HCC joint venture bags Rs639-crore Andhra irrigation project contract new

July 31, 2008

Mumbai: Hindustan Construction Company (HCC) jointly with SEW Infrastructures Ltd and Megha Engineering & Infrastructures Ltd (MEIL) has bagged a Rs639-crore contract for building a barrage of around 3.5 km on river Pranahita near Tummidi Hetti village in Adilabad district of Andhra Pradesh.

HCC will have a share of Rs326.03 crore in the work being undertaken for the Pranahitha-Chevella Package-3 being undertaken by the Irrigation & Command Area Development (ICAD) department of the government of Andhra Pradesh.

The contract covers detailed investigation, preparation of designs, drawings and construction of a barrage including fixing of gates, head regulator and 500 meter long gravity canals. The project will be completed in 48 months.

The project is a part of the government’s ‘Jalayagnam’ programme, an initiative to provide immediate irrigation benefits to all underdeveloped regions of Andhra Pradesh.

Pranahitha-Chevella lift irrigation scheme will irrigate an ayacut of 12.20 lakh acres and provide drinking water to about 1,000 villages in Adilabad, Karimnagar, Nizamabad, Medak, Nalgonda and Rangareddy districts in Telangana region.

HCC is currently involved in construction of Godavari lift irrigation phase I and Phase II in Andhra Pradesh where Phase I has already been commissioned and phase II is in advanced stages of completion. In addition, HCC is currently executing four major projects in Andhra Pradesh, including the country’s first cavern for strategic storage of crude oil at Visakhapatnam, the Veligonda lift irrigation project, the Rajiv Sagar lift irrigation project and a 30 km highway of NHAI on NH-7 under north-south corridor on BOT basis.

HCC constructed the first bridge over the river Godavari at Shahgar, in Andhra Pradesh way back in the 1930s. Since then it has built several infrastructure projects, including the Godavari Barrage at Rajahmundry, the Papavinasam Dam, the Vizag Monolith & West Wall Protection and the Railway Bridge over Godavari which is the first and only bow-string bridge in India, the company said in a release.

HCC has so far constructed over 45 dams, barrages and 15 powerhouses in the sub continent, contributing to over 30 per cent of the country’s installed hydropower capacity.

Source: domain-b.com

Written by ITW Editor · Filed Under Investment and Finance

Ministry unlikely to pay highway companies for higher input costs

April 28, 2008

The Ministry of Road, Transport and Highways is unlikely to accept a demand of private contractors engaged in the construction of national highways for reimbursement of increased costs, incurred due to the unprecedented hike in cement and steel prices.

A senior official in the Ministry of Road, Transport and Highways said: “We have received the demands of the highway contractors. However, it is very difficult to rework the cost escalation norms and reimburse the escalated price in a running contract. The government has taken several measures to address the price issue and in the coming days the prices of steel and cement are expected to come down”.

He added the projects undertaken on a public-private partnership (PPP) basis always have a risk element involved.

The risk is addressed to a certain extent as the contract is based on the star rate (the base rate at which the contract is signed for any given commodity used) and in which there is a provision to reimburse the escalated price.

Brahmdutt, president, National Highway Builders Federation, said: “The unanticipated sharp rise in the price of cement, steel, bitumen and other raw materials over the last year have hit hard the contractors undertaking National Highway Authority of India’s (NHAI) projects. The escalation clause of most contract documents are insufficient to accommodate the large variations in prices of construction materials. As a result such variations transfer themselves to the contractor in the form of increased costs”.

Over the last year, prices of steel, cement and bitumen have increased at an average of 76.96 per cent. This has led to increase in cost of building a 1 km four lane project from Rs 6 crore to Rs 7.84 crore

Ankideedu Maganti, director, Soma Enterprises Ltd, which is undertaking a couple of National Highways Authority of India, projects said: “At the time of bidding we assume a inflation of 7-8 per cent on materials.

But right now, our assumptions are not able to accommodate the 40-50 per cent rise in the price of raw materials”.

Source: www.business-standard.com

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SIX Laning of delhi-Dehradun National Highway

April 24, 2008

Delhi-Dehradun stretch of NH-58 & 72 has been identified for 4/6-laning under National Highways Development Project (NHDP) Phase III on Build, Operate & Transfer (BOT) mode based on the criteria of high density of traffic and connectivity of State capitals with corridors of NHDP Phase I & II . The present status of this stretch is as under:

Delhi-Meerut section of NH-58 is already 4-laned and preparation of Detailed Project Report (DPR) for 6-laning is in progress.
The work of 4-laning of Meerut-Muzaffarnagar section of NH-58 on BOT basis is in progress and targeted for completion by March, 2009.
The work of 4-laning of Muzaffarnagar-Haridwar section could not be awarded as only single bid was received and the same was cancelled. For re-bidding of this section, updation of Detailed Project Report (DPR) as per new Model Concession Agreement (MCA) as decided by Public Private Partnership Appraisal Committee (PPPAC) is in progress. The Haridwar-Dehradun section is passing through Rajaji National Park and clearance is to be obtained from the Central Empowered Committee constituted by the Hon’ble Supreme Court of India. After clearance from Central Empowered Committee and PPPAC, bidding process is to be taken up for award of 4-laning work. It is too early to indicate the completion time of 4-laning work of Muzaffarnagar-Haridwar-Dehradun section at this stage. However, the same may not be completed by 2010 keeping in view the time taken in obtaining the clearance from Central Empowered Committee & PPPAC as well as response of bidders.

This information was given by the Minister of State for Shipping, Road Transport and Highways, Shri K.H. Muniyappa in a written reply in the Rajya Sabha today.

Source: pib.nic.in

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Road expansion along Singjamei side on NH-39

April 17, 2008

Road expansion along Singjamei side on NH-39

Non-utilisation of funds curse continues to haunt

Imphal, April 17: The work on upgrading the National Highway-39 stretch from Moirangkhom to Singjamei Bazar to a four-lane has been stalled as the Ministry of Shipping, Road Transport and Highways, Government of India is hesitant on releasing the required fund in view of the failure to utilise the fund sanctioned earlier for various works.

The Ministry also seems to see no point or urgency in converting the road stretch to a four-lane in view of the existing traffic volume along the said National Highway.

Speaking to The Sangai Express an official source in the Works Department of the State Government, said that the Government of Manipur has spent Rs 11.45 crores till date in giving compensation to the owners of the land and buildings that were demolished for the purpose of expansion and upgradation of the road from Moirangkhom to Singjamei Bazar to a four-lane.

The source disclosed that for implementing the task of upgrading the road stretch to four-lane, the Works Department had submitted a DPR of Rs 6 crores to the Ministry of Shipping, Road Transport and Highways for carrying out the task from Singjamei Parking to MU Main Gate during 2006-07 besides another DPR of Rs 18.5 crores for the task from Ist MR Gate to Singjamei Parking.

The DPRs of the Works Department have been included in the work programme of the annual plan of the Ministry.

But inspite of several reminders, the Ministry has not sanctioned the required fund, thus putting the proposal of upgrading the road stretch to four-lane to a grinding halt, the source said.

Nonetheless, in the month of January this year, the Ministry gave its approval for sanctioning Rs 8 crores for taking up the work from Singjamei Parking to MU Main Gate.

Accordingly, the process for inviting tender is already underway, the source informed.

As for the road upgradation work from Ist MR Gate to Singjamei Parking, the required fund is yet to be sanctioned by the Ministry, the source said, adding that the State Public Works Department would be exerting pressure on the Ministry for sanctioning the fund.

In connection with the refusal of the Ministry to sanction the required fund for upgrading the road from Moirangkhom to MU Main Gate to four-lane, the source disclosed that the Ministry has conveyed verbally to the officials of the Works Dept that conversion of the NH stretch into four-lane is not necessary in consideration for the current traffic volume along the said route.

On top of this, the Ministry has also made it clear that the fund sanctioned earlier for development of the National Highway stretch from Maram to Moreh should be utilised properly first, the source disclosed.

Conceding that the fund sanctioned by the Ministry during 1996-1997 for construction/repairing of the bridges at Pallel and Lokchao has not been able to utilise till date, the source, however, claimed that most of the works that have been sanctioned by the Ministry during 2003-04 are nearing completion.

Source: e-pao.net

Written by ITW Editor · Filed Under Investment and Finance

DR. KARUNANIDHI TO INAUGURATE FOUR NHAI PROJECTS IN CHENNAI

April 4, 2008

DR. KARUNANIDHI TO INAUGURATE FOUR NHAI PROJECTS IN CHENNAI. ALSO TO LAY FOUNDATION STONE FOR FOOT OVER BRIDGE AT CHROMEPET

The Chief Minister of Tamil Nadu Dr. Kalaignar M., Karunanidhi will inaugurate four projects completed at a total cost of Rs. 80 crore by the National Highways Authority of India (NHAI) on Wednesday the 9th April 2008. He will also lay the foundation stone for Foot-over Bridge at Chromepet on the same day.

The function for the inaugural ceremony would be presided over by the Union Minister of Shipping, Road Transport and Highways Thiru T. R. Baalu and the Minister for Local Administration, Government of Tamil Nadu Thiru M.K Stalin would be the Chief Guest. The Guests of honour of the function would be Thiru M.P. Swaminathan, Minister for Highways, Government of Tamil Nadu and Thiru T.M. Anbarasan, Minister for Labour, Government of Tamil Nadu.

The Irumbuliyur Underpass has been built at a cost of Rs. four crore, four-laning of Chennai Bypass Phase-I up to Porur has been completed by NHAI at a cost of Rs. 70 crore, the pedestrian subway at Tirisulam has cost Rs. five crore and the Bus Shelter at Chromepet built under the MPLAD Scheme has cost Rs. 82 lakhs. The completion of the Irumbuliyur Underpass will facilitate right turn for the Tambaram Traffic to access Chennai Bypass and thereby quicker connectivity to the Golden Quadrilateral Corridor.

The Chromepet Foot-over Bridge for which the foundation stone will be laid on Wednesday to facilitate the commuters in crossing NH-45 to access the railway station on the other side and vice versa which provides rail connectivity to southern part of Tamil Nadu, would cost Rs. 2.40 crore.

Thiru T.R. Baalu has expressed the hope that with the completion of these four projects, the people living in and around these areas would be greatly benefited.

Source: pib.nic.in

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Update on NHAI expressways projects

April 3, 2008

It is reported that, with access controlled expressways attracting massive investments, ministry of road transport & highways has decided to conduct the feasibility study for more such expressways and construction companies eyeing the access controlled expressway projects of National Highways Authority of India are likely to get investment opportunities for at least 4 such projects spread over 495 kilometer over the next few months. They are1) 70 kilometer Chandikhol Jagatpur Bhubaneswar – INR 761 crore2) 47 kilometer long Delhi Hapur – INR 474 crore3) 198 kilometer long Vijayawada Elluru Rajamundri – INR 1,602 crore4) 180 kilometer long Delhi Agra highway – INR 1,918 croreThe feasibility reports for these projects are already completed and the work is likely to be awarded in about 6 months. These projects are for widening the current 4 lane highways into 6 lanes and operating them for certain durations. Companies would have to bid competitively for these projects on a revenue sharing basis. Thus companies would have to bid on the extent of toll revenue that they are ready to share with the Government if they are allowed to operate the roads. Since these highways are already 4 lane stretches, the road operators can start toll collection even during the project construction phase from an appointed date, mutually decided by NHAI and the road operator. The toll revenues will be routed to an escrow account.Recently, NHAI has awarded 4 such mega projects of 882 kilometer length, which are likely to cost an estimated INR 10,912 crore. From the NHAI perspective, these projects have emerged as money spinners, with companies willing to foot the entire construction cost and part with 2% to 48.06% of their revenues in the initial leg of the project. At the end of the concession period, which is about 12 to 15 years duration, the winning firms have agreed to part with 12% to 59% share of toll revenues.The feasibility reports for another 10 projects of similar nature are under preparation. They are1) 315 kilometer long Kishangarh Udaipur stretch – INR 2,205 crore2) 235 kilometer long Udaipur Ahmedabad – INR 1,645 crore3) 190 kilometer long Varanasi Aurangabad – INR 1,330 crore4) 184 kilometer long Nellore Chilkaluripet – INR 1,288 crore5) 148 kilometer long Krishnagiri Walajapet – INR 1,036 crore6) 145 kilometer long Pune Satara – INR 1,015 crore7) 85 kilometer long Ludhiana Chandigarh – INR 595 crore8) 80 kilometer long Belgaum Dharwad – INR 560 crore9) 56 kilometer long Samakhiali Gandhidham – INR 392 crore10) 55 kilometer long Indore Dewas – INR 385 croreThe ministry has also decided to conduct the feasibility study for 4 such expressways between Delhi and Meerut, Chennai and Bangalore, Vadodara and Mumbai and Dhanbad and Kolkata. Source: http://steelguru.com

Written by ITW Editor · Filed Under Default, Investment and Finance

NHAI goes in for a board shake-up

April 3, 2008

The ministry of shipping, road transport and highways has been under severe criticism for NHAI’s inability to meet the deadlines for developing road projects in the country.

New Delhi: Ahead of plans to give out some 10,000km in road projects over the next year, the ruling United Progressive Alliance, or UPA, is replacing at least half of the six-member board of the National Highways Authority of India, or NHAI, the country’s apex road regulator.

The radical revamp of the board, the first of its kind, comes at a time when the ministry of shipping, road transport and highways, which works closely with NHAI, has been under severe criticism for its inability to meet the deadlines for developing road projects in the country.

The revamp comes at a time when the ministry of shipping, road transport and highways has been under criticism for its inability to meet the deadlines for developing road projects in the country

NHAI oversees the National Highway Development Programme (NHDP), under which, almost 33,097km of highways were to be four-laned. Barely 50% of the projects have been awarded so far. As of February this year, work on only 7,942km of highways have been completed; of this, work on around 5,500km was completed during the tenure of the National Democratic Alliance government, which preceded UPA.

NHDP, launched in 1996, was seen as a flagship programme for successive governments, especially since an estimated 60% of freight is still transported by road in the country. There are 66,000km of national highways in India.

Neither the minister, T.R. Baalu, nor the concerned officials, NHAI chairman N. Gokulram and road transport secretary Brahm Dutt, could be immediately reached for comment on Thursday evening. As a result, it is still not clear as to why the government has sought such an overhaul in the NHAI board. The changes have been effected over the past 15 days.

Mint has independently confirmed from various government officials who do not wish to be identified that three out of the six members on NHAI’s board were asked to return to positions at the ministry in the last fortnight. According to officers at NHAI who do not wish to be identified, one of the members C. Kandasamy has already been named a chief engineer at the ministry of shipping and road transport.

A.V. Sinha and Nirmaljeet Singh, too, are being forced to “come back” to their parent ministry. “In one case, the ministry said it would promote a junior officer thereby forcing an NHAI member—on deputation with NHAI—to seek repatriation (back to the ministry),” an officer at the regulator who did not wish to be identified added.

While Sinha could not be reached for comment, Nirmaljeet Singh and Kandasamy declined comment. “I am not with NHAI any more. And for any information pertaining to board members, please contact the chairman,” Kandasamy said.

The shake-up in NHAI’s board comes at a time when the regulator has been accused of not only failing to meet deadlines, but also misgovernance.

“In fact, one of the members was threatened with suspension because some projects in Tamil Nadu got delayed,” said the officer at NHAI.

Highway builders say working with NHAI is difficult primarily because officers refuse to make decisions. “You can say one contractor is bad or may be two contractors are bad, but how can all contractors be bad at the same time? It is the authority (NHAI) that refuses to make decisions for three years sometimes. We are tired of working for them,” said an executive with a highway builder who did not wish to be named. “Why is it, that the same contractors perform on time when it comes to work by the Delhi Metro Corporation?” the executive asked.

Contractors also claim that the authority is unwilling to release money for changes in the scope of work for fear of being investigated by the vigilance department. Mint had earlier reported that almost three in ten NHAI contracts end up in some form of arbitration or the other.

None of the contractors or highway builders contacted by Mint would speak on record, saying it could affect their chances of winning contracts from NHAI in the future.

Meanwhile, the NHAI officials said the board was being revamped because it did not agree with certain proposals made by the Planning Commission on guidelines for drafting tenders for upcoming projects.

“The fact is that the minister has been unhappy with the way the NHAI has functioned in the last year and so these changes are being contemplated,” said a senior government official, who did not wish to be identified.

NHAI has also been named in a court case filed by the National Highway Builders Federation, a trade body representing highway contractors, who claimed that recent pre-qualification criteria used by NHAI favour large bidders. The case is expected to be heard by the Delhi High Court on Friday.

One analyst said it was not fair to accuse only the board, saying that other organizations, such as the Planning Commission, were equally to blame for not ironing out policy issues related to work on NHDP. “The paranoia of the government (over being blamed for non-completion of highways in an election year) could be a factor,” said this analyst who did not wish to be identified.

Source: www.livemint.com

Written by ITW Editor · Filed Under Investment and Finance

FOUR-LANING OF PATNA-HAJIPUR-MUZAFFARPUR SECTION

March 20, 2008

4 laning of Patna-Muzaffarpur section of NH 19 & 77 has been included under NHDP Phase III in the State of Bihar on BOT (Toll) mode. Bids for 4 laning of Patna-Muzaffarpur Section of NH 19 & 77 were invited in June 2005 under old Model Concession Agreement (MCA) for which no response was received. Bids were again invited for the second time in June 2007 on the basis of new MCA with the last date of submission of bid as 20.08.2007. But, no response was received this time also. As there is no response of bidders on toll based BOT bid for the project stretch, Government has accorded approval for changing the mode of upgradation of Patna-Muzaffarpur Section of NH 19 & 77 from BOT (Toll ) to BOT ( Annuity). This information was given by the Minister of State for Shipping, Road Transport and Highways, Shri K.H. Muniyappa in a written reply in the Rajya Sabha today. Source: http://pib.nic.in

Written by ITW Editor · Filed Under Investment and Finance

Annuity model for Bihar, Jharkhand BOT projects

March 18, 2008

NHAI has not been able to award any project on build-operate-transfer basis via tolling in the states in last two years

New Delhi: Desperate to get the roads programme off the ground in Bihar and Jharkhand, where the private sector is declining all offers—including on lucrative stretches—in view of the challenge from Leftist extremist groups, the Centre is offering investors guaranteed payments instead of recovering their investment by collecting toll revenues.

A senior official of the National Highways Authority of India (NHAI), the regulator for highways, who did not wish to be identified, said, “The reason for this (investor disinterest) is partly law and order situation in these states, and Naxalism.”

As a result, NHAI has not been able to award a single build-operate-transfer (BOT) highway project through tolling in these states in the last two years. In such highway projects, the company awarded the contract for constructing a stretch of highway collects toll from those using the highway.

Law and order, and Naxalism scare away bidders, who recover their investment from highway tolls

Prime Minister Manmohan Singh recently said that Naxalites, Leftist extremists, posed the single biggest internal security challenge to the country. As many as 13 out of 28 states in the country are classified as Naxalite-affected.

To woo investors towards these highway stretches, NHAI is now planning to recast these BOT projects on an annuity basis, wherein contractors who are awarded projects would be paid a guaranteed amount in instalments.

The authority had carved out around 11 highway sections in Bihar for awarding under the BOT mode in 2006 under phase III of the National Highway Development Programme.

NHAI first put up its most lucrative stretch, Patna–Muzaffarpur, for bidding in early 2006, but it received no response. “We then tried putting up another stretch for bidding as well, but even then the companies did not show any interest,” said the NHAI official.

The authority has faced a similar problem in Jharkhand, where it did not receive any bids for a couple of tolled road projects.

The lack of interest in tolling projects in Bihar and Jharkhand is happening at a time when NHAI has made it a policy to gravitate towards BOT projects in order to reduce the government’s investment in the highway sector.

Another official in NHAI, who also did not wish to be identified, confirmed that the highways regulator now planned to redraft the proposal for these projects under annuity terms.

Members of Parliament from the two states said concerns over viability of the projects apart, private players were hesitant to take up contracts in these areas because they feared for the security of their staff.

Bhubaneswar Prasad Mehta, a Lok Sabha member of the Communist Party of India from Hazaribagh in Jharkhand, said even as some tenders were floated last year, there was little response from the private agencies. “Infrastructure development cannot happen in a vacuum,” he said. “Why should anyone risk his life in an area where there is no rule of law and little security? We are planning to raise this issue yet again in our party’s three-day state conference in Ranchi, which begins on 15 March.”

However, Nikhil Kumar, a former special secretary for internal security in the Union ministry of home affairs, and a Lok Sabha member of the Congress party from Aurangabad in Bihar, said the situation was somewhat better in his constituency.

“I can say for my constituency that though the quality of work remains a matter of concern, wherever we have managed to provide sufficient security to the contractors, with the help of the state government, there has been some progress,” said Kumar. “If the political representatives from these two states, and other areas affected by Naxalism keep pursuing the matter with the state governments and the private executing agencies, we can get the work done. In my constituency alone, about 25 link roads will be constructed under the Pradhan Mantri Gram Sadak Yojana (Prime Minister’s Village Road Programme) and work is set to begin. Earlier, between 2004 and 2007, seven other roads were completed in my constituency,” he added.

Ram Deo Bhandary, a Rajya Sabha member of the Rashtriya Janata Dal from Bihar, said it was quite clear that even a few high-profile incidents of violent crime could deter developmental activities.

“There haven’t been too many incidents of late, but, of course, law and order remains an area of concern. If contractors are not coming forward to take up work, it is quite clear that the state has not been able to instil confidence in them,” Bhandary said. Source: http://www.livemint.com

Written by ITW Editor · Filed Under Investment and Finance

NHAI likely to issue contracts for 10,000km of highways soon

March 16, 2008

These contracts will be a part of phase III and phase V of the government’s highway project New Delhi: The United Progressive Alliance government wants to award, in the next few months, contracts to build up to 10,000km of national highways, equal to almost 70% the 14,500km of national highways on which similar contracts have been issued since 2000.Long Road Ahead (Graphic)The decision to award the contracts, worth at least Rs70,000 crore, comes with the general election likely to be held either late this year or early in 2009, although an official at the agency that regulates the highways sector in India claimed that this was because procedural issues related to the contracts had now been “ironed out”.The official at the National Highways Authority of India, or NHAI, added that since 2000, when the country’s National Highways Development Programme or NHDP was launched, the regulator had awarded contracts for the construction of 14,500km of highways worth around Rs80,000 crore and that work on 8,500km had been completed.The contracts that will be issued are part of phase III and phase V of NHDP and involve upgrading existing national highways into four-lane and six-lane ones. Five of the seven phases of NHDP involve upgrading existing highways.The stretches will first be offered to private companies to be developed under the ‘build-operate-transfer’ model where the companies will build the highways, operate them and collect toll for a certain period of time, and transfer them to the government at the end of a certain period of time called the concession period. In case this fails to draw bids, the projects will be offered on the ‘engineering-procurement-construction’ method, where private companies build the roads for a stipulated fee but will not have any stake in the project.“Detailed project reports are being created for these stretches and they are expected to be awarded in the next few months,” said a senior government official, who did not wish to be identified. “There was a lull in award of projects because the policy was being ironed out. But now that things are falling into place, you will see more and more projects on offer,” the official added.For almost a year, NHAI has gone slow in awarding projects.“Till now we were waiting for ironing out procedural issues such as preparation of the new model concession agreement and setting up a two-stage bidding process. Those matters have been taken care of now. And now the only serious impediment in the way of awarding these contracts is clearing of the toll policy,” said an NHAI official.The toll policy is to be cleared by the law ministry and this could take a couple of months, the official added.Analysts however said that while the agency was capable of awarding 8,000km of construction a year, exactly how much would get done depends on a number of factors including a legal challenge to the government’s bid process.The National Highways Builders Federation, an industry body, filed a suit in January against guidelines issued by the finance ministry and ratified by the Prime Minister’s committee on infrastructure that favour bidders who have executed large projects. The norms, reported by Mint on 28 December, cap the number of bidders at six, with some individual exceptions.“There are three factors that could affect the process (of awarding contracts),” said Kuljit Singh, a partner with the transaction advisory services practice of audit and consulting firm Ernst and Young Pvt. Ltd.“Technical detailed project reports usually take a while to prepare. Also, things generally slow down a little in an election year. Also, depending on what the court finds (in the case where the National Highways Builders Federation has challenged NHAI’s bidding norms), the process could be affected,” he added.Source: http://www.livemint.com

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