Browse ››
Home › Archive by category 'Projects'
Many overbridge and road projects in the city are becoming non-starters as the State government and the Kochi Corporation are scouting for funds to acquire land for the projects. The Jawaharlal Nehru National Urban Renewal Mission (JNNURM) funds only cover the projects’ construction cost.
On an average, a two-lane overbridge can be built for less than Rs.15 crore. But land acquisition and rehabilitation costs within the city may work out to around Rs.100 crore, which is around seven times the project’s cost.
The cost of land acquisition for a two-lane overbridge proposed at Atlantis works out to over Rs.100 crore. Similar is the case with Pachalam overbridge. Both the projects are hanging fire for over a decade, causing hardships to commuters. In the case of Thammanam-Pullepady Road, the cost of building a tarred road is just over Rs.20 crore, while expenditure for acquiring land at 18 metre width works out to over Rs.100 crore. The project cost for Goshree-Mamangalam Road is over Rs.23 crore, while widening the narrow stretch into four or two lane will cost more.
Chairman of the corporation’s town planning committee and former Mayor K.J. Sohan suggested narrowing down of four-lane bridges to two-lane wherever possible so that land acquisition is minimal. “Cost of land acquisition can further be brought down if bridges are built at 1:20 gradient – an elevation of a metre for every 20 metre distance,” he said.
The gradient as per JNNURM norms is 1:30, which would increase the bridge’s length. Though this specification ensures a less-steep bridge, the area of land to be acquired increases.
COST-EFFECTIVE
“Dilution of norms might result in denial of JNNURM funds. Even then, the financial liability on State government and the civic agency concerned would be much lesser for each project,” he said.
TNN |
SHIMLA: A road that passes through the apple heartland of Himachal and was a sensitive poll issue during assembly polls last year is still far from completion. While the previous BJP regime failed to ensure its completion, now, keeping in view the 2014 polls, Congress government in the state has fixed a deadline of December 15 next year to complete the road project.
The 80km road project, which has now become a bone of contention between BJP and Congress, was approved over five years ago. The project was awarded to Chinese government backed Longijian Road and Bridge Company on February 22, 2008, and was slated to be completed by June 4, 2011. After the Chinese firm sought an extension, the previous BJP government set fresh deadline of June 20, 2013, but even after this the project remained incomplete. As the company failed to meet deadline, the government finally cancelled the contract.
Sources said that the state government in February this year had sent fresh tender documents to World Bank. In the revised documents, a proposal was made to complete the project in two phases. Sources said the first phase was of 48km stretch from Theog to Kharapathar, while the second phase was for a 32km stretch from Kharapathar to Rohru.
Officials said a fresh contract agreement was signed with an Indian construction company on November 19 this year. “Codal formalities of both phases have been done and the company has been asked to mobilize resources by the first week of December,” said an official.
According to officials, the entire work would take around 30 months to complete. “Efforts are on to complete the project by December 2015,” officials added. The project cost has been worked out at Rs 323 crore.
OUR BUREAU| NEW DELHI
IIFCL opposed to the NHAI and Road Ministry stance that the exit norms for highway developers should be relaxed.
Highway developers should not be allowed to exit from projects till the highway stretches are constructed, a senior India Infrastructure Finance Corporation Ltd (IIFCL) official said.
This stance of IIFCL’s, which has disbursed around Rs 9,300 crore for road projects, is important in the backdrop of the Highway Ministry taking a re-look at the exit clause for highway projects.
IIFCL has sanctioned (net) about Rs 18,000 crore for road projects. It is the largest loan segment for the infrastructure financier. “Do not allow a developer to exit till construction has been done,” Sanjeev Ghai, Chief General Manager, IIFCL said, speaking at a traffic technology conference.
PROPOSAL ON TABLE
The Highway Ministry is reviewing a proposal to allow developers to sell their stake and exit from projects before they are permitted to underthe terms of the contract with the National Highways Authority of India.
At present, there are different rules regarding exit of road developers from their projects, depending on the year in which they had bagged the project. If the project was bagged after 2009, the exit norms are easier. But, for projects awarded before 2009, the norms are tighter and do not allow developers to sell stake before some years of operation.
The NHAI and Road Ministry had earlier taken a stance that the exit norms for highway developers should be relaxed. But, the Cabinet approved a proposal which allowed for lender substitution, something that has not taken off.
This is because highway developers raised concerns, saying, among others, that with the forming of a new special purpose vehicle, the income tax benefits of a 10-year infrastructure project are not transferred to the new developer who acquires the project.
“Senior lenders are unwilling to substitute during construction,” said Anand Kumar Singh, CGM, NHAI.
Mukesh Kumar, Vice-President, Infra Group, SBI Capital Markets, said that stake sale should be allowed between highway developers.
[email protected]
[email protected]
(This article was published on November 23, 2013)
Anil Kumar M, TNN
BANGALORE: The public private partnership(PPP) arrangement for levying tolls on major highways in the state has hit a roadblock with no private company bidding for the project.
While low traffic volume due to ban on mining is the main reason, the high interest rate sought by financial institutions has also discouraged toll operators.
User fee for roads was proposed when mining was at its peak. The toll revenue was meant for upkeep of roads used by mining companies to transport iron ore to ports. “Now, the state government plans to develop and maintain these roads until mining resumes. The National Highways Authority of India has all weather-roads, and toll is charged on most,” a senior official in the public works department told TOI.
The government also wanted to provide better infrastructure to industrialists who had raised the issue of bad roads at two Global Investors’ Meets. As more than 60% of the investment promises were committed for North Karnataka, more highways in that region were chosen for imposing a toll.
Of the 12 highways opened for toll, only four have attracted bids. The toll operation in the 141-km Vagdhari-Ripponpalli stretch connecting Karnataka, Maharashtra and Andhra Pradesh near Gulbarga has already started.
Companies have evinced interest in three highways – Dharwad-Alnavara-Ramanagara (SH-34, 60km), Chikkanayakamahalli-Tipatur-Hassan (SH-71, 74km) and Ginigere-Gangavathi-Sindhanur (SH-23, 83km).
Though Section 194 of the Karnataka State Highways Act, 1964, empowers the Karnataka Road Development Corporation Ltd to collect a user fee, no government has dared to toll roads over the past 48 years as they fear a political backlash.
“In the past six years, nearly 2,000km of state highways have been completed by KRDCL at a cost of nearly Rs 3,000 crore, primarily with loans from the World Bank and Hudco. The government has to repay the loans with interest and therefore found it necessary to levy a user fee,” the official said.
Toll roads
Kalmala-Shiggaon (SH-23): 77km
Hattigudur-Humnabad (SH-19): 96km
Sankeshwar-Sangam (SH-44): 73km
Aurad-Sadashivagarh (SH-34): 56km
Raichur-Bachi (SH-20): 175km
Hiriyur-Bellary (SH-19): 142km
Bagalkot-Biligiriranganabetta (SH-57): 12km
Sindagi-Kondagal (SH-16): 94km
(SH: State Highway)
NEW DELHI: The Rangarajan panel on premium rescheduling of road projects will only formulate guidelines and the task of implementation will rest with the NHAI .
Prime Minister’s Economic Advisory Council Chairman C Rangarajan headed panel, by this month end, will submit its report on restructuring the premium paid by the highway developers. “We are not looking at individual projects, we will prepare a framework, regulations, etc and lay down the parameters which NHAI Board will take up,” Road Secretary Vijay Chhibber, who is also one of the members of the committee comprising representatives from Ministry of Finance and Planning Commission, told report here.
When asked about the issues the panel is deliberating upon, he said all issues requiring restructuring, rate of interest for premium payment, identifying stressed projects which will be allowed to delay payments.
“Rescheduling of premium will be different for pre- construction and post construction projects,” he added. The report will be submitted to the Finance Ministry by the end of this month. The proposal for restructuring the premium for highway projects was aimed at providing relief to players such as GMR and GVK. Their projects have been facing delays on account of high premium — the payment made by the developer to National Highways Authority of India under the build, operate and transfer(BOT) mode.
The premium, which is offered by companies during the bidding stage, is based on projected returns from tolls.
Source-http://economictimes.indiatimes.com
Manu Balachandran |
Road projects have been struggling in the past few years largely as private developers have stayed away
The Ministry of Road Transport and Highways is looking to tweak an exit policy announced for highway projects this year. The policy falied to excite developers as it did not transfer the perks to the new operator. The Union ministry is considering a proposal by the National Highways Authortity of India that allows a developer to sell or transfer their stake in a special purpose vehicle (SPV) formed for a project.
Road projects in India are undertaken through such vehicles, made up of the concessionaire (operator), lenders and the highways authority, and the project is usually awarded for 20-25 years. The construction is usually done in three years and the tolling period starts once the project is bulit. The current policy does not allow transfer of equity but only substitution of a concessionaire, following which a new vehicle has to be then formed. The exit policy announced in July this year found no takers, as the new vehicle did not get the perquisites offered to the original vehcile, including a tax holiday of 10 years.
“This was the original recommendation that NHAI had put forward. But the government formulated the new policy that required the creation of a new SPV, once a concessionaire is substituted; there were a host of concerns, including the issue of tax holiday”, a senior official at the highways authority said.
Meanwhile, developers looking to exit a project will continue to need approvals from the lenders of the project and the highways authority. More, the developer will also have to pay a penalty of one per cent of the project cost. “They should remove the penalty first and come out with a comprehensive policy. There are also concerns over income tax and taxation concerns and the government should address them,” said B Murali, Director General, National Highway Builders Federation.
Road projects in India have been struggling in the past few years largely as private developers have stayed away. Lenders have also been reluctant to fund road projects over various concerns. In an interview with Business Standard, Minister for Road Transport Oscar Fernandes had acknowledged funding for projects was the biggest constraint.
The ministry has suggested the finance ministry to reschedule premium worth Rs 1,51,000 crore that developers owe the highways authority. The finance ministry has in turn set up a committee under Prime Minister’s Economic Advisory Council Chairman C Rangarajan to study the terms and conditions of rescheduling. The committee is expected to come out with recommendations next month.
The government is also looking at the option of doing road shows in countries including China and Australia to attract investments in the road sector after domestic companies have stayed back from investing in road projects. The ministry is expected to make a presentation to the Prime Minister soon.
Source-http://www.business-standard.com
DC | G. Jagannath |
Chennai: Faced with hurdles, Rs 600 crore Ennore Manali Road Improvement Project (EMRIP) would miss the December deadline for work’s completion.
EMRIP, which was conceptualised in 1998, envisages improvement of about 30 km road network in North Chennai to ease flow of truck traffic from Chennai and Ennore ports and improve road connectivity between ports to national highway network.
“We have so far completed 75 per cent of the road project. Most of the widening and improvement works on Tiruvottiyur-Ponneri-Panchetti Road (9 km), northern segment of Inner Ring Road (8.1 km), Ennore Expressay (6 km) and Manali Oil Refinery Road (MORR) (5.4 km) were completed except for few stretches where the land was not handed over,” a senior NHAI official said.
Delay in shifting of the drinking water pipeline running beneath the MORR has affected road widening works.
“The metro water is expected to complete the shifting works only by December. Only after that we will be able to complete road widening works,” the official said. As far as construction of the bridge across Kosathalaiyar at Napalayam on TPP road, the official said the works would be completed only by February next year.
NHAI official said that no headway was made in shifting tenements in Cherian Nagar and Nalla Thanneer Odai (NTO) Kuppam along Ennore Expressway and handing over the 1.6 km stretch from Zero gate to S.N. Chetty Street in the port trust.
“If the tenements were not shifted, we will be forced to handover those stretches to the state government for widening,” the official said.
The Chennai port trust officials were not able to begin reclamation of land on seafront as demanded by fishermen for parting their land in lieu of construction of carriageway from Zero Gate to S.N. Chetty Road. Only after getting the coastal regulatory zone clearance, the reclamation would be started.
Manu Balachandran |
Current policy bars equity transfer, only allows substitution of concessionaire after which a new SPV has to be formed to undertake the road project
The union road ministry is looking to tweak an exit policy announced for highway projects this year in a bid to provide a breather to concessionaires looking to exit road projects. The ministry is currently considering a proposal by NHAI which allows a developer to sell or transfer his stake in a Special Purpose Vehicle (SPV) formed to develop a road project.
Road projects in India are undertaken through an SPV which comprises the concessionaire, lenders and NHAI and the project is usually awarded for a period of 20-25 years. The construction is usually done in 3 years and the tolling period starts on completion of construction.
The current policy does not allow the transfer of equity and merely allows a substitution of a concessionaire following which a new SPV has to be then formed to undertake the road project. The exit policy announced by the government in July this year found no takers as the new SPV was not eligible for the perquisites offered to the original SPV including a tax holiday of 10 years.
“This was the original recommendation that NHAI had put forward. But the government formulated the new policy which required the creation of a new SPV once a concessionaire is substituted and thereby there were a host of concerns including the issue of Tax holiday”, a senior official at NHAI said.
Meanwhile, concessionaires looking to exit the project will continue to need approvals from the lenders of the project and from NHAI. In addition, the exiting concessionaire will also have to pay a penalty of 1 per cent of the entire project cost. “They should remove the penalty first and come out with a comprehensive policy. There are also concerns over Income tax and taxation concerns and the government should address them”, B.Murali, Director General at National Highway Builders federation said.
Road projects in India have been struggling since the past few years largely due to private developers staying away from road projects in the country. In addition, lenders have also been staying away from funding road projects over various concerns. In an interview with Business Standard, minister for Road Transport, Oscar Fernandes had acknowledged that the funding for projects remain the biggest constraint.
The ministry meanwhile has asked the finance ministry to look at rescheduling premium worth Rs 151000 crore that developers owe NHAI. The finance ministry has in turn set up a committee under C.Rangarajan to study the terms and conditions of rescheduling and the committee is expected to come out with their recommendation next month.
The government is also looking at the option of doing road shows in countries including China and Australia to attract investments in the road sector after domestic companies have stayed back from investing in road projects. The ministry is expected to make a presentation to the Prime Minister soon.
Source-http://www.business-standard.com
TNN |
LUDHIANA: The Rs 209-crore project of 8-laning of Ferozepur Road will be inaugurated on Friday. Despite strong criticism, the civic authority decided to go ahead with the project saying it would give the city a makeover.
While residents concede that the plans areimpressive, they doubt the MC’s commitment to see them through to the end. The host of projects left incomplete by the MC include rejuvenation of Buddha Nullah and four-laning of Doraha-Ferozepur Road. They are also apprehensive about the pace of the project.Kamaljeet Singh, a resident of Civil Lines, who has been living in Ludhiana for the last 20 years said, “I have seen Ludhiana changing but the corporation has taken a long time to complete its projects, which irritates residents. If they plan to start, they must not stop midway, which will be a huge disaster.”
According to Paramjeet Arora of Ghumar Mandi, “The MC should have completed old projects first but if the proposal is sanctioned and guarantees to change the look of the city completely, I don’t mind. But that does not mean the MC should stop working on other projects.”
Ministry is disappointed by dismal response of domestic companies to road projects opened up for bids this year
The road ministry has already extended the closing date for submission of the request for qualification document for three projects. Photo: Pradeep Gaur/Mint
New Delhi: Disappointed by the dismal response of domestic companies to road projects opened up for bids this year, the road ministry is considering taking its big-ticket projects to international markets.
Road secretary Vijay Chhibber has written a letter to R.P. Singh, chairman, National Highways Authority of India, to explore the option of conducting road shows abroad for major expressway projects such as the Eastern Peripheral Expressway and the Delhi-Meerut Expressway that are being monitored by a group set up by the Prime Minister.
“There is an overdependence on the domestic players who have either run out of equity or have defaulted on some infrastructure debt or the other and are struggling to get finance from banks,” said a senior road ministry official who did not want to be named.
“So we are looking to bring in international competition and market our bigger projects outside.”
The ministry of road transport and highways has already extended the closing date for submission of the request for qualification (RFQ) document for three projects—the two mentioned above and the Mumbai-Vadodra expressway.
These project have a total cost of around Rs.25,000 crore and are being monitored by a steering committee chaired by the principal secretary to the Prime Minister. The committee was set up by the prime minister in July to fast-track infrastructure projects with investments above Rs.1,000 crore.
The ministry extended the deadline in order to get regulatory approvals that are pending. “Domestic players understand that by the RFP (request for proposal) stage, the ministry might get the remaining clearances, but the international player would refer to a checklist. In order to market our projects better in the international market, we would like to get all the clearances.”
“So we will extend the closing of the RFQ date till all clearances are in place,” the official said.
While most clearances for the Eastern Peripheral Expressway have been secured, wildlife clearance for the Delhi-Meerut Expressway and land acquisition for the first phase of the Mumbai-Vadodra Expressway are pending, the official added.
Another senior road ministry official confirmed the development, saying: “We are exploring the option of conducting road shows in countries like Singapore, Hong Kong, Malaysia and Beijing (China). A recent visit abroad made us realize most other countries are not well aware of our projects.”
The move is likely to delay the deadline set by the steering group for these projects. But, the first official said, “It is preferable to get a better response for the project than meeting the deadline.”
The steering group had asked the ministry to award the Eastern Peripheral Expressway by 31 December 2013, the Mumbai-Vadodara Expressway by 1 March 2014, and the Delhi-Meerut Expressway by 15 March 2014.
The ministry failed to attract bids for 20 road projects worth Rs.27,000 crore, totalling 2,900km between March 2012 and October 2013.
“The Eastern Peripheral Expressway has been marketed several times; it has viability issues. Mumbai-Vadodra is a good project and perhaps one of the largest project that NHAI will ever bid, so it needs serious marketing,” said Parvesh Minocha, managing director of transportation business at infrastructure consultancy Feedback Infrastructure Services Pvt. Ltd
.
“The Delhi-Meerut project is a difficult project. In today’s environment, I am not sure which international company will bid for these projects. Clearances is not the biggest issue—the ministry needs to structure these projects better,” Minocha said.
« Previous Page — Next Page »
