Green cover plea along highways: NGT seeks reply of Centre
The National Green Tribunal (NGT) has sought the response of the Centre, NHAI and others on a petition seeking a direction for maintenance of mandatory 30 metres green cover on both sides of the national highways. The green panel also issued notices to the governments of Delhi and Haryana on the plea which claimed that there was an erosion of the mandatory green cover on both sides of NH-1 and NH-8 which was necessary to maintain the ecological balance between pollution and development. A bench headed by NGT chairperson Swatanter Kumar asked the respondents to file their reply and fixed the matter for hearing on September 7. The plea, filed by an NGO, said an effort should be made by National Highway Authority of India (NHAI) and the state governments, through which national highways pass, to preserve and maintain the surrounding areas. “As per norms adopted by the NHAI, mandatory green of 30 metres on each side of the highway/scheduled road and 50 metres on both sides of any bypass is to be maintained,” it said. It claimed that effective green cover along the national highways have manifold uses and NHAI itself has prescribed the mandatory green cover. “This is a huge loss to the green cover of the country, which is struggling with acute shortage of water and is faced with humungous air and noise pollution,” it said. The petition also referred to the notifications issued by the Haryana government which said that no construction can be allowed within 30 metres on either side of national highways and 50 metres on both sides in case of bypass road and it has to be maintained as green area. “The basic concept is that trees should be planted along the highway to maintain ecological balance between pollution and development and the future need for expansion of roads and insulate the population living nearby from noise pollution, dust and emission pollution,” it said. It sought a direction to authorities concerned for declogging of traffic on national highways. Mark Walton Jersey
Global investors likely to be cautious on NIIF investments: Report
Even as India is “aggressively” trying to attract funds for the Rs. 40,000-crore National Investment and Infrastructure Fund (NIIF), global investors are likely to adopt a “cautious” approach over investing in it, a report by BMI Research has said. The company, a part of the Fitch Group, said infrastructure sector in the country continues to face challenges, which is discouraging international investments. “Indian government is aggressively trying to attract foreign investments into its infrastructure sector, seeking $1 trillion in investments, however, we expect that international investors will continue to remain cautious over investing in the fund which seeks to fill the funding gap in India,” the company said in its latest report. Till date, NIIF has secured support through memorandum of understandings (MoUs) with sovereign wealth funds, including Russia’s Rusnano, Abu Dhabi Investment Authority and Qatar Investment Authority, the report added. However, BMI Research said: “While encouraging that there is interest in the fund, there is yet to be any formal commitment of capital.” The government had created NIIF in December last year as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects. While the government will invest Rs. 20,000 crore in NIIF, the remaining amount will come from private investors. BMI Research further said, “The potential of India’s $6 billion NIIF will not be fulfilled in the short-term, even as projects are selected for investment. “Crucially, the Indian infrastructure sector continues to present various challenges hindering the attraction of the market for international investors.” On the reasons behind the lack of interest from global investors in investing in NIIF, it said that it is likely on account of India’s investment outlook, which remains challenging. “The country scores below regional average in both our operational and project risk Index, with particularly low score for crime and security risk and construction risk, highlighted by the fact that a third of projects — worth a combined value of $210 billion — are delayed,” it said. However, BMI Research expects India’s construction and infrastructure sectors to grow by an annual average of 6.4 per cent between 2016 and 2025. “While we expect NIIF to continue to fund projects itself, we believe international backers, which the fund is looking to tap, are likely to adopt a wait-and-see attitude before investing in the fund, largely owing to a still challenging operational environment and high project risks which threaten timely returns on investment,” it said. Natrell Jamerson Jersey
IRB Infra bags Rs 2,100 crore project from NHAI
Toll road firm IRB Infrastructure Developers said it has bagged a contract worth Rs 2,100 crore from NHAI for a six-laning project in Rajasthan and Gujarat. “IRB has emerged as a preferred bidder for the project of six laning from Udaipur to Rajasthan/ Gujarat border on section of NH-8 in Rajasthan and Gujarat,” the company said in a statement issued here. The Rs 2,100 crore project is to be developed on design, built, finance, operate and transfer (DBFOT) under the National Highways Development Programme (NHDP) phase V. The concession period for the project is 21 years including construction period of 910 days, the statement said. “Subject to award, IRB’s construction order book will stand to increase to around Rs 10,000 crore, to be executed in the next four years. This will boost the company’s construction order book visibility for next three to four year,” IRB said. With this project, the company will have 21 build-operate-transfer (BOT) road projects, out of which 13 projects are under operation. Zack Smith Authentic Jersey
101 infra projects see Rs 1.29 lakh crore in cost overruns
As many as 101 infrastructure projects sized Rs 1,000-crore and above have reported a cost overrun of Rs 1.29 lakh crore, as per official data. The Statistics Ministry monitored 286 infrastructure projects, each worth Rs 1,000 crore or more across sectors such as power, railways and roads in April 2016. “The total original cost of the 286 projects was about Rs 9,40,160.86 crore and latest reported anticipated completion cost is Rs 10,69,547.02 crore, which reflects an overall cost overrun of Rs 1,29,386.16 crore,” according to the latest report for April. As per the report, out of the 286 projects, 2 projects are ahead of schedule, 54 are on schedule, 123 delayed and 101 projects reported cost overrun and 41 projects reported both time and cost overrun with respect to their original project implementation schedules. During the reference month, out of 286 projects, 123 projects are delayed with respect to original schedule and 31 projects have reported additional delay vis-a-vis the date of completion reported in the previous month (March, 2016). The report stated that the additional delay is in the range of 1 to 13 months in respect of projects relating to power, petroleum, urban development and road transport & highways sectors. It said the expenditure incurred on these projects till April is Rs 4,57,160.26 crore. Out of 286 projects, 101 projects have cost overruns with respect to original cost. Cost overrun of these is 101.72 per cent while during the last month, it was 103.84 per cent in 100 projects out of 278 monitored projects. In comparison with the last month, the number of projects reporting cost overruns decreases from 35.97 per cent to 35.31 per cent, it said. Out of 123 delayed projects, 22 projects have overall delay in the range of 1 to 12 months, 18 projects have delay in the range of 13 to 24 months, 59 projects have delay in the range of 25 to 60 months and 24 projects have delay of 61 months and above. During April, there are 117 projects which are showing time overruns of more than 6 months and 99 projects which are having cost overruns of more than Rs 100 crore and 40 projects are having both time overruns of more than 6 months and cost overruns of more than Rs 100 crore. Speedy implementation of projects assumes significance in view of government’s push to move towards high growth trajectory of over 8 per cent and touch double-digit mark over the next few years. Kevin King Authentic Jersey
Brookfield in driver’s seat to buy out Anil Ambani’s road assets for Rs 8000 crore
Brookfield, the world’s 2nd biggest manager of alternative assets like real estate and private equity from Canada, is closing in to make its second big buyout in the Indian toll roads and highways sector. Brookfield has emerged as the frontrunner to take over the entire portfolio of 11 road projects of Anil Ambani flagship Reliance Infrastructure for an enterprise value of Rs 8000 crore, said multiple sources aware of the ongoing negotiations. Both sides have entered into exclusive negotiations and are hoping to sign a definitive sale agreement by next month. Last August, Brookfield agreed to buy six road projects of Gammon Infrastructure for an enterprise value of Rs 2000 crore. It is today the sole foreign player to own 100 per cent of road assets portfolio in India. Reliance is among the largest NHAI concessionaire with concession periods ranging from 18-30 years. All its 11 roads – located in high traffic urban corridors including New Delhi, Bangalore, Jaipur, Agra, Gurgaon, Pune among others – currently generate revenues. In FY16, the portfolio earned toll revenues of Rs 675 crore, an increase of 10 per cent YoY but is expected to clock Rs 900 crore topline in FY17, where in the entire portfolio will complete one full year of operations. So far, it has invested Rs 7500 – Rs 8000 crore behind these build-operate-transfer (BOT) projects spanning 1,000 km across seven states. Of this, around Rs.5,000 crore is debt. Both Brookfield and Reliance declined to comment. “All the 11 projects are housed under separate SPVs. All of them will come under 1 mother SPV and Reliance plans to sell 100 per cent shareholding of that to Brookfield. There is no FDI restriction in roads and only NHAI approvals will be required,” said a source in the know, on condition of anonymity as the talks are still in private domain. “Brookfield after the Gammon buyout last year has on ground expertise to manage and run such toll roads assets in the country,” he added. Investment bank Ambit is sell side the advisor in the deal. Restructuring Reliance With an eye to turn Reliance Infrastructure debt-free on a standalone basis by 2017, the company’s management has been actively pursuing a series of asset sales. The company was founded as an electricity company when the undivided Reliance Industries acquired the state-run Mumbai electricity distribution company and then expanded into infrastructure development. But of late, the Reliance group has been in the process of restructuring – selling off capital-intensive businesses like cement and roads and looking to rope in partners for its Mumbai electricity distribution arm in an attempt to reduce debt and focus more on new, capital-light, high RoE defence business. It recently agreed to sell its cement business to Birla Corp for Rs 4800 crore and has signed a non-binding term sheet to sell 49 per cent in its Mumbai power business to the Canadian pension fund Public Sector Pension Investment Board (PSP Investments). Following the closure of both the cement and roads portfolio, Reliance Infrastructure’s debt is expected to come down by Rs 13,000 crore. The company’s standalone debt was about Rs 15,500 crore as on 31 March. Consolidated debt was Rs.25,000 crore in the same period, which the firm expects to cut by a third to Rs 8,000 crore by the end of the current fiscal itself. “The net cash flow of Rs 24 billion from stake sale will be used to reduce standalone debt. We believe the focus on defence equipment business, along with steady cash flows from the power distribution business, can create value for shareholders in the long term,” wrote IDFC Securities analysts Shirish Rane and Mohit Kumar earlier this February post the cement sale at 2.2 X equity invested. “If Reliance can recover its invested equity and debt it will be happy. It is clearly defocusing on most sectors other than defence and EPC,” said another sector analyst when asked about the likely deal valuations. Big bull on India After pumping in $2 billion in India since 2009-10 when it set up its local office, Brookfield is planning to invest $2 billion more in India over the next 2-3 years to buyout upscale offices and commercial towers, stranded roads, power and utilities infrastructure as it aims to double its existing asset base in the country. It started investing here in 2012-13, with $20 million in Kotak Mahindra Bank Ltd’s infrastructure fund and subsequently tied up with Peninsular Land for mezzanine lending to residential projects. But its first mega local deal was in 2014, when it bought out Unitech Corporate Parks Plc. (UCP), a portfolio of six assets including special economic zones and information technology (IT) parks for around Rs 4,700 crore. It was one of the largest commercial real estate transactions. Today, with 400 people in the team, Brookfield rivals some of the biggest real estate and infrastructure companies in the country in heft. Globally, the group also seeks to be countercyclical, buying during distressed periods. In India, in recent times its name as a potential suitor has repeatedly cropped up in almost all multi-billion M&A transactions – from DLF or Hiranandani’s office portfolio to Jaypee’s cement assets. With operating platforms well in place following big ticket acquisitions, Brookfield has been scouting for operationally intensive businesses and sectors or troubled assets with dislocated capital structures. “Our core areas — property, infrastructure, power and private equity, that is building materials and industrial businesses — happen to be where a lot of the stress is. But the assets themselves are not stressed, but are world class. They just happen to belong to businesses that are stressed,” Brookfield India Country Head, Anuj Ranjan had told ET recently in an interview. Intereestingly, just last week, State Bank of India (SBI) and Brookfield proposed to launch a joint venture (JV) fund to which the Canadian partner has agreed to commit Rs 7,000 crore to purchase distressed assets. SBI, the country’s largest lender, will contribute up to 5 per cent of the
403 road projects worth Rs 3.85 lakh crore initiated during UPA rule are pending: Nitin Gadkari
As many as 403 road projects totalling Rs 3.85 lakh crore initiated during the UPA rule are pending due to a variety of reasons, Lok Sabha was informed today. Responding to supplementaries, Road Transport and Highways Minister Nitin Gadkari said by the next Parliament session, finality will be achieved regarding these projects — either they will be restarted or terminated. He said work orders for the projects were issued before encroachments were removed or forest and environment clearance given. Gadkari said work has stopped in various projects and, in some cases, the companies given the contract are on the verge of being declared bankrupt. Banks were told to provide additional funds for these projects. “If we terminate the projects, you will lose and the blame will eventually come on you. This is what I told the banks,” he said, adding that his ministry walked the extra mile to ensure that the pending projects reach a logical conclusion. In his written response, he said the ministry has fixed a target for award of road projects of 25,000 km length during the current fiscal which are envisaged to have tentative completion period ranging from 24 months to 36 months. Road projects in total length of about 1,378 km have been awarded during 2016-17 till June, he added. Tarik Cohen Authentic Jersey
Govt’s plan to expand highway network could revive builders
Transport minister Nitin Gadkari’s plan to expand the highway network in the world’s fastest-growing major economy could help revive struggling construction stocks. The nation will aim to add 41 kilometers of roads daily from March next year, up from 20 kilometers a day currently, Gadkari said in an interview. A project logjam had slowed the pace to about 3 kilometers when Prime Minister Narendra Modi’s government took office just over two years ago. “The situation has changed,” Gadkari, 59, said in his office in New Delhi on 20 July. “We’re working fast and taking decisions. Now land acquisition isn’t a problem. Forest clearance isn’t a problem.” An eight-member index of builders including Ashoka Buildcon Ltd. and Sadbhav Engineering Ltd. compiled by Bloomberg News has tumbled 11% in 2016. The gauge had surged after Modi took office amid optimism about his focus on improving infrastructure. Its decline this year bucks a 7% advance in the benchmark S&P BSE Sensex. The Sensex trades at 21 times reported earnings, data compiled by Bloomberg show. The valuations for the eight-member index range from 6.3 times for MBL Infrastructures Ltd and 13 times for KNR Constructions Ltd to 80 times for Man Infraconstruction Ltd. “Cement, road construction as well as tollway companies will benefit from an acceleration in road building,” said Chinmay Madgulkar, an analyst at Taurus Asset Management Co. in Mumbai. Road construction has the potential to create millions of jobs, Gadkari said. Boosting employment is critical for the government ahead of key state polls next year and a general election that’s due by 2019. As many as 95% of stalled road projects are back on track now, the minister said. He plans to double the length of national highways to 200,000 kilometers, but didn’t give a time-frame. Gadkari added that the government plans to sign 25,000 kilometers of road deals in the year through March 2017. His ambitions contrast with India’s mixed history on executing infrastructure upgrades. About 60% of the $2 trillion economy’s roads are paved, compared with 87% in China, according to Bloomberg Intelligence. “Things are moving fast,” Gadkari said. “As a minister, it’s my duty that by hook or crook I should manage it.” Chris Kelly Womens Jersey
New regulations to change face of Indian roads
To call the current scenario regarding Indian roads and automobiles haphazard would be an understatement. In the last year or so, numerous regulations have been issued or proposed by the Ministry for Road Transport and Highways (MoRTH). Union Minister Nitin Gadkari, who helms the ministry, said, “The auto industry has one of the highest employment potentials in the country. The future is very bright and we should make the auto industry according to international standards.” In this piece we try to make sense of it all and see where the road is heading in terms of the Indian automotive landscape. Introduction of BS-VI emission norms With the new regulations, the first issue that the ministry aims to tackle is the menace of rising air pollution. Besides the recent ban of cars with 2-litre plus diesel engines in the Delhi-NCR, the government is working hard towards introducing BS-VI emission norms across the country by April 2020. The availability of BS-VI fuel across the country is critical for the feasibility of introducing BS-VI norms in the country. In this regard, former environment minister Prakash Javadekar has stated that the government will invest Rs 60,000 crore to improve fuel quality to BS-VI levels. The government is confident of providing BS-VI quality fuel by the intended deadline. However, fuel adulteration is a major concern in Tier-2 and Tier-3 cities and stringent quality control processes need to be implemented. Engine technologies will also need to be updated to comply with BS-VI norms. In case of diesel-powered cars, for instance, BS VI will necessitate the incorporation of the Diesel Particulate Filter (DPF) in the exhaust system which would increase costs. DPFs trap the harmful particulate matter as they flow out of the exhaust system. Some systems self clean by burning off the residue at high temperature while others need periodic cleaning. Without DPFs, BS-VI fuels would be rendered redundant. Stable regulations Another big issue that the government needs to tackle is the uncertainty when it comes to emission norms and other regulations in the country. The knee-jerk diesel ban, for instance, has many manufacturers up in arms against the ruling. The sheer arbitrariness of the ruling is also a matter of concern since there was no empirical evidence to justify the ban. Maruti Suzuki’s CEO and Chairman, RC Bhargava, stated that it’s nitrous oxide (N2O) that’s to be blamed and not Particulate Matter 2.0/ 2.5 (PM2/ PM25) for the alarming levels of air pollution in Delhi-NCR. He further stated that adopting western practices completely, to counter pollution, does not help in the Indian context. Detailed studies are the need of the hour to come up with specific solutions for India. Just before going to press, the National Green Tribunal (NGT) issued an immediate ban on all 10-year-old diesel cars in New Delhi. Pawan Goenka, executive director, Mahindra and Mahindra, says that vehicle regulations in India are unstable and every new budget levies changes to vehicles which does not bode well for the automobile sector. Another new programme is the Voluntary Vehicle Fleet Modernisation Programme, wherein vehicles bought on or before March 31, 2005 can be exchanged for a new BS-IV compliant vehicle. Owners, in exchange for their old car, get financial aid to buy a new car. They get a scrap value of the car, partial excise duty exemption and manufacturer’s special discount. The aim is to scrap old vehicles which contribute to air pollution at a greater level than modern day cars. The fuel efficiency of such cars is below that of modern cars, which translates to higher fuel imports and considerable losses to the exchequer. The programme estimates that 28 million pre-2005 vehicles will be scrapped. The savings for oil imports itself is estimated at Rs 7,000 crore. However, the finance ministry has, so far, refused to offer partial excise duty exemption for the vehicles as buyers of expensive vehicles stand to gain more. Instead, it intends to offer cash incentives. For now, the policy is stuck in limbo. Manufacturing hybrid/electric vehicles in India The government is also urging automobile and auto component manufacturers in India to get involved in manufacturing pure electric/hybrid vehicles and their components in India. The government believes that the manufacturing in India will significantly reduce the cost of electric vehicles. The high purchase cost and lack of charging infrastructure is one of the primary reasons why electric cars haven’t received the desired response. Pawan Goenka also stated that an electric car in the Rs 6-8 lakh bracket makes more sense in our country. Nitin Gadkari recently visited premium electric carmaker Tesla Motor’s headquarters in the US to discuss possibilities of tying up with Indian manufacturers to manufacture electric vehicles. He also promised land to set up a factory at a major port in India, which in turn would serve as the Asia manufacturing and distribution hub for Tesla Motors. The company says that it would consider the proposal if plans to expand manufacturing out of the US materialise. This could be hugely beneficial for India as Tesla’s prowess in manufacturing electric cars and setting up charging infrastructure is regarded as one of the best. Also, collaborating with Indian manufacturers would benefit both. For Tesla, India will offer cheap and cost-effective manufacturing while the Indian manufacturer gains access to proven technology. Recently, the government has approved retrofitment of electric/hybrid kits on cars that have been made on or after January 1990. The cost of the retrofitment is estimated to be under a lakh but we have our doubts. Primarily as such kits are a very new and rare concept and will be quite expensive. Further, fitting them will require extensive modifications and may affect the dynamics of the car, putting a big question mark on safety. Making safety systems mandatory in vehicles India is known to record one of the highest number of road accident-related fatalities in the world. A major contributing factor is the lack of safety systems like airbags and ABS in vehicles. While it may be
IRF expresses concern over Gurgaon traffic nightmare
With the Millennium City coming to a standstill following heavy rains leading to massive traffic jams, the International Road Federation (IRF) today expressed deep concern and called for concerted efforts, both long-term and short-term, to address the problem. A spell of monsoon showers, which is welcomed otherwise, has brought the Millennium City to its knees due to severe water-logging resulting in long traffic jams, leaving millions of commuters, including office-goers, stranded. “Due to almost non-functioning of storm water drains and inadequate sewage system, GURGAON roads get water-logged each Monsoon resulting in potholes, sometimes moon craters. Water accumulates at unexpected places spelling danger for both motorists and pedestrians,” IRF Chairman K K Kapila said. Road network in Gurgaon encompasses different zones of authority like Municipal Corporation of Gurgaon, Public Works Department, Haryana Urban Development Authority, private builders and the Delhi-Jaipur Expressway under the National Highways Authority of India. “Each year after the monsoon, these agencies tend to pass the buck and thereby virtually disowning their own responsibility, as a result there is acute water-logging, deep potholes, portions of the roads getting sub-merged and side-walks becoming unusable, causing immense hardship to the general public,” he said. Kapila said apart from creating a unified body comprising all these authorities to tackle the drainage and water-logging problems of Gurgaon with representatives from each of the agencies initiating appropriate long-term as well as short-term measures, there is an urgent need to find immediate solution to contain the damage due to flooding of roads. “With continued urbanisation, the drains are either choked or ineffective to carry the surface water to the deep storm water drains, which also lack adequate capacity. For this, a long-term solution with proper network of drainage lines with adequate capacity for storm water and sewage drains is an immediate necessity,” he said. Immediate short-term measures must also be undertaken at locations where roads have been flooded, the global road safety organisation said. Dallas Cowboys Jersey
India more than capable of achieving 100 Smart City goal: Hany Fam
India is more than capable of achieving its 100 Smart City goal but needs a “collaborative” and focussed approach to complete the ambitious plan, a top executive of a leading global Financial services company has said. “With its ambitious plan, it is more crucial than ever for India to stay realistic and focused. (For) Smart city planning and development, India needs a collaborative approach of shared technology, expertise, learning and governance. That is what India needs to keep focused on to meet their 100 Smart City goal,” said Hany Fam, executive vice president, Enterprise Partnerships, Mastercard. He noted that India was working towards leveraging the smart city experience and technology available across the globe to drive the transformation it needs. Fam, however, cautioned that it was also important not to overlook the current problems plaguing society while they ambitiously work on developing India’s future. “In order to unlock cities’ full potential, they (India) need to remain focused on simultaneously developing basic services and infrastructure,” Fam said. India needs to keep its smart city vision in mind while it addresses issues such as sanitation and transport, in order to achieve its 100 Smart City goal. “It needs time, patience and work, but with a solid plan, governance and focus, India is more than capable of achieving it,” he stressed. The major concern for India is tackling the implications of urbanisation, with people moving from countryside to cities in unprecedented numbers, Fam said. “This is a trend that has global impact and is not specific to developing economies. So now, more than ever, there is a need to come up with technology that can be applied to the challenges cities face in order to make cities smarter, enabling business growth and quality of life,” he advised. A collaborative approach is needed with regards to shared technology, expertise and learning in order to recognise the potential in future cities and deliver truly impactful transformation, Fam said. “The Indian government has ambitious plans and recently announced 20 priority cities that will be the focus for the first phase of its smart city investment,” he said. “By taking into account the experiences citizens have with the city they live in, and applying technology to transform these interactions, we (Mastercard) can help to develop cities that are dynamic, liveable and sustainable,” he said. Mastercard is already working with 50 cities from all over the globe. In September last year, the company launched the Urbanomics Mobility Project, a new data analysis platform to fuel smarter, more inclusive cities. Jonathan Jones Jersey