Court order on Noida toll road brings user concerns back in focus
The Allahabad High Court’s decision to stall toll charges for the DND road between Delhi and Noida has been welcomed by users, primarily the residents’ welfare associations of Noida. But, the legal tangles of the project are not expected to end soon, as the Noida Toll Bridge Company Limited, a listed firm, is approaching the Supreme Court. The company’s stocks closed down over 19 per cent on Thursday. However, the move is expected to spook existing and potential private investors in infrastructure projects — also termed public-private partnerships (PPP) — particularly at a time when the country is looking to attract investors for toll roads of national and other state highways. Many highway operators in India are trying to get funds from foreign investors, such as Brookfield, Macquarie, Canadian Pension Fund, Cube Investments, among others. Some have already invested here. According to reports, the Allahabad High Court has said the company is profitable, as it has started paying dividends. But, this stance is likely to discourage special purpose vehicles of infrastructure companies across sectors from paying dividend to the parent company. Such a decision also highlights the importance that the toll road operators give to users and the steps they take to facilitate their movement. These roads, after all, are almost like natural monopolies. But, sadly, many years after the toll gates in Noida opened, services have not improved for the users to reduce their waiting time. This calls for operators to define ‘quality of service’ in terms of seconds, or minutes for waiting, beyond which users should be allowed to zoom through the gates for free. Such solutions have been implemented at times by toll road operators in areas where there is strong local resistance. For instance, an operator has drawn a line on the road a few metres away from the toll booths. After the waiting vehicles cross that line, they are allowed to cross the toll road gates for free. Also, there could be technology-based solutions, including tag-based tokens being sold at multiple points and probably with incentives, or even allowing use of credit or debit cards to pay the toll charges. That said, users had to cough up toll charges on the DND road, with collecting agents feigning ignorance about the implementation of the court order. Finally, which stakeholder steps in at the ground level to ensure a consistent long-term solution and quality service for users remains to be seen. Vince Williams Authentic Jersey
Despite massive returns, DND expressway cost rose from Rs 408 cr to Rs 5,000 cr
Even before the Allahabad High Court ruled to end the tolling on the DND expressway connecting Delhi and Noida on Wednesday, there was enough evidence to show the project was badly conceived from the very start, and that is what led to its dramatically escalating costs—the project that was structured as a R408 crore one when it started in the early 2000s has seen its cost escalate to R5,000 crore today. Apart from the fact that the project was not competitively bid out, it was assured a 20% return on total cost—most such assured returns are on equity, not debt. And, amazingly, if there was any shortfall in revenues, the contract allowed this to be added back to the costs on which a 20% return was to be ensured—this is why the costs are escalating—which effectively meant there was little project risk to justify this huge return. Worse, the contracting was so loose, there was no cap on costs. And, as a study for the Planning Commission pointed out in 2007, IL&FS, a project sponsor, was involved in conceptualising the project and was a member of the steering committee that decided the project would be implemented by a corporate entity promoted by itself—in other words, the project didn’t have the kind of checks and balances you would expect. The 20% return on project cost, the study calculated after looking at the interest costs paid, worked out to a 32% return on equity; and when the debt was restructured following traffic shortfalls in the initial years, this raised the return on equity to 47%. Adding back shortfalls to the capital each year and no cap in costs, in effect, meant the project would never break even, so the length of the concession would have to be raised from the original 30 years—in 2006, in the Noida Toll Bridge Company Limited’s (NTBCL) AIM listing document, the directors estimated the concession period would be over 70 years. By 2012, as a document revealed in the high court hearing showed, this had gone up to 100 years. Not surprisingly, the court has said the original award was ‘unfair’. After examining the manner in which the costs kept galloping—ideally, costs should reduce each year as debt gets paid off—the court talked of the concession lasting in perpetuity ‘due to wrongful arbitrary terms and conditions of the contract’ and recommended the parts of the contract that allowed this to happen be struck off. It then looked at the amount of toll NTBCL had collected and said this more than covered costs and reasonable returns/profits, so tolling had to be discontinued. Given there are still large public infrastructure projects across the country being given out on a nominated basis, even if to government-owned entities, it is important to ensure none of them are able to extract such high returns from an unsuspecting public. Jake Fisher Authentic Jersey
NGO moves court over BRT corridor debris
The Delhi High Court on Thursday sought the government’s response on a plea seeking direction to remove all metal structures dismantled from the BRT corridor. The plea alleged that the metal structures were blocking the footpath on the stretch. A Bench of Chief Justice G. Rohini and Justice Sangita Dhingra Sehgal also issued a notice to the Office of the Lieutenant-Governor on the plea seeking a direction to the authorities to grant requisite approval for construction of six half sub-merged subways along the 5.8-km stretch between Moolchand and Ambedkar Nagar in south Delhi. The Bench has asked the AAP government and the Office of the L-G to file their responses by January 16, the next date of hearing. The PIL has been filed by NGO Fights for Human Rights. “A large stretch of the footpath is blocked because of the metal structure and tiles, which were dismantled and have been stored along the road. As a result, motor vehicles are not able to move freely and there is acute blockage of road…Motorists and pedestrians continuously face imminent danger to their lives. There are no boards to caution the public and motorists to travel with care to avoid accidents,” the plea claimed The plea claimed that the dismantling work “was supposed to be completed by February-end” and road was to be re-laid. Brandon Williams Authentic Jersey
Bihar MLA strips half naked to demand construction of road, sends kurta to Gadkari, pyjama to Nitish
BJP MLA Vinay Bihari devised a unique way to protest. Vinay stripped down to half-pants and an undershirt to send out a message to the Minister for Road Transport and Highways and Shipping Nitin Gadkari and Bihar Chief Minister Nitish Kumar. Since last three years Vinay has been trying to get a road constructed from West Champaran’s Manuapul via Jogapatti, to Navalpur Ratwal Chowk Path. The stretch is a 44-km-long road for which Vinay has even sent a letter to Nitin Gadkari and Nitish Kumar. But the road work did not kick-off. This time, Vinay packed his kurta along with a letter and sent it to Nitin Gadkari. In the letter, Vinay wrote how his kurta was emblematic of Bhartiya Janta Party’s pride and honour. He even told Gadkari that he will start wearing kurta only once the construction of the road has begun. Not stopping at that, Vinay sent his pyjama to CM Nitish reminding him the promise he made three years ago. Vinay says, Nitish Kumar, in front of 1.5 lakh people, promised that the road will soon become a state highway on December 26, 2013. But after winning Lok Sabha elections, the promise was not kept. Max Muncy Womens Jersey
Gung-ho on road construction targets, Nitin Gadkari led Highways ministry to ask for 57% hike in allocation
Firmly poised to achieve its ambitious targets on road construction, the ministry of road transport and highways will ask for budgetary allocation of R91,000 crore for 2017-18, up 57% from the current year’s outlay, which the ministry is set to overshoot by about R4,500 crore. Road transport and highways minister Nitin Gadkari has set ambitious targets of awarding highway projects of 25,000 km and building 15,000-km long roads during 2016-17. Though the achievement so far remains way lower than the targets, ministry officials insist that the targets would be met. The targets for next year have not been fixed so far. Gadkari has repeatedly said highway construction won’t be hit by paucity of funds even as it is obvious that private developers and banks remain wary of the sector despite government incentives. Most projects that are currently being implemented are in the conventional engineering, procurement and construction (EPC) category, which are fully funded by the government. This makes budget allocations and borrowings by the government for road projects all the more critical. While NHAI, through which a sizeable portion of highway projects are implemented, has been allowed to borrow R59,000 crore in the current fiscal, it has so far borrowed only R12,000 crore. Apart from its share of the budget outlay for the ministry and borrowings (from LIC and EPFO and via taxable and tax-free bonds), the NHAI has other means to mobilise funds: toll revenue and a part of road cess proceeds. NHAI chairman Raghav Chandra said the authority will borrow more funds as and when required. On its part, the government is looking at unconventional ways of raising funds for road construction; it, for instance, is set to offer 75 existing toll-able projects on lease to private players, including global funds with patient capital with the aim of raising up to R60,000 crore over the next six months. The minister is also planning to set up a dedicated funding agency in the state sector for highways and ports — sectors it believes would witness investments of R10 lakh crore and R15 lakh crore respectively, in the “medium term”. Sources said the road ministry would also seek permission to allow NHAI to borrow up to R59,000 crore from the markets for the 2017-18 fiscal as well. Brandon Sutter Authentic Jersey
Expansion, Lower Interest Outgo To Power Adani Transmission
The net profit of Adani Transmission, India’s largest private sector power transmission company , fell by 38% year-on-year to Rs 99.5 crore in the September quarter on account of higher interest outgo. The management expects to cut interest expense in the next two quarters following debt refinancing. This along with expansion of its transmission network is likely to retain investor interest. Interest cost as a percentage of operating profit (EBITDA) increased to 53% in the September quarter compared with 40% in the previous quarter. The total debt in the September quarter was Rs 8,803 crore. The average interest rate is likely to come down after the debt refinancing at an attractive rate by using instruments such as masala bonds and US bonds of 10-year maturity. The company said in a conference call after the September quarter earnings announcement that the average interest rate is expected to fall by around 150 basis points to 9.66% from nearly 12% in the first half of the current fiscal, thereby improving net profit in the coming quarters even though the outstanding debt will rise by nearly Rs 800 crore. The company is on track to double its transmission line in the next three years from 5,050 circuit kilometers (km). Recently, the company has acquired 384 circuit km line from GMR and 3,521 circuit km from Reliance Infrastructure. This will help the company to reach the 10,800 circuit km target by FY19. The company aims at a market share of 1820% of transmission capacity as compared with 7%, currently. A power transmission company earns revenues based on the fixed 15.5% return on equity(RoE) deployed for a project and can add expenses such as depreciation, interest charges on normative loans, interest on working capital and operating and maintenance (O&M) cost. Given that most of these projects have a life of 35 years, increasing transmission lines provide revenue visibility and stable cash flows for the long term. Wesley Johnson Womens Jersey
Kerala electricity commission simplifies application procedure
Applying for an electricity connection would be a less hassle-free experience from now on. The Kerala State Electricity Regulatory Commission issued orders on Wednesday, simplifying the procedure for releasing new connections. The changes include a simplified application format, an online facility for filing the applications and making payments, and just two documents to be provided as proofs instead of the seven required at present. Proof of identity and proof of ownership/legal occupancy will alone be needed now. The norms were relaxed on the basis of an instruction issued by the state government under Section 108 of the Electricity Act in September. On some other points, the commission has sought more details from the Power Department, it is understood. The three-member commission headed by chairman T M Manoharan met on Wednesday to decide on the changes. On the other hand, the commission has not made any amendments to the Electricity Supply Code, 2010, although the government wanted it to ‘rework’ it to make the changes. “Amendments to the code will take time as it involves several steps including pre-publication of the proposed changes and public hearings. We have used the provision for ‘difficulty removal’ in the code to relax the norms,’’ commission member K Vikraman Nair said. It was on September 20 that the LDF government briefed the commission to ‘rework’ the supply code to simplify the process, a key requirement if the government was to keep the March 31, 2017, deadline for its ambitious total electrification project. In fact, the government had been specific that the changes were critical to meeting this target. So far, over 1.16 lakh people have registered in the project, according to the Power Department.?? The changes are necessary for the government to keep its promise – through the Kerala State Electricity Board – of giving connections within 15 days of applying (within two days if new posts are not needed). The government’s instructions to the commission were based on a Union Power Ministry directive which sought a simpler, three-step process for releasing connections. Section 108, of the Electricity Act, 2003, requires the commission to be guided by government directives in policy matters involving public interest. Alex Lewis Jersey
4 ex-CMs owe over Rs 59L in pending electricity dues, says U’khand Power Corp
Adding further to the woes of the ex-chief ministers who have been asked to vacate their government bungalows by December 16, the Uttarakhand Power Corporation Limited (UPCL) has alleged that four of the five ex-CMs have failed to pay cumulative dues of over Rs 59 lakh arising out of the electricity usage at their official accommodation in Dehradun. The Uttarakhand high court had on Monday refused to allow the ex-CMs more time than the two months given by the state government to leave their bungalows. Sources in the power discom told TOI that the amounts pending came to a cumulative total of Rs 59,51,728. Ramesh Pokhriyal Nishank is believed to owe Rs 3,18,252 for his Yamuna Colony house as well as Rs 27,34,127 for the accommodation at Circuit House annexe; N D Tiwari, who has been allotted a bungalow in the FRI campus has dues of Rs 13,63,821 while Bhagat Singh Koshyari whose official accommodation is in Cantt Road, has pending bills of Rs 10,79,313. BC Khanduri, who has been given two electricity connections at his bungalow in Yamuna Colony, has balance dues of Rs 4,56, 215. A UPCL spokesperson said that the pending bills had been calculated from the time the former CMs had demitted their offices but kept occupying the official accommodation. He added that all the ex-CMs had been sent notices and reminders earlier and now, details of their dues have been given to the state government. “We have not given notices directly to the CMs but to the establishment department of the state government. As per the high court order, the state government will be calculating the market rent payable by the ex-CMs and informing the court by November 21. We have asked for the electricity dues to be also added to the rent recoverable from them,” he said. A close aide of Nishank said that “we will pay whatever legitimate dues are pending.” He added that a “massive amount of Rs 27,34,127 had been wrongly attributed as dues to be paid by Dr Nishank for the Circuit House annexe.” “A number of former chief ministers were using the Circuit House annexe and it is wrong to put the bill in just one ex-CM’s name,” he said. Meanwhile, commenting on the power corporation’s move to recover the electricity dues from the ex-CMs, social activist Avadhash Kaushal, who had filed the PIL regarding the huge bungalows being occupied by the former CMs years after demitting office, told TOI, “It is a gross misuse of power by the ex-chief ministers that UPCL, which promptly disconnects the common man’s power connection if one fails to pay the bill for even a month, had been so slow in taking up the case of recovery of dues from these politicians.” Mitchell Marner Womens Jersey
RP-Sanjiv Goenka Group may reorganise power biz
The Rs 32,000 crore RP Sanjiv Goenka group is evaluating the possibility of re-organising its power business facilitation consolidation of generation and distribution units. “The consultant is yet to give the final report and we haven’t taken a final call,” RP Sanjiv Goenka group chairman Sanjiv Goenka said. “We see merit in having all generating units together. And distributions can come under a separate umbrella. I personally don’t see the logic of my distribution business in Rajathan or distribution is Noida under separate companies,” Goenka said. I now need separate management and multiple CFOs or MDs for each of these businesses, there could be probably holding companies each for generation and distribution businesses, Goenka pointed out. A group presentation shows six companies engaged into power business having close to Rs 10,000 crore revenue. They are: Haldia Energy, Dhariwal Infrastructure, Crescent Power, Noida Power, Surya Vidyut and CESC Ltd. CESC has both generation and distribution rights in Kolkata, parts of Howrah and Hooghly in West Bengal, Noida in Uttar Pradesh, and distribution franchisee Kota and Bharatpur in Rajasthan. Additionally, it has renewable capacity of about 100MW. Goenka did not respond when asked if evaluation of re-organisation was restricted to power or other business. Chester Rogers Jersey
GMR Airports bids for Rs 4,000-crore greenfield project in Greece
GMR Airports Ltd, a subsidiary of GMR Infra, Thursday bid for a EUR550 million (Rs 4,000 crore) greenfield airport project in Crete island at Greece, a person in the know told ET. GMR is the single bidder for the Kasteli airport project which entails just a one-stage bid encompassing techinical and financial qualifications. The company is likely to be awarded the project in 2-3 weeks, the person who didn’t want to be identified, told ET. The last date of submitting the bids was today. It has been extended several times since February. GMR has tied up with Greek infrastructure major GEK Terna Holding Real Estate Construction for the project, the person said. GEK will hold 90% of the project while GMR will control the rest. The concession period is for 35 years and will be based on the build operate and transfer model. A spokesman at GEK Terna confirmed the development, the partnership and the shareholding structure in response to an emailed query. The new airport is to replace the ageing Heraklion airport in the city which is likely to be shut. The Kasteli airport project is said to be a test of investor interest in projects in Greece, which is financially struggling and has recently signed up for its third round of bailout from the European Union. But Crete is a major tourist destination and the Heraklion airport had been a gateway for 15%-20% of tourist arrivals to the country. Last year, tourist arrivals to Greece increased by 5.7% to over 15 million. Global media reports said that France’s Vinci along with Greece’s Ellaktor and Spain’s ACS were interested in the project. Reports also cited China State Construction Engineering in a joint venture with Zurich Airport as interested in the project. ET couldn’t independently ascertain the veracity of the reports. GMR Airports in August won the competitive bid for development and operation of the Rs 3,000 crore Mopa Greenfield Airport in North Goa. The concession period for the greenfield project will be 40 years with a possible extension of another 20 years through a bid process. The airport will also be built under the BOT model. GMR operates airports in Delhi and Hyderabad. The conglomerate is also developing the Mactan Cebu International Airport (MCIA) in Philippines and has in the past developed an airport in Istanbul, Turkey. Earlier in the day, GMR said it won a compensation of $270 million (Rs 1,800 crore) in the outcome of a legal dispute over an airport project in Male, Maldives. Howie Kendrick Womens Jersey