Radio Frequency Identification

November 30, 2011

The Government has a proposal to introduce Radio Frequency Identification (RFID) Smart Tag on certain highways in the country National Highways Authority of India (NHAI) has adopted Public Private Partnership (PPP) mode as the preferred mode of delivery. Two variants of PPP model i.e. Build, Operate and Transfer (BOT) (Toll) and BOT (Annuity) have been adopted. So far 149 projects of length 13791.25 km have been awarded on BOT (Toll) and 29 projects of total length 3311.42 km have been awarded on BOT (Annuity).

It is proposed to extend the scheme to other parts of the country also. The Electronic Toll Collection scheme shall be implemented on all India basis.

It is also proposed to build toll roads on Public Private Partnership (PPP) model in various parts of the country. The specification for Radio Frequency Identification (RFID) transceivers, RFID Tag & Data Exchange format between Toll Plaza server and the Central Electronic Toll Collection (ETC) System for implementation of national wide interoperable ETC system based on RFID technology on National Highways has been finalized. RFID will be based on EPC Gen-2, ISO 18000-6C standards for Electronic Toll Collection on National Highways in India.

This information was given by the Minister of State of Road Transport and Highways, Shri Jitin Prasada in a written reply in Lok Sabha today

Source: http://pib.nic.in

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BEML bets big on mining equipment

November 28, 2011

BEML Limited, the Bangalore-based defence ministry undertaking, is looking at a turnover of Rs 2,000 crore from the mining and construction equipment business during the current fiscal (2011-12), a growth of 25 per cent over last fiscal, a top company official said.

“We have a strong order book of Rs 6,000 crore on hand and we have just enhanced our product portfolio with the launch of Rail-Road Excavator among others. We have a strong enquiry from the Indian railway contractors and road developers for this product,” V R S Natarajan, chairman and managing director, BEML, told Business Standard on the sidelines of Excon 2011, international exhibition on construction equipment, here.

The Rs 3,500 crore BEML has three main business units such as mining and construction, defence, rail and metro. It has recently forayed into aerospace components business. It manufactures dozers, excavators, dumpers, pipe layers, walking draglines among others in the mining and construction business segment.

BEML is also looking at revenue of Rs 1,500 crore from the railway business and another Rs 1,000 crore from the defence segment. The company recently secured an order worth Rs 1,400 crore from the Army for supply of 204 units of Armoured Recovery Vehicles (ARVs) based on T72 tanks. It also received an order for supply of 135 intermediate metro coaches from Delhi Metro Rail Corporation Limited (DMRCL) recently, he said.

“We are in an advanced stage of securing an order worthRs 300 crore from Jaipur Metro for supply of 40 coaches on standard gauge platform. This order will be increased to 100 units going forward worth Rs 600 crore, Natarajan said. He said the company is also in the process of supplying intermediate cars to Delhi Metro.

“Delhi Metro is going for a big contract for supply of 400 cars. We also expect them to place an order for standard gauge intermediate cars. They are going in for an 8-car train set from the existing 6-car train set. We are currently negotiating with them for an order for about 100+ units,” he said. For Bangalore Metro, the company is set to deliver 150 coaches and expects to supply another 90 coaches in the second phase. Once, the Bangalore Metro Rail Corporation Limited (BMRCL) goes for a 6-car train set from the existing three car train set, another 150 coach order is expected, he said. In addition to this, BEML is also looking at other Metro rail projects like Hyderabad and Kolkata.

“The BOT (build, own and transfer) operator for Hyderabad Metro, which is L&T, has floated the tender for rolling stock. We are the strong contenders to bag this order. Apart from this, we are also looking forward to participate in the international projects like Dubai, Abu Dhabi, Qatar, Colombo, Malaysia and Dhaka. All these countries are likely to float tenders shortly. We will work with international consultants and our technology partner, Rotem of Korea in all these projects,” Natarajan said.

BEML is also set to export five numbers of dredging units to Bangladesh under a line of credit between India and Bangladesh. The company has tied up with Vosta of Holland for technology to manufacture dredgers at its Mysore facility. The company aims to capture at least 25 per cent of the Rs 6,000 crore dredging market in India, Natarajan added.

Source: business-standard.com

Written by ITW Editor · Filed Under BEML Ltd

Prithviraj Chavan seeks Central funding to fix Maharashtra roads

November 28, 2011

Chief minister Prithviraj Chavan has urged the Centre to allocate funds under the Pradhan Mantri Sadak Yojna to enable Maharashtra to fix state roads.

Chavan indicated that large funds which were allocated to other states under the scheme was not availed by the state for several years leading to a disadvantage. The state was denied the funds as it had already declared 100% connectivity and good conditions using state funds.

However, in the last 15 years, the state had managed to make little investments in the road sector. A majority of the new projects which were envisaged and implemented related to built-operate and transfer basis (BoT).

An official in the ministry of planning and finance said, “If we compare the funds allocated to states like Andhra Pradesh, then we lost almost Rs3,000 crore per year. Between 1999 and 2009, the state should have pressed for at least Rs15,000 crore from the Centre to be undertaken in phases.”

The poor allocation of funds from the Centre was also on account of lack of political will to pursue the matter with the Planning Commission. In the 1990s, having attained almost maximum connectivity, the state focused on new projects but the investments required formaintenance was overlooked.

Now the senior NCP minister for public works department (PWD), Chhagan Bhujbal has decided to mobilise resources through public and private partnerships to fix state road infrastructure. The PWD has already undertaken major projects worth Rs33,000 crore through private-public partnership in phases.

Source: dnaindia.com

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India to raise $1.9 bn debt for building highways

November 28, 2011

India will soon raise Rs.10,000 crore ($1.9 billion) through a public debt issue for funding its ambitious national highways project, union Road Transport and Highways Minister C.P. Joshi said Wednesday.

“The finance ministry has allowed us to raise Rs.10,000 crore through debt bonds for funding construction of highways across the country,” Joshi told reporters on the margins of a trade event.

The state-run National Highway Authority of India (NHAI) will raise the fund through tax-free infrastructure bonds within a month. “The proposed fund-rising will be sufficient for the highway projects under execution. We will raise more funds as we go for more such projects,” Joshi said after unveiling the sixth international construction equipment industry trade fair Excon 2011 on the outskirts of this tech hub.

In the budget for this fiscal (2011-12), Finance Minister Pranab Mukherjee made a provision for the first time to allow NHAI to raise funds as government’s share of financing the roads sector.

Though the highway authority planned to raise the amount through private placement earlier, rising interest rates had forced it to opt for the public issue.

The proposed fund will be used to partly finance highway projects to be executed on build, operate and transfer (BOT) basis and for viability gap funding through which the government pays to make the projects viable financially.

Under the BOT model, the winning bidder will build the highways and the government will pay in installments.

The authority has awarded till date 59 projects covering a distance of 7,994 km that is estimated to cost a whopping Rs.60,000 crore (Rs.600 billion).

“To achieve the target of building 20 km of road a day set by the prime minister (Manmohan Singh), the highway authority has to award 7,300 km for every three years consecutively,” Joshi pointed out.

Admitting that only 4,600 km was awarded during this fiscal, Joshi said the target of 20 km per day would be met by 2014.

“We have not been able to achieve 20 km per day but we are confident of doing it before the next general elections,” Joshi added.

Written by ITW Editor · Filed Under Uncategorized

Madhucon bags EPC Contract of Rs 422.06 crore

November 28, 2011

Madhucon Projects Ltd has announced that the company has bagged an EPC contract of Rs 422.06 crore from Bharat Coking Coal Ltd, Dhanbad, for a mine it is executing in Barora.

The project, which covers surface mining, extraction and transportation of coal located in Phularitand Colliery of Barora area, is to be completed in 84 months from the date of acceptance.

The company’s arm Madhucon Infra Ltd, which is currently executing road projects with a total outlay of Rs 7,000 crore, has secured one more BOT (build, own and transfer) toll road project from NHAI to be executed between Vijayawada and Machilipatnam, with a total outlay of Rs 760 crore.

The Hyderabad-based infrastructure company, which is also executing power projects and taking up mining activity, has an order book of Rs 6,500 crore and has been pre-qualified for orders worth Rs 20,000 crore

Source: indiainfoline.com

Written by ITW Editor · Filed Under Madhucon

CRISIL assigns valuation grade of 5/5 to KNR Construction

November 28, 2011

CRISIL assigns valuation grade of 5/5 to KNR Construction CRISIL Research has come out with its initial coverage on KNR Construction . The research firm has maintained the fundamental grade of 3/5 to the company in its November 25, 2011 report.

KNR Construction (KNR) is a Hyderabad-based company focussing on road infrastructure projects. It has a healthy order book of Rs 25.1 bn (2.4x TTM revenues), which provides sufficient revenue visibility. Though order flows are expected to be healthy given traction in project awards, the company’s ability to bag new orders in a competitive scenario without compromising on margins will be a challenge. KNR also has one of the lowest gearing in the industry; as on FY11, KNR’s net debt-equity ratio stood at 0.1x compared to peers’ average of 2.5x. CRISIL Research assigns KNR a fundamental grade of 3/5, indicating that its fundamentals are good relative to other listed securities in India.

Proven execution track record in roads; entering into other segments
A mid-sized player, KNR has demonstrated good execution capabilities in the road segment and has so far constructed more than 4,000 km of roads. Of late, it has diversified into water, irrigation and urban infra projects. However, roads still comprise the major chunk (~90%) of its order book.

Order book stands at 2.4x TTM; provides sufficient revenue visibility
KNR’s current order book is Rs 25.1 bn (2.4x TTM revenues) which provides revenue visibility for the next 24-30 months. The order book has been boosted by recent project awards worth Rs 11 bn including an EPC order from Sadbhav Engineering for Rs 5.8 bn. It also has L1 status for projects worth Rs 1 bn.

Forayed into asset ownership model
In FY08, KNR bagged two BOT projects in JV with Patel Engineering. Both these projects have been completed and the government has begun making the annuity payments. KNR has also securitised one of the projects for Rs 4 bn which will ease funding requirement for future projects.

Risk: Operating margins could decline due to increasing competition
KNR has higher operating margins due to benefits from backward integration of sourcing aggregates from its captive quarrying mines. However, we believe that going forward there is a risk of margin decline given the current competitive scenario, when it may have to bid aggressively for projects, resulting in lower margins.

Revenues and PAT to grow at a two-year CAGR of 19% and 4%
We expect revenues to grow at two-year CAGR of 19% to Rs 14.6 bn in FY13. PAT growth is expected to be lower at 4% to Rs 696 mn in FY13 compared to Rs 640 mn in FY11 due to high interest costs and initial losses in BOT projects.

Valuations – current market price has ‘strong upside’
CRISIL Research has used the sum-of-the-parts method to value KNR. The contracting business has been valued based on the P/E method at Rs 142 per share and the BOT projects have been valued using the discounted cash flow method at Rs 15 per share. We initiate coverage on KNR with a fair value of Rs 157 per share and a valuation grade of 5/5.

To read the full report click on the attachment

Disclaimer: This report (Report) has been commissioned by the Company/Investor/Exchange and prepared by CRISIL. The report is based on data publicly available or from sources considered reliable by CRISIL (Data). However, CRISIL does not guarantee the accuracy, adequacy or completeness of the Data / Report and is not responsible for any errors or omissions or for the results obtained from the use of Data / Report. Opinions expressed herein are CRISIL’s opinions as on the date of this Report. The Data / Report are subject to change without any prior notice. Nothing in this Report constitutes investment, legal, accounting or tax advice or any solicitation, whatsoever. The Report is not a recommendation to buy / sell or hold any securities of the Company. CRISIL especially states that it has no financial liability, whatsoever, to the subscribers / users of this Report. This Report is for the personal information of the authorized recipient only. This Report should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied in whole or in part especially outside India, for any purpose.

Source: moneycontrol.com

Written by ITW Editor · Filed Under KNR Constructions

Madhucon bags Rs 422-cr order from Bharat Coking Coal

November 28, 2011

Hyderabad, Nov 25:

Madhucon Projects Ltd has announced that the company has bagged an EPC contract of Rs 422.06 crore from Bharat Coking Coal Ltd, Dhanbad, for a mine it is executing in Barora.

The project, which covers surface mining, extraction and transportation of coal located in Phularitand Colliery of Barora area, is to be completed in 84 months from the date of acceptance.

Source: thehindubusinessline.com

Written by ITW Editor · Filed Under Madhucon

Banks lend 200% of road project costs, govt worried

November 28, 2011

NEW DELHI: If you were to buy a house, banks would give you a loan of 80-85% of the value of the property. If you were to build a road, though, you could get double the project cost computed by the highways authority.

On an average, banks lend 39% more than the project cost arrived at by the National Highways Authority of India, the agency that hands out bids across the country. A key reason is the huge gap between the cost arrived at by NHAI and the estimate drawn up by developers who bag the contracts.

With private developers bidding aggressively for highway contracts and willing to fork out a significant premium (an annual amount paid upfront to National Highways Authority of India), the road transport and highways ministry decided to examine 66 projects where funding has been tied up.

Source: indiatimes.com

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Milton, Ontario project affects abandoned industrial property

November 28, 2011

Hazco Environmental Services Ltd. excavated and hauled away approximately 5,500 tonnes of hazardous soils and 28,000 tonnes of non-hazardous soils from the abandoned industrial site. One of the largest road projects ever undertaken by the Town of Milton has also been the catalyst for the remediation of a brownfield site which will eventually be turned into housing.

The $49-million Main Street underpass is designed to reduce vehicle idling times and safety concerns at the point where that street crosses the heavily used four-track CP rail line.

At the same time, its construction will create an S-curve realignment of the street which means it will have a major impact on a long-abandoned industrial property on the south side.

“The project requires a deep slice though the property to allow the street to pass underneath the rail line,” says Derek Stewart, associate partner, Ecoplans Ltd.

As a result, the rail separation is intertwined with the remediation of the three-hectare industrial site, says Stewart, whose firm is the environmental consultant for both the remediation and the underpass.

McCormick Rankin Corp. is the overall detailed designer and contract administrator.

The property was the location of a zinc-oxide manufacturing plant from the early 1950s to the early 1990s and was once occupied by several buildings including the main manufacturing plant, a baghouse, a furnace production and storage building, as well as underground storage tanks.

An investigation of the site by Ecoplans, which included drilling 31 boreholes and a comprehensive sampling and analysis, showed large areas of contaminates such as heavy metals.

“Most (of the contaminants) were in the top metre and a half of soil, although some went deeper.”

A number of remedial options including encapsulation were proposed. “But the town was concerned about liability and rejected that option.”

There was also certain urgency. As the west half of the municipally owned site will be the area most directly impacted, the town decided to sever the land. It has retained ownership of the west parcel, but has sold the east half to a developer who has proposed using it for a mixed-used commercial/residential development.

So, a more traditional remediation method was chosen. Over a two-month period, Hazco Environmental Services Ltd. excavated and hauled away approximately 5,500 tonnes of hazardous soils and 28,000 tonnes of non-hazardous soils. The Hamilton-based firm also trucked in and applied 15,000 tonnes of clean backfill and then lined the property limits with a PVC geothermal membrane to prevent migration of contaminants which had been detected on adjacent properties, says Stewart.

Despite the amount of truck traffic entering the site on a daily basis, every effort was made to minimize the project’s impact.

“The streets were kept clean by the contractor using a sweeper and water truck and dust levels were controlled by the application of water using a water truck.”

Traffic control was also managed by the contractor. Site egress and exit were strictly controlled through a traffic management plan agreement with the town.

The east half of the site — the parcel which will eventually house the condominium — is now being used as a staging area by BOT Construction, the grade separation contractor.

At this point, the rail grade separation is in a very preliminary stage. BOT has moved rails to accommodate a temporary detour and is now in the process of removing the contaminated soil beneath those tracks.

It will take four years to fully complete the underpass, says John Brophy, the town’s senior manager of infrastructure. “However, after two years we will be able to direct two lanes of traffic under the rail bridge.”

The catalyst for the project is the heavy amount of road and rail traffic at the crossing. Its daily “exposure index” is 300,000. The index is the term used by the Canadian Transportation Agency to gauge road and rail traffic.

“The trigger limit when a grade separation is warranted is 200,000, so this location is warranted to be grade-separated.”

Compounding the potential safety hazards of that high traffic are poor sightlines and the fact the tracks are at an extreme angle to the road, says Brophy.

Source: dcnonl.com

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Cabinet Committee on Infrastructure okays 15 highway projects

November 21, 2011

The Cabinet Committee on Infrastructure approved 15 projects for highway construction of about 1,814 kilometres at an estimated cost of Rs 15,680 crore.

The National Highway Authority Of India (NHAI) will undertake 10 projects whereas implementation of the rest of the projects would be with the Rajasthan and Madhya Pradesh state agencies.

Source: articles.economictimes.indiatimes.com

Written by ITW Editor · Filed Under Uncategorized