IL&FS secures major highway widening contract in India

June 20, 2013

India-based transportation infrastructure company IL&FS Transportation Networks (ITNL) has signed a new concession agreement with the National Highways Authority of India (NHAI) for a Rs16.65bn ($304.3m) road widening project in the states of Jharkhand and West Bengal.

To be executed under the National Highways Development Project (NHDP) Phase V on design, build, finance, operate and transfer (DBOFT) basis, the latest project includes six-laning the Barwa-Adda-Panagarh stretch of National Highway 2 (NH-2) from km 398.240 to km 521.120, including the Panagarh Bypass.

The project is set to be implemented on a toll basis, and has a concession period of 20 years, including a 910-day period for construction. ITNL had quoted a premium of Rs420m ($7.68m) for the project.

{“The project is set to be implemented on a toll basis, and has a

concession period of 20 years,

including a 910-day period for construction.”}

Established in 2000, IL&FS Transportation Networks is a surface transportation infrastructure company and a private sector BOT road operator in India.

The company is involved in the development, operation and maintenance of national and state highways, roads, flyovers and bridges in various states across the country.

IL&FS has also signed a concession agreement with NHAI for Rs13.48bn ($246.48m) four-laning of the Khed-Sinnar section of National Highway 50 (NH-50) in the state of Maharashtra.

The programme will carried out under Phase IV B on DBFOT basis and has a concession period of 20 years, including construction period of 910 days.

Written by ITW Editor · Filed Under BOT, Highway, IL&FS, ITNL

Government Set to Award 3,000 km Road Projects under EPC this fiscal

July 23, 2012

To accelerate highway building process, Road Transport Ministry is all set to bid out at least 3,000 km of projects this fiscal and 20,000 km by 2017 under EPC mode that minimises risk to developers.

Finding that 20,000 km of National Highways of the total about 74,000 km are single, low density traffic lanes, not viable on PPP (public private partnership) basis, the government is ready with the final draft of EPC (engineering, procurement and construction) that would be sent to the Cabinet by the month-end.

“We are ready to award over 3,000 km on EPC mode this fiscal to accelerate the road building process. The Ministry has decided for upgradation of 20,000 km highways to two-lane standards on EPC basis during the XIIth Five-Year Plan (2012-17), a Road Transport and Highways Ministry official said.

EPC mode would not only minimise time and cost overruns but would also result in increased bidding by developers, the official added.

In EPC projects, the government pays the developer for constructing the highway while the toll revenues accrue to the government.

The other two modes through which the highways projects are bid are build operate transfer (BOT-toll) and BOT-annuity. and EPC. In the BOT mode, the developer has to operate the highway for several years.

The model draft for EPC said, “Experience also suggests that annuity based projects are comparatively expensive, while conventional contracts (BOT) are prone to time and cost overruns. It has, therefore, been decided to adopt the EPC mode of construction.”

The draft quoted a sample analysis of 20 NH projects executed on item-rate contracts that took, on an average, 61 months to complete as against 29 months taken by projects executed through PPP which generally adopted the EPC mode for project execution.

“Further, these projects had cost overruns of an average 48% (ranging from 25 to 183%) besides large volumes of foregone toll revenues on account of delayed completion,” the draft said.

With a view to enabling a transparent, fair and competitive roll out of highway projects, the model draft incorporates international best practices and provides a sound contractual framework that specifies the allocation of risks and rewards, equity of obligations between Government and the Contractor, precision and predictability of costs etc, the draft added.

On selection of contractor, the draft said it will be based on open competitive bidding and “the bidder who seeks the lowest payment should win the contract.”

On defect liability period, it said that same has been made two years from the earlier specified one year to “in order to provide additional comfort to the Government.”

The draft has been finalised by an inter-ministerial panel against the backdrop of differences between the Road Transport Ministry and the Planning Commission over some issues including the defect liability period.

Road Transport Secretary A K Upadhyay last week said that the Ministry after obtaining stakeholders comments on draft EPC would send it for Cabinet nod by July 30.

The EPC mode is expected to accelerate the pace of awards as the National Highways Authority of India (NHAI), which has not awarded a single project in the last quarter.

Last month, Prime Minister Manmohan Singh had set a target of award of 9,500 km of road projects in FY13 for the Ministry.

SOURCE: http://business-standard.com

Written by ITW Editor · Filed Under News, Road

Road development, a major achievement in Rajasthan

June 28, 2012

Roads make a vital contribution to India’s economy and to infrastrutural development overall, and, the state of Rajasthan has not lagged behind in this endeavor, implementing various development projects worth Rs.4549 crore to improve over 30,000-kilometers of roads.

The Rajasthan Government’s commitment towards infrastructure development took shape with the setting up of the Road Infrastructure Development Company of Rajasthan (RIDCOR).

This project involves improvement and maintenance of 1053 kilometers of road across 13 districts of the state, at an investment of Rs.12 billon.

Under the Ashok Gehlot regime, road connectivity in Rajasthan has improved considerably.

In the last 36 months, the state government has activated projects of road repair, renewal and re-carpeting. It has upgraded and strengthened highways and other main district roads at a cost of Rs.750 crores.

The state government has also sanctioned the construction of 2420 km of roads at a cost of Rs.517 crores.

Under the Mahanarega Scheme, more than 2900 villages with population of 250 to 500 will be developed and get their roads connected to the nearest roadways bus service.

In first phase (2012-13), 3302 kilometers of road will be developed. A sum of Rs.832 crores has been given to NABARD for the completion of this work.

Roads of the remaining 1400 villages will also be developed with the help of the World Bank.

At least 16 mega highway projects are under construction, the objective being to connect important roads in the state.

Under this scheme, 2631 kilometers of roads will be developed and re carpeting at a cost of Rs.3590 crore. About 28 main roads are to be developed under PPP/BOT/BGF scheme.

Plans include developing roads between Jaipur and Falodi via the Jobner-Kuchaman-Nagore stretch (a distance of 360 kilometers).

Work on the Kotputli-Neem ka Thana-Sikar-Kuchman road corridor of 193 km is also expected to be developed soon at a cost of Rs.285 crores.

The Bharatpur-Alwar-Bahrod-Narnoul road corridor of 167 km will be developed at a cost of 249 crore rupees.

The state government also plans to connect 610 important religious places with the main roads (1156 km).

Development of these identified corridors will also include development and support environmental, community, social, educational and tourism initiatives along the road projects. Improvement works of these corridors have been divided into many packages for implementation.

Having good road infrastructure can make the roadways better and transport system would become faster, because roads and transport are interrelated for the development.

A massive development plan has been undertaken by the department of the transport to strengthen its infrastructure in the state.

The government has also been trying to raise public awareness about safe road travel.

Road development in the state is expected to highlight the Gehlot regime’s move to the high growth path. (ANI)

SOURCE:http://www.newstrackindia.com

Written by ITW Editor · Filed Under News, Rajasthan, Road

New road projects less profitable: CRISIL

June 4, 2012

The average return on equity on road projects awarded in 2010-11 is likely to be 6%-8% lower than those contracted before 2009, according to a study by ratings and research agency CRISIL.

The study estimates that toll road projects awarded on build-operate-transfer basis before 2009 could earn developers an average equity return of 22%. In comparison, projects awarded in 2010-11 may see a drop in returns to about 14% due to high premiums offered by developers to the government. Generally, road developers target a return of 16%-18%.

SOURCE: http://articles.economictimes.indiatimes.com

Written by ITW Editor · Filed Under Construction

Roads to nowhere

November 1, 2006

What is the National Highway Development Programme (NHDP)? As originally contemplated under the NDA government, there was the golden quadrilateral (Phase I) and the North-South and East-West corridors (Phase II). We had a deadline of December 2003 for Phase I and a deadline of December 2008 for Phase II. We are pretty close to December 2006 and Phase I is far from over.

Written by ITW Editor · Filed Under NHAI, NHDP

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