NHAI Opens Bids For Road Assets Worth Rs 50,000 Crore
The National Highways Authority of India (NHAI) has floated tenders inviting bids to monetise its road assets worth Rs 50,000 crore. The government-run authority said it expects to lease out around 6,000 km of national highways to private players through the auction route starting next month. Around 50 national highways would be leased out in the next month, according to data from NHAI website, mostly for toll collection and maintenance in lieu of the upfront payment to the road authority. “I would like to make it very clear that this is not a distress sale of assets but an initiative to enhance private sector participation in the operations and management of the highway sector,” Raghav Chandra, Chairman, National Highways Authority of India said in an emailed response. Growing Appetite NHAI’s latest move has the potential to kickstart stalled projects in the highways sector, according to experts. “Since most of these highways are already being made, it is just about maintenance, which private players feel comfortable working around with,” said Gaurav Karnik, partner and leader of real estate and infrastructure, at advisory, auditing and business consultancy firm EY. What could sustain the momentum is the ministry of road transport and highways’ ambitious target of adding 50,000 km of national highways over the next five years. The government will set the pace of highway construction at 42 km per day, Union minister for road transport & highways and shipping, Nitin Gadkari said. Floating online tenders will make the auction process more transparent, said EY’s Karnik. “The highways sector is growing and we are bullish on it. There is good growth potential over the next couple of years, especially given the government’s push,” he added. Cruising Ahead A recent study by India Ratings and Research estimates that investors are keen on picking up stake in completed highway projects worth Rs 24,500 crore. With infrastructure investment trusts gaining traction, highways will evolve further as an asset class, the agency says in a report titled ‘Opportunities Manifest Despite Overt Limitations’. Global institutional investors such as UAE Infrastructure Investment Fund, Japan Bank for International Cooperation (JBIC), Nomura and others have indeed shown interest in picking up stake in these long-term projects, Chandra of NHAI confirmed. While institutional investors including sovereign wealth funds are generally averse to taking risks in ongoing projects, they are open to investing in stable yield projects, the state-run authority said. The availability of foreign capital frees up domestic capital, both equity and debt, for the NHAI to invest in more greenfield projects. Welcoming the NHAI’s decision, Isaac George, director and chief financial officer, GVK Power & Infrastructure said. “It is a good thing to bring private players in the sector. Road maintenance will improve and so will the administration of toll collection.” That is precisely the NHAI’s rationale behind these auctions. “This would ensure efficient operations and management of monetised assets on a long-term basis while generating financial resources upfront for investing in new projects,” Chandra said. More private companies should exploit these opportunities, Issac added. When asked whether GVK has bid for any of these or other projects, he said, “As of now, we have not taken any call as we are still dealing with problems on our end.” Though private players are gung-ho, the NHAI cautioned that projects will only be monetised if it gets attractive bids. “The base price for the project will be determined by the authority,” clarified Chandra. Seth Jones Authentic Jersey
Banks delaying roads sector funding: Nitin Gadkari
Union Transport Minister Nitin Gadkari on Tuesday chided the bankers for delaying funding of road projects at a time when most issues in the roads sector have been resolved. Gadkari said bankers did not exercise the same caution earlier when the sector was facing difficulties. “I have some reservations with the bankers. When everything is clear, we are taking 8-10 months for financial closure. But when there was a bad situation, they financed,” Gadkari said. “We have a watch list of banks,” he added. “We have resolved enovironment and land acquisition issues. We are not giving approval to projects if 90 per cent of the land is not acquired,” he said. Giving details of how his ministry had worked on reducing the number of pending projects, Gadkari said he had saved the banks billions of rupees of bad loans by faster clearances. When he took the office in May 2014, there were 403 stuck projects with an underlying investment of Rs 3.86 trillion, which had now come down to just eight projects, Gadkari said. “I would request all of you to invest in the road sector. We’ve a lot of potential, we’ve increased the road length, economic viability is good, internal rate of return is good,” he said. The minister said there are no major issues regarding land acquisition now. “There is no problem, even with utilities there’s no problem in acquiring land,” he said. After the NDA government came to power at the centre, the length of the national highways has been increased to 1.62 lakh km from 96,000 km in two years, he claimed. Nick Bonino Jersey
Bridging infrastructure deficit: Need to quickly perfect funding model, says Jaitley
The Finance Minister, Arun Jaitley, on Thursday stressed upon the need for India to quickly perfect the “funding model’’ for filling infrastructure deficit and thereby help keep the economic growth rate at current high levels going. “I think our model is in the process of evolving. This model has to be perfected to keep the growth rate going. If India is to grow faster than 7.5-8 per cent, infrastructure is the key,’’ Jaitley said at seminar on ‘Best Practices in PPPs and Long Term Infrastructure Financing’ in the capital. This day-long knowledge exchange seminar was jointly organised by the Finance Ministry and Confederation of Indian Industry (CII) in the run up to BRICS Summit in October. India has assumed the chairmanship of BRICS during 2016. In his address, Jaitley highlighted that there cannot be an one-size-fits all solution for bridging infrastructure deficit. “Each country has been experimenting its model. In different spheres, we are attempting different models. Some with higher success and some with lower success,’’ Jaitley noted. India has been experimenting several innovative modes of infrastructure financing, including Infrastructure Development Funds (IDFs), Infrastructure Investment Trusts (Invts), Real Estate Investment Funds (REITs) and National Infrastructure Investment Fund (NIIF). Jaitley said that although NIIF has become operational, it will start its major activity in a few days from now. He said that a large number of international organisations, including sovereign wealth funds, have made commitments towards NIIF and that the Centre was awaiting their contributions to specific funds under NIIF. Jaitley said that he was conscious of the fact that the ‘State’ had the responsibility in meeting the infrastructure needs of its citizens. He highlighted that public investments in infrastructure had been on the rise and described the highways sector performance over last two years as a clear “success story’’. NIIF challenges Speaking on the occasion, Economic Affairs Secretary Shaktikanta Das said that NIIF had actually posed several challenges to the Finance Ministry. In the initial interactions that were held with prospective investors, it appeared they would be interested in investing into the umbrella fund (mother fund), which will invest in various infrastructure projects, Das said. However, when further interactions happened, it came out that the long-term funds were interested in investing in dedicated sectoral funds than any all purpose/multipurpose funds, he said. “We had to therefore recast the NIIF. Now we have two sectoral funds — one for highways and the other for clean energy,” Das said. Meanwhile, Das also said that the Centre was taking special focus on public private partnership (PPP) projects in railways to contribute to India growth story. Charles Haley Authentic Jersey
Nitin Gadkari promises Arunachal Pradesh to expedite 4-lane road project
Union minister Nitin Gadkari has assured Arunachal Pradesh to expedite the sanction process of Itanagar-Banderdewa four-lane Road project for which the state government had made a representation to his ministry earlier. His assurance came when Deputy Chief Minister Chowna Mein called on him in New Delhi to apprise him of problems and demands of the state, an official communique said here today. Mein had requested Gadkari for early sanction of special repair estimate of Itanagar-Banderdewa Road which has been submitted to the ministry, to which the Minister for Road Transport and Highways asked a senior officer to examine the case for early approval. Chief Minister Pema Khandu had earlier submitted a memorandum to MoS for Road Transport & Highway Mansukh Mandaviya, during his visit to the state recently, demanding declaration of four roads as National Highways. He had named Akajan-Likhabali-Bame Road (106 km) in West Siang, Margherita-Changlang (37 km) in Changlang, Daporijo to Dollungmukh via Dumporijo along the left bank of Subansiri river (125 km), and Tezu to Chapakhowa via Sunpura (20 km). Gadkari informed Mein the Centre was actively considering the proposal for declaring roads as National Highways and it would be examined and considered. Mein also apprised the Minister of the incessant monsoon rains that play havoc resulting in huge damage both on the completed stretch and on-going NH projects every year. “As such, regular maintenance and protection work is required so that damages due to landslides and other damages can be arrested to ensuring all-weather connectivity,” Mein pointed out. The Deputy Chief Minister also requested the Union minister to allocate a maintenance fund of Rs 10 crore for the maintenance and repairs works of National Highway 13-Potin to Ziro road as a special case. Josh Malone Authentic Jersey
Mumbai to Goa in just 6 hours soon: Nitin Gadkari
Travelling to Goa from Mumbai by road may soon take only six hours due to the construction of a new four-lane concrete highway, Union Minister for Roads Transport and Highways Nitin Gadkari said on Thursday. “It will soon take only six-hours to travel between Goa and Mumbai with the four-lane concrete highway we are building,” Gadkari said, adding that the rate of road building by his ministry was 22 kms per day. He was speaking at a function on the occasion of signing a concession agreement between the Mormugao Port Trust and Goa Seaport Pvt Ltd for redevelopment of two berths and other barge berths at the central government facility. The minister also proposed to shift a port project in Goa’s Betul village, which has faced local opposition, to either of the neighbouring states of Maharashtra or Karnataka, on account of a series of protests against it. He also said an eight km highway will be constructed, connecting the upcoming Mopa airport in North Goa, located 40 kms from Panaji, to the National Highway 17 at the cost of Rs 300 crore. Eric Ebron Authentic Jersey
Oracle and Maharashtra partner to launch Smart City Centre of Excellence
Maharashtra chief minister Devendra Fadnavis is pretty pleased with the recent announcement of five cities from his state being added to the Smart City mission launched by the Modi government. Currently on a trip to San Francisco, USA, he delivered a keynote speech at the Oracle Open World 2016, a first for any Indian politician, announcing his CEO-like vision for the state he administers. Quick to make a move and deliver on the smart city promise, he signed a MoU (Memorandum of Understanding) with Oracle Corporation to create a Centre of Excellence (CoE) in Mumbai to help connect 29,000 villages of Maharashtra and launch government-to-citizen and government-to-business services in the state. The MoU plans to accelerate the state’s digital transformation initiatives, leveraging Oracle’s Cloud solutions and develop the state’s smart city programme. The Centre will become a research platform to design, develop and test new capabilities and offer a flexible and scalable common framework to run various government schemes and create robust IT infrastructure that aids government utilities and services for citizens. Oracle will use the learnings from this first Centre of Excellence and drive its Smart City initiatives in other states of India and also take the learnings to other countries, said Safra Catz, CEO, Oracle Corp. Making the first move, Fadnavis said the CoE can become a prototype for all other states to emulate and learn from their experiences of building a smart city. Using cloud capabilities, Catz believes Maharashtra can leapfrog to using the latest technology and skip what other cities having legacy technology capabilities have had to go through to bring about the transformation. If Fadnavis’s plan goes through, expect Mumbai city itself to have about 1200 hotspots for instant Wi-fi connectivity; he says 500 of them will be ready by November this year. Using technology and by inviting many other partners on this tech-transformation journey, he also plans to unify Mumbai’s transportation infrastructure and offer its residents a single ticket to hail a ride on the city bus, metro train, mono rail as well as the trusty old Mumbai suburban local trains. Much like the one-ticket for all rides offered globally by cities like London and Paris. He admits it’s not an easy task but he has set a firm deadline to achieve it – end of 2018. The biggest challenge is to take the network to all villages, catering to the 113 million people in Maharashtra. As one of the many solutions to achieve his goal, he plans to use the electricity poles to help spread the tentacles of optic fibre network across his state. The proposed projects to be covered under the CoE initiative include: Smart city in a box, mobile platform to address service queries, unified app development for services like drivers license, renewals or property tax payments, resources to manage transportation logistics, including analytics, asset tracking, fleet management and resources to manage utilities, including water and power Oracle and the government of Maharashtra plan to invest in IT infrastructure, training and skill-set resources to run the CoE. “Cloud computing has changed the landscape of governance. It has the power to enable inclusive growth and to transform the state into a digitally empowered society,” said Fadnavis. “Together with Oracle, we want to build a new, efficient, transparent and inclusive system that benefits our people. The CoE is a step in that direction and will make more government services available with the click of a button.” Catz plans to use this initiative to invite many other technology companies and join hands with them to support the Digital India initiative outlined by Indian government. “We are thrilled to further our commitment in India by working with the Government of Maharashtra and the Prime Minister of India, Narendra Modi, to help position India as a world-class design and manufacturing epicentre. The Cloud Center of Excellence powered by Oracle will play a key role in improving the lives of the people of this state,” said Catz. “By moving to the Cloud, the government has the opportunity to create a digitally empowered society and a growing knowledge economy. We look forward to making this partnership a success.” Oracle plans to tap the potential business that will emanate from the India over the next few years. She expects Oracle India’s revenue to grow 10 times in near future. On an earlier trip to India, Catz unveiled a state-of-the-art campus centre at Bengalaru. Oracle also has nine incubation centres in India, and has launched an initiative to train more than half a million students each year to develop computer science skills. When Catz joined Oracle Corp, it had 40 thousand employees globally; today Oracle India alone employs about 40 thousand people. She believes India has the single largest growth potential for Oracle and thus is committed to invest in resources that will help it grow the India business 10 times. Evander Kane Authentic Jersey
ADB clears $631 million loan for Vizag-Chennai industrial corridor
The Asian Development Bank (ADB) has approved a $631-million loan for construction of industrial corridor between Visakhapatnam and Chennai, part of India’s first coastal industrial corridor running from West Bengal to Tuticorin in Tamil Nadu. “The fund will help develop the first key 800-km section of the planned 2,500-km East Coast Economic Corridor expected to spur development on India’s eastern coast and enable seamless trade links with other parts of South and Southeast Asia,” ADB said in an official statement on Tuesday. The total cost of the project is $846 million and work on it is expected to be over by 2031. The remaining $215 million will be funded by the Andhra Pradesh government. Loans and grants from the Manilabased bank comprise a $500 million two-tranche facility to build key infrastructure and a $125 million two-tranche loan to help in industrial policies and business promotion. The loan is for a period of 25 years at interest rate of 0.5% plus libor. The ADB loan will help the government build state-of-theart industrial clusters, roads, efficient transport, and reliable water and power supplies with a skilled workforce and good business policies. The new infrastructure will be built in the four main centres — Visakhapatnam, Kakinada, Amaravati and Yerpedu-Srikalahasti — along the corridor. It will include 138 km of state highways and roads, water treatment plants, 488 km of drinking water pipeline, 47 km of storm drains, 10 power substations and 281 km of power transmission and distribution lines. According to ADB’s projections, automobile and electronic manufacturing will grow 24% a year over the next two decades along the coastal corridor districts. During this period, 7-13% growth is expected in plastics, food processing, textiles and apparels, chemicals, pharmaceuticals and petrochemicals sectors. Reggie White Jersey
Land issues delaying construction: NHAI
The National Highways Authority of India (NHAI) has said that service road construction between Bhagawan Mahaveer (Pumpwell) Circle and Talapady on the four-lane NH 66 is being delayed for want of physical possession of required land to be handed over by the State government. Samson Vijay Kumar, NHAI Project Director, Mangaluru, Zone, told The Hindu that the authority and the concessionaire—Navayuga Udupi Tollway Pvt., Ltd., are ready to construct the service roads, but for technical reasons. The Special Land Acquisition Officer (SLAO) is unable to disburse compensation to a tune of about Rs. 32 crore to land owners because of their non-availability. Mr. Kumar was responding to a news article “Police will not hesitate to book NHAI if flaws in road building lead to accidents,” appearing in these columns on Monday. On specific queries by The Hindu about incomplete service roads all along four-lane NH 66 between Pumpwell and Talapady, he said though technically the lands (about 16 hectares) vested with NHAI, it cannot go ahead for want of physical possession. The district administration too had conducted special adalats to settle such cases recently and a few were settled. In Udupi district too, possession of about 5 hectares of land is yet to be given to NHAI as about Rs. 21 crore of compensation to land owners is yet to be disbursed. Mr. Kumar said the NHAI has already deposited the entire compensation amount with SLAOs concerned. With regard to absence of median opening at Yekkur Junction on NH 66, Mr. Kumar said initially there was a proposal to provide one. It was deleted as the height of the main carriageway on the other side had to be increased to match the height of the new Road Over Bridge on the Railway line. The authority is willing to provide one, if the City Police suggest so, Mr. Kumar added. Mr. Kumar also said the Dakshina Kannada Deputy Commissioner has appointed a designated SLAO for NH projects in the district to relieve the Assistant Commissioner of Mangaluru revenue sub division from the additional charge. Danny Gare Womens Jersey
Bidding for NHAI road assets to begin in October
From October, the government plans to start inviting bids to monetise its road assets worth Rs 70,000 crore. The aim is to unlock money that can used to build more roads. The transport ministry has lined up 100 high traction highways owned by the National Highways Authority of India (NHAI) to be leased out to private players through competitive bidding. The highway projects will be leased to private players for maintenance and toll collection for 30 years in exchange for an upfront payment. A NHAI estimate says the government can rake in Rs 70,000-Rs 75,000 crore over a certain period of time by leasing out its road assets. “We’ll initiate the bidding process next month. We are already getting queries from investors. The project list is being worked out,” said a senior transport ministry official, who did not want to be named. The official said several foreign investors, including Canadian pension fund PSP and investors led by CLSA (Credit Lyonnais Securities Asia), Goldman Sachs and Abu Dhabi Investment Authority (ADIA) have shown interest in investing in these projects along with local operations and maintenance partners. “All domestic and long-term financial institutions are quite bullish about investing in operating assets instead of putting their money in greenfield projects,” said Vinayak Chatterjee, chairman, Feedback Infra. Recently, Goldman Sachs invested $220 million in Essel Highways. Canada’s Brookfield Asset Management is also vying for road assets of Anil Ambani’s Reliance Infrastructure. Under the Road Transport and Highways Ministry’s policy, highways built by NHAI are awarded to private players for an upfront fee. The private party operates the highway stretch and collects tolls for a long-term period. Infra developers, PE firms and institutional investors can take up completed highway stretches. The proceeds from leasing out will be invested in capacity expansion, officials said. The ministry has set a target of constructing 15,000 km of national highways in FY16-17. Kent Hrbek Authentic Jersey
9 states stall push for full rural connectivity by 2019
Nine states seem to be holding back India’s race to achieve full rural connectivity by 2019 with Assam, Jammu & Kashmir and Jharkhand topping the list, according to a central government assessment. The fear is that the ambitious scheme may have to be pushed beyond 2019, a politically significant date as the Modi government will be up for re-election then, despite recent improvements having taken daily road construction to 130 km from the earlier average of around 85 km. Besides the three worst performers, a review of ‘Pradhan Mantri Gram Sadak Yojana’ (PMGSY) found progress wanting in Chhattisgarh, Bihar, Rajasthan, Odisha, Uttarakhand and West Bengal, prompting a concerned rural development ministry to begin meeting chief secretaries of these states to urge them to step up the pace of work. Some of the states, like J&K and Chhattisgarh, face obvious problems of terrain and terrorism. Development work in these states is a challenge and recurrent political turmoil in J&K makes the state even less effective. West Bengal is seen to lack admini strative efficiency while Odisha and Rajasthan have large backward areas. Bihar’s road construction has improved but PMGSY records reveal more needs to be done. The choice of 2019 to achieve full rural road connectivity is clearly linked to the political objective of presenting voters with a glowing report card ahead of Lok Sabha elections. While targets may have to be pushed forward owing to the drag of nine states, the question is if the Modi government will be able to do enough to make it count in its attempt to net the sprawling rural constituency . The 2019 time-frame is daunting. As per estimates, Assam will have to scale up the pace of work by 10 times to take the length of road constructed per day from 2.3 km to 22.5 km. Only if roads are constructed at a rate of 22.5 kmday over three years will Assam be able to connect all rural habitations by 2019. The chart of estimates drawn up for laggard states presents clear targets. Second on the list is J&K which has to take road construction from the present 1.3 km a day to 8 km; Jharkhand from 3.7 to 20.2; Odisha from 10.3 to 18.9; Uttarakhand from 3.3 to 7.7; West Bengal from 6.6 to 10 and Chhattisgarh from 5.1to 6.2. A senior official said, “The ministry has already met all states barring Bengal and J&K. We are urging them to raise the pace of work.There is no shortage of funds and there is no reason why states should not step up.” Noticing that hill states are among those lagging behind, the Centre has decided to rope in Border Roads Organisation in Assam, Uttarakhand, J&K and Arunachal Pradesh. Josh Robinson Jersey