Infra companies keen on investment trusts, but want more clarity
Infrastructures developers such as IRB, GMR and IL&FS are keen to launch their infrastructure investment trusts after Sebi announced guidelines last week, but may hold their plans for more clarity on disclosure and accounting norms. An infrastructure investment trust (InvITs) offers an opportunity to promoters of projects to sell their stake in completed projects to the trust, which in turn can raise longterm and tax-free funds from unit holders. Markets regulator Securities & Exchange Board of India (Sebi) issued the norms for public issue of units of these InvITs which are likely to pump in liquidity into an otherwise cash-strapped infrastructure sector. “We are keen to tap this route for fundraising but until we have more clarity on accounting standards, disclosure and prospectus norms, we cannot go ahead with it. We expect Sebi to come out with guidelines on that soon so that this fund raising option can be exercised,” said IRB InfrastructureBSE 2.08 % Developers’ promoter and Chairman Virendra Mhaiskar. IRB and GMR InfrastructureBSE 1.07 % have already received the regulator’s approval for the trust while others such as Infrastructure Leasing & Financial Services have sought the regulators nod. L&T is also considering this route for fundraising. “We will look at it if we have the comfort that it will get long term investors since it is a product modelled for institutional and long term investors. Investors looking for short term gain may get frustrated if they invest in it,” L&T Chief Financial Officer R Shankar Raman said. The guidelines announced by Sebi last week give these developers more flexibility by allowing sponsors to reduce their holding in the trust to 10% from 25% mandated earlier. It also allows them to invest in two-level special purpose vehicle structure and increase the number of sponsors to 5 from 3. But companies may have to tweak their plans and may be able to raise less than what they had planned initially after Sebi detailed the eligibility criteria for projects that can be included. “We were earlier hoping to put all 12-15 of our projects into a trust, which would have had an enterprise value of Rs 15,000 crore. But according to the guidelines, only 6 of our projects are eligible which have a total enterprise value of Rs 7,000-8,000 crore,” said Mhaiskar. Most infrastructure developers are struggling with low cash flows and have heavily leveraged balance sheets, which constraints their ability to bid for new projects. Several projects, and even holding companies, are on the block but there have been far too few deals. “Very few deals are going through in the secondary Market even though a lot of projects are looking for equity investments as there’s a valuation mismatch. We will have to see what kind of valuation these trusts can fetch as it is a new route and there could be some teething issues,” said Shubham Jain, vice president at the rating agency ICRA. Infrastructure developers are refraining from bidding for new projects given their financial constraints with a number of bids for Build-Operate-Transfer (BOT) road project falling to 3-5 from about 20 during 2011-12. Timo Meier Womens Jersey
Economy on fast-track; need to boost infra, cut logistic costs: Gadkari
In an interview to Bloomberg TV India, Union Road Transport, Highways and Shipping Minister Nitin Gadkari crystal gazes at what was missing in the earlier regimes and what has been achieved by the Modi government in the last two years He also outlines the challenges and the road ahead for the fastest-growing major emerging economy. Starting with a stark slowdown, the NDA government has been able to pull up GDP growth to 7.5 per cent even as the global economy remains feeble and the neighbouring China is in a crisis. The Modi government is decisive, it has a vision and has fast-tracked decision making process, and this has changed the scenario, he says. Excerpts: Two years have passed. . Before we get into some specific things, I want your big picture assessment. Two years down the line, are you satisfied with the overall performance of the government as well as your Ministry? I feel that this is the first time a government is with a vision and a government has a commitment for gaon, gareeb mazdoor and kisaan (village, poor, worker and farmer). And that reflects in the policies. This is a decisive government. Prime Minister Narendra Modi has a vision. The government has a fast-track decision-making process and definitely the scenario has changed. You talk about the coal sector, now we have a surplus there. You talk about the power sector, now we have a surplus. Now you talk about road sector. At a time when the government took charge, road construction was only 2 km per day. Today, it has reached 25 km per day. In the port sector and in inland water sector, things are progressing. In case of agriculture sector, there is no black marketing of urea. There is no lathi charge on farmers because of urea. From last year, urea production is in surplus. So a lot of things are changing. You have given a time period of 60 years to Congress and we are just completing two years. It will not be appropriate to compare our two years with the 60 years of the Congress. I am confident that we have basically changed the track of the economy. Our economy is now on a fast track. We are going to increase employment potential. These will result in increase in GDP. When Manmohan Singh was Prime Minister, the GDP growth rate was 4.5 per cent in FY13 and 4.7 per cent in FY14. Today, the GDP growth is over 7.5 per cent. Agriculture growth has also increased. Still, we are facing a lot of problems. In the last two years, there were a lot of problems, challenges, and some negative things were there. But still our government has succeeded in giving a good vision to the country and we are moving fast. Infrastructure building in different fields, Digital India, Make in India, Start-up India — these are the new visions. Innovation, entrepreneurship, technology and research — these are the things we are focusing on. The way in which the Prime Minister visited different parts of the world, he is recognised as a world leader. There is a lot of respect for the country and for the Prime Minister in the whole world. There are great achievements. We have improved the relations with our neighbouring countries — Nepal, Bhutan and Bangladesh. We have solved the land dispute issue with Bangladesh. But still there are many challenges. You are not only a Union Minister, but also have been the BJP president. And now that the Congress seems to have been restricted to just a few states, what changes, as far as the political discourse in the Parliament, do you perceive? Although the Bankruptcy Bill has been passed, what about some of the pending reforms? Is the climate likely to change Do you feel the Congress will continue to remain the way it was? Do you expect an improvement in relation with the Congress and other parties on the floor of the Parliament? Poverty and unemployment are two very important issues for the country. I sincerely feel that these are still the issues only because of the wrong economic policies, bad and corrupt governance and the visionless leadership of the Congress party. I have serious reservation about the economic policies created during the Congress rule. Now we are facing drought. No drinking water is available in villages. There is no water available for farmers. But the Congress government purchased aircrafts worth ?70, 000 crore. I never understood what the priority was. When there were a lot of private players who were ready to invest in the aviation industry, what was the need for the government to invest ?70,000 crore in purchasing aircraft? This is a wrong economic policy. The country needed a development-oriented government, a transparent government, a corruption-free government and a government with a vision for development. Our government has these qualities. There is no charge of corruption against our government. That’s why the economy is changing. But still there are challenges. World economy is under recession now. China is facing economic crisis. In such a scenario, it is difficult for us to work in our country also. We have to increase our exports, we have to increase investments and foreign investments across sectors. These are the challenges before us. But I always have faith. There are some who convert problems into opportunities and there are some people who convert opportunities into problems. But our government under the leadership of Prime Minister Narendra Modi is confident that we can convert problems into opportunities and we can make India socially and economically strong. I want to request you to tell us about water-bone transport. Since India is a mainland country we continue to get stuck at red lights and we forget that there is no red light in rivers or seas. In the future what is the plan? You are absolutely correct. This sector was totally neglected by the previous government. In China, 47 per cent of
List of smart cities could cross 100, hints Venkaiah Naidu
The number of Smart Cities may end up at more than 100, the government indicated on Tuesday as it announced allowing seven state capitals -Bengaluru, Patna, Shimla, Amaravati (Andhra Pradesh), Thiruvananthapuram, Naya Raipur and Itanagar- to participate in the competition. These capital cities were left out of the mission. Moreover, Meerut and Rae Bareli from UP, both of which had scored similar marks resulting in a tie for the 13th nomination from Uttar Pradesh will also be allowed to submit their plans. Even Jammu and Srinagar from J&K will be allowed to compete. “One city from each of these states will be selected based on the quality of Smart City plans,” urban development minister M Venkaiah Naidu said. Neither Centre nor the UP government was ready to take a decision between Rae Bareli and Meerut considering the political implications. While Rae Bareli is Sonia Gandhi’s constituency, BJP won Meerut Lok Sabha seat in 2014. Responding to what the logic is behind bringing more cities into this competition when the total number of cities and for each state have been capped, Naidu said, “It’s not necessary that all the nominees from states can qualify. So, there will be room for new cities. If we get more budget once the GST is passed, we may go for more cities under this scheme. The list of 100 cities will act as light houses,” he said. Stephen Curry Jersey
‘Expansion of smart cities list to evenly distribute benefits’
Real estate industry experts today welcomed the addition of 13 cities to the list of smart cities, saying it will distribute the benefits of urban development more evenly across the country and drive growth. The Union Government today announced the names of 13 new cities which will be developed under the Smart City Mission. It includes Lucknow in poll-bound Uttar Pradesh, Warangal in Telangana and Dharamsala in Himachal Pradesh. “This is a welcome development as the government has allowed more states and cities to participate in the Smart Cities initiative. It is encouraging to note the participation of more tier-II and III cities, which means that the benefits of urban development and infrastructure creation will be evenly spread across the country,” CBRE South Asia Chairman and Managing Director Anshuman Magazine said. “The release of the list of the next 13 smart cities today brings up the credibility of the government in pushing forth with the smart cities program in a time-bound manner. “The initiative will significantly benefit the economy and the people and help build demand for the industry,” KPMG (India) Partner-Infrastructure and Government Services Jaijit Bhattacharya said. Deloitte India Senior Director Arindam Guha also said the additions are expected to make distribution of smart cities across the states more balanced. “What is more important is what kind of models individual cities will adopt for procurement and implementation,” he said. Dwayne Allen Jersey
Nitin Gadkari’s home state Maharashtra to get most road projects
Maharashtra , the home state of Union highways minister Nitin Gadkari , will get the lion’s share of road projects this year, which will be executed by the road transport and highways ministry . According to an official order issued by the ministry on Friday, officials have been allowed to sanction projects with expenses up to Rs 20,000 crore for Maharashtra during this year. The total approved sanction ceiling for building highways for 2016-17 for all states is pegged at Rs 42,208 crore. These works don’t include projects that are undertaken by National Highways Authority of India. “The projects sanctioned this year will be executed in the next 2-3 years, and hence, the entire allocation will be released in installments. Maharashtra has got a good share since many stretches in the state have been declared as new national highways in the past two years,” said a ministry official. He added that the original demand from the state was Rs 40,000 crore investment, but it was reduced to half. Cole Cassels Womens Jersey
NHAI to repay loan to banks even in stuck projects
Bringing some relief to lenders that have financed ‘languishing’ projects, NHAI has decided to pay back major share of the loan to banks after carrying out independent assessment of the work done. Such projects will then be, under public-privatepartnership (PPP), taken over by the authority for their completion. Sources said NHAI Board, the apex body with representatives from different ministries, has approved the proposal and it will soon be sent to the cabinet secretariat for its assent to carry out necessary changes in the model concession agreement ( MCA). Such a mechanism is likely to bring relief for bankers in at least 7-8 languishing projects. In the existing MCA, lenders get no compensation in case a project is terminated during construction period. They are entitled to get 90 per cent of the remaining debt only in case a contract is terminated after completion of the project. “We have prepared a policy proposal on this to take forward the works and also to reduce chances of huge number of litigations. Some portion of the amount lent by banks will be recovered,” NHAI chairman Raghav Chandra told. He said the payment released by NHAI, based on independent evaluation, will be transferred to the escrow account of each project and the lender will be free to decide about usage of the funds.
Infrastructure projects to increase use of geosynthetics: NHIDCL
Given the life-extension benefits and durability that geosynthetics provide, they are increasingly being deployed for road projects in regions with high soil erosion, an NHIDCL official said on Thursday. “For accelerating usage of Geosynthetics in road construction, the Ministry of Textiles is incentivising their usage by providing a subsidy,” Anand Kumar, Managing Director, National Highways and Infrastructure Development Corporation, said at a global summit on Geosynthetics here. Highlighting the manifold applications of Geosynthetics, he said there is a need to sensitise on the advantages of its adoption and their positive impact from a lifecycle cost-benefit perspective. Other advantages, according to him, include enhanced efficiencies, quality and a reduced carbon footprint. He emphasised on indigenous development, constant research and continuous propagation of the material for its increased usage. Arvind Ltd, Executive Director, Punit Lalbhai said Geosynthetics has played a key role in infrastructure development in countries. Brian Schou Nielsen, Director, Fibertex Private said its global market was growing at 4-5 per cent per annum with India and China growing at 10 per cent. Nick Kwiatkoski Jersey
13 new smart cities announced; Lucknow, Chandigarh make it to the list
Lucknow, Faridabad, Dharmashala, Chandigarh, Raipur, New Town Kolkata, Panaji, Ranchi, Bhagalpur (in Bihar), and Warangal (in Telangana) are among the 13 new cities that have been selected under the Smart City scheme. The other cities in the list which were finalised through a “fast track competition” are Port Blair, Imphal, and Agartala. However, Uttarakhand capital Dehradun could not make it to the group. Earlier, the names of 20 cities were announced and government had started the “fast track competition” for 23 cities from an equal number of states since none of the cities nominated by them figured in the first list of top 10 smart cities. While announcing the new names on Tuesday, Union Urban Development minister, M Venkaiah Naidu, stated that these cities have proposed investments of Rs 30,299 crore. The earlier 20 cities had proposed an investment of Rs 50,560 crore. Naidu said the cities selected in this round have improved their earlier plans in areas including better profiling of respective cities, ensuring consistency between citizens’ aspirations and action plans, more feasible resource mobilization plans and presenting a more coordinated and integrated picture of how individual projects will contribute to the area level changes. The 10 cities that could not make the grade in this fast track competition will get another opportunity to revise their plans and submit them for evaluation in the second round of regular competition to be held by the end of June. TJ Brodie Authentic Jersey
Construction work in 20 smart cities to start on June 25: Naidu
Construction activity in first 20 smart cities will commence on June 25, urban development minister Venkaiah Naidu said in an interview to Bloomberg TV. “Detailed project report for the first 20 smart cities have been approved. We are going to start the construction on these cities on June 25,” said the minister. Naidu also informed that the names of another 13-14 cities will be announced on either May 22 or May 23. “We had given opportunity to 23 cities which could not find place in the first list. The competition is over now,” he said. The minister said a lot of international funding agencies are showing interest in participating in the government’s smart city scheme and ambassadors of around 34 countries have met him to discuss the same. Six ambassadors representing countries such as the US, the UK, Japan, Germany, Korea, Spain met the minister yesterday about finding opportunities in smart cities, he informed. “Good thing is there is awareness about the responsibility of local bodies; they are preparing smart plans, there is competition, there is an urge for improving the service to the people so that they can get recognition. This is a good development,” he said. The government in January this year announced the first list of 20 cities to be made smart under its 100 Smart City scheme. It also offered a fast track window for the next rejected 23 cities based on their ranks to upgrade their proposals and submit them by April 15, 2016 for evaluation. A total investment of Rs 50,802 crore has been proposed in these 20 cities and towns during a five-year period, of which, Rs 38,693 crore will be spent on area development and Rs 12,109 crore on a total of 56 pan-city solutions. A total area of 26,735 acres will be taken up for improvements in these 20 cities including redevelopment of 425 acres in Bhopal (350 acres) and Ahmedabad (75 acres) Kyle Brodziak Womens Jersey
Ministry of Road Transport & Highways19-May, 2016 18:19 IST Shri Nitin Gadkari Calls for Joint Efforts of Centre & Delhi Government for Rectification of Road Accident Black Spots : Calls for a Dedicated Road Safety Cell in Delhi PWD
Union Minister of Road Transport & Highways and Shipping Shri Nitin Gadkari has called for a dedicated Road Safety Cell in Delhi PWD, that would focus upon incorporating engineering features to enhance safety on roads, especially at identified black spots . This comes in context of a report prepared by the India Chapter of International Road Federation in which they have proposed certain simple engineering and traffic management improvements at moderate investments at ten major black spots in Delhi. These black spots include Sarai Kale Khan, Mori Gate, Nigam Bodh Ghat, Mukhandpur Chowk, Dr Bhabha Marg Crossing, Punjabi Bagh Chowk, ISBT Kashmiri Gate, Mahipalpur Flyover, Shani Mandir and Shahdara flyover. These spots have together recorded 245 accidents last year, in which 203 persons were injured while 84 lost their lives. In its report IRF has suggested features like footpaths, traffic islands, channelization of traffic, signalization and provision of road signs & pavement markings to make these spots safer for traffic. In a letter to Delhi Chief Minister Shri Arvind Kejriwal, Shri Gadkari has urged him to get the report of IRF examined and send relevant proposals to the Road Transport & highways Ministry for financing. He has further mentioned that the Ministry will soon launch a national initiative to remove black spots and proposals from Delhi can be accommodated therein. It may be reiterated that the Ministry of Road Transport and Highways is committed to reducing fatalities due to road accidents to 50 percent by 2020 and has taken many steps to improve safety on Indian roads. As part of the efforts, 789 black spots have been identified across the country which recorded repeated accidents/fatalities and steps are being taken to rectify engineering defects at such spots at a cost of Rs 11,000 crore. Road safety has been made an integral part of road designing, and state governments have been asked to have dedicated Road Safety Cells in their respective Public Works Departments. Ereck Flowers Womens Jersey