L1Bidding creates shabby roads: Deepak Parekh
Pitching for public-private partnership to build urban roads, Housing Development Finance Corporation Chairman Deepak Parekh blamed the bidding process for the “shabby” and “very poor” quality of city roads in the country. “Quality is very poor and every monsoon after rains, we have to redo the roads. This is because state governments have to award to L1, to the lowest tender,” he said at an event in New Delhi. “So the lowest contractor, lowest price bidder will always build a shabby road…I think some (PPP) experiment could be done with city roads.” As Chairman of HDFC, which is India’s largest mortgage lender, Parekh also asked the government to have proper pricing for building infrastructure. “We need better contractors. The government and states must pay proper pricing. They don’t have the resources, they go for the lowest bid. We have to build more permanent roads, which don’t get damaged after every monsoon every year,” he said. Referring to the capital, which gets into a state of chaos every time it rains, Parekh said that while the odd-and-even rule for plying cars on roads didn’t work here, Mumbai and Bengaluru have the added problem of the quality of roads, besides traffic. As a possible solution, Parekh said municipal authorities should be allowed to raise funds by issuing bonds, which will help create quality urban infrastructure. Brett Hundley Jersey
Ludhiana looms far behind when it comes to road infrastructure
For a city that has been dubbed as the “Manchester of Punjab” for its thriving industry, Ludhiana is yet to hit the fast lane when it comes to road infrastructure. Most areas of the city continue to be at the receiving end of roads riddled with potholes. With monsoon at its peak, it is unlikely that commuting in the city is going to be a smooth ride for citizens in the near future. The worst-affected roads and areas include: Focal Point, Jaimal Road, Bhagwan Chowk, Pahwa Hospital Road, Gill Road, Basant Road, Pratap Chowk, and many others. Manoj Gupta, who resides in Model Town, said his office was in Focal Point and the roads there were the worst. “The potholes there are so deep that they damage cars. It takes twice the time to reach there only because of the condition of the roads. Repairs are a far cry. The MC has used sand to fill some of the potholes, but these only add to our woes when it rains,” he said. Atam Park resident Tarun Malhotra commutes daily to office using Gill Road. “Though Ludhiana is an industrial hub and is now touted to become a Smart City, roads have been neglected for long. Gill Road happens to be a busy industrial area, but the roads have made it difficult for the industrialists based there. Deliveries often get late because of the roads,” he said. Haibowal resident Jagdeep Malhotra said roads are basic infrastructure. “But it does not seem to be on the MC’s priority list. I am an avid cyclist, and it gets difficult to cycle on these roads,” he said. Model Town resident Daman Singh said he his car had once gotten damaged because of the poor condition of roads. “Only I had to pay for the damage to my car. Not the MC. The authorities need to fix responsibility when it comes to the condition of such roads,” he said. MC commissioner Ghanshyam Thori admitted to roads in Focal Point being in a bad condition and assured that roads would repaired after monsoon. “They will be in shape after monsoons, possibly around September 15. At Gill Road, work will be done after September 15,” he said. Matt Ryan Jersey
Kerala will get coastal, hill highways: Minister
The State Government is for building coastal and hill highways connecting the northern and southern tips of the state as part of improving road infrastructure. The government intends to complete the project worth about Rs 10,000 crore during its tenure, PWD Minister G Sudhakaran said. The decision for building these two highways was taken up at a meeting in the presence of Chief Minister Pinarayi Vijayan and Finance Minister Thomas Issac, he said. The officials in the PWD have been asked to submit a detailed project report in this regard, he said and added that they were asked to submit the report within four months. Sudhakaran also said that the highways would be constructed using the most modern techniques. The coastal highway will have a length of 606 km and the hill highway 1195 km. The Minister also said that an investigation would be held on how the former UDF government had given sanction for the projects under the District Flagship Infrastructure Project (DFIP) without having enough funds. The probe was only for knowing the reality and not to take action against anyone, he added. Refuting the allegations that the government had abandoned the projects brought by the UDF government, he said that the projects have only be stopped for a short period as funds were not available. Discussions are on with the Chief Minister and the finance minister to raise the funds, he added. He also lashed out at the previous UDF government for its projects under DFIP. As per the budget proposal, 14 projects for 14 districts were announced and an amount of Rs 1,400 crore was announced for this. Later, the number of projects was increased to 21 and sanction was given to the tune of Rs 3,771.47 crore but without any fund allocation, Sudhakaran alleged. He further said that ten of the 21 projects were given priority and administrative sanction of Rs 1,620.30 crore was given. However, he alleged that the projects were taken up without any criteria. The UDF government had proposed the projects without any fund allocation and without any clear cut vision of raising the funds, he alleged. Brian Elliott Authentic Jersey
Gaining momentum: Private players hit the road as new model fuels project pace
A steady ramp-up in the revival of private sector interest in the country’s highways sector is evidenced by an over two-fold increase in sections offered this fiscal for bidding under the government’s new project implementation format — the hybrid annuity model (HAM). This, alongside a pickup in the resolution of stranded projects, has infused fresh traction in the country’s roads sector. Progress on the ground offers some pointers. The average pace of construction for the first quarter of the current fiscal — April-June 2016 — is pegged at 21.86 km per day, up from a daily average of 16.60 km last fiscal and just over 12 km in 2014-15, according to Ministry of Road Transport and Highways (MoRTH) estimates. Since 2014-15, the Centre’s efforts to revive the roads sector saw it progressively shift focus from the default BOT (build-operate-transfer) model to projects being awarded through the EPC format — the engineering-procurement-construction model — which is less capital-intensive and where the developer is responsible for just the delivery of the completed project and thereby remains insulated from the traffic risk. The fact that the private sector is warming up to the new HAM format — a combination of EPC and BOT-annuity models where the Centre bears only a part of the traffic risk — offers fresh evidence of a turnaround in the risk-reward appetite among developers and is being construed as a pointer to renewed optimism in the sector. The numbers offer some indication of the revival in sentiment. As against 92.676 km of highway sections that were awarded under the HAM in the year 2015-16 (worth about Rs 2,582.34 crore), the projects likely to be awarded under this format in the current fiscal are over two-folds higher at 208.21 km (worth Rs 4,363.84 crore). Another 17 projects totalling 873 km have been proposed under this format in 2016-17, government officials involved in the exercise said. Adding to the renewed sense of optimism in the roads sector, widely touted as the only glimmer of hope in an otherwise bleak core sector narrative, is the progress on the resolution of stuck projects. An estimated 46 projects that were identified two years ago by the National Highways Authority of India (NHAI) as “languishing”, totalling a length of 4,860 km and entailing a total project cost of Rs 51,338 crore, is now down to 19 projects. The inherent hurdles have been resolved in 27 cases, which frees up private sector capital and equipment to be deployed in fresh projects. “Currently, no new project is launched unless the pre-construction activities are fully complete, that means in case of PPP projects, 80 per cent land has to be available and for the EPC projects, 90 per cent of land has to be available,” an official said. Apart from this, to address the paucity of equity capital and improve liquidity, the steps taken by the Centre in the last two years include permitting the securitisation of future cash flows, deferment of premium in stressed highway projects, substitution in financially stressed highway projects and 100 per cent equity divestment after two years of construction for all highway projects under PPP (public private partnership) mode. Two other key measures taken by the Centre to speed up project lead time, officials said, pertain to green clearances and coordination with the Railways. Environment clearance procedures have been eased to ensure that EC is not required for length of 100 km and even beyond 100 km, it is not required if widening is restricted to 40 metres and realignment to 60 metres. For the construction of Rail Over Bridges (ROBs) and Rail Under Bridges, the procedure for GAD (General Arrangement Drawing) approved by Railways for ROBs has been simplified and made online. Maintenance charges, which were hampering the progress of many projects, have been waived off by Railways while the standard design has been put online. The private sector participation in the road sector had witnessed severe liquidity crunch in the years 2012-13, 2013-14 and 2014-15, which resulted not just limited or no participation in the new projects awarded on the default BOT-toll format, but it also resulted in delay in completion of ongoing projects. Under the BOT model, the developer funds the project and earns returns from toll collection for the duration of the concession, resulting in the capital being locked in for a long period with the risk of revenue not adequately covering for construction and debt servicing costs. Under the HAM model, the government commits up to 40 per cent of the project cost over a period, even as it hands over the project to the developer to start road building work. A majority of road stretches offered under HAM since April this year has seen a progressive warming up of interest, with over nine road developers bidding for each of the five projects where bids submission happened. This compares with up to four bidders for each of the hybrid annuity projects announced during January-March this year. Even in sections offered under the BOT format, an uptick is palpable, with a total of 27 projects of the NHAI having achieved financial closure during the last three years. In case of EPC projects as well, increased participation among developers has translated into extremely competitive bids in recent months. Of a total of 52 EPC road projects (worth about Rs.26,700 crore) that were awarded between January and June this year, close to 40 projects were won below the NHAI’s estimated cost, according to data compiled by brokerage Equirus Securities Pvt Ltd. Pernell McPhee Womens Jersey
Govt panel clears 16 highway projects for bidding
A government panel on Tuesday cleared for bidding 16 highway projects worth Rs 7,456 crore in 11 states: Uttarakhand, Maharashtra, Haryana, Gujarat, Assam, Arunachal Pradesh, Andhra Pradesh, Sikkim, West Bengal, Chhattisgarh, and Odisha. These projects, totalling a length of 622 km, are fit for bidding now but the award of these contracts can only take place after 90 per cent of the land acquisition process is made available, Secretary, road transport and highways, Sanjay Mitra, told reporters here, after the meeting of Standing Finance Committee that approved these projects. EPC (engineering, procurement, and construction) projects would require government investment of Rs 3,876 crore. Of the total number of projects, 13 would be executed in EPC mode, two in hybrid annuity mode, and one in BOT (build, operate, and transfer) mode. These highway contracts include construction of new roads, widening and expansion of existing highways, and rehabilitation and upgrade of some projects. Mitra said detailed project reports of the projects are complete and the contracts can be put up for bidding. Large infrastructure companies like L&T, Gammon, Jaiprakash Associates and Punj Lloyd have evinced interest in executing highway projects on EPC mode. According to National Highways Authority of India (NHAI) data, in the list of 62 EPC projects, L&T bagged seven EPC highway contracts in 2015-16 and two projects between April and June, this year (2016-17). In 2015-16, 87 per cent of the projects were awarded on EPC basis. In 2014-15, the figure was as high as 91 per cent. Walt Aikens Womens Jersey
Indefinite protest begins for toll-free DND flyway
Hundreds of people from more than 35 organisations in Noida and Greater Noida started an indefinite protest against the toll-tax on Delhi-Noida-Direct flyway on Sunday. Led by former minister Nawab Singh Nagar under the banner of Janhit Morcha, the protesters removed the barricades at the toll plaza to allow vehicles a free-of-charge passage and continued to do so throughout the day. While commuters had a free run on the flyway without paying the toll, the protesters said they will not allow toll to be levied till their indefinite sit-in is over. However, being a Sunday, there were no traffic snarls or inconvenience to the commuters as the protest continued on the side of the DND bridge while allowing a free flow of traffic. “It’s a rare opportunity to get a free-of-charge ride on DND. It’s high time the toll-tax was removed from here,” said a commuter on way to Delhi. Nagar told TOI that the protest will last till a final settlement on the matter is arrived at. While a large contingent of police presence on the flyway ensured that the protest was a peaceful one, numerous attempts to reach Anwar Abbasi, spokesperson for Noida Toll Bridge Company Limited (NTBCL) failed as his cellphone was not reachable. The protest, result of a month-long preparation by the morcha including a series of meetings and plannings at the residence of Nagar in Sector 33, was a peaceful one and was held in the presence of SP, crime, Vishwajeet Shrivastava, city magistrate Bachchu Singh and ADM Vineet Kumar. “We are here to ensure that no one takes law and order in their hands,” said a police officer. The protestors also handed over a petition to ADM Vineet Kumar and addressed to chief minister Akhilesh Yadav for a CAG inquiry into the toll-tax. Jordy Nelson Jersey
‘Govt. committed to improving condition of roads’
Roads and Buildings Minister Tummala Nageswara Rao said that the State government was committed towards improving the condition of all the roads in the State by spending Rs. 15,000 crore in the next two years. Addressing a public meeting after launching road works in Jukkal Assembly constituency on Saturday, he said the Chief Minister, K. Chandrasekhar Rao, has taken several measures to lay new roads and improve the condition of bad roads. Before the bifurcation, the united Andhra Pradesh had a total length of national highway was 2,600 km, but after the formation of the Telangana State, in just one year, another 2,600 km was added, the credit of which goes to the Chief Minister, he said. He said with the improvement of roads and road network, farmers can take their produce to any place in the country while even tourism gets a fillip. Riley Sheahan Womens Jersey
Highways widening: BJP accuses government of giving farmers less compensation
Ahead of 2017 assembly elections, the opposition BJP has started cornering chief minister Virbhadra Singh-led Congress government in the state on the issue of poor compensation being paid to the farmers to acquire their land for the four-laning of national highways. BJP leaders are claiming that the Centre is ready to pay more compensation but the state government is not taking the required initiative to do so, leading to losses for farmers. In Himachal Pradesh, a large chunk of land is being acquired for the four-laning of Kiratpur-Manali stretch of NH-21 and Parwanoo-Shimla stretch of National Higway -22. Ricky Jean Francois Womens Jersey
Why did banks ‘over-finance’ road projects, asks Parliamentary panel
Observing that loan disbursed by banks in excess of an estimated project cost is “strange”, a parliamentary panel has expressed concern over a large chunk of about Rs 75,000 crore of loans extended to the road sector turning bad. In particular, the panel has raised questions about huge loans advanced to Jaypee Infratech turning into NPAs. “Some of the banks have given information on total loan (Rs 74,088 crore) given to the road sector… for IDBI, the NPA percentage is as high as 52 per cent of loan disbursed for the road sector. The committee wants to know the reason why this huge amount has become NPA, that too to a single concessionaire, Jaypee Infratech Ltd,” the panel chaired by Kanwar Deep Singh said in its latest report. Seeking full details of the project awarded to Jaypee, the 33-member standing committee on transport further observed that State Bank of India has lent Rs 19,502 crore out of which Rs 1,986 crore has slipped into NPAs. SBI submitted before the committee that the projects may be approved only after ensuring 90 per cent of land acquisition is completed. The panel said, “The committee finds it strange as to how the concessionaire who has got a project for Rs 1,000 crore gets Rs 1,400 crore for the same project.” It also asked: “Why the concessionaire has been given a free hand to get the bank’s loan as per their wish?” It instructed NHAI to keep a watch on the excess loan amount obtained by the developer. Incidentally, former road transport and highways secretary Vijay Chhibber has remarked that aggressive lending by banks which were “happily over-financing even non-serious highway players without assessing risks has virtually killed the sector”. He told media, “The concessionaires and bankers are not realising that we are reaching a stage of impatience, and people who are users of these roads are not going to be waiting any more.” Projecting that total NPAs of Rs 2.6 lakh crore may go up to Rs 4 lakh crore because of defaults, the panel recommended that banks be empowered more to make recovery of bad debt. Asking the government to consider empowering the banks adequately to make recovery of bad debt easier, it said, “For example, in the case of a default, the banks may be allowed to take over the entire company.” It also noted SBI’s contention that all approvals from statutory authorities and clearances from government agencies should be obtained before a particular project is sent for bidding. “Another area of discord is the project cost estimated by NHAI and the concessionaires, which results in lending delay by financial institutions,” the committee said. William Perry Authentic Jersey
Draft vehicle scrapping policy to be ready in a fortnight: Nitin Gadkari
Aiming to scrap nearly 15 lakh heavy vehicles that are more than 15 years old in the first phase, Union minister Nitin Gadkari has said the draft policy will be ready in a fortnight. “We intend to scrap 15-year-old about 12-15 lakh heavy vehicles, mostly trucks and buses, in the first phase of our proposed Voluntary Vehicle Fleet Modernisation Programme (V-VMP). The draft policy would be ready in a fortnight,” road transport and highways minister Gadkari told PTI. The minister said 65% of the vehicular pollution is caused by heavy vehicles and scrapping of these will be done at industrial clusters like Kandla to be set up under the government’s ambitious Sagarmala project. Gadkari had called on finance minister Arun Jaitley last week in this regard, who had suggested making the policy mandatory, not voluntary. The finance minister had also said that instead of excise tax exemptions, funds will be provided for this in the Budget. According to Gadkari, the policy may provide benefits of Rs.2-3 lakh for every heavy vehicle to be scrapped. The draft V-VMP policy had earlier proposed to bring vehicles bought on or before 31 March, 2005, numbering about 28 million, under its purview. The government is also expected to take permission from the GST Council as “the tax structure is likely to change”. He said the benefits of the policy include additional net revenue of over Rs.21,000 crore on account of additional automobile sales, besides crude oil savings of Rs.7,700 crore due to improved fuel efficiency. Once the policy is finalised, it is estimated to result in domestic steel scrap generation worth Rs.5,500 crore to substitute imported scrap. The other positive, Gadkari said, is employment generation as there will be huge demand for workforce for scrapping/recycling operations and automobile manufacturing. The automobile industry’s turnover in the country is Rs.4.5 lakh crore, he said, adding that making these industrial clusters will boost job creation. He termed the policy as a “win-win” for government, stakeholders and common masses. According to the ministry, the proposed policy has the potential to reduce vehicular emission by 25-30% and save oil consumption by 3.2 billion litres a year. Jermaine Kearse Jersey