National highway authority of India invites request for proposal
The National Highway Authority of India (NHAI) has invited request for proposal (RFP) to widen the Thalassery-Mahe bypass under engineering, procurement and contract (EPC) basis.The new road is expected to provide better connectivity in the Kannur-Kozhikode stretch. The NHAI has invited RFP for widening the 17.6km stretch to 45 metres. The work has to be completed in 2.5 years. The project has a 4-year maintenance contract. Under EPC mode, the contractor will be paid Rs 813.66 crore as lump sum grant. The NHAI will collect this money through toll booths once the work is completed. Prospective bidders have been given time till January 15 to submit proposals. The Thalassery-Mahe bypass connecting Azhiyoor and Muzhappilangadu has been a long pending demand of the local residents. The land acquisition for the project began almost 35 years ago. The new stretch could bring better connectivity and is expected to solve traffic issues in Mahe and Thalassery . The land acquisition was completed in Kodiyeri. Distribution of compensation for the acquired land is progressing at Chokli and Azhiyoor. However, land acquisition in a small stretch in Mahe is stuck after differences with regard to compensation. NHAI can proceed with work once 60% of land is acquired. Rod Gilbert Jersey
Demonetisation: ICRA pegs revenue loss from toll collections suspension in first 10 day at Rs 460 cr; road project debt servicing under lens
The debt servicing ability of road projects would be under strict watch over the next few months, as the impact of demonetisation on the cash flows becomes clear, say credit rating agencies. Although the National Highways Authority of India (NHAI) has authorised its regional officers to make payment covering 90% of the interest amount provided in the financial/refinancing package to the concessionaires on submission of the required documents, this would remain inadequate, say analysts. Shubham Jain, vice president, ICRA said, “Unlike annuity road projects, wherein the principal repayment falls due on semi-annual basis, majority of the toll road projects have monthly debt-repayment frequencies. With only interest cost and operations and maintenance expenses getting compensated, the compensation will be inadequate from the debt servicing point of view, unless the project has DSRA or other cash reserves to fall back on”. However, Jain said that the projects with DSRA constitute a very small percentage of the operational projects and hence the credit impact on the sector can be substantial. Jain told FE that there might be instances where concessionaires missed their November payments. “We are monitoring these developments and there could be some rating actions over the next one week,” he said. In a statement last Friday, ICRA observed that the proposed compensation mechanism based on O&M and interest costs, could lead to disputes with developers given the huge revenue loss for them. Last month, the rating agency had pegged the loss in toll revenues resulting due to demonetisation at Rs 460 crore for the first 10 days of stoppage of toll collection. This was for around 115 toll projects having an average daily collection ranging around Rs 40 lakh. “The loss owing to 23 days of no toll collection would have crossed Rs 1,000 crore,” Jain added. Meanwhile, there is still lack of clarity over how long will it take for the compensation to reach the developers. Ajay Srinivasan, director, CRISIL Research said there is still no clarity over when will NHAI compensate the road developers. “The loss of toll revenues for the month when the toll collections were stopped will pose a constraint for road projects. Therefore, actual timing of release of payments from the authorities for the loss of cash flows of projects is what we are watching out for at the moment”. The developers will apply for compensation under the change in law provision provided in the concession agreements and may also ask for extending the concession period by the number of days such change was applicable. However, in times of uncertainty sponsors’ ability to bail out the project from cash flow shortfall to meet its debt repayment obligations will be tested. Given that a significant number of projects continued to languish despite the uptick in traffic seen in the last two years, not many sponsors will be in a position to support the projects if required. A recent report by CARE Ratings suggested that quantum of sponsor support required in FY17 is expected to increase to some extent in 43% of the 67 operational projects with outstanding debt of around R15,150 crore and length of 12,000 lane kilometres. Further, 28% projects with length of 3,700 lane kilometres and debt of R6,900 crore are owned by sponsors with moderate to weak credit quality and will require sponsor support. However, apart from the short term pain, the impact of slowdown in economic activity post-demonetisation is likely to constrain the cash flows of these roads for a bit longer, say analysts. Srinivasan said that whether the developers can claim the impact of demonetisation on the lower commercial vehicle traffic under change of law provision is also being looked into by the developers. There are already indications that the toll collection growth will be much lower compared to the last two financial years. CARE Ratings observed that the toll collection growth is likely to be moderated to 6-7% in the financial year ended March 31, 2017 due to subdued economic activity post demonetisation. This is in stark contrast to the growth of 11% and 11.25% witnessed in average daily toll collections during FY15 and FY16 respectively despite subdued hike in toll rates. Darren Woodson Jersey
Delays dog infra projects, cost overrun at Rs 1.47 lakh cr
A combination of factors including delay in regulatory approval, lack of funds and land acquisition issues are taking a toll on 115 mega infrastructure projects, which face a cost overrun of Rs 1.47 lakh crore. The projects in question, each worth Rs 1,000 crore or more, are part of a total 339 across sectors such as power, railway and roads that were examined by the Statistics Ministry in August 2016. “The total original cost of 339 projects was about Rs 10,91,090.86 crore and the latest reported anticipated completion cost is 12,38,844.26 crore, which reflects an overall cost overrun of 1,47,753.40 crore (13.54 per cent of the original cost),” said the Flash Report on Mega Projects for August 2016. “During the last month (July 2016), the overall cost overrun for 329 projects was Rs 1,47,339.86 crore (14.19 per cent of the original cost).” As per the report, the expenditure incurred on these till August 2016 stood at Rs 5,17,080.79 crore. Of the 339 infra works, 115 have seen a cost bump-up, which worked out to 114.13 per cent, while in July, it was 108.50 per cent. However, the number of projects reporting inflated cost fell to 33.92 per cent in August, from 34.95 per cent in July, it added. According to the report, the factors at work as reported by implementing agencies are delay in land acquisition, forest clearance, supply of equipment, funds constraints, geological surprises, problems in setting up equipment, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist issues, legal cases and contractual hurdle and law and order, among others. During the month under review, of 339 projects, 122 are delayed with respect to the original schedule and 7 have reported additional delay. In August 2016, there are 116 projects that overshot schedule by more than 6 months and 113 with a higher cost of more than Rs 100 crore, and 45 projects have both time and cost overruns of more than 6 months and over Rs 100 crore, respectively. The report further stated that out of the 339, 3 projects are ahead of schedule, 74 on schedule and 122 delayed. A total of 115 projects reported a cost spike and 46 saw both time and cost overrun with respect to their original project schedule. It has been observed that the project agencies shy away from reporting revised cost estimate and commissioning schedule for many projects, which suggests that the time and cost overrun figures may have been under-reported. Jonathan Quick Womens Jersey
NHAI’s compensation for toll revenue loss insufficient: ICRA
Road regulator NHAI’s decision to give relief on interest cost and operational expenses is a welcome step but the compensation is insufficient as it does not cover debt repayment obligation, ratings agency ICRABSE -0.33 % said. Post demonetisation of currency notes of Rs 500 and Rs 1000, government suspended user fee collection on National Highways with effect from November 9 which went on till December 2 (midnight). “NHAI’s plan to provide immediate relief by covering 90 per cent of interest cost and O&M expenses (lower of actual and projected at the time of bidding) for the period during which tolling is suspended is a welcome move, however, the compensation does not cover the debt repayment obligation,” ICRA said. The proposed compensation mechanism based on Operations and Maintenance (O&M) and interest costs, could lead to disputes with developers given the huge revenue loss for them, it added. “Given that the revenue loss is greater than Rs 1 crore in most of the BOT (Toll) projects and even in terms of the net realisable fee, it is around 6.6 per cent (24/365*100), some of the developers want Clause 41 to be invoked in this case,” ICRA Vice President Shubham Jain said. Under this, NHAI is obligated to place the concessionaire in the same financial position as it would have enjoyed had there been no such change in law. In which case, the clause also provides for cash compensation for revenue loss in order to protect the net present value of the cash flows to the developers, he added. Classifying the temporary suspension of toll collection as a political event under force majeure, the NHAI plans to provide compensation to the extent of 90 per cent of interest cost for the 24-day period, only to the extent of the interest accrued on principal amount of debt provided by senior lenders for financing the total project cost (or the NHAI-approved refinancing package as the case may be), Jain said. Interest on any top-up loan availed by the developers will not be considered, he added. Unlike annuity road projects, where principal repayment falls due on semi-annual basis (in sync with semi-annuity payments from authority), majority of the toll road projects have monthly debt-repayment frequencies, he said. “With only interest cost and O&M expenses getting compensated, the compensation will be inadequate from the debt servicing point of view, unless the project has debt service reserve account or other cash reserves to fall back on,” Jain added. National Highway Authority of India (NHA) has suffered an income loss of around Rs 1,238 crore due to suspension of toll collection on highways till December 2 post demonetisation. Average toll collection per day is Rs 51.59 crore from fee plazas under NHAI, and taking into account the exemption till December 2, the income loss to NHAI due to suspension of toll collection on highways is around Rs 1,238 crore. P.K Subban Jersey
Road transport and highways ministry seeks 50 per cent more funds for next year
The road transport and highways ministry is seeking a budgetary allocation of Rs 86,000 crore for the next fiscal year to fund its highway expansion plan in line with the government’s plans to boost public spending and create more construction sector jobs. The amount sought from the finance ministry is almost Rs 29,000 crore, or about 50%, higher than what the roads ministry had received in the last budget. Most of this grant would be used for the government’s programme to construct greenfield economic corridors mostly as expressways, a ministry official said. Almost 44 such economic corridors have been lined up to connect ports, backward areas and several district headquarters to existing highway networks. “The target for the next financial year would be to construct around 15,000 km of roads,” the official said. “This year we could do around 9,000 km, which is a little less the target for current fiscal.” The roads ministry has a target of constructing 10,000 km of highways this fiscal. Road construction pace has picked up this year to reach an all-time high of 27 km per day, which the ministry expects could be raised to over 30 km a day in the next couple of months as construction clearances for several new projects have already been received. The official also said the ministry would raise money through National Highways Authority of India (NHAI) bonds as well. However, the amount is yet to be finalised. Chris Conte Jersey
All 11 RInfra toll plazas to go cashless from midnight
All 11 toll plazas of Reliance Infrastructure Ltd, across India, will go “cashless” from midnight Friday, accepting toll payments through cards and or mobile wallets, an official said here. RInfra is the concessionaire in 11 road projects, totalling 1,000 km and all in high-density traffic corridors, across India and has enabled all its 225 toll lanes to accept payments through debit, credit cards and mobile wallet Paytm from Friday night when toll collection resumes. It becomes the first NHAI concessionaire to introduce cashless toll payments at all its toll plazas. Vehicle owners can breeze through without having to worry about availability of cash as all the 11 centres have points of sale machines enabled by Paytm and hand-held card swipe machines to enable cashless payments. For this, 146 PoS machines, or roughly 10 at each toll plaza, and 285 card swipe machines or roughly 15 at each toll post, have been deployed. Besides, RInfra has dedicated one lane at each toll plaza for the tag users, fast tag users or the ETC tag users. One lane in each direction is also enabled for ETC-mode with a process underway to increase this number at each plaza. Over the next few weeks, RInfra will also enable online payments, other digital wallet payments like MobiKwik and deploy micro-ATMs at the toll plazas for the comfort of drivers and vehicle owners. Lance Alworth Womens Jersey
Eight-fold path to decongest Bengaluru roads
We can approach a solution to the vexed problem of road traffic if we pay attention to one simple concept: flow. While there are degrees of truth in all the arguments put forth by different groups, what’s lost is that conceptually , the problem of traffic is a problem of flow. If we focus on improving flows, we can enjoy some respite from the tyranny of traffic. Here’s an eight-fold path to improve traffic without spending massive amounts of money. 1. Focus on the flow. Don’t get mesmerised by road-widening projects that are not only messy but might not improve the situation. Unless a road is of uniform width throughout its length, flow is unlikely to improve much by widening.Uneven road width causes congestion and can actually worsen the situation. 2. Remove road cholesterol.In many places almost 40% of the road is unusable because, like clogged arteries, circulation of traffic is choked by various blockages. Potholes, construction material, parked cars, autorickshaw stands and street vendors interrupt traffic flow and not only cause congestion points but also endanger safety of motorists and pedestrians.Make it compulsory for construction material and debris to be placed in bins, with a fee charged for occupying road space. Make parallel parking compulsory , draw parking lots and assign a serial number to each of them. Move autorickshaw stands away from street intersections. Ensure street vendors occupy designated lots. 3. Get cows and other animals off the road. It’s astounding that a city that connects India to the global economy tolerates herds of cows on major roads.Cows might be holy but that does not prevent them from causing congestion and endangering their own lives and the lives of motorists. 4. Make all lanes of uniform width. Today , lanes are mostly not marked, and where marked, they bisect the available road width. The lack of lane markings and lanes of varying widths create no behavioural triggers for people to drive in a disciplined manner. 5. Enforce queuing for right turns. A major reason for congestion on major roads is that when vehicles wait to turn right, they don’t queue up but line up side by side in an rightturning arc. All vehicles that intend to go straight ahead or turn left are blocked. 6. There have to be more directional signs. Overhead gantries identifying lanes for left, right and straight ahead are necessary. These must be placed well ahead of intersections so that vehicles can change lanes much before the intersection. 7. The stop line at intersections must be prominent. It must be a lakshman rekha crossing which should attract severe penalties. Cameras already exist that can enforce this easily. 8.Although pedestrians ought to have the first right on the road, they are constantly robbed of their safety and dignity . Traffic lights for pedestrian crossings seem to have been designed for Olympic sprinters, as it is almost impossible to cross even a midsized road in the ten seconds allocated for it. Skybridges and underpasses are impractical if they have steep staircases or are at unnatural crossing points. At times where traffic lights are sought to be synchronised to create “green channels” and smooth traffic flows, the pedestrian’s rights must not be sacrificed. Michael Gallup Jersey
Either abolish toll on highways or charge us one time annual fee, say truckers
Toll tax on highways is a cancer and needs to be removed, one major truckers’ body demanded on Wednesday, as it claimed that truckers are ready to pay one time annual toll amount rather than paying it each time. Though All India Motor Transport Congress (AIMTC) is pushing this demand for the past few years, this time they revived it as government struggles to resume toll collection from Friday night. The truckers’ body also said that one of the ministers of state they recently met had agreed that “the disease of toll has to be eradicated”. However, the government has maintained that there is no question of scrapping toll on highways since it needs funds to expand the existing highways and build new ones. It also argues that users have to pay for better service, something that many of the commuters don’t agree as the service is often not up to the mark. During an interaction with officials from highways ministry and NHAI on Wednesday, representatives of AIMTC said that resumption of toll collection may not work even for 2-3 days and many of the trucks would stop operating. “Government must find alternate ways to get the toll amount rather than making everyone stop at toll plazas. We want to pay annual fee and operate throughout the year without any hurdle,” one of them said. Truck operators claimed that since government announced demonetisation, corruption on roads and highways has increased. If earlier enforcement officials negotiated at Rs 200 or Rs 300, now it’s not less than Rs 500 and in several cases taking new Rs 2,000 notes has become a trend. “What can you do when you have to run a business? Many a times even drivers short change owners since all these transactions are not in record,” said a truck operator. The truckers’ body has demanded that government should allow the operators to withdraw Rs 15,000 from their accounts per truck per trip. Meanwhile, the ministry has asked truckers to use RFID tags and give debit cards to their drivers so that more transaction can happen through electronic mode. “But they told us that they are getting one lakh fresh tags. Will that be enough when we have crores of vehicles?” asked a trucker. Government is considering if it can come out with some secured pre-paid coupons that can be issued to truckers which they can deposit to pass through toll plazas quickly. Quincy Wilson Authentic Jersey
Construction of 69 Bridges for Better Road Connectivity Between India and South East Asia
Construction of 69 Bridges for Better Road Connectivity Between India and South East Asia India is funding construction of 69 Bridges on the Tamu-Kyigone-Kalewa Road (149.70 kms) Section” and construction of 120.74 kms road between Kalewa and Yargi section” of the India-Myanmar-Thailand (IMT) Trilateral Highway, in Myanmar to improve connectivity with South East Asia by road. The Trilateral Highway starts from Moreh (Manipur) in India up to Mae Sot in Thailand through Myanmar. Construction of 130 km length stretch of road connecting Moreh (India) / Tamu (Myanmar) to Kalewa in Myanmar has already been completed by Border Roads Organization of India. For construction of 69 bridges including approach roads in the Tamu-Kyigone-Kalewa road section (149.70 kms) and construction/upgradation of the Kalewa-Yargi road section (120.74 kms) of the IMT Trilateral Highway in Myanmar, appointment of Consultants to finalise tender documents and award of contracts has already been completed. This information was given by the Minister of State for Road Transport and Highways Shri Pon. Radhakrishnan in written reply to a question in Lok Sabha. Jordan Matthews Jersey
Maha inks MoU with NHAI to plant trees along National Highways
To expand its afforestation drive and increase tree cover in the state, Maharashtra government’s Forest Development Corporation of Maharashtra Ltd (FDCM) has inked a MoU with National Highway Authority of India to plant trees along the national highways passing through the state. The project involves planting trees in the next two years along 10,000 km national highways that pass through the state beginning from March 2017. While the state FDCM will plant the trees, the NHAI will bear the cost of the project, states the MoU. Maharashtra Forest minister Sudhir Mungantiwar said afforestation is the government’s mission and it is taking it very seriously. “We are planting trees on both sides of the National Highways taken for upgradation. There is only one planet in the universe where life exists. And life exists because of trees. Thousands of crores have been spent in trying to search for life on Mars but we have not found anything as yet in spite of so much spending. Humans cannot exist without trees,” Mungantiwar told PTI. As per the agreement, the demarcation and fixing of boundary pillars of the said lands (under national highways) will be done by the NHAI. The FDCM will carryout the plantation on the said lands falling within the boundaries of the state. The Ministry of Surface Transport has in its Green Highways Policy 2015 has provided for creating Green Corridors along the national highways. The policy document lays down the criteria for plantation of trees and shrubs, taking into account the traffic visibility, planting trees along the curves and minimum distances of planting line from the toe or berm of the highway. Josh Reynolds Authentic Jersey