Piramal Enterprises enters fray for Lanco Infra assets
Piramal Enterprises, led by billionaire Ajay Piramal, is betting big on the infrastructure sector and the diversified company has entered the race to pick up a stake in debt-ridden Lanco Infra’s thermal power portfolio, four individuals familiar with the development told ET NOW on the condition of anonymity. “Preliminary talks have been initiated between Lanco Infra which is looking at inducting strategic investors to reduce its debt & the structured investment group of Piramal Enterprises which falls under Piramal Capital. A few overseas distressed asset funds are also interested in the portfolio. On completion and on a fully operational basis, the enterprise value of the 6 power plants of Lanco Infra is estimated between Rs 42,000 crs to Rs 45,000 crs,” said one of the two sources cited above . Piramal Capital is the financial services arm of Piramal Enterprises. Lanco’s thermal power portfolio has a total capacity of around 7256 MW and the company’s debt burden as of 31st, March, 2015 stood at Rs 37,526 crores. ” Lanco Infra is looking at carving out its thermal power assets into a separate holding company and then sell a 51% stake in the entity. They are looking at initially raising capital for operational assets and use the initial deal proceeds to revive the rest of the portfolio,” according to the other three sources cited above. ” In the thermal power segment, buyers are looking at cherry-picking operational assets,” says Jatin Aneja, National Practice Head, Projects & Projects Finance, at law firm Shardul Amarchand Mangaldas. Jarius Wright Womens Jersey
Hyderabad: L&T, Telangana stare at fresh tussle over execution of metro rail project
Engineering giant Larsen and Toubro and the Telangana government could be headed for another faceoff over execution of the Rs 16,375-crore metro rail project in Hyderabad. L&T Metro Rail, which has suffered time and cost overruns, both before and after the formation of Telangana, has a July 2017 deadline for completing the 72-km metro rail project which will crisscross Hyderabad in three corridors. Top officials in the Telangana government and L&T executives confirmed that the infrastructure firm has sent a fresh request to the state government seeking extension of construction deadline by at least 18 months and compensation for various impediments. The project, for which a concession agreement was signed in July 2012, has seen a cost overrun of Rs 3,000 crore, taking the projected cost to nearly Rs 20,000 crore. L&T has reportedly raised these concerns with the state government in the past. Confirming submission of a fresh request to the Telangana government on measures to make the project financially viable, L&T Metro Rail’s chief executive officer VB Gadgil told ET “the government is currently looking into our request and the discussions are going on”. A spokesperson for L&T said delays in finalisation of alignment issues and providing continuous right of way in prime areas, coupled with many other reasons beyond the control of major stakeholders have forced the company to seek more time. However, a senior Telangana official, who did not want to be named, said, “The state government has given the right of way for most portions of the metro rail project except a stretch of 4-km in the old city and hence L&T’s request for compensating for time and cost overruns was rejected. We have asked them to expedite the works and complete the project on schedule.” Another bureaucrat said the state government is against accepting L&T’s request for compensation as it could potentially culminate in complications on penalties, which in turn could lead to modifications to viability gap funding, among other problems. A person close to the development said an independent engineering agency has now been asked to examine the technical and commercial factors and advise both parties on the way forward. “Approaching the independent engineer on any dispute between the partners is just a step before moving towards a prolonged arbitration process,” he said. Claiming that the Telangana government did not refuse L&T’s request, a spokesperson for the state government said, “It (Telangana government) has asked the independent engineer, Louis Berger, to review the request and give them the detailed report.” L&T, which is building the public-private-partnership project with viability gap funding from the central government, was asked by Telangana’s first chief minister, K Chandrasekhar Rao, in 2014 to stall work at certain key locations and consider changing alignments. L&T Metro Rail, which in September 2014 had threatened to pull out of the project expressing concerns over the project’s financial viability, was recently asked to resume work at the locations without any change in alignment. David Mayo Authentic Jersey
Rehab plan for Mumbai’s Girgaum in place for Metro-III
Another hurdle on the Metro-III corridor is expected to be resolved as its consultants have worked out in situ rehabilitation plan for the project-affected persons (PAPs) of Girgaum and Kalbadevi llocalities. The report, which was submitted by the consultants to the Mumbai Metro Rail Corporation (MMRC), has been forwarded to the state government to seek concessions under the cluster redevelopment policy. A senior official said, “We want the project to be developed under the cluster policy to make a rehabilitation plan for these tenants viable.” Currently, projects on plots measuring 4,000 square metres and above are eligible for approval under the cluster policy. In case of Metro-III, though, consultants have asked the government to relax the guidelines as the affected area would measure 2,000 sq m. The official said, “We have requested the state government to consider our proposal under the cluster policy as a special case.” The MMRC has also reduced the area of the stations by 20-25m to ensure that the least number of structures get affected in these two areas. A total of 26 buildingsin all, 737 familiesin the Kalbadevi and Girgaum areas would be affected by Metro-III. Chief minister Devendra Fadnavis had promised in situ rehabilitation for the PAPs and provision for larger homes. All the PAPs will get a minimum of 405 sq ft homes. Currently, those who have 100 or 150 sq ft tenements will get 405 sq ft. But if someone has a 250 sq ft tenement, then the person would get a 500 sq ft one, and for 300 sq ft, a 600 sq ft one. The usual rules of rehabilitation will apply to those who have tenements measuring over 300 sq ft where the occupant will get up to 700 sq ft free and for more, he or she will have to pay the construction cost. The first-ever underground Metro in the city will cover Colaba-Bandra-Seepz. Work is expected to begin this month. The government has decided to allot 30 hectares inside Aarey Colony for construction of a depot, for which a final sanction is likely to come soon. The MMRC has claimed that environmentalists should not have a problem as the number of trees to be hacked in Aarey have also been reduced and changing the location will mean an increase in project cost. The MMRC had set a deadline to appoint a civil works contractor in October 2015 but escalation in cost has delayed awarding of the contract. Bruce Matthews Jersey
NHAI takes steps to remove Hurdles for Faster Execution of Projects
In order to ensure faster execution of projects, National Highways Authority of India has delegated powers to its Regional Officers for hiring of equipment and laborers up to Rs.10 lacs per project, to demolish structures that fall within the right-of-way of the project. As some of the contracts had no provision for demolition of such structures, there would often be protracted correspondence between the contractors, Project Directors and NHAI headquarters before these could be removed, often leading to delay in execution of projects. With this delegation of power to ROs NHAI will be able to make encumbrance free land available more speedily to the concessionaire/contractors as laid down under the concession agreement or contract. The Regional Officers have also been instructed to ensure measurement of such structures along with videography for record purpose. NHAI is keen to remove all hurdles for speedy execution of highway projects. This is just one step in a series of delegation of powers at regional level. NHAI has recently delegated powers for construction of foot over bridges under Change of Scope upto Rs. 80 lakh and for 4 and 6 laning projects upto Rs. 1 crore respectively. Similarly, Regional Officers have been delegated the power for maintenance of highways requiring urgent repair works up to Rs. 1 crore. CGM (T) jointly with Regional Officers have also been delegated power for shifting of transmission line/electric line and water pipelines/ other utilities upto Rs 10 crores and Rs 5 crores respectively. All these steps are expected to cut down delays in completion of projects. Arian Foster Womens Jersey
NHAI to raise ₹55,000 cr via bonds in FY17
To finance its various projects, National Highways Authority of India (NHAI) plans to raise ?55,000 crore through bonds this fiscal. The government has permitted borrowing of ?59,279 crore by NHAI during 2016-17. The borrowed funds would be utilised towards part financing of various projects being implemented by NHAI under the National Highways Development Project (NHDP) and other national highways projects with emphasis on the ongoing projects and the various special projects. Chase Daniel Womens Jersey
Cidco invites financial bids for proposed Navi Mumbai airport
City and Industrial Development Corporation (Cidco) has invited financial bids for the proposed Navi Mumbai airport, the financial stage before the much-delayed project is awarded, a person familiar with the matter said. “The Request for Proposals (RFPs) were sent out to the three shortlisted bidders on Friday. As of now, they have to respond by the first week of September but we may extend that by a month,” the person said, adding “in any case, we firmly hope the project will be awarded latest by end of October.” Three companies GMR Infrastructure, Mumbai International Airport (MIAL) and Mia Infrastructure are currently in the fray for the project. An alliance of Hiranandani Group and Zurich Airports had been among the shortlisted bidders, but was subsequently disqualified. The company, or alliance, which proposes the highest revenue share with City & Industrial Development Corporation (Cidco), the state-run nodal body for the project, will win the mandate to develop and operate it. MIAL is a subsidiary of GVK and currently runs the Mumbai International Airport, while Mia Infrastructure is a joint venture between Tata Realty & Infrastructure (TRIL) and French company Vinci Concessions. Cidco on April 11 received the approval for issuing RFPs for the project monitoring and implementation committee an agency formed by the civil aviation ministry for faster implementation of projects and the state government cabinet. Cidco holds 26% of the special purpose vehicle, and had commenced the first stage of the two-stage bidding process by issuing RFQ on February 5 last year. The Rs 14,573-crore project is seen as a crucial alternative to the congested airport in the city. The government had initially approved setting up the airport in 2007, but ran into several environmental and land acquisition problems. The airport will span an area of 2,867 acres with a terminal building of 5,23,000 square meters and two runways. Cameron Brate Authentic Jersey
Toll road firm MEP may launch InvIT in Q4 FY17, to raise around Rs 1,200 crore
Toll road firm MEP Infrastructure Developers plans to raise over Rs 1,200 crore from an infrastructure investment trust (InvIT), which it hopes to launch in the last quarter of this fiscal, a top company official said. “We have already submitted our proposal for forming InvIT in March to the Securities and Exchange Board of India (Sebi) for its in-principle approval and we expect to get the clearance this month,” company’s Vice-Chairman and Managing Director Jayant Mhaiskar told PTI here. Once the in-principle approval is in place, the company will start the process for forming the InvIT, he said. “We are hopeful of launching it before March 2017. InvITs will help us release our capital which is locked in the current on-going projects and the same came be redeployed over a period of time,” Mhaiskar said. When asked how much was the company planning to raise through the model, he said, “The valuation cannot be disclosed at this stage and we will be able to give the number after the closure. But as a part of InvITs, 49 per cent of the debt has to be reduced and to that extent we can raise funds. Our current debt stands at around Rs 3,000 crore.” In 2014, capital market regulator Sebi allowed the launch of real estate investment trusts (REITs) and InvITs to get easier access to funds. In April last year, the company launched its initial public offer to raise Rs 324 crore which was mainly utilised to repay its debt. MEP Infra, which is largely into two areas of business – toll collection and OMT (operate, maitain and transfer), is also eyeing 15-20 per cent increase in topline by 2018-19 fiscal, he said “Apart from the toll collection and the OMT (operate, maintain and transfer) businesses, we have, along with our Spanish joint venture partner Sanjose India Infrastructure and Construction ventured into the construction of roads under the hybrid annuity model. We hope this business will drive our growth in the years to come,” Mhaiskar said. At present, its order book for the hybrid annuity project stands at around Rs 2,600 crore which is to be executed over the next 30 months. Rod Woodson Jersey
Huda to expedite completion of railway over bridge on Dwarka expressway
Haryana Urban Development Authority (HUDA) is planning to complete the construction of railway-over-bridge (RoB) at the junction of sector 100 and 37D at Basai village before August. RoB is on Northern Peripheral Road (NPR) known as Dwarka expressway and completion of the bridge will help in early completion of the road. It will fill a crucial connectivity gap on the 18-km-long road. Estate officer of Huda Tarun Pawaria said additional chief secretary of department of town and country planning (DTCP) P Raghvendra Rao has directed to complete the RoB works before August. “We are planning to make a section of Dwarka expressway -from Kherki Daula to Palam Viharoperation by August 22, for this completion of RoB is necessary,” said Pawaria. Huda recently had a meeting with the railway to expedite the construction of RoB. “Section of RoB, passing over railway track, is being constructed by railway,” said a senior Huda official adding that that they are coordinating with railway to complete the work without any hassle. Last year in September railway had allotted work order to a company for construction of a portion of RoB, passing over railway track. Out of the 1200 metre long RoB railway will construct 128 metre area, passing over the railway track, rest will be constructed by Huda. For the construction of three-lane RoB it will cost around Rs 153 cr. “We are hopeful to complete the works on time,” said the Huda official. Along with this Huda is also going to connect the expressway with Pataudi and Basai roads and all nearby sectors by August. “It is likely to improve connectivity to at least 25 sectors on either side of the road,” said he. According to sources, roads in sectors 83-84, 82-85, 8186, 99-102, 102-102A, 120-103, 103 106, 109-112, 110A-111 are ready. After this stretch is opened, all these roads will be connected with the expressway. Most of the residential projects in these sectors are either complete or near completion. The six-lane Dwarka Expressway, which was conceived over eight years ago, starts from Dwarka in Delhi and ends at Kherki Daula. It was expected to divert 40% of the traffic on NH-8 between Gurgaon and Delhi, but till date, work on only 14.33 km of the road has been completed. The state government has fixed a new deadline of June 2017 for its completion. Matt Nieto Jersey
Embassy Group buys part of Chennai SEZ unit from SNP Infrastructure
Embassy Group has partially acquired a stalled SEZ project in Chennai from SNP Infrastructure for an undisclosed amount, two people aware of the development said. The 26-acre property on Thoraipakkam-Pallavaram road is close to the airport. Land on Pallavaram road costs about Rs 20 crore per acre. “The special economic zone project was shelved in 2008 by SNP due to bad market condition.It will be partial buyout and partial joint development,” the people cited earlier said. Mike Holland, CEO of Embassy Office Parks -a joint venture between Blackstone and Embassy Group -refused to comment on the matter. “The structure is ready and Embassy will soon start construction,” said one of the persons quoted earlier. While Embassy will build office property over 4 million sq ft, the remaining will be used for integrated development comprising residential and retail components. In the recent past, Chennai has seen a spurt in land transactions, with a majority of investments coming in office assets. The biggest deal during this period involved Canada Pension Plan Investment Board (CPPIB) and Shapoorji Pallonji Group’s joint venture company SPREP acquiring SP Infocity IT Park in Chennai for $220 millon, or nearly Rs 1,460 crore. In addition, Brigade Properties, a joint venture between Brigade Enterprises and GIC, Singapore, jointly acquired a 15.86-acre land parcel from Kansai Nerolac Paints in Chennai in a deal valued at Rs 550 crore, and Chennai-based real estate developer VGN raised Rs 670 crore from Piramal Capital and ECL Finance. Embassy Group has 24 million sq ft of leased and under-construction property. Of this 12 million sq ft of office properties is under construction, with a total capital expenditure of Rs 4,500 crore. Tyson Alualu Authentic Jersey
Government expecting Rs 25 lakh crore investment for infra development: Nitin Gadkari
The government is expecting investments worth Rs 25 lakh crore over the next 3 years in the roads, railway and shipping infrastructure that includes setting up of 27 industrial clusters at ports at around Rs 8 lakh crore, Union Minister Nitin Gadkari said today. “We are committed to overhaul country’s infrastructure and gradually working towards achieving this. We plan to spend Rs 25 lakh crore in our highways and shipping sector which includes setting up of 27 industrial clusters near ports at an estimated cost of Rs 8 lakh crore,” Gadkari said. Apart from Rs 8 lakh crore on developing 27 industrial clusters, another about Rs 5 lakh crore would be spent on road, railway and ports connectivity projects, the Minister said on the sidelines of an event by Indo-American Chamber of Commerce. Besides, smart cities will be built at ports which will entail a huge investment, he said. Earlier addressing the Chamber event, Gadkari said, “By May this year, awards in highways projects will swell to Rs 2 lakh crore from Rs 1.6 lakh crore now and by May 2017 it will be another 5 lakh crore.” He said concerted efforts by his Ministry to expedite road projects has started bearing fruits and the road building pace, which was barely 2 km a day when the Narendra Modi government took over, has reached 20 km a day and will touch 25 km a day next month. He added that at the time of taking charge of the Ministry, 403 projects worth Rs 3.35 lakh crore were stuck but most of the issues have been addressed and barring 31 projects worth about Rs 30,000 crore all are being executed, he said. He further said that out of the six planned ports in the country, three alone at Tamil Nadu, West Bengal and Maharashtra would entail an investment of Rs 60,000 crore. Massive work is also being done on waterways front and detailed project reports are being worked out for converting 111 rivers into waterways. Work on the stretch between Pala in Haryana and Wazirabad will be initiated in three months’ time, he added. Tarik Cohen Jersey