NEW DELHI: Building 20 km of road on national highways a day is still a distant dream for the UPA II government.

Four years after the then road minister Kamal Nath had announced the ambitious target, the National Highways Authority of India — the central agency which builds highways across the country – has managed to build just 8 km of highways per day during the financial year 2012-13 that ended on Sunday.

According to statistics made available by the NHAI, the agency was able to construct a little over 2900-km stretch in 2012-13. Though the figure is highest so far (see box), NHAI still has way to go before it is able to meet the 20-km-a-day target. To achieve this, NHAI will not only have to award higher number of highway projects but will also have to build 7000 km stretch every year. Experts say it seems unlikely unless the highway agency augments its capacity.

RP Singh, NHAI chairman, however, said, “Our target was to build 3000 km. Our achievement is much better than expected and is the highest as compared to the previous years”.

But more than meeting its construction target, what has worried road ministry officials is the dismal achievement vis a vis awarding highway projects during 2012-13. The NHAI has been able to award a little over 1,000 km stretch as on March 31 as against the original target of 9,500 km which was later scaled down to 6600 km.

Officials attribute this to a host of factors, including the prevailing market condition and delay in getting environment clearance. “For the time being, we should live with this. There are a number of reasons — administrative such as delay in getting environment clearance, land acquisition etc. and market related which have been responsible for dismal award figures,” BK Chaturvedi, Planning Commission member (infrastructure) told HT.

While NHAI has been able to build 2900 km highways during 2012-13, the road ministry has been able to build an additional 2900 km as part of its various non national highway development projects.

Source- http://paper.hindustantimes.com

These include providing connectivity to the naxal-affected areas and the North-East region.

Chaturvedi is holding a meeting to review the progress of road projects on April 3.

MUMBAI: The city’s longest flyover, connecting the 9.29-km stretch from Orange Gate on P D’Mello Road to the Mahul creek salt pan between Anik and Chembur, will be completed on Saturday. It will also be the second largest flyover in the country, the largest being the one that connects Hyderabad airport to that city.

Still, the Eastern Freeway elevated road will be the longest such in an urban area in the country once the final concrete block is lifted and placed on Saturday afternoon. The bridge will have 313 pillars and 3,340 segments.

With the development, massive traffic decongestion on the eastern road corridor of the city will be achieved from May onwards, as the flyover forms part of an upcoming 17-km signal-free freeway. Mumbaikars would be able to enter and exit the road from eight points. While six pairs of ramps would become be operational in May, the remaining two will be opened to traffic in June at the earliest.

A 4.5-km mixed road-tunnel-flyover connectivity willcome about between Anik and Chembur; the freeway will offer Mumbaikars a much-awaited 20-minute road journey from CST to Chembur—the entry point there being at Panjarpol near R K Studios.

Thus, the 17-km freeway is divided in three parts: the 9.29-km elevated road, the 4.3-km road-tunnel-flyover and an elevated 2.5-km flyover from Panjarpol till the Mankhurd-Ghatkopar Link Road (MGLR) via Govandi.

“By May end, we will start the four-lane road up to Shivaji Chowk, Chembur, from CST, but for the last leg (till MGLR), we may need another one or two months,” said a senior MMRDA official. “The second part of the freeway will be eight-laned to take traffic from four lanes of flyovers and four lanes of roads below.

Source- http://timesofindia.indiatimes.com/

The country’s infrastructure sector, seen as a growth engine for economy, is beset with problems.

The 12th Plan projects an investment of Rs 55 lakh crore ($1 trillion) in infrastructure with private sector contributing about 47 per cent.

While private sector is seen to contribute a major chunk of the potential opportunity, players in the sector are faced with liquidity crunch and funding is hard to come by lately. While several measures have been initiated by the Government to address the sector concerns, it is still some way away in terms of returning to normalcy.

The infrastructure sector woes include tough macro economic conditions, high interest rates, mounting debt, liquidity concerns, tough scenario in the capital markets, making entry and exit difficult. There are also a slew of regulatory issues, including environmental, contributing to slowdown leading to delays in project implementation.

LIVING ON HOPE

Interaction with several leading infrastructure companies shows that they are all living on hope and a changed business environment to help them turn around.

Even the measures announced by the Government and the Reserve Bank of India to lower repo rates, to accelerate growth, have not begun to impact at the ground level. Banks have not yet passed on the benefits.

Prime Minister Manmohan Singh and a core team are looking into concerns of the sector and to help create the necessary feel good factor to accelerate the growth.

Union Finance Minister P. Chidambaram in the Budget for 2013-14 has announced several measures to restart the growth engine to attract more investments — domestic and foreign.

Power sector and construction of roads have been adversely hit due to fuel supply concerns and environmental issues. The Government is now seeking to address this problem by setting up a regulator for roads and a Cabinet Committee on Investment.

GROWTH CORRIDORS

The industrial corridors such as Delhi-Mumbai corridor connecting major cities and industrial hubs in South will be one big unfolding opportunity for infra companies to play a role in their development.

The Department of Industrial Policy and Promotion and the Japan International Cooperation Agency are preparing a plan for Chennai-Bangalore Industrial Corridor to be developed in collaboration with the Governments of Tamil Nadu, Andhra Pradesh and Karnataka. It is also proposed to take up yet another major corridor between Bangalore and Mumbai. While the planning and execution may take a few years, they will open up big opportunity for development of expressways, industrial hubs dotting these corridors and towns and cities along will benefit with improved infrastructure.

With such projects running into thousands of crores, the Government is banking on investments from multilateral agencies. Japanese companies, in particular, are keen to play a big role in these corridors, a recent delegation that visited Hyderabad told Business Line.

The Government hinted at setting up of two large ports in Andhra Pradesh and another one in Tamil Nadu, the latter with an outlay of Rs 7,500 crore.

While some of the initiatives of State Governments, such as the development of petroleum and petrochemical region in Andhra Pradesh, are still struggling to attract investments, industry watchers say that the situation may improve as LNG terminals come up in the South and the gas output improves in the Krishna Godavari basin.

TOUGH TIMES

While new opportunities are opening up for development in infrastructure sector, top companies executing projects are passing through tough times. Their corporate debt has been mounting and profitability dwindling due to high interest rates.

Faced with liquidity crunch, they are in the process of churning portfolio. But with most companies planning to divest stake in matured projects to trim debt and redeploy funds for new projects, the focus has shifted from build, operate and transfer mode projects to EPC contracts, the latter ensures there is low debt.

While there have been couple of deals where GMR has divested stake in a road project in Andhra Pradesh, and power project in Singapore, GVK in its rail and transportation project in Australia, the market conditions are still not conducive for deal making, infra companies say.

The Government move to set up national investment and manufacturing zones and electronic clusters will spur new activity in development of infrastructure associated with such projects. Andhra Pradesh, for instance, has been allocated two such zones. Several projects at advanced stages, including two power projects in AP, have been impacted by agitations by locals. And many other projects are still awaiting clearances adding to hurdles in bridging the demand-supply mismatch.

LAND HURDLE

Land acquisition continues to be a major hurdle for power projects and dozens of road projects, close to completion, have been impacted due to acquisition issues.

All these contribute to delays and lenders are feeling the pinch.

Source-http://www.thehindubusinessline.com

The wheels of the Government seem to be turning to get new and stalled projects in the power, road, iron and steel, cement, and port sectors off the ground.

Following Finance Minister P. Chidambaram’s meeting with the chiefs of public sector banks (PSBs) and state-owned financial institutions on March 18, the process of region-wise stock-taking of new and stalled projects has begun.

The first meeting, organised by Canara Bank, was held in Bangalore last week. Top representatives of major banks headquartered in the South, their large clients having projects in the region and top Finance Ministry officials were present at the meeting.

Similar meetings would be held in Delhi, Mumbai and Kolkata.

GDP AND INFRASTRUCTURE

The stock-taking initiative on new and stalled projects comes at a time when growth has decelerated significantly. India’s GDP growth at 4.5 per cent, in the October-December quarter of 2012-13, was the weakest in the last 15 quarters.

According to Reserve Bank of India Deputy Governor H.R. Khan, infrastructure development facilitates economic growth and economic growth in turn increases demand for more infrastructure. Thus, development of adequate and quality infrastructure is a necessary condition, if not sufficient, to maintain growth momentum in any economy.

Finance Ministry estimates show that there are 215 projects, each with a project size of Rs 250 crore and above, that are stalled. Out of 215 projects, 106 are in the power sector, 79 in roads, 20 in iron and steel, and 5 each in cement and port sectors.

All these projects, which collectively involve an outlay of over Rs 7 lakh crore, have been supported by PSBs. As at December-end 2012, PSBs had disbursed Rs 54,000 crore to the projects.

Delays in land acquisition, resettlement and rehabilitation issues, environmental clearances, tie-up of project financing, non-availability of fuel for power generation, lack of infrastructure support and linkages are some of the reasons for the projects being stalled.

During the current financial year up to December 2012, PSBs received 126 new projects — in power, power, road, iron and steel, cement, and port sectors — involving a collective outlay of Rs 3,55,880 crore. The projects are at various stages of appraisal and sanction.

ADDRESSING BOTTLENECKS

At the March 18th meeting, Government officials sought to assure bankers that the issues relating to coal linkages are getting addressed with bids being called for new projects.

Delays associated with environmental clearance are also likely to be sorted out shortly with the proposal to de-link forest clearance from environment clearance and an agreement being reached between various Ministries to expedite the clearance process.

Most of the issues relating to highway projects were being addressed and there is a likelihood of the various roadblocks being duly addressed by the Cabinet Committee on Investment. Issues relating to 37 road projects, where the selected promoters were not performing, would also be addressed shortly.

As regards electricity distribution companies, issues with related to settlement on the interest rate (on outstanding loans) to be charged are likely to be resolved.

AREAS OF CONCERN

Iron ore mining was still stuck in the courts and it was not clear when this issue would be addressed.

Gas supply for power projects remains a concern.

In the case of road projects, huge funds are stuck in arbitration. Hence, bankers want the Finance Ministry to intervene and impress upon the National Highways Authority of India to settle these cases out of court at the earliest so that funds could be released into the system.

Escalation in project costs due to time and cost overruns is likely to raise problems for banks.

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Source-http://www.thehindubusinessline.com

Shares of IRB Infrastructure Developers  gained more than 2 percent on Tuesday after the company’s subsidiary IRB Westcoast Tollway (special purpose vehicle) has executed concession agreement with NHAI for the road project. 
The project includes construction of four laning of Goa/Karnataka border to Kundapur section of NH-17 in the State of Karnataka on design, build, finance, operate and transfer (toll) basis.
“Estimated cost of the project is approximately Rs 2,600 crore and the construction is to be completed within 910 days from the appointed date,” the company said in a release sent to exchanges.
The SPV will get tolling rights on NH-17 upon completion of construction. The grant sought by the SPV from NHAI is Rs 536.22 crore.
At 14:09 hours IST, shares went up 0.72 percent to Rs 112.30 on Bombay Stock Exchange.

Market capitalisation of the company currently stands at Rs 3,732.45 crore.

Source- http://www.moneycontrol.com