cost of equity for BOT road and power phase I projects to bring it inline with the current market risk, resultantly we have raised cost of equity to 15% from 13%. b) Earlier we had valued mining project at one time equity investment i.e. Rs410mn (Rs5 per share), now we wait till the logistical issue is resolved. c) The core EPC business earnings have been revised downward by 4.1% and 16.7% for FY12E and FY13E due to higher interest cost factored at 11.5%, now the total debt in MPL stands at Rs7.5bn (1.1x D/E FY11) and is likely to increase to 1.3x by FY12 end. We maintain our ‘BUY’ recommendation,” says PINC Research report.

Attachments : MadhuconProjects_PINC_031011.pdf

Source: moneycontrol.com

Written by ITW Editor · Filed Under Default, Madhucon

KMC plans to expand

October 10, 2011

KOCHI: Hyderabad-based KMC Constructions Ltd, has announced today that the company had finalised plans for a public float to mobilise fund for its expansion-cum-diversification projects in solar power generation and BOT projects in railways.

The company now has 10 BOT road projects in hand. This includes three annuity and seven toll ways with an aggregate order book of Rs. 9,000 crore.

“The Company had investments of Rs. 825 crore from 3i, SNC Lavalin including Rs. 175 crore from IDFC, Blue River Capital and Sequoia Capital. We are looking at IPO to part divest the company stake and offer exit route to some of the investors,” said M Gautham Reddy, managing director of KMC Constructions Ltd.

The company closed last financial year with revenues of Rs. 1,080 crore. As part of the company’s efforts to meet its manpower requirement, KMC has set up a training division which helps groom youth to take up jobs in the construction sector.

Source: ibnlive.in.com

Written by ITW Editor · Filed Under BOT, KMC

GVK arm bags NHAI road project in Madhya Pradesh

October 10, 2011

GVK Power and Infrastructure Ltd has announced that GVK Transportation Private Ltd, a wholly-owned company subsidiary, has been chosen through an international competitive bidding process to take up the four-laning of Shivpuri-Dewas section of National Highway No 3 in Madhya Pradesh.

The road project is to be executed as BOT (Toll) project on Design, Build, Finance, Operate and Transfer pattern under the National Highways Development Programme (Phase IV) of NHAI. The company has received the Letter of Award from NHAI and expects to ink the Concession Agreement shortly.

The project entails the widening and strengthening of the two-lane highway to a four lane highway over a 332 km stretch. It has a concession period of 30 years including a construction phase of 30 months.

ANOTHER MILESTONE

Mr G.V. Krishna Reddy, Chairman, GVK, in a statement said, “the winning of this major road project in Madhya Pradesh marks yet another milestone for GVK. With this new project, we will develop one of India’s busiest highways to meet the growing road transport needs in Central and Northern India.”

The project road on National Highway No 3 is one of India’s major corridors referred to as Mumbai-Agra highway. It is a vital trade link connecting Western and Central India to Northern India and passes entirely through Madhya Pradesh carrying predominantly long distance freight traffic.

The Hyderabad-based infrastructure company has implemented India’s first six-lane toll road project 90 km long between Jaipur-Kishangarh on NH 8, part of NHAI’s Golden Quadrilateral and is developing two toll road projects. The company has a portfolio of four toll road projects of over 600 km.

Source: thehindubusinessline.com

Written by ITW Editor · Filed Under GVK, NHAI

Chinese firm offers to finance Lamu port plan

October 3, 2011

President Kibaki points to a map of the Lamu-South Sudan-Ethiopia corridor project at the KICC in Nairobi on July 26 as PM Rail Odinga and Transport minister Amos Kimunya look on. Photo/STEPHEN MUDIARI

A Chinese company has expressed interest in financing the construction of Lamu Port and its related infrastructure.

The firm, JS Neoplant Company Limited of Shanghai, has said it is “ready, able and willing” to undertake the massive project whose cost had been estimated at US $16 billion (Sh1.4 trillion).

According to the communication, the six components of the project include a sea port straddling some 750 acres of land with 10 container terminal berths and three bulk cargo terminal berths, an oil jetty and an international airport with a 2,000 person-per-day capacity on 10 daily flights.

Other components are a three-limbed 1.4m gauge railway line for high speed trains: the limbs are Lamu-Isiolo-South Sudan (1,400km); Nairobi-Isiolo-Moyale-Addis Ababa (1,596km) and Lamu-Mombasa (350km).

The pipeline too had three phases: South Sudan border-Lamu-Isiolo (1500km); Nairobi-Isiolo-Moyale-Addis Ababa (1400km) and a branch to link Lamu to the existing Mombasa/Kampala pipeline.

The project also includes three stretches of highway: Lamu-Isiolo-South Sudan border (1400km); Nairobi-Addis Ababa (1596km) and Lamu-Mombasa (320km).

A fibre optic cable running along the highway completes his gargantuan regional project.

Last month, President Kibaki gave an indication of the impending commencement of the construction work with a promise to undertake a ground-breaking ceremony “soon”.

“The feasibility study for Lamu Port and supporting infrastructure is now complete… I look forward to soon undertaking the ground-breaking ceremony for the project,” point he said in Mombasa a week ago when he visited the town to open this year’s Agricultural Society of Kenya show.

President Kibaki mandated Kenyan ambassadors to aggressively market the proposed second transport corridor that would serve Ethiopia and South Sudan.

Several countries including Canada, Germany, China, Japan and United Arab Emirates have made inquiries since the government declared its intention to construct the corridor about three years ago.

The corridor has immense political and economic potential and will open up large sections of the country’s North Eastern and Eastern provinces that have for years enjoyed scant attention in terms of business opportunities.

“I urge you to focus some energy on promoting investment in this project in your respective areas of accreditation, as it is expected to play a major role in catalysing Kenya progress towards the achievement of the economic goals,” Mr Kibaki told the ambassadors.

Japan Port Consultants has completed a one-year feasibility study on the development of the port and Lamu-South Sudan-Ethiopia Transport corridor.

With the anticipated entry of South Sudan and even Sudan into the East African Community, estimates put unrestricted demand of cargo rising by more than 32 million tons per annum – far above what Mombasa Port alone can handle.

South Sudan has always relied on Port Sudan in Sudan to the north.

The Ethiopian market, the other target, is currently served by Djibouti port. Lack of good roads connecting Kenya and Ethiopia, with a population of 80 million, has hampered the trade between the two nations.

Ethiopia’s dependence on imported goods has meant that Djibouti port handles 98 per cent of Ethiopian traffic which is about 85 per cent of all the traffic in through the port.

Source: nation.co.ke

Written by ITW Editor · Filed Under china

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