Nitin Gadkari lays foundation stone for four laning of National Highway 6

November 23, 2015

The Union Surface Transport Minister said developmental works worth Rs 50,000 crores would be completed in west Vidarbha region in next 5 years.

AKOLA: Union Minister Nitin Gadkari laid foundation stone for the four-laning of the Akola-Murtizaur section on National Highway 6.

Gadkari, who laid the foundation yesterday, assured all round development of west Vidharbha region in Maharashtra comprising of three districts of Akola, Washim and Buldana in next five years.

The Union Surface Transport Minister said developmental works worth Rs 50,000 crores would be completed in west Vidarbha region in next 5 years.

Gadkari also dedicated the Raj Rajeshwari Setu to the public.

Work of road construction covering 194 kms distance from Amravati to Chikhli would be completed in next 2.5 years, he added.

He said funds will made available for health education and transport hubs along NH 06 at Akola in near future.

He asked BJP MP Sanjay Dhote to obtain the 40 acres of land needed for the hub.

Taking a swipe at Congress, he said the party failed to give justice to the people in all respects during its rule of long tenure in the country.

Dhotre and other local leaders were present on the occasion.

Source: Economic Times

six changes needed for better transportation

July 24, 2014

It is just a welcome coincidence that a single party majority government has come in the centre at the time when the country just laid out its National Transport Development Policy for the next 20 years. As per the policy, if India has to grow its GDP at 8-9%, it needs to increase its investment in infrastructure six times from current USD 45 billion to USD 250 billion by 2032. This translates increasing the investment in infrastructure from 5.8% of GDP (during 11th FYP) to 8% of GDP by the end of 2031-32
Investment of this scale would not only require significant government funding, but also building enabling environment to attract private capital, domestically as well as foreign. This would require government to take quick, planned and timely reforms across levels – policy, operational, institutional and capacity.
Urgent need for investment

According to the Global Competitiveness Report 2013-14 of World Economic Forum, India stands at 85th and 61st position in the global ranking of infrastructure and transport, respectively amongst group of 148 countries.

Since, investment in infrastructure sector, particularly transportation has multiplier effect on the economic growth; there is an urgent need for investment in these sectors to bring back economy on high growth trajectory. Hence, when the new government will table its first budget in July, 2014, it will have to strike balance between the prevailing inflation and long waiting reforms to remobilize funds in the transportation sector, which shall lay foundation for a long-term growth. For example in highways, there is an immediate need to rebalance the concession agreements, to move the struck projects and attract private sector interest in the upcoming projects.
Concept of revenue guarantees, as being used in some of the Latin American and developed countries, where government shares with private sector, both upside potential and downside risk of traffic, beyond a threshold, should be brought in to attract investor confidence and lender’s comfort.

At the same time it is important for NHAI, if it is moving to EPC model, to build its own pool of resources. For this purpose, fast tracking implementation of electronic toll collection to maximize toll revenues and raising funds through long-term bonds and capitalize its toll revenue earnings for interest and principal repayments, can be explored. In fact, India can learn from experience of Japanese Expressway Holding and Debt Repayment Agency, which used bond funds to develop expressways in Japan. These bonds were duly backed by government guarantees to provide security to bond subscriber.

Special Projects for Rural Development
To increase penetration in villages, particularly for effective implementation of food security, it is critical to continue fillip programs like Pradhan Mantri Gram Sadak Yojana (PMGSY-II), which are critical for farm to market linkages and connectivity to rural growth centres.

An Integrated Transport System

Probably, it is right time for the government to think transport as an integrated system and all its components (rail, road, port and airways) should work in a holistic manner. Different modes of transport between two nodes should be developed based on the principles of demand-supply and balance between time and fuel cost. For instance, if time is not a constraint (non-perishable goods), goods can be transported using IWT or coastal shipping.To achieve this, coastal terminals at select ports and deeper stretches of the rivers (LAD) can be developed. For other routes, rail and road connectivity with ports should be enhanced on PPP basis.

Develop low-cost Airports

Similarly, low-cost airports in tier-II and tier-III cities can be developed which can be integrated with high speed rails at select stretches. This will provide faster connectivity to the entire country and thereby unlock growth potential .To move goods through airport, similar to inland ports and container depots, off-airport cargo processing facilities can be developed.

Moreover, these facilities to be ably augmented by cold chains in the vicinity of low cost airports, which can facilitate warehousing and dispatching cargo of perishable goods. This will help reduce congestion and delays at airports. Development of such off-airport facilities can be defined as infrastructure and the respective benefits should be extended accordingly.

E-vehicles to Boost Urban Transportation

There is also a need to boost urban transport within the cities. In this regard, recent announcement of government to treat e-rickshaws with motor power of 650mw as non-motorised vehicles in the NCR is a welcome step. However, government will have to be mindful that although e-rickshaws are environment friendly, their use should not go out of proportions to increase congestion in already cramped up roads.

Hence, government should promote setting up of state level funding agencies to finance urban transport projects. Central government should facilitate states setting up such bodies and providing government guarantees to securing funds from international financial institutions.

Implementation through Fiscal Incentives

However, to effectively execute the above ideas, it is also important to back them by suitable fiscal incentives. Some of these include:

- relaxation of ECB norms for borrowing by infrastructure companies,

- extension of tax incentives on major augmentation of existing infrastructure, in particular Maintenance, Repair and Overhaul (‘MRO’) services in airlines,

- extension of depreciation on expenditure incurred to develop public assets on BOT, which is not owned by

private sector, even for the sector other than roads

- exemption of MAT for infrastructure sector during 80IA period.

At the outset, there is a lot to be done, which poses a big challenge, but also presents an opportunity for the government for creating much needed transport infrastructure for doing business. Although, industry expects government to respond timely on the above hard-pressed reforms, in the upcoming budget Government will have to strike balance between its

revenues and easing of complex net of regulations and approvals to enhance the value-addition process and making us more competitive. .

Source:The Economic Times

Rajasthan plans 20,000 km of State Highways

July 15, 2014

Giving a major push to better road connectivity and tourism, Rajasthan Chief Minister Vasundhara Raje  announced the Budget for 2014-15 presented in the Assembly on Monday.

The total Plan outlay for the budget is Rs 69,820 crore, an increase of 72 per cent as against the last budget. The estimated revenue surplus stands at Rs 737 crore and the fiscal deficit at Rs 20,186 crore, which is 3.52 per cent of the Gross State Domestic Product (GSDP). The estimated budgetary deficit for the year 2014-15 is Rs 3,151 crore whereas the total revenue Receipts are estimated to be Rs 1,06,125 crore and the estimated revenue raised by the State is likely to be Rs 40,655 crore –18 per cent higher than the previous fiscal year.

Ms Raje also announced the setting up of a Rajasthan State highway authority for laying 20,000 km of State Highways. Six roads of 1,000 km would be developed as east-west corridor. To be developed under public-private partnership (PPP) mode, contracts would be given on the basis of output and performance-based roads construction system. “There will be penalty and incentives for builders as per the performance,” she said. All nationalised routes would be de-nationalised in a phased manner and the bus stops will be constructed with latest amenities.

Taking on the previous Congress government for initiating work on metro in hurried manner for political gains, Ms Raje said an amount of Rs 3,000 crore had been invested for laying a 12- km-long metro line. Economically, the Jaipur Metro is not feasible proposition and the same amount could have been utilised for laying 110 road over-bridges and 5,000 km of road across the State, she said.



Source: The Hindu

Further funds to support Indian roads

December 17, 2013

Written by Helen Wright – 16 Dec 2013

World BankWorld Bank

The World Bank has approved a US$ 175 million loan to improve connectivity in the state of Gujarat.

The funds will go towards the Second Gujarat State Highway Project, which aims to improve 635 km of the road network passing through 16 districts within the state, particularly the underdeveloped eastern tribal region.

“This project will build on our long engagement in the road sector in India by connecting small and remote habitations in the lagging tribal regions of east Gujarat to the mainstream,” said Onno Ruhl, World Bank country director for India.

The latest funds come after a string of World Bank loans supporting the development of India’s roads this year, including US$ 660 million awarded in October towards India’s National Highways Interconnectivity Improvement Project and the Rajasthan Road Sector Modernisation Project.

In March, the World Bank said it planned to continue its level of annual assistance of between US$ 3 billion to US$ 5 billion a year to India over the next four years with the aim of boosting development in low-income states.



Tariff dodging takes its toll on India’s highway developers

November 8, 2013


(Reuters) – Flashing lights on the roof, tailgating politicians’ motorcades, smashing up toll booths, and beating up toll collectors.

Welcome to India’s network of privately run highways, where endemic toll dodging is a drag on the finances of road operators such as GVK Power and Infrastructure and Reliance Infrastructure, and a deterrent to private investment in a country where poor infrastructure shaves an estimated 2 percentage points from economic growth each year.

Ambulances, fire trucks and the cars of senior government officials are among those exempted from paying tolls, but other drivers often claim a free ride, said Isaac George, GVK’s chief financial officer.

“If an MP (member of parliament) has to be exempted, it’s not just his car that is exempted. The entire entourage which follows or goes in front seeks an exemption,” he said. “The government has to do something because these are all revenue leakages.”

India’s cash-strapped government wants private companies to double their share of the cost of building roads and bridges by 2017 from about a fifth in the last five years.

Eight out of every 10 road projects, however, miss revenue expectations in their first year, with the shortfall as high as 45 percent, according to a 2012 study by Fitch Ratings. The slowing economy, and sometimes inflated forecasts, are partly to blame, but toll dodging is a significant factor, said Fitch India analyst S. Nandakumar.

“There is obviously resistance to tolling, particularly for brownfield or greenfield toll roads which have been tolled for the first time,” he said.


The resistance to paying tolls is part of a wider pushback against India’s attempt to charge for services such as electricity that have been heavily subsidised or free, and which are plagued by under-investment.

Drivers use threats, violence, protests and claims of powerful connections to demand toll exemptions. Road developers lose up to a tenth of their toll revenues because of dodgers, said Vishwas Udgirkar, an infrastructure specialist at consultancy Deloitte.

IRB Infrastructure Developers could not levy tolls on one road for nearly two years due to protests in the western state of Maharashtra, where Mumbai is located. Charges began on Oct. 17, after a court ordered the local government to provide police protection.

Last month, security camera footage showed 6 men, armed with rods, assaulting staff and stealing money from a toll booth outside New Delhi. Two years ago, a toll collector was shot dead during a payment dispute at a booth near Gurgaon, where cars are charged 27 rupees (44 cents).

This lawlessness comes at an economic cost.

The government awarded less than a fifth of its target for new road construction contracts to private companies in the last fiscal year, official data shows. GVK and GMR Infrastructure both pulled out of road projects stalled by bureaucracy. In July, local media reported that IRB pulled out of bidding for a harbour crossing in Mumbai because of its toll collection woes in Maharashtra.

In a bid to tackle toll dodging and ease congestion at toll gates, Road Transport Minister C.P. Joshi said he wants all national highways to use electronic tolls by 2014.

A senior government official, however, was less concerned.

“I won’t deny this is an issue,” he said, declining to be named as he did not want to publicly speak about the issue. “We are not concerned about his (a company’s) loss of revenue. He should be concerned about it.”


India’s toll roads tend to be better maintained and less congested than public routes. But unlike in Europe, for example, private roads, and not state roads, tend to become the main route between cities, leaving drivers with little choice.

This breeds resentment, especially if the road is pot-holed, unsafe or snarled by mind-numbing traffic.

Raju, who lives in Delhi, used to put a red flashing light on his car to pass himself off as a lawmaker to avoid tolls. He’s now befriended the driver of a genuine politician and often joins his entourage when travelling in northern India.

“They don’t provide facilities, so why should I pay a toll?” said Raju, who declined to give his full name. Highways are often congested, he said, and once, when he had a flat tyre on his way to a funeral, he waited two hours before help arrived.

Waiting for government help, and attitudes to shift, could take years.

K. Ramchand, managing director at road builder IL&FS Transportation Networks Ltd, said one way to manage toll dodgers was to let them have their way in the early days of the project.

“Most of the toll deviants are … cars normally owned by either the local mafia, the minister or his cronies,” he said. “It’s safer to keep them on your side and give them a free pass.”

“Otherwise what happens is, these 30-40 followers come on the toll plaza, make a noise and then everybody falls into that mob mentality and then it becomes a big issue,” he added. (Additional reporting by Anindito Mukherjee; Editing by Tony Munroe and Miral Fahmy)



Decision on post-contract sops for highway developers by December

November 5, 2013

By Vikas Dhoot & YASHODHARA DASGUPTA, ET Bureau |

The highways ministry and National Highways Authority of India believe the post-contract concession will benefit 40 stalled projects.
The highways ministry and National Highways Authority of India believe the post-contract concession will benefit 40 stalled projects.


NEW DELHI: Financially stressed highway developers seeking a bailout from the Centre will get to know by next month whether their demands are going to be accepted.An expert panel set up by the Cabinet under the Prime Minister’s Economic Advisory Council chairman C Rangarajan will examine whether any concession should be given to developers in the form of deferral of the premium payment they had committed to while bidding for the highway contracts.

The panel, expected to be formally constituted this week, will also consider the moral hazard of allowing such post-contract concessions that the highways ministry and National Highways Authority of India (NHAI) believe will benefit 40 stalled projects in this case.

“I am now studying the problem in terms of whether a) if any concession should be given at all, and b) if given, what form should it take and how should it work,” Rangarajan told ET. “Because it’s a post-contract concession, we will have to work that (moral hazard) out. We will have one month to submit our report from the time it is formally set up,” he added.

The government had decided to set up the committee under Rangarajan in October to work out the modalities of the highlycontentious bailout policy which has been discussed for much of the past year.

The Planning Commission and finance ministry had initially objected to the policy due to concerns over maintaining the sanctity of public private partnerships (PPP) and the potential moral hazard in renegotiating existing contracts.

Opinions between the highway ministry and NHAI are still divided. The highways authority has told the panel that the discount rate should be kept at 10%, no penalty should be imposed and no corporate guarantee should be taken from developers, a person familiar with the matter said.

The ministry, on the other hand, is in favour of a 12% discount rate as well as imposition of penalty, which was suggested by the finance ministry to avoid any undue advantage to a handful of developers.

Industry experts have, however, cautioned of the adverse impact the delay in decision-making would have on the already stagnant investment flows in the highways sector. “The more there is delay in taking a decision, the more it is unlikely to come about before elections.

At this stage, the committee should work on the modalities of the policy instead of going back to the basic question if this should be done at all.

A decision needs to be taken by December because once the results of the state elections are out, there will be political turmoil and a reluctance to take decisions,” said Vishwas Udgirkar, senior director at Deloitte, adding that the industry was unlikely to bid for new projects until the resolution of the issue since such a renegotiation could set a precedent for shaping future contracts.

According to a person familiar with the matter, Rangarajan has asked for inclusion of Planning Commission secretary Sindhushree Khullar, road ministry secretary Vijay Chhibber and PMEAC secretary Alok Sheel in the group, besides NHAI chairman RP Singh and expenditure secretary RS Gujral, whose names were included at the time the Cabinet Committee on Economic Affairs was deliberating on the matter.


Odisha needs more pvt funds for transport sector: minister

October 7, 2013

Govt has recently launched Rs 3,000-crore plan to develop state highways within next four years

 Private investors should come up with investment plan for improvement of transport infrastructure in the state  like they have done in metal, power and port sectors, said Subrat Tarai, state minister of commerce and  transport.

“Without adequate investment in road and railway transport infrastructure, private investment only in building new ports will be in vain. Better transport infrastructure will ensure higher manufacturing activities too”, he said at Transport Infra Odisha-2013, a conference organised by Indian Chambers of Commerce (ICC) here to highlight different issues of the sector.

The minister said, Public Private Partnership (PPP) is being promoted for physical and social infrastructure creation. The state also seeks to augment public sector investment in high priority sectors like infrastructure.

The state government has recently launched a Rs 3000 crore plan to develop state highways within next four years. However, there is need for more investment from private and government-run PSUs in this sector, he said.

Tarai recently met Union Railways minister on a proposal to develop rail link from Bimlagarh in Koira tehsil of Sundergarh district to Talcher in public private partnership (PPP) mode. Steel Authority of India Ltd (SAIL) has shown interest to invest in the project.

“As of now, SAIL, the Railways and the state government are ready to invest in the Rs  800 crore project. I am sure more partners would come forward to participate in the project, which after completion, would reduce total travel time from Rourkela to Cuttack by at least five hours”, said the minister at the conference.The proposed rail line will help in transporting steel products of Rourkela Steel Plant in minimum possible time, he added.

Besides the rail project, the state government has taken initiative to develop the Rs 5000 crore National Waterways-5 by partnering with public sector enterprises and private investors instead of waiting for World Bank fund as that might delay the project implementation.




Pune Municipal Corporation needs Rs 25,000 crore to implement development plan for old city

August 14, 2013


PUNE: Preparing a new development plan (DP) for Pune city comes with a challenge of raising Rs 25,000 crore, a sum which will be required to improve infrastructure and meet its social obligations in the years to come.

This DP will be for a duration of 20 years (2007-2027), with special provisions for the Pune metro rail, a transport hub, expansion of main roads, schemes for housing for the needy and cluster development of old dilapidated ‘wadas’.

The PMC had earlier admitted that implementation of consecutive DPs drawn up in 1966 and 1987 was “pathetic” as a majority of the plans have remained on paper. In fact, only 40% of the 1987 DP has been implemented so far. Reservations for basic amenities like public urinals, play grounds, hospitals have not been developed. The 1987 DP reservations covered an area of around 1,000 hectare, of which only 134 hectare has been developed.

With bitter experiences of the past, the civic administration has worked on details of the financial feasibility analysis for the new plan.

The civic body has drafted a DP applicable to the old city area comprising 17 Peths and surrounding areas spread in a diameter of 147.85 sq km. It proposes 921 reservations covering 1,080.79 hectares for amenities like health, education, recreation, etc. The 1987 DP had 587 reservations for the purpose.

The civic administration, however, cites financial constraints, besides procedural delays, as a major reason for failure to implement the DP. City engineer Prashant Waghmare said, “The total cost of the draft DP is Rs 25,806.07 crore. The civic administration has made a detailed study on its financial aspects and has incorporated these conclusions. It is a must for any planning body to have a financial plan ready and the PMC has worked out the possible revenue resources which will help us carve out an implementation budget.”

A financial assessment document of the PMC incorporated in the draft DP states: “A detailed cost of acquisition and development of reservations, roads, tunnels, flyovers, buildings etc. has been worked out. Adequate deductions were then made for provisions made in the Development Control Regulation, such as accommodation reservation, Transfer of Development Right (TDR), amenity spaces use of (Floor Space Index) FSI of reservation and development TDR, mechanism of Public Private Partnership (PPP) and Build Operate and Transfer (BOT) etc”.

The total provision in the PMC annual budget has worked out to Rs 3,570.96 crore over a period of 10 years. This implies that every year a provision of Rs 357.96 crore has to be made in the PMC budget to meet the cost of acquisition and development of amenities proposed in the DP.

The reservation have been worked out based on the projected population of Pune by 2017 while the land use and zoning proposals have been planned based on the projected population by 2027. The cost required for land acquisition has been worked out by referring to values of land that is land cost, as mentioned in the Ready Reckoner 2011.

“The PMC’s revenue sources are shrinking. Pune is sixth in the list of big emerging cities in India and earlier the administration had categorically stated that an ideal annual budget for the city should be Rs 9,828 crore. However, elected representatives are against any tax hike. It is a fact that the city is falling short of funds for new projects and maintenance of the completed projects. If the city wants DP implemented, citizens should be ready to pay from their pockets and politicians need to stop playing to popular tunes,” said a senior official in the civic accounts department.

Development body moots infrastructure projects

June 24, 2013


KOZHIKODE: The recently revived Calicut Development Authority (CDA) has unveiled a host of key urban development and infrastructure projects, which will be implemented in the city under its aegis.

Among the key projects that will be undertaken by the agency include a multi- level car parking at Link Road and four- laning of the Kallayi Road from Palayam to Meenchanda.

The CDA has also proposed implementing an ambitious urban re-construction project at Veliyangadi and urban renewal project at SM Street, apart from development of a godown complex at Beypore as part of its action plan.

CDA chairman N C Aboobacker, told the media that the authority will take over the multi-level car parking project at Link Road, which has been initiated by the Kozhikode corporation.

“Lack of parking spaces has become a major problem in the commercial hubs of the city. CDA will set up a multi-level car park with a capacity to accommodate over 100 vehicles along with a commercial complex in the 21 cents it has near the Link Road under a PPP(public-private partnership) model. The corporation has already inked a BOT(build operate transfer) agreement with a company called Yennavees for the project, which will now be implemented by the CDA,” he said.

The project envisaging four-laning of the 4km stretch of Kallayi Road from Palayam to Meenchanda has been taken up as the widening of the road to 24m is vital for the Kozhikode monorail project. CDA said that the existing project to widen the road from Palayam to Francis Road Junction will be extended till Meenchanda considering its criticality for the monorail project.

“The authority will ensure that the shops and business establishments affected by the project will be provided premises near the widened road as part of the rehabilitation package,” CDA secretary AM Jayan said.

CDA authorities said that final decision on the funding of the projects would be made only after the constitution of the executive committee of the CDA, which will be completed soon. “Most of the proposed projects would be either through PPP or BOT model. The authority is also expecting grants from the state government and intends to raise funds from its own assets,” a CDA official said.

Among the other projects in the pipeline include development of busy road junctions in the city. It will also look into the possibility of setting up an international sports complex.

The state government had earlier this year revived the CDA, which was disbanded by the LDF government on March 31, 2007 and ordered the transfer of CDA assets held by the corporation to the revived authority.

The CDA assets include eight shopping complexes in the city, a godown in Beypore and land at key locations.

Industry corridor may get land near IGI

May 4, 2013

Dipak Kumar Dash TNN
New Delhi: A major portion of a 130-acre prime land adjacent to the Indira Gandhi International Airport (IGIA), may go to the Delhi-Mumbai Industrial Corridor Development Corporation (DMICDC), a government firm, for a song. 

Government sources said that the company wants about 100 acres spread over two sectors in Dwarka from the Delhi Development Authority (DDA) for developing a complex that would include a convention centre, hotels and luxury housing/service apartments.
The patch spread over Sector 25&26 in Dwarka sub city was originally earmarked for relocation of wholesale trade centres in central Delhi, including Sadar Bazar, Nai Sadak and Khari Baoli, which are known for large-scale grain, paper and chemicals markets, in Master Plan-2021. Five more such areas were identified in the Master Plan-2021. The plan document says that the new wholesale markets are planned “as counter markets to cater to the demands of the growing population of Delhi only, near the rail and road entry points of NCTD. These should be linked with the proposed integrated freight complexes where the wholesale business could be operated more efficiently in a better environment”.
Sources said the task of developing an integrated freight development complex spread over 30 acres might be entrusted with the DDA.
Government sources said that DMIC Development Corporation (DMICDC) has moved its proposal, and the Union urban development ministry recently held highlevel meeting on the issue. It is learnt that while the UD ministry is in favour of allotting it at lesser price than the market rate, a section of DDA officials are hesitant since the market value of the land would be around Rs 10,000 crore.
Sources said that in a worst-case scenario, the DDA would have to allot the land for institutional use and per acre rate for such a plot is Rs 3 crore. In case the entire land is allotted to DMICDC as an institutional plot, the corporation has to cough up only Rs 300 crore.
“There are many within government who don’t agree to the proposal of giving the land at a concessional rate,” a government official said.
But there are others who have argued that DDA should focus on how to allow most efficient use of its land. “It may bring manifold investment and create job opportunities,” an urban development ministry official said.




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