‘My way or highway’ won’t work

MAMUNI DAS

Without a change in approach, many road projects will disappear into thin air. — K. Murali Kumar

Highway developers should perhaps be allowed to rework premium payments, given the economic crisis.

Should financially-strapped highway developers be allowed to ‘reschedule’ the annual premiums they had offered to pay while successfully bidding for projects? This is becoming a classic case where several government arms want to escape the burden of saying a clear ‘no’, even though they do not want to say ‘yes’.

With a ‘no’, the UPA-2 government risks staining its report card on the highway development front at a time when it — and the economy — badly needs projects taking off the ground. Developers dumping projects isn’t good news when elections are barely months ahead. But a ‘yes’ could also mean taking decisions that the Government’s audit arms may question in future.

For almost six months now, a proposal to permit highway developers to postpone their premium payments in a manner that keeps the net present value of these obligations constant over the entire contract period, has been doing the rounds. It has been, to use official language, “under consideration”, with the Government neither accepting it nor rejecting it categorically.

THE GENESIS

The entire “under-consideration” exercise started as an attempt by the National Highways Authority of India (NHAI) to prevent developers walking out of road projects that they had won only two-three years ago.

They had done so by quoting high premiums payable to NHAI in return for getting the right to develop or widen highway stretches, maintain these and collect toll from users over a pre-determined period of 20-30 years.

Those were, of course, roaring times when everything seemed to be going right for the economy. So, instead of seeking a subsidy — viability gap funding — most developers raced to bag ‘design-build-finance-operate-transfer’ concessions by offering ever high premiums.

But with economic growth slowing down — from 8-9 per cent at the time of the award of contracts to 4-5 per cent now — and high inflation pushing up project costs, many developers have ‘discovered’ the same projects to be financially unviable and not capable of realising the toll revenues that they had originally projected. And luckily, they have found solace in Government’s inefficiencies, such as inability to get regulatory clearances on time.

Thus, the likes of GMR, GVK and Ashoka Buildcon have laid the blame on environmental/forest clearances and land acquisition. These clearances were delayed to such an extent as to change the entire project finance equations. Besides these developers, there are others too watching from the fringes as of now, although they haven’t served any termination notices on the NHAI.

Currently, there are some 15 highway projects that were awarded in 2011 but are yet to achieve financial closure.

DOING THE ROUNDS

In January, GMR announced its decision to seek termination of a 555-km, six-laning project between Kishangarh and Ahmedabad, while officially citing delays in obtaining regulatory various nods.

The infrastructure company had committed to pay a premium of some Rs 32,000 crore over the project period of 26 years. Interestingly, the Comptroller and Auditor General of India pulled up the NHAI on GMR’s threatened pull-out, saying that it would jeopardise potential premium revenues of Rs 32,000 crore from the project.

It was in this context that the NHAI Board, in March-end, approved a proposal by GMR for premium rescheduling. The approval, however, came with a dissent from the Expenditure Secretary R.S. Gujral and concerns raised by the Planning Commission Secretary Sindhushree Khullar. Both are members of the Board.

Since then, the Ministry of Road Transport and Highways has suggested some changes to frame a common policy for all such cases, involving premium rescheduling.

It sent a note to the Law Ministry for approval. The latter, in turn, turned the proposal down on grounds that it would amount to renegotiation of contracts.

The NHAI Chairman R.P. Singh, on his part, has sought an informed decision from all concerned Ministers. A ‘no’ to the proposal would ultimately endanger potential premium revenues aggregating about Rs 98,000 crore over 26 years, having a net present value of Rs 26,000 crore.

Following the NHAI Chairman’s intervention, the Law Ministry seemingly diluted its stance on the issue, while referring the matter to the Finance Ministry.

The latter, while proposing some riders, agreed to a one-time renegotiation, subject to concurrence from the Law Ministry.

The Road Ministry has since floated a Cabinet note listing all the available options. But what will emerge from all this isn’t clear. This rigmarole was only to be expected, since the proposal eventually involved reworking the norms of a contract that private firms had already entered into with the NHAI.

Contract renegotiation is not an area government officials are comfortable with, more so, given the potential risk of attracting audit scrutiny. And the timing — with elections around the corner and a government already under attack for Coalgate, Spectrum, Commonwealth Games and whatnot — couldn’t be worse.

THE ROAD AHEAD

The Government’s indecisiveness is due to lack of confidence, and there’s some over-defensiveness born out of previous scams.

At the same time, what it needs to also bear in mind is the fact that by not going in for renegotiation and instead allowing developers to exit, it jeopardises potential premium revenues in the future. That is something even the CAG has alluded to.

In other words, for the Government, it is a case of damned if you do and damned if you don’t.

The best way out of this mess is to follow some basics. If the Government decides to renegotiate a contract, it is important to not lose sight of the core aim of such an exercise.

In this case, the purpose clearly is to salvage highway development contracts that are on the whole favourable to the Government — those that can be physically executed on the ground, while protecting the Government’s financial interests.

Second, assuming clarity in regard to the core aim, the renegotiating conditions have to be transparent.

So, if the different arms of government arrive at a consensus proposal, they should discuss the final form of proposal with the developers before taking it to the Cabinet, to get an idea of whether the rescheduling proposal has any takers.

Unilaterally presenting a ‘take-it-or-leave-it’ proposal that developers don’t find viable defeats the very purpose of renegotiation. Else, the Government should have the spunk to say a simple ‘no’ (to any renegotiation)!

 

Source- http://www.thehindubusinessline.com

NHAI releases money for Panipat-Jalandhar highway repair

I P Singh, TNN

JALANDHAR: The National Highway Authority of India (NHAI) has released Rs 17 crore to the Punjab and Haryana governments for undertaking immediate repair and maintenance of NH1 between Panipat and Jalandhar.

The NHAI has also served a notice on project concessionaire Soma Isolux asking it to suspend toll collection as it was not maintaining the highway. “We have released Rs 9 crore and Rs 8 crore to Punjab and Haryana governments, respectively, to ensure that the highway was immediately repaired as commuters were facing difficulties due the bad condition of the road at several places. This amount would be added to the account of the concessionaire,” said NHAI member (finance) Satish Chandra.

Pitiable road conditions cast shadow on tourism in Kullu

Dipender Manta, Hindustan Times,  Kullu,

Rescheduling of premium: L&T, IDFC may also see their highway projects qualify

CCEA would soon be considering proposal to reschedule premium payment worth Rs 98,000 cr to be paid by private concessionaries to NHAI for 23 road projects

 

The union ministry for road transport and Highways may yield to a request by the National Highways Authority of India to consider 16 more projects for premium rescheduling if the Cabinet Committee on Economic Affairs decides to provide a one-time relief to 23 projects for rescheduling their premium.

The Cabinet Committee on Economic Affairs would soon be considering a proposal to reschedule premium payment worth Rs 98,000 crore to be paid by private concessionaires to NHAI for 23 road projects. If 16 more projects are approved for rescheduling then another Rs 53,000 crore premium payment due to be paid to NHAI would need to be rescheduled.

Companies including Larsen & Toubro, IDFC, Ashoka Buildcon and Oriental Structural Engineers are among the 16 companies looking to be considered for premium rescheduling for various projects, said an official. NHAI has been repeatedly holding meetings with officials in the ministry to take up the case of 16 projects as they fear a backlash from the project concessionaires.

 

“We can look at providing relief to the projects if CCEA agrees to reschedule premium in the first place. This is a one-time relief and not a policy, so we are hoping that they agree to it”, a senior official at ministry of Roads told Business Standard.

 

The issue of rescheduling for 16 projects emerged since these project developers had achieved the appointed date. It is the date on which the contract period begins. According to the norms, once a project is awarded to a concessionaire, it has to complete land acquisition and take clearances from the environment and forest ministry. The developer has to tie up funds besides meeting other norms. Once these norms are achieved, an appointed date for start of construction is said to have been achieved.

 

Meanwhile the official also added that the Finance Ministry has recommended that a stress test be conducted to find out the number of projects that are seriously affected due to various reasons before rescheduling their premium.“The finance ministry has recommended that we conduct a stress test to find out who are in real trouble and they have a valid point. With regards to the 16 projects, we feel that they need some help and we will see what we can do from our side”, the official added.

 

Premium is an amount that concessionaires pay to NHAI for a BoT (Build-Operate-Transfer) project as they feel that the returns from the project are expected to be very high and is usually decided on the basis of future traffic flow at the time of bidding.

 

The ministry is considering a premium rescheduling in a bid to give a breather to companies for a few years considering a slowdown in the economy. According to the premium rescheduling plan, concessionaires are expected to pay lesser premium for a few years and then subsequently increase their premium without affecting the total payment.

 

“Basically, it’s a breather so that we can kick start the projects and once traffic picks up, they can pay back higher amount in the future. At this point, we need these measures to encourage private sector investments”, an NHAI official said.

 

NHAI had in their board meeting proposed that 23 projects be considered for premium rescheduling and forwarded the request to the ministry of roads. Following concerns raised by the remaining project concessionaires, NHAI then requested that the remaining companies be added to the list.

 

The move to restructure premiums were proposed against the backdrop of some private infrastructure firms pulling out of road projects due to delays in regulatory clearances like land acquisition and environment clearances.

 

“Except a few cases, there is actually no need for premium restructuring. The government has actually taken a number of steps to ensure that the private sector is not affected and it is the companies who are at fault as they anticipated that the economy will continue to grow at the same pace as it did. There are some genuine cases where for reason such as a ban on mining, the traffic flow has fallen, But otherwise there is no genuine.

 

 

Source-http://timesofindia.indiatimes.com

 

 

Land hope shines on highway – Acquisition to be done by govt in a year, says NHAI official

PRANESH SARKAR /ADDITIONAL REPORTING BY AVIJIT SINHA

Calcutta,   The Mamata Banerjee government has agreed to acquire land within a year for four-laning NH31D, an official of the National Highways Authority of India (NHAI) has said.

If the state acquires the land, it will be a departure from its hands-off land policy.

Sources in the state government said the decision was taken at a meeting of senior officials of the state public works department, the NHAI and the Union ministry of roads, transport and highways in Delhi on Thursday.

The failure of the Bengal government to acquire land had prompted the NHAI to return the NH31D to the state this August.

Officials said around 1,400 acres were required to widen NH31D, part of the East-West Corridor from Porbandar in Gujarat to Silchar in Assam. The Bengal government has so far acquired only 20 per cent of the land.

An NHAI official today said the Union ministry of roads, transport and highways had sanctioned Rs 95.2 crore to carry out repairs on a 67km stretch of NH31D between Fulbari near Siliguri and Dhupguri in Jalpaiguri

“The state government has said it will acquire the land required for four-laning in one year,” the official added.

According to the official, the ministry has sanctioned the amount to repair the two-lane highway because it expects that the four-laning work will be completed in three years if the state hands over the required land in a year.

Senior state government officials said it was not often that the ministry allotted an amount as high as Rs 95 crore for repairs on a two-lane highway as it cannot levy a toll for two-lane roads.

Several highway-widening projects in Bengal have been stalled because of the state’s reluctance to acquire land.

“But the situation started changing in the past six months. Work to widen NH34 (Barasat-Dalkhola) has progressed significantly. But this is the first time the state government has agreed to acquire land within a time frame,” a senior state government official said.

Asked about the NH31D project, north Bengal development minister Gautam Deb said: “We are against forcible acquisition of land. But the state also wants the four-lane project to be completed in north Bengal for better connectivity…. We are always ready for talks with landowners to ensure they receive the best compensation.”

A wider NH31D would offer faster travel between north Bengal’s tea gardens and the tea trade centres in Siliguri and Assam.

But the government has faced protests from landowners in Falakata and Dhupguri blocks in Jalpaiguri. The NH31D is the only part of the East-West Corridor where four-laning work is yet to begin.

Source-http://www.telegraphindia.com

Highway to hell: 40km stretch of NH7 from Mansar to Khawasa in pathetic condition

 Ashish Roy & Abhishek Choudhari, TNN |

NAGPUR: The 40km stretch from Mansar to Khawasa on NH-7 resembles anything but a road today. To call it ‘pothole ridden’ would be an understatement, since the potholes have turned into almost two-feet-deep ditches, almost throughout this stretch. The road, unworthy of being called a national highway, has gained notoriety for accidents, long traffic snarls and damaged vehicles.Sadiq Qureshi has been ferrying passengers daily between Kamptee and Khawasa in his private taxi for the last nine years. He has never seen the stretch is this dangerous a condition. “It was always bad, but this monsoon seems to have taken everything out of it. The tar has been washed away completely, and huge ditches are the norm. Our taxis are loaded with people and maneuvering loaded vehicles through the ditches is risky. I have seen two trucks tip over this month alone, just beyond Deolapar village. The ditches are so deep that balancing a loaded truck is tricky in the day, and impossible in the night,” said Qureshi.For truck owners, driving on this stretch is akin to a death wish for their vehicles. But with fixed transport routes, they have few options. Truck driver Komal Singh Parmar said, “I frequently travel on this road and ferry goods from Uttar Pradesh to southern states, as it is the shortest route. Since Holi, I have replaced three tyres as they got damaged. After monsoon, the conditions have become horrible. The stretch is bad enough to break the axle of a fully loaded transport truck.”Traffic on this route literally crawls, taking 90 minutes on an average to travel the 40km stretch. At the really bad spots, trucks face off for hours together, as only one can pass at a time.Truck driver Naman Sheikh said, “Just beyond Deolapar village, there is a small bridge that is clearly the worst patch on this route. Navigating those 20-30 meters is the most challenging tasks for us, as even the slightest slip will result in the truck tipping over. When that happens, there’s bound to be a traffic jam for six to seven hours.”

As far as repair and maintenance go, the 40km stretch is a no-go zone. The National Highway Authority Of India (NHAI) has leased the road for 28 years to Oriental Structural Engineers (OSE), on build-operate-transfer basis. But a part of the project is stuck because of objections from the forest department.

NHAI chief engineer Arvind Kale said, “We had signed a contract in 2006 with OSE to turn the entire 117km road from Khawasa border to Borkhedi into a four-lane highway. The 40km stretch from Mansar to Khawasa is also part of this contract, and 30km of this comes under forest land. This stretch could not be four-laned because the Supreme Court struck down the project as it would affect Pench National Park.”

With the project in doldrums, NHAI claims to have worked out a compromise formula. Kale said, “The proposed width of this road was 60 metres, but we decided to construct a 30 metre wide road instead. The revised proposal was sent to the state government, which forwarded it to the union ministry of environment and forests (MoEF).”

OSE has washed its hands of the issue, admitting that it got the contract but NHAI never handed over the Mansar-Khawasa stretch to it. Prashant Bargi, local representative of OSE, said, “We are currently maintaining the stretch from Borkhedi to Ramdham (just before Mansar). We have not been handed over the remaining stretch yet, it remains with NHAI.”

Asked about the horrific road conditions and threat to human life, Kale said maintenance of the stretch is under consideration. “We are hoping the MOEF clears the revised four-laning proposal soon, else we will go ahead with the repair work. The damage is due to very heavy rainfall this year. NHAI had prepared an estimate for road repairs, but after our senior officials inspected the stretch we realized the estimate needs to be revised upwards,” said Kale.

The files and permissions related to road construction and repairs seem to be stuck in red tape, and progress is slower than the traffic on this road. DM Reddy, a civil contractor and social activist based in Ramtek, said, “Trucks line up for hours and accidents occur by the dozens as the road condition deteriorates by the day. Residents all along this killer highway are living in constant fear, not knowing which acquaintance or relative will be claimed by the road next. Our public representatives have failed us, and now we can just resign ourselves to fate.”

For tourists headed to wildlife sanctuaries like Pench or Karmazari, the adventure begins much earlier in their journey. The horrific condition of the stretch of road from Mansar to Khawasa makes driving a treacherous and risky proposition. With tiger reserves set to open in October, the local travel industry is worried about the adverse impact on not only tourism revenues but also tourism reputation.

Chandrapal Choukasey is a member of the National Tourism Advisory Council (NTAC) and says the tourism business is being ‘wiped out’ due to bureaucratic hurdles. “The reputation of our region will plummet once tourists travel on that road. We are bringing in tourists from overseas and different parts of the country to showcase our majestic tigers but the National Highway Authority of India (NHAI) seems to be hell bent on ensuring that tourists never return. Even though Karmazari is in Madhya Pradesh, the road and airport used to get there belongs to us. It is Nagpur’s reputation at stake but NHAI and the contractor, Oriental Structural Engineers, are least bothered,” said Choukasey who also has stakes in the tourism business near the Mansar-Khawasa stretch.

The impact on tourism has already begun to show as Sandeep Singh, secretary of Pench Jungle Lodges’ Federation (Madhya Pradesh), says the pathetic road conditions are scaring off tourists. “I reside in Nagpur and take that road every week and can say that it is not fit for driving anymore. We have had cases of where tourists coming from Nagpur have turned back, leading to many bookings being cancelled. We have been in touch with NHAI but there has been very little progress on road maintenance. The forests will open for tourism on October 16 and there is no doubt that the road condition will affect tourism,” said Singh.

MS Tuli, a veteran hotelier with a high end property at Pench, says anywhere in the world, tourism industry’s fortunes are directly connected to transportation facilities. “I would not say the road between Mansar and Khawasa is bad because I think there is no road there at all! It is extremely embarrassing to bring in tourists from all over the globe and set them off on a 40km stretch of ditches and trenches. A foreigner comes from Mumbai to Nagpur in 75 minutes but then discovers that it takes minimum two hours, sometimes three, to reach Pench. After such a bad experience the word spreads and tourism will take a toll if the highway is not repaired this year. I don’t understand why they can’t fill up the ditches with murum (red gravel) so that at least the ride for tourists is comfortable,” says Tuli.

Resort owners assert that with more options of tiger tourism available near Nagpur, a considerable traffic can be drawn away from Pench if the roads are not repaired with urgency.

While the residents of Ramtek are angry over National Highway Authority of India (NHAI) and its contractor Oriental Constructions for the abysmal shape of Mansar-Khawasa road, the shifting of toll plaza from Tekadi to Amdi (opposite Ramdham) has also invited controversy. The matter had reached the Supreme Court and the court ruled in favour of Oriental Constructions.

If you travel from Kanhan to Mansar, you cross a small village called Tekadi and then come at a T-point called Amdi Phata. The road towards left goes to Parsheoni and Saoner. On travelling further you reach Amdi village and then finally Mansar.

Earlier, the toll plaza was at Tekadi. However, according to Ramtek politician DM Reddy, it was shifted to Amdi so that the traffic from Raipur, Bhandara and Gondia towards Bhopal would be forced to pay toll for using just 3 km of the toll road. “Many people travelling from Chhattisgarh, Gondia and Bhandara travel to Bhopal using the Tumsar/Bhandara-Ramtek-Mansar-Amdi Phata-Saoner-Multai route. When the toll plaza was at Tekadi such vehicles did not pay any toll,” Reddy said.

“Very few people travel from Kanhan to Parsheoni and Saoner using Amdi Phata and hence the loss of toll due to closure of plaza at Tekadi is minimal,” he explained.

Mahendra Lule, office-bearer of private bus operators’ association, said that the plaza was moved from Tekadi to Amdi to compensate for revenue loss at Dongargaon toll plaza. “We had intervened in SC in the petition opposing shifting of the toll plaza to Amdi but unfortunately the SC did not hear our plea,” he said.

The Nagpur bench of Bombay high court, hearing a case filed by Butibori Manufacturers Association (BMA) had held that both the toll plazas at Dongargaon and Amdi were illegal. Oriental and NHAI appealed against it and the SC allowed them to set up plazas at Borkhedi and Amdi, the two ends of the toll road. BMA did not object to this decision as its problem was solved.

Prashant Bargi of Oriental Constructions said the toll plaza was at the spot mentioned in the agreement between NHAI and his company and there was no irregularity involved.

Politicians take to streets even if condition of district roads is half bad as that of NH 7 between Mansar and Khawasa. However, as the 40km stretch passes through Pench national park and Mansinghdeo wildlife sanctuary and has very few villages, no politician has taken the issue seriously.

Ramtek MP Mukul Wasnik could have easily got it repaired given his clout in New Delhi. However, he rarely bothered to visit it until a few months ago. Deolapar residents say Ramtek MLA Ashish Jaiswal too does not bother about their area as there are not many votes there. “He concentrates on Ramtek area, which is quite populated,” a resident said.

When MLA Jaiswal, who is from Shiv Sena, was asked about the condition of the highway he shrugged off his responsibility saying that the 40km stretch was being maintained by NHAI and hence it was the responsibility of MP Mukul Wasnik to take up the issue. “Had it been a state highway, I would have got it repaired by pressuring the state government,” he claimed.

Jaiswal had promised TOI on Friday to show the bad stretches and arrange meeting with local residents suffering because of the abysmal condition of the road. On Sunday morning, TOI tried to contact him several times but he neither responded to SMSes nor took any call. On Monday, he claimed he was indisposed. Krupal Tumane, Shiv Sena leader who contested against Wasnik in 2009 general elections, too blamed Wasnik. “The MP is just not interested in getting the road repaired. People are angry with him. About three months back, they had gheraoed him between Mansar and Paoni. He assured to get the road repaired within 15 days but nothing happened,” he said.

On the efforts he had made in this regard, he said, “We had staged a road blockade some time ago. We also met NHAI chief engineer Arvind Kale but to no avail. If NHAI doesn’t listen to Wasnik, what can people like me do?”

D M Reddy, an independent candidate who contested against Jaiswal, claimed he was the only politician taking up the issue. “I had led the road blockade in Deolapar two months ago. MP Mukul Wasnik and MLA Ashish Jaiswal did not even visit for a minute. Jaiswal lives just a few kilometres away but even then he did not come though it was an apolitical agitation. This in spite of the fact that about 125 people have died in last two to three years,” he said.

Chandrapal Choukasey, Congress candidate who contested against Jaiswal in 2009, defended Wasnik. “It was due to Wasnik’s efforts that Rs7 crore were sanctioned for repairing the road. However, Orient did not do anything and the money lapsed. It is completely their fault. About 100 people have died and thousands, who travel on the road regularly have developed back trouble. State government’s forest department is also responsible for delay in forwarding the file to centre,” he said.

Source http://timesofindia.indiatimes.com

DC informs on highway alignment

DIMAPUR,   (NPN)

Re-survey for rectification and pillaring along the proposed four-lane National Highway as per National Highway Authority of India (NHAI) alignment within Right of Way (RoW) from Kukidolong upto Piphema would begin from September 23.

In an order, DC Dimapur N. Hushili Sema requested all government departments: LRSO, EE PWD (R&B), EE Housing, EE NH, EE (Elect), DFO Dimapur, EE Irrigation & FC, district horticulture officer, EE soil & water conservation, land resource, fisheries, agri departments and others to assist the survey team wherever necessary till completion of the re-survey works. DC also requested all GBs/chairmen of village councils between Kukidolong and Piphema to inform landowners to extend cooperation to the survey team for smooth conduct of re-survey and re-alignment of the four-lane NH till its completion.

Source-http://www.nagalandpost.com

Pathankote-Jammu highway Toll Post can take toll on J&K’s law and order, warns report

UMER MAQBOOL

Darkness on Hyderpora-Tengpora highway risks public life, property

GK NEWS NETWORK

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