GMR exits NHAI project in frustration over red tape

December 29, 2012

Despite doing whatever was required, the permissions were not granted and this forced us to serve a termination notice under terms of the contract
The GMR Group has walked out of the Kishangarh-Udaipur-Ahmedabad National Highway project 16 months after it won the project in a bid, reports CNBC-TV18. GMR had promised to pay the National Highways Authority Of India over Rs 9,000 crore on a net present value basis. The group says that it exited the project after waiting far too long for the grant of critical permissions.
According to Arun Bhagat, EVP and group head – corporate communications, GMR Group, “This is a 555 km-long, 4-6 laning of the Kishangarh- Udaipur- Ahmedabad stretch.”
“We were awarded this in September 2011. At the end of about 16 months since the award of contract, certain critical permissions that were applied for were yet to be granted,” he clarified.
“Despite doing whatever was required, the permissions were not granted and this forced us to serve a termination notice under terms of the contract.”Source: moneycontrol.com

Complain-Against RVTL Toll Plaza Jamnagar Vadinagar

December 29, 2012

From: Anil Kumar
Subject: Toll plaza pass

Message Body:
This is with reference to toll plaza Jamnagar Vadinar RVTL section near Bedgaon. I am staying in township near the toll plaza (2 Kms from Toll plaza) and frequently required to go to Jamnagar city for various reasons like Medical treatment, schooling, etc.
We have issued the free passes but need to renew the pass every month, if we are late these people are charging the toll fee to us.
We are normally passing through toll plaza in the morning at 7:30 am or in the evening around 7 to 8 pm, we are unable to match out timings with toll plaza office timing for renewal of pass. Sunday also it is closed. When I discussed this issue with L&T official he was arguing only like he is doing a great favor to us. He is not trying to understand the difficulties we are facing. I was very unhappy the way toll plaza providing the services to us,
Hope you may do something to improve the service.

Operators cock a snook at toll rules

December 24, 2012

The Ministry of Road Transport and Highways (MoRTH) has finally woken up to the gross violation of the toll agreements with concessionaires, who are collecting road tax on 17 major “under-construction” highways in violation of rules.

The amended notification of 2009 bars toll collection on incomplete highways. The flouting of rules came to notice from projects like Gurgaon-Kotputli-Jaipur, Delhi-Agra, Varanasi-Aurangabad and the Pune-Satara national highways.

Ironically, the violation of the Central Government’s notification is taking place under the garb of “technicality”. While the Government rules specifically mention that no toll can be imposed on the under-construction road projects, developers have started collecting toll. At present, there are 212 toll collection centres across the country under the National Highways Authority of India’s (NHAI) various projects based on PPP, BOT or OMT model. “The collection of fee levied shall commence within 45 days from the date of completion of the section of national highway, permanent bridge, bypass or tunnel, as the case may be, constructed through a public-funded project,” says the Review (Report) of the Toll Policy of National Highways in May 2009.

The Government has notified the National Highways Fee according to the National Highways Fee (determination of Rates and Collection) Rules 2008, and the rules are amended periodically. In 2009, it was amended keeping in mind widespread protest by road users and misuse by the concessionaries of BOT or PPP. A well-placed source said that the Ministry has asked the road making agency to review the contract agreement between the NHAI and concessionaries on the 17 stretches where toll is being charged.

However, a Ministry official justified the road tax on six-lane under-construction projects with the argument that toll was collected when these roads were just four-lane ones. However, citing the 2009 amendment, another official contested the argument citing the amended notification.
There are 111 public-funded road projects which collect toll. There are 102 State-wise stretches on which tax is levied. These include the 312-km Durg Bypass on NH-6 where toll is being collected by M/s Shakti Kumar M Sancheti Limited since December 2000. On some roads like the 72-km Badarpur-Kosi on NH-2, toll is being collected since June 2002. The Ministry also received complaints of overcharging by toll operators on NH-5 in Andhra Pradesh at Laxmipuram and Sunnambatti Toll Plaza. The concessionaire was penalised to the tune of `3.6 crore in total and contracts terminated. A penalty of `1.48 crore was levied o Vantada Toll Plaza in Gujarat. The matter is sub-judice.

source: http://www.dailypioneer.com

India Inc shuns govt road projects

December 24, 2012

MUMBAI: The infra growth story at least in the road sector appears to be over as the private sector is now shunning government’s road projects. The government which announced an ambitious target of $1 trillion of infrastructure spending is finding no takers for the 8,000 km of road projects to be awarded under the built, operate & transfer (BOT) mechanism this fiscal.

Interestingly, the National Highways Authority of India (NHAI), the nodal agency for awarding these road projects, witnessed phenomenal success in awarding over 8,000 km of road projects last year as 31 of the 51 road project were bagged at premium. Based on last year’s success, the government increased the target to award 8,800 kms of road projects this year; however, NHAI so far was able to award only 700 kms with less than four months remaining in the current fiscal.

Two projects, worth about Rs 2,450 crore, awarded last year to DSC Ltd and Gannon-Dunkerley Co Ltd were terminated after failure to achieve financial closure. This was the first time that such termination had to be done due to failure of companies to achieve financial closure (tie up debt).

At current pace of less than 5 km of road construction per day, the government is way behind its ambitious target of achieving 20 km of road construction per day for which it needs to award over 7,000 km of road projects each year. The reason: Availability of 50 road projects worth Rs 50,000 crore totaling 5,000 km are on the block in the secondary market as the debt-laden infrastructure firms wants to get rid of these road projects that they bagged by aggressive bidding and are now finding it difficult to execute due to the depressed returns. Prime Minister Manmohan Singh reviewed the performance of the transport sector in a series of meetings recently and a recent PMO statement on targets for awarding road transport and highways project last week said, “The ministry will try its best to award road projects as per the original targets for FY 12-13 and will certainly cross 8,000 kms of awards this year by March, 2013. Road projects of at least 3,000 kms length will be awarded under OMT by March, 2013.”

This means that in the absence of takers for road projects under BOT basis, which requires companies to raise funds from the market, the government is planning to award 3,000 km of road projects on engineering procurement contract (EPC) basis, where government spends the entire money required to build roads. However a government statement on Wednesday said, “As against the target for awarding works for a total length of 8,800 km during 2012-13, it has been possible to award projects for a length of 705 km upto October, 2012. Some projects have not received good response from bidders. Apart from general slowdown of economy, viability of some of the projects, sectoral lending caps of the banks, limitations of the concessionaires like availability of equity and other resources to execute the projects appear to be the main factors for poor response.”

“I have my doubts on the PMO statement. If they awarded just 700 kms in the first nine months, then how can they award 9000 km in the next three months. The constraints like land acquisition, funding from banks and remain the same. The government first needs to address these issues before awarding further road projects,” Bajrang Choudhary, CEO, Infrastructure Project Development at SREI Infra told ToI. Leading infrastructure firms like L&T, GVK, GMR, IVRCL, Gammon Infrastructure, SREI Infrastructure, Gayatri Projects, Madhucon Projects, Ashoka Buildcon amongst others have meanwhile reportedly put their road assets on the block.

Infra firms meanwhile are being chased by their lenders to sell assets any which way they can as the banks have stopped lending to the road sector with stringent lending norms scaring away private developers from investing in the highway projects. Over three dozen highway projects are awaiting financial closure.

source: http://timesofindia.indiatimes.com

The road ahead for Virendra Mhaiskar and IRB India

December 10, 2012

Virendra Mhaiskar has made IRB India’s largest and most profitable toll-road operator. In a sector that has most companies reeling under debt, he seems to be the rare animal with enough cash on hand

Name:  Virendra Mhaiskar
Age:  
41
Profile:  Chairman and managing director, IRB Infrastructure
Rank in Rich List 2012: 96
Net Worth:  USD560 mln
The Big Hairy Challenge faced in the last one year:  Slowdown in the infrastructure business, public protests against toll payments, and allegations of political links
The Way Forward:  Focusing on project execution, particularly on the Ahmedabad-Vadodara BOT project

Virendra Mhaiskar must be incredibly crazy. There is nothing else that explains the kind of risks the 41-year-old chairman and managing director of IRB Infrastructure takes, and his rise as India’s largest and most profitable toll-road operator. He deals with problems of the kind that could drive most people around the bend.

Consider, for instance, the episode this July when the Maharashtra Navnirman Sena (MNS), one of Maharashtra’s most raucous political parties, thought up an idea: Galvanise supporters to go past toll booths across the state without paying to use the roads. Egged on by exhortations made by their leader Raj Thackeray, they complied, and men tolling the booths could do nothing. Thackeray claimed it was to protest against the obscene profits the “toll mafia” was raking in from the dense traffic that used these roads.

Toll booth staff manning the Mumbai-Pune Expressway, the crown jewel in IRB Infrastructure’s portfolio, came in for special treatment. (The company is responsible for its upkeep until 2019.) Ironically, Mhaiskar says, “Raj is a friend at a personal level.” But that said, he argues, “To those who say traffic has grown more than projected, I ask, what if it had been otherwise? Would we get our money back?”

I ask if he has tried explaining this to Mr Thackeray and how they continue to be friends. “Enforcing agreements signed with developers, and explaining the rationale to stakeholders is the government’s job,’’ he says, as a matter of fact. I can’t help but think it ironical. But I guess there is a method to the irony.

How else could he have grown the company into India’s largest in the sector, and manage 12 roads across west and south India? So, I probe him a bit deeper. “The government’s policy on road construction and toll through the build-operate-transfer (BOT) model has been the most successful and transparent of all public-private partnerships in the country. But it is also the most poorly understood,” he says.

The problem, Mhaiskar says, is no politician or bureaucrat has bothered to explain to the public how it works. By way of explanation, he offers an analogy. “If you borrow Rs 70 lakh to buy a home, and agree to repay it over 15 years, you return several times the amount to the bank by the end of the tenure, and nobody complains. Going by that same logic, how can you argue if a road developer has invested Rs 1,500 crore [over 20 years], returns ought to be limited to the original investment? What about our borrowing cost, maintenance costs and our returns?”

That is why, he says, public anger manufactured against toll-road operators by politicians have badly impacted investors in the business. Caught between policy changes and the unwillingness (or inability) of users to pay, they are stuck with millions of dollars in debt.

For instance, he’s still trying to extricate himself from a situation in Kolhapur, where IRB won a 30-year contract in 2008 to maintain all of the city’s inner roads. Back then, it was hailed as a pilot project that would lead the way for municipalities across the country to liberate themselves from the responsibility of maintaining roads.

People in the city, though, simply refused to pay, and earlier, in January, they organised rallies to protest against the tolls. Collections had to be stopped after the state government thought the protests impossible to ignore. All attempts to find a solution continue to hang in abeyance.

Problems like these find participants in the Indian infrastructure business under huge amounts of debt, and are compelling many to get out of the projects they had bid for. Mhaiskar, though, seems the rare animal with enough cash on  hand. His revenues almost doubled from Rs 1,753 crore in 2009-10 to Rs 3,255 crore in 2011-12. His profit margins are a little over 15 percent. And, early in October, he signed on to buy out MVR Infra’s road project in Andhra Pradesh for an undisclosed amount. “A lot of such projects are now on sale, mostly by promoters under stress. We are looking at those that can give us an internal rate of return [IRR] of at least 20 percent,” Mhaiskar says.

You must be wondering if Mhaiskar is counting his chickens before they hatch, but Parikshit Kandpal, a senior analyst at Karvy Insitutional Equities, shares his optimism and is putting a ‘buy’ rating on the stock.

Most of the projects IRB is involved with are either in the west or south of India, he says. These are parts of the country that have demonstrated most growth. Of these, projects in Maharashtra and Gujarat account for 74 percent of IRB’s portfolio. “Understanding risks in traffic growth is a big part of our project evaluation,” says Mhaiskar.

When the government opened up projects for private participation in the late 1990s, many businessmen bid aggressively. They followed up later by raising equity from the public at super-normal valuations. Mhaiskar, too, capitalised on the market’s appetite for infrastructure companies. He raised Rs 944 crore through an initial public offering (IPO) in 2008.

For many, fat order books were a measure of success, irrespective of the cost at which they were acquired.  But soon the regulatory environment changed, and returns from ventures dropped below expectations. As banks cut down on lending, larger companies like GMR declared they were taking ‘investment holidays’.

source: http://www.moneycontrol.com

 

Looking to involve people in infra development

December 10, 2012

December 6, 2012: The three-day ‘Infrastructure Conference 2012’ being organised by the Kerala Public Works Department is under way at the Bolghatty Palace in Kochi from Thursday.

The timing could not have been more apt coming as it does exactly a year after the previous event, which affords an opportunity for serious reflection and productive planning.

‘WORKING’ MINISTER

V. Ebrahim Kunju, who has already made a mark as a ‘working’ minister for public works, says that a number of suggestions/recommendations made at last conference are currently being implemented. One instance is where the department is moving ahead with a plan to laying concrete roads in the State on a pilot basis.

“It is not as if we are suggesting something that is not known to the State already; in fact, we used to have concrete roads here in the past,” the minister says. “It is just an issue of revisiting the past purely for reasons of advisability and practicality.”

He points to major metropolises such as Mumbai which have plumped for concretised roads with a comparatively longer life span. So public works department is essentially dusting up the concept here and proposes to implement same in Kochi – from HMT Junction in Kalamassery to Manalimukku in Kochi.

On another front, the public works department is looking at ways to ensure people’s participation in infrastructure development.

LOCAL BODIES

This is sought to be achieved through the vehicle of local self-government institutions after suggestions to the effect were floated at the Emerging Kerala Global Connect meet that Kochi hosted in September last and also in view of increasing opposition to land acquisition, the minister says.

So, the department is seeking to suitably tweak the public-private partnership (PPP) mode to public-private-people-partnership (PPPP) mode, Ebrahim Kunju says. The department believes that many of the imponderables to development issues, including vexed land acquisition, could be more effectively dealt with in this manner.

An exclusive session has been earmarked to discuss this issue at the Infrastructure Conference 2012, the minister said. The main theme, ‘An integrated approach to infrastructure development,’ has been carefully chosen to rhyme with the comprehensive revamp that the department is currently undergoing with a view to assimilating technological and conceptual advancements.

BUILDING ON 2011

According to the minister, the last edition of the conference helped the department to adopt latest technologies, construction techniques, and management systems for sustainable development.

He attributed various path-breaking initiatives launched since – concretising roads, revising the public works department manual, launch of e-tendering, and inclusion of road safety and maintenance aspects in the contract terms on a long-term – to the successful conclusion of the year 2011 event and the result-oriented follow-up thereafter. The department officials may have just got another opportunity to acquaint themselves with modern techniques and approaches in the infrastructure and construction sectors, Ebrahim Kunju points out.

The public works department manual has been revised after a long gap of 40 years. E-tendering and e-payment options will improve transparency and efficiency of the tendering transactions and also speed up connected procedures.

PERFORMANCE GUARANTEE

Despite spending huge amount of money for maintenance, the roads in the State are in a state of disrepair, not to speak of despair, the minister says. It is with an intention to meet this situation fair and square that the State Government has proposed to implement a performance-based guarantee in the road building sector.

According to the minister, the State Government has envisaged five-year performance-based guarantee for all heavy maintenance works. As per this package, maintenance of roads for a period of five years after building them would have to be done by the contractor who undertakes the project. This would help in improving the quality of roads, Ebrahim Kunju says.

One other feature that the minister sought to proudly highlight is the fact that there is hardly any delay to speak of in work/projects. “Works are completed on time and sometimes even before time. Our hardworking and dedicated staff are committed to providing quality work and enhancing the comfort level of road users,” the minister said.

But he was aware of the major challenges that the department is faced with, not least of which is land acquisition and resettlement. But here again, the minister had reason to sound hopeful and optimistic. He agreed that there is apprehension in the minds of people in the State about land acquisition.

BEST PACKAGE

“But I’m happy and proud to say that, among the States, we offer the best rehabilitation and resettlement package. Those who sacrifice land for public good – for construction purposes in this case – will get market value for the parcel parted with. No other State in the country has anything better to offer,” Ebrahim Kunju says.

District level purchase committees with collector as the chairman will decide on the amount to be compensated and the recommendation is escalated to an empowered committee. The latter will have the final say on the amount payable, which would be paid out to the concerned person. According to the minister, rehabilitation packages have been designed for shopkeepers and street vendors, who will be given six months income as compensation without delay.

The minister was equally forthcoming on the issue of sustainable development, which is something close to his heart. Since sustainable construction is the running theme of the times we are in and gaining more and more prominence, the State Government has endeavoured to promote green building concepts and practices in a planned manner. Being an environmentally sensitive geographic region with meagre resources, it is desirable and only in the fitness of overall scheme of things that the State should promote green building technology in a systematic manner.

SUSTAINABLE GROWTH

While energy performance of the building is the primary focus in the green-building context, water conservation and use of sustainable materials also need most attention considering the peculiar characteristics of our State. Public works department buildings will play an important role by demonstrating this commitment by fully adopting the green building in all new buildings, the minister avers.

Meanwhile, timing of Infrastructure Conference 2012 assumes significance viewed against the backdrop of the multiple challenges that the road sector in the country at large has continued to face in recent times. These range from high interest rates, reduced availability of funds and execution slowdown to increased competitive intensity, according to an assessment by rating agency, ICRA.

Award of new projects has picked up during the last two quarters with the National Highways Authority of India awarding some mega projects.

However, execution on many of the projects awarded over the last one year has remained slow primarily because of delays in land acquisition, clearances, and financial closure. Projects that had the requisite approvals and funding reported healthy execution.

ROUGH PHASE

While both developers and contractors are going through a rough phase over the last one and a half years, the challenges were higher in the case of companies that had recently entered the project development space. While developers with a portfolio of operational toll road projects were partly hedged from high interest rates due to inflation-linked toll rates, those with projects in the developmental phase faced challenges in achieving financial closure due to weakened project viability owing to high interest rates besides delays in land acquisition and approvals.

Road construction companies continued to face long working capital cycles, which put a strain on their liquidity position and increased their indebtedness. The operating margins of several road contractors also witnessed pressure because of rising commodity prices (for fixed-price contracts) and idling of capacities as execution could not begin in many new projects.

With the National Highways Authority increasingly awarding projects under the public-private partnership model, engineering, procurement and construction (EPC) contractors have struggled to maintain their order-book growth and many have chosen to enter the PPP space by undertaking projects on build-operate-transfer basis.

The equity requirement for BOT projects, along with the weak capital markets that have made raising capital difficult, has increased their dependence on external borrowings. Further, many of these companies have raised debt at the parent or holding company level to meet the equity requirement in BOT projects thus significantly increasing the indebtedness at the group level.

9 sessions proposed

Infrastructure Conference 2012 has been structured to host nine technical sessions where experts of renown would share their experience.

Apart from Ministers, bureaucrats, engineers, and domain experts would attend the meet. Among the topics being discussed are institutional preparedness for a paradigm shift; new dimensions in land acquisition; asset management with special emphasis on performance-based maintenance approach; and pre-fabrication technology in modern construction.

Multi-modal integration of transport systems, road safety issues, participatory approach, and innovative financing for infrastructure development would also come up for discussions.

‘Vox populi,’ a special session, with an open debate on national highway development under build-operate-transfer (BOT) and road safety rules and a presentation on development of monorail projects would also be organised.

Among those who would be making special addresses are K. M. Mani, Minister for Finance; Aryaden Muhammed, Minister for Transport and Power; P.J. Joseph, Minister for Water Resources; K.C. Joseph, Minister for Rural Development; and Manjalamkuzhi Ali, Minister for Urban Development.

After the felicitation addresses, Parveen Kumar, Senior Vice-President, IL&FS Rail Ltd, will make a presentation on monorail projects.

The post-lunch session will be chaired by Manoj Joshi, Joint Secretary, Government of India, who will make the introductory address.

Arnab Bandyopadhyay, Senior Transport Engineer, World Bank, will present the paper on ‘Institutional preparedness – Need for paradigm shift.’

This will be followed by a panel discussion. Later, S.V.R. Srinivasan, additional metropolitan commissioner and managing director, Mumbai Metro, will make a presentation.

The topic will be on ‘New dimensions in land acquisition – A participatory approach.’ Ajith B. Patil, secretary, Kochi Corporation, will join him.

This will be followed by ‘Vox Populi,’ an open debate on national highway under BOT (build, own, transfer) and road safety issues.

source: http://www.thehindubusinessline.com

Road project loans to get secured debt tag

December 10, 2012

Move can cut cost of funds for large projects

The prime minister has moved a proposal that will lead to classifying loans given by banks and financial institutions to road projects as secured debt.

The objective is to reduce the cost of funds for the projects and also encourage banks to take larger exposures in road projects.

To make this possible, prime minister Manmohan Singh has asked the chairman of his economic advisory council, C Rangarajan, to suggest appropriate recommendations. Roads secretary A K Upadhyay has been asked to put together a note to the council for the purpose. On its part, the finance ministry will seek feedback from RBI and banks. Rangarajan will consult RBI before making recommendations.

At a recent review by the prime minister, the ministry flagged the treatment of loans and the cost of money as the biggest limiting factors in mobilising funds for road projects.

The prime minister has asked road minister C P Joshi to ensure that contracts for construction of 8,000 km of roads are awarded by March. But the ministry has said that contracts for 3,000 km under the build operate and transfer scheme would be awarded by then.

The government has also decided to set up an independent rail tariff authority and railway minister Pawan Kumar Bansal will go to the cabinet with the relevant proposal next month. The authority may be announced in the next rail budget.

Also on the directive of the prime minister’s office, the Mumbai elevated rail corridor and locomotive factories in Madhpur (Bihar) and Marhowra (West Bengal) would get support from the railways next year.

PMO wants the Maharashtra government to sign the support agreement for the elevated rail project within a fortnight. The railway ministry has been asked to ensure that bids for the project are opened before the next rail budget.

An inter-ministerial group headed by cabinet secretary Ajit Kumar Seth has suggested that the railway ministry seek approvals from the cabinet committee on economic affairs quickly for both the locomotive factories. Both will come up in partnership with the private sector.

About the dedicated rail freight corridors PMO wants revised estimates and funding arrangements finalised by next week.

Seth will coordinate security clearance before the financial ends for large port projects which plan to expand their combined handling capacity to 245 million tonnes a year.

March is also the deadline by which two major ports projects in Andhra Pradesh and West Bengal will be awarded. The shipping ministry’s proposals for this will go before the cabinet soon.

Loans given to roads, bridges and other public properties like Delhi Metro are considered unsecured as there is no tangible security. Banks recently made a representation to finance minister P Chidambaram to let them classify loans to public property as secured advance.

Banks also said that once revenues began to come in as toll fee for sue of roads ad bridges, loans to them could be used as collateral, making it secured exposure.

Lately banks have been cutting their exposure as many road projects are stuck for want of clearances. Their main complaint is loans to projects delayed by more than two years have to be classified as substandard assets and they have to make higher provisions.

A substandard unsecured loan has a provisioning requirement of 25 per cent of total loans, while a secured loan has only 15 per cent in the first year of classification.

P Sitaram, chief financial officer of IDBI Bank, said, “For loans given to roads bridges and other public property there is no tangible security as these cannot be taken up by banks and sold off. But all these projects have toll collections that can serve as collateral. There is a view that these advances should be considered secured assets.”

Bankers say that even working capital loans given to some debtors are secured as cash receivable from the customer is secured. The same argument can be extended to exposures to public utility infrastructure.

Usually road developers enter into a concession agreement with banks, NHAI and the state concerned. Private companies develop roads on a BOT basis which allows them to run and maintain the road or bridge for 10 to15 years and then transfer it to the government.

source: http://www.mydigitalfc.com

Toll Operations Organization Chart!!

December 6, 2012

Tolling Organization Chart varies from Operations to Operations. Given below is an illustrative example of the organization chart.

Manpower cost since the one of the major cost players in the O & M Budget, few of the pointers that can be kept in mind in reducing the same are:

While planning the Manpower, the following pointers are also to be kept in mind:

  • Weekly Off of the staff.
  • Relieve between the shift.
  • Leaves .( Cl / PL / SL / National Holidays )

1.   Increase in level of position to the team member being hired :

Whenever hiring for a position if the candidates fits the bill hire by giving him increase in his position , this way we save cost ,i.e. for hiring a G.M Operations , he will be on higher package and for him to come and join us will have to give him a more lucrative offer . Other than that hire a level lower i.e. Plaza Manager and offer him the position of G.M Operations.

2.   Mix of Team :

A mix of the team should be hired i.e. introduce a position of Asst for Blue Collar levels. I.e.we hire Toll Collectors and AsstToll Collectors and mix them in the duty allocation so that there is a mix of every in every shift.

3.   Centralized :

For a stretch of more than one plaza we have a Centralized solution for Control Room,Audit,and POSetc. and so on. This helps in saving the manpower costs plus overheads.

4.   Salary Linked to Performance :

For Top Positions we have salary divided into parts one is what they get and second is what they earn, by increasing the revenue.

5.   Incentive Schemes :

We might give the team the same salary that was given by concessionaire but introduce various incentive schemes in place like for T.C.: highest vehicle processed, for L.A: Highest number of vehicles through his lane without Queing, for Cashier: Highest number of Bleed Off. Plus above all an incentive for everyone who helps plugs a leak in the system.

6.   Standardization of System and Process :

We need to develop standard regarding system and process so that no matter which projects we work on our standards do not change drastically as this will help us in shifting people as and when there is requirement in any other project.

7.   In House Training Team :

We develop the training team in-house which imparts training first time an operation starts and trains the key players so that for any refresher course the in-house team of that project can take charge.

8.   Multi-Tasking Team :

Depending on the stretch of the project we can check on the facet of multi-tasking, for eg G.M Operations or Safety and Corridor Manager can also do the liaison of the project.

9.   Audit  :

The audit function at Project wise should be done with and the same should be done by toll Supervisor for his shift prior to banking in the vault for his shift.

10.   Centralized functions : ( From H.O )

We have centralized position i.e. from H.O which aids or helps the individual projects this will help us in dividing their cost of multiple locations rather than one. Some of the functions that can be done from H.O are:Procurement,Accounts,Training,and Human Resources plus over and above we have Audits by the H.O in the projects that we have so as to have a better control over the system.

 11.   Lane Optimum Utilization :

After checking the traffic figures we will have to see what is the best possible way to utilize all the lanes also keeping in mind the minimum q length is not effected.

Cost Saving Techniques Flow Chart

source:  Nipun Soni

                    9811471727

Management Graduate with over thirteen years of experience in Commercial Operation Management. Was a part of mobilization team of 2 BOT Projects (Delhi Gurgaon and Bangalore elevated Tollway Limited) plus setting the system and procedures for the biggest Point of Sale Operations in India at Delhi Gurgaon Super Connectivity Ltd.
Was also part of the mobilization team of India’s biggest Multi Level Car Parking in Delhi International Airport Pvt. Ltd.
Involved in opening and setting up systems and procedures in various hospitality outlets.



Poor market sentiment for slow pace in road project awarding

December 3, 2012

NEW DELHI: The government today said pace of awarding road projects is slow in the current fiscal due to a host of reasons, including poor market sentiment.

“The pace of award of projects is slow due to various constrains like poor market sentiments, shortage of equity of developers, lender’s pre-condition of 80 per cent possession of land…,” Minister of State for Road, Transport and Highways Sarvey Sathyanarayana said in a written reply to the Lok Sabha.

The exposure limit of banks for infrastructure projects reaching to its pinnacle and Supreme Court’s ban on quarrying of stones and pure earth, used in road construction, are also posing problems.

The Minister, however, said out of the 6,089 km National Highways targeted to be developed/improved during the current fiscal under NHDP (National Highways Development Project) and non-NHDP schemes, 2,493 km have been developed till September.

Sathyanarayana said 32 projects, aggregating 3,750 km, are proposed to be taken up with 100 per cent Government funding in various states on engineering, procurement and construction mode as these were not viable to be developed on Built Operate Transfer (BOT) mode.

In a separate reply, he said that of the proposed 32 projects, 10 with a total length of 1,010 km are in Rajasthan and six road projects measuring 765 are in Uttar Pradesh among others.

In another reply, Sathyanarayana said that a proposal amounting to Rs 156.79 crore was received for development of the existing four-lane carriageway to six-lane carriageway passing through Ghaziabad on NH-24.

“… the same was returned unapporved as the work was not included in the Annual Plan 2012-13,” he said.

source: http://articles.economictimes.indiatimes.com

India calls for Malaysia cos in road projects

December 3, 2012

India on Thursday sought investment from Malaysian companies in road-development projects in the country, stating that it had embarked on a massive national highway building programme. Visiting minister of state for road transport and highways, S Sathyanarayana, said India envisaged investment of upto USD 70 billion in the next five years in this field.

“About 50-to-60 percent of this programme is envisaged to be built through public-private partnership (PPP) in different types of concession agreements such as the build, operate and transfer (BoT) on toll basis and design, build, finance, operate and transfer (DBFOT) concept,” he said.

“A balanced programme is envisaged to be taken up on BoT (annuity) and engineering, procurement and construction (EPC) mode with public funding,” the minister said. “We intend to take up mega projects of longer length of about 400 to 500 km estimated to cost about USD 1 billion each and would welcome international participation and foreign direct investment (FDI),” he told reporters at the sidelines of the Asean-India Connectivity Summit.

source: http://www.moneycontrol.com

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