Metro rider for NHAI Dwarka Expressway takeover
Haryana chief minister Manohar Lal Khattar has directed Huda to hand over a 75-metre-wide corridor to the Union ministry of road transport and highways, for the latter to develop an elevated Metro on the corridor. This is against the ministry’s demand for a 90-metre-wide corridor, for two contiguous projects – increase the width of the Northern Peripheral Road (NPR) also known as Dwarka Expressway, and develop a proposed metro route over it. During the Happening Haryana summit in Gurgaon in March, Union roadways minister Nitin Gadkari had announced granting of National Highway status to the NPR, after a request by the chief minister. With that, it became imperative that National Highways Authority of India (NHAI) will take over the project from Huda. In a recent meeting with state government to discuss the handover of NPR to NHAI, the ministry had made the demand for the 90-metre-wide corridor, to increase the width of the road and add a few extra lanes. At present, the 8-lane NPR is 75m wide in Gurgaon. “Beyond the 75 metres already used up by the NPR, are lines for essential services like sewerage, drainage and water. Shifting all these services would be very difficult and cost intensive, so we can’t give any more land,” said Huda administrator Yashpal Yadav. The ministry had expressed its reservation about developing the metro corridor above the NPR, as proposed in the master plan. An NHAI official said that after taking over from Huda, they will first develop NPR, and if possible, also increase its width.
7 BOT road projects reach financial closure over last 2 years
As many as seven build-operate-transfer (BOT) road projects reached financial closure over the last two years, parliament was told on Monday. “Seven BOT projects have reached financial closure in the last 2 years. Some of the challenges faced by BOT projects are lack of equity with developers, over leveraged balance sheet of the developers, equity funded through borrowing by parent lender, stress on the existing road infrastructure loan portfolios of Financial Institutions (FIs), corporate debt restructuring effected in many special purpose vehicle (SPV) debt and sectoral exposure norms of FIs getting exhausted,” inister of State for Road Transport and Highways Pon Radhakrishnan told the Rajya Sabha in a written reply. He said that modes of delivery for implementing National Highway (NH) projects are BOT-Toll, BOT-Annuity, Hybrid Annuity and Engineering Procurement and Construction (EPC), but BOT-Toll remains the default mode of delivery subject to project viability on case to case basis. Major steps undertaken include emphasis on better project preparation including land acquisition, undertaking major policy initiatives and simplification of procedure for project appraisal, exit policy for concessionaires, amicable settlement of disputes, addressing issues for languishing projects, extensive coordination with line ministries and departments and promoting innovative project implementation through hybrid annuity model, he said. Jamie Langenbrunner Authentic Jersey
Government to spend Rs 7 lakh crore in developing highways
With the government constructing roads at a record 20 kilometers per day, Nitin Gadkari, Roads, Transport and Highway Minister on Monday said that about Rs 7 lakh crore would be spent to develop around 50,000 kilometres of national highways over the next five years. Replying to a query at the Rajya Sabha, Gadkari further added that the government has allocated a total gross budgetary support of Rs 46,834 crore including cess and toll remittance for 2016-17 for the ministry. In addition, internal and extra budgetary resources of Rs 59,279 crore have also been allowed to be raised for the highways department in 2016-17. For the Ministry of Shipping, the government has allocated a total gross budgetary suport of Rs 1,531 crore. In addition, internal and extra budgetary resources of Rs 3,183 crore has also been allowed. “There is a proposal to spend around Rs 7 lakh crores to develop National Highways of around 50,000 kilometres in the next five years. “For Sagarmala port development, the project cost is Rs 73,375 crore and in respect to port modernisation it is Rs 9,891 crore,” he added. The current pace is a third more than the previous best of 15 km per day achieved in 2012. “We’ll touch our target of 30 kilometres per day in another five-six months,” Gadkari had said earlier. According to him, the United States has promised technical help for the construction of roads, bridges and flyovers. The US will also share expertise in road safety and traffic management. Acknowledging that road safety is a big problem in India, Gadkari had earlier said that safe roads are of the highest priority for the government and that the US had assured full co-operation in meeting the challenge. During the current financial year, the government has set a target of constructing 10,000 kilometres of greenfield highways, for which a budgetary allocation of Rs 57,000 crore has been made. Eddie Goldman Jersey
Infrastructure projects may be insured to reduce risks over delays
Promoters of infrastructure projects may soon get to buy an insurance to cover interest payments should the project run into delays due to extraneous reasons, a measure government thinks will reduce risks, lower interest rates and step up lending to the sector. The government is working with state-run financial institutions to launch a product on these lines by the end of this year, said a government official aware of the deliberations. According to the latest data from the Reserve Bank of India credit to infrastructure sector contracted to 3.9% during March-May 2016 compared to the 0.3% increase a year ago. “The idea is to set up a fund which will provide protection to promoters at a reasonable fee. The insurance part will kick in if the project gets stuck for extraneous reason, and which are beyond the control of the promoter,” the official said, requesting not to be identified. Asian Development Bank has evinced interest in setting up such a mechanism, he said. The fund will bear the cost of interest payment during such period, thereby ensuring that the account remains standard in the books of lenders. The latest finance ministry data shows that public sector banks had gross non-performing assets amounting to Rs 4.76 lakh crore in 2015-16, mostly in the infrastructure segment. “Various mechanisms are being deliberated, which include lead bank to participate in the project specific fund. The idea is to tackle the issue before it becomes a nonperforming asset,” the official said. He said the newly formed National Investment and Infrastructure Fund (NIIF) can also play a major role in the initiative. The government has set up NIIF with an initial corpus of Rs 20,000 crore with the aim of attracting investment from both domestic and international sources for in frastructure development in commercially viable projects. According to experts, this insurance fund can help promoters especially in cases where there is a delay in execution and it can work like a revolving fund which may eventually become self-sustainable. “In most cases it so happens that the bank asks the promoter to bring in more equity, which is a huge challenge,” said Jaijit Bhattacharya, partner, infrastructure at KPMG India. “The insurance fund can step in during such eventuality and provide relief. A portion of the revenue, once the project takes off, can be used to service the interest component of such cover provided,” he said. Another official, associated with a state-run financial institution, said that the product will be on the lines of a mortgage guarantee, which protects lenders in case a home owner defaults on a mortgage loan. “Already, we have similar nature of products in the country and they are doing well,” he said. India Mortgage Guarantee Corporation offers a product on these lines to both borrowers and lenders in retail housing sector wherein the firm covers a portion of both interest and principal amount if the borrower defaults. Bankers are of view that given the uncertainty in infrastructure lending, a product on these lines will give comfort to the lenders. “There is a need to push investment in infrastructure sector. Any financial product that helps to assuage the concerns of both borrowers and lenders is a good move,” said RK Gupta, general manager at Bank of Baroda. Bennie Logan Authentic Jersey
States have to use 10% of central fund to repair National Highways’ black spots
Now 10% of the Central Road Fund (CRF) allocated to each state will be utilised for works relating to road safety. The Centre has modified the CRF rules to include this provision, particularly for repair of black spots based on road crashes and fatality data or works CRF is formed by collection of cess levied on petrol and diesel every year. The Central government allocates the share to the states based on a formula that gives 30% weightage for fuel consumption and 70% for its geographical area. According to the modified guidelines, “road safety works” will get priority in road-building projects or any scheme that state governments will undertake using CRF. The other major focus area will be using this fund for building over bridges or underpasses. Sources said the changes were made considering the increasing number of crashes on both state and national highways. The fund will be primarily used for the network comprising selected state highways and major district roads in states, which have the potential to be upgraded as National Highways. According to government’s latest road accident data, nearly 97,000 of the 1.46 lakh deaths on roads took place on state highways and other roads. Rural areas were more prone to road crashes, accounting for 53.8% of total road accidents during 2015. The percentage of road fatalities was higher at 61% (89,155) in rural areas in comparison to nearly 57,000 in urban areas. T. J. Logan Authentic Jersey
Govt mulls tolls on public-funded national highways
“A proposal for monetisation of completed public funded national highway projects through Toll-Operate Transfer mode based on the expected collection of user fee receivables, through private sector efficiency and expertise is under active consideration,” Minister of State for Road Transport and Highways Pon Radhakrishnan told Lok Sabha in a written reply. Proceeds from such monetisation of completed national highway projects shall be utilised for construction, operation and maintenance of national highways, he said. Besides, he said as per budgetary approval for the current year, Internal Extra Budgetary Resources (IEBR) amounting to Rs 59,279 crore has been allotted to NHAI. The National Highways Authority of India (NHAI) has been already authorised to raise Rs 25,000 crore (taxable) and Rs 5,000 crore (54EC) for construction and maintenance of National Highways. Steve Yzerman Authentic Jersey
CII demands panel to revive private sector investment in infra
Pegging the stuck liquidity with government bodies at Rs 1.25 lakh crore, industry body CII has sought setting up a ‘Renegotiation Commission’ to revive private sector investment in infrastructure. It has also pressed for introduction of Public Utilities Dispute Resolution Bill in Parliament besides implementation of Kelkar Committee report. “Right now there is a downplay of sentiment on PPP and public expenditure on infra … There is huge stuck liquidity with government… Good guesstimate today is it ranges from a figure of Rs 75,000 crore to Rs 1.25 lakh crore,” Chairman, CII National Committee on Infrastructure & PPP, Vinayak Chatterjee said. He was briefing media after the first meeting of the committee. “The key issue that we discussed was how to take private sector sentiment up again for enthusiasm-led investment in the infrastructure sector,” he added. Seeking urgent intervention from the government, Chatterjee said most of the liquidity was stuck in roads and power sector with the government, and include disputed amounts as well as the bills not paid by the government. The key expectation of the private sector is implementation of key recommendations of Kelkar Committee report that has provided solutions for a large number of problems including need for dispute mechanism resolution. “All that needs to be set right away because you cannot wish away private sector. The first budget of the current Finance Minister on July 14, 2014 saw that Rs 500 crore was allocated for 3P India. “It was a clear indication by the NDA government as soon as it came to power but government is midway in its tenure and urgent steps are needed now,” he said. Dispute resolution mechanism can solve many of the problems that the private sector is battling with, he said. Chatterjee said stuck liquidity is astronomically large and when cleared, will pump in a huge quantum of money. He said ‘Renegotiation Commission’ should have a quasi judicial structure with representation from stakeholders as well as civil society besides retired judges that will look into the “existing basket of stressed projects and give dispensation”. This will be a massive signal to domestic and foreign investors for reviving investment. With inadequate infrastructure choking economic growth, the Kelkar Committee has suggested easier funding of projects and a dispute resolution tribunal in its report. The eight-member Vijay Kelkar Committee has also suggested setting up of an Infrastructure PPP Project Review Committee (IPRC) to deal with the problems being faced by such projects. Felix Potvin Authentic Jersey
MPs need to be consulted on PM’s rural roads scheme: Minister
There is a mandatory provision in the rule book that elected lawmakers in the Lok Sabha ought to be consulted for taking up projects under Prime Minister Gramin Sadak Yojana (PMGSY), Union Rural Development Minister Narendra Singh Tomar said here on Thursday. “I am also an elected member. So I understand the grievances and pain of the elected members. If there are states where the elected MPs are not being consulted, the central government will ensure that such consultation does take place,” Tomar told the Lok Sabha during question hour. Answering supplementary questions from members, he said under the rules framed for PMGSY, the superintendent engineer of the concerned projects should contact MPs and ensure that there is a joint inspection of the spot. The issue was flagged during question hour by Congress MP Badaruddoza Khan from Murshidabad who complained that while a sum of Rs 2,623 crore was allotted to West Bengal under the project, “it is a matter of great regret that not a single rupee was allotted” to his constituency for the implementation of the PMGSY and nobody consulted him in this regard. Khan said he has already written two letters to the Union minister. “I have requested the district magistrate. I have raised this question in the general meeting of the Zila Parishad also, but nothing has been done for the last two years,” he said. The MP was supported by party colleague and West Bengal Pradesh Congress chief Adhir Ranjan Choudhury. As several members wanted to raise this issue, Lok Sabha Speaker Sumitra Mahajan said if members want, the house can take up a 30-minute discussion on the subject. Minister Tomar said: “We came to power just some months back, you (Congress) were in power.” Heena Gavit, BJP member from Maharashtra, complained that during spot inspection it was often found that “roads were not only of poor quality but also the length of the road constructed was way less than what was sanctioned”. She demanded the minister should also initiate actions on such complaints. Minister of State for Roads Ram Kripal Yadav asserted that the government will never make any compromise on the standards of the roads. Speaker Mahajan also told the minister that members want that they are taken into confidence when road construction works in their respective constituencies are taken up. Terry Sawchuk Jersey
India aggressive on roads to China
China’s easy road access up to the Line of Actual Control (LAC) has India worried. The government has now decided to put the pace of construction of certain strategic roads along the international border between the two countries on a war-footing. On Tuesday, defence minister Manohar Parrikar said in Parliament that the deadlines of 39 strategic Indo-China border roads have been revised and will be completed in the next three years. Of these 39, five roads will be completed in 2016 itself, eight roads in 2017, 12 roads in 2018, eight roads in 2019 and six in 2020. The LAC is the effective border between India and China. Altogether 73 roads are identified as “strategic” as far as the Indo-China border is concerned. Out of this, 61 roads with a length of 3,417 km entrusted to the Border Roads Organisation (BRO) were planned to be completed by 2012, but out of which only 22 roads of length 708 km have been completed. Lack of road connectivity towards the LAC has been part of a conscious government policy of not developing the borders with China so as to create a buffer area, but it proved to be a handicap as in the case of the 6.9-magnitude Sikkim earthquake of September 2011, when it took days before relief could reach the quake-affected regions in northern Sikkim. To override legal roadblocks like land acquisition, forest and wildlife clearance and so on, the Indian states bordering China — Jammu and Kashmir, Himachal Pradesh, Sikkim, and Arunachal Pradesh — have constituted the empowered committees to resolve issues related to land acquisition, forest and wildlife clearance, etc. The environment minister has also okayed the diversion of forest land required for construction and widening of roads entrusted to BRO in areas falling within 100 km aerial distance from the LAC. Two years back, the then Arunachal Pradesh governor, Lt Gen (Rtd) Nirbhay Sharma had, in a report to the PMO, said that for most of the rugged and difficult terrain along the Indo-China border in Arunachal, China has built roads that almost touch the LAC, while most of the Indian road-heads peter off at least about 50-70 km from the LAC. He had even submitted photographs comparing both sides of the LAC. Mr Sharma had also sought PMO’s direct involvement in road construction. “There is perhaps a case for an integrated road development agency for the state to ensure better coordination and efficiency. The agency may be monitored by PMO directly.” In May, China vastly reorganised its military by raising the level of the Tibet Military Command bringing it directly under the command of the People’s Liberation Army ground forces. This move is looked upon by experts as a measure to buttress its borders with India and to keep troops skilled in high-altitude warfare in the state ready for quick deployment and combat. Before this, China’s western border with India was under Xinjiang’s command while the eastern stretch was under the military region responsible for the eastern sector of the border. A recent Pentagon report had said: “India’s nuclear force is an additional driver behind China’s nuclear force modernisation”. Deadrin Senat Jersey
Even as road building pace quickens, NHAI strands Rs 45,000 cr of projects
Even as the pace of execution and awards in the roads sector picks up pace, a host of half-finished projects entailing investments of close to Rs 45,000 crore are languishing. While National Highways Authority of India (NHAI) has agreed to fund these stalled projects, builders are reluctant to use the money since it would mean giving the authority the first right to cash flows, NHAI has told developers it would be willing to fund half-done build, operate and transfer (BOT) projects provided it accesses the toll receivables first. The additional funding — at 2% over the bank rate — would have benefited some 50 projects across developers. However, bankers are unwilling to give up their rights to the cash flows. A senior executive with a public sector bank said lenders had conveyed their reservations on the proposal to NHAI. “If NHAI debt is given preference we might not be able to recover our dues from the project,” he said. A senior executive at an infrastructure firm told FE that while NHAI’s intentions may have been sincere, the condition had not been prudent.“Instead of asking for a senior debt status, NHAI should have treated the bridge loan on a pari-passu basis,” the executive observed. However, some lenders are attempting to find a solution to the problem. Kamlesh Chechani, vice-president (finance), Supreme Infrastructure, told FE that although it was not directly involved in the negotiations, it was aware State Bank of India had agreed to a priority fee being paid to NHAI in lieu of extra funding by the authority. This development is related to the firm’s Panvel-Indapur project. “We have not received anything in writing as yet but an in-principle agreement has been reached between SBI and NHAI,” Chechani said. The Rs 940-crore road project has been stuck due to delay in land acquisition. Among the road projects that remain incomplete include those of Madhucon Projects, Era Infrastructure, Abhijit Group, Ramky Infrastructure and Supreme Infrastructure. India Ratings estimates 30% of these projects have been constructed in the BOT mode and are annuity-based projects while the majority are toll projects. Meanwhile, roads continue to be built at a good pace with the completion run rate in May at 22 km per day, according to analysts at Jefferies. If the target of 15,000 km in FY17 — as put out by the roads ministry — is to be achieved, it would call for funding of close to Rs 1,50,000 crore. Of this a provision for Rs 55,000 crore has been made in the Budget for FY17, with another Rs 15,000 crore to be mopped up via bonds. The ministry is planning to raise some amount from Life Insurance Corporation of India and the Employees’ Provident Fund Organisation. There is also a proposal to monetise assets. Kansas City Chiefs Authentic Jersey