IL&FS Rail awards Rs 5.7 bn worth contract

August 12, 2013

IL&FS Rail (a subsidiary of Infrastructure Leasing and Financial Services) awarded an approximately Rs 574 crore worth of turnkey project to a consortium of Siemens, Siemens AG and Siemens, China.

The consortium secured the contract, which is valued at about 70 million euros. The consortium is responsible for extension of the Gurgaon metro line with a new 7 km southern line. The line will add six stations in south-east Gurgaon.

Of the order, the share of Siemens is about 30 per cent or Rs 184.1 crore. However, the share of Siemens AG and Siemens, China is not known.

Siemens would deliver seven aluminium-bodied metro trains for the new section of the Gurgaon line. The trains are to run on standard-gauge track at a top speed of about 80 km/h.

The modern signalling and train control system that will ensure required service interval of 120 seconds is achieved during rush-hour traffic. This short headway will enable the metro trains to transport more than 30,000 passengers per hour.

The Gurgaon metro project is a first of its kind in India; the first phase is close to completion. The new southern line of the metro rail link from Sikanderpur station to Sector 56, Gurgaon, will bring respite to the numerous people travelling to the various office complexes and residential areas in this area.

Source –http://www.constructionworld.in

Written by ITW Editor · Filed Under Articles

A capital cost of capacity

March 3, 2008

Demand is growing faster than anticipated. And there is such dearth of infrastructure that new capacities will be absorbed promptly

Last month, the showpiece urban transportation project, the 28km Delhi-Gurgaon expressway was inaugurated. Another big-ticket project, Bangalore International Airport Ltd, is set to begin operations in March. In the case of the expressway, traffic on the first day was what was projected for 2013. In Bangalore, the passenger traffic will cross 11.3 million—a number initially projected for 2015—by the end of the year. In both cases, capacities for the first year are inadquate.

Clearly, the project planners in both instances got their projections quite wrong. But, if one steps back, a more complex picture emerges. The most obvious fact is that demand is growing faster than anticipated. And there is such dearth of infrastructure that new capacities will be absorbed promptly. In contrast, China seems to be a case of excess capacities.

Another factor being debated is that this is not a simple case of an owner-operator failing to anticipate traffic. Any entrepreneur would see the obvious and plan for it. Instead, it is argued, given the cost of capital, one shouldn’t expect anything different. Our real interest rate—corrected for inflation—is about 7%, probably among the highest in the world. Hence, the entrepreneur’s action would be an error of commission—to minimise project risk.

The other side of the coin is that the pricing of public services is subsidized, largely to ensure that the less well off can avail the benefits. In other words, far more people can afford to consume these services than otherwise. While not making a case for leaving out these segments, there is need to strike a correction.

The reason is simple.

Subsidized consumption, like other political largesse, comes at a fiscal cost. Not only does this push up the cost of capital, it also—since government borrowings inevitably expand money supply—stokes inflationary pressures, hurting the very people that the government set about protecting. In China it is the opposite, where fiscal profligacy subsidizes investment.

Both extremes are unsustainable. Given India’s mixed socio-economic demography, there is a case for revisiting subsidized consumption. A good beginning would be if the political parties arrive at a consensus that ensures bad economics will no longer be passed off as sensitive politics.

A precedent exists. Gujarat, in the early 1990s, had come out with a document detailing an all-party commitment to structural reforms in the state. That no doubt underlines the economic success of the state over the past decade.

Source: livemint.com

Written by ITW Editor · Filed Under Uncategorized

India approves offshore container terminal

November 11, 2007

New Delhi: India’s Cabinet approved the development of an offshore container terminal at Mumbai Port as trade expands in line with growth in Asia’s third-biggest economy after Japan and China.

The terminal will be built by a group of companies consisting of Gammon India, Gammon Infrastructure and Dragados of Spain, the government said in a release in New Delhi.

India is bolstering port capacity as economic growth boosts the import of oil and the export of textiles.

The shipping ministry said in December 2005 it expects to spend Rs1 trillion ($25 billion) in six years to improve maritime facilities.

Expansion

The South Asian nation’s economy has expanded at an average 8.6 per cent since 2003, the second-fastest pace among major economies after China.

India’s exports of gems, textiles and other manufactured products rose at the fastest pace in five months in September, the government said November 1.

Mumbai Port Trust, which will provide the supporting infrastructure for the project, will spend Rs3.66 billion ($93 million) on the project, which will cost a total of Rs12.28 billion, the government said.

Funding

The remaining Rs8.62 billion will be invested by the non-state partners.

The project will add capacity of 9.6 million tonnes per annum and will be constructed in three years, Finance Minister Palaniappan Chidambaram told reporters after the Cabinet meeting that approved the plan.

Source: gufnews

Written by ITW Editor · Filed Under Investment and Finance