Navayuga Engg bags Rs 710cr NHAI project

December 6, 2007

Hyderabad-based multi-disciplinary engineering and construction player, Navayuga Engineering Company, has bagged a Rs 710 crore project from the National Highway Authority of India (NHAI).

The contract envisages designing, construction, financing and maintenance of an access-controlled highway project between the Bangalore and Nelamangala section on NH-4 on a build-operate-transfer (BOT) basis in Karnataka.

Debt syndication of Rs 540 crore has been done by
Bhubaneswar-based SRB Consultancy Private Limited from a consortium of banks.

The six-lane highway project, total length of which is 19.5 kilometres with elevated highway for 4.5 kilometres, terminates at Nelamangala. The scope of the work also includes underpasses and service roads for the entire length on both sides of the highway.

According to a company press release, revenues generated from the proposed tolling will accrue to an SPV (special purpose vehicle) formed for implementing the project.

The concession period of the project is 20 years, including the construction period of two years. The project is expected to be completed by the end of 2009, it added.

Source: business-standard.com

Written by ITW Editor · Filed Under Investment and Finance

CRISIL assigned IPO Grade 3/5 to KNR Constructions

December 6, 2007

Leading credit rating agency, CRISIL assigned IPO Grade 3/5 (pronounced `three on five`) to the proposed initial public offer of KNR Constructions (KNRCL). The public issue of 7,874,570 equity shares of face value Rs 10 targeting an issue size in the range of Rs 1,500-Rs 1,750 million. This grade indicates that the fundamentals of the issue are average, in relation to other listed equity securities in India.

The grading reflects KNRCL`s strong track record of project execution in both roads construction and operations and maintenance (O&M). The company has executed many projects as part of the NHAI`s NHDP program and has had a 7-year relationship with Patel Engineering as a joint venture partner.

The KNR-Patel JV has won 10 road construction projects so far. These include two BOT annuity projects as a part of NHDP Phase II, the combined value of which is Rs 9.6 billion. As of September 2007, KNRCL`s order book stood at Rs 16.25 billion, of which the roads sector constituted 89%.

The grading is however constrained by the relatively underdeveloped state of the company`s operating system, which in turn, could constrain its ability to augment the size of its operations. The grading also reflects the uncertainties associated with company`s plans to diversify into the power generation and real estate sectors.

Source: myiris.com

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

Govt approves Rs 16,680-cr NHDP Phase VII

December 6, 2007

NEW DELHI: The government on Thursday approved development of road projects including construction of ring roads, bypasses and tunnels under Phase VII of National Highways Development Programme at a cost of Rs 16,680 crore.

“The Cabinet Comittee on Economic Affairs (CCEA) today gave its approval for construction of ring roads, bypasses, graded intersections, flyovers, elevated roads, tunnels, road over-bridges, underpasses and service roads at a cost of Rs 16,680 core,” an official spokesperson said after the CECA meeting.

The total project would be executed on build, operate and transfer (BOT) basis.

Of the total money, the government would fund Rs 6,302 crore and Rs 10,378 crore would be ensured through private sector participation, she said.

Under NHDP-VII, Rs 10,500 crore will be spent on constructions for 700 km of ring roads and bypasses and the remaining money would be utilised to construct grade separated intersections, road over-bridges, elevated roads, tunnels, underpasses and service roads, the spokesperson said.

These constructions will improve traffic safety and ensure faster movement of vehicles with improved riding quality time.

“This will lead to reduction in vehicle operating cost and significant reduction in fuel consumption for the vehicles resulting in energy conservation,” she said.

The works on stand-alone ring roads and bypasses are likely to be awarded by March 2011 and is to be completed by December 2014.

Source: economictimes.indiatimes.com

Written by ITW Editor · Filed Under Investment and Finance

CONSTRUCTION OF STAND ALONE RING ROADS, BYPASSES, GRADE SEPARATORS, FLYOVER, ELEVATED ROADS, TUNNELS ETC. UNDER NATIONAL HIGHWAYS DEVELOPMENT PROJECT PHASE VII

December 6, 2007

The Cabinet Committee on Economic Affairs today gave its approval for Construction of Ring Roads/Bypasses (including improvement of NH links in city), Grade Separated Intersections, Flyovers, Elevated roads, tunnels, Road Over Bridges, Underpasses and Service Roads at a cost of Rs.16,680 crore (Rs. 6,302 crore from Government + Rs.10,378 crore from Private Sector), on BOT (Toll) basis. Out of Rs.16,680 crore of NHDP Phase – VII, Rs.10,500 crore will be spent on constructions for 700 km of ring roads and bypasses. The remaining amount of Rs.6,180 crore on stand alone Grade Separated Intersections, Road Over Bridges, Elevated Roads, Tunnel, Underpasses and Service Roads.

Construction of ring roads, bypasses, grade separators, flyovers, Elevated roads, tunnels, Road Over Bridges, Underpasses, service roads, etc. will improve traffic safety and improve faster movement of vehicles with improved riding quality and time. This will lead to reduction in vehicle operating cost and significant reduction in fuel consumption for the vehicles resulting in energy conservation.

The works of stand alone ring roads & bypasses are likely to be awarded by March, 2011 and is likely to be completed by December, 2014.

Written by ITW Editor · Filed Under Investment and Finance

20 cos bid for longest expressway in India

December 6, 2007

The planned expressway will dwarf the 95km-long, six-laned, access controlled expressway connecting India’s financial capital Mumbai with Pune

Mumbai: Twenty firms have submitted initial bids for building India’s longest and biggest expressway project yet—a Rs40,000 crore, eight-laned, access controlled expressway linking Ballia in eastern Uttar Pradesh (UP) with Greater Noida—located on the border of the Capital, New Delhi.

The 1047 km-long road project dubbed Ganga Expressway will, when operational, cut travel time between the backward eastern part of Uttar Pradesh and the more prosperous western part of the state, by 16 hours from the current 24 hours.

For a traveller, it would take just about eight hours to zip from the holy city of Varanasi to New Delhi when the project is completed.

The planned expressway will dwarf the 95km-long, six-laned, access controlled expressway connecting India’s financial capital Mumbai with Pune and the under construction and controversy-ridden 111km-long expressway linking Bangalore with the garden city of Mysore.

The firms that have applied for pre-qualification include Larsen & Toubro Ltd, Reliance Energy Ltd, DLF Ltd, IL&FS Ltd, Gammon Infrastructure Projects Ltd with Australia’s biggest investment bank Macquarie, GMR Group, the Omaxe Ltd-GVK Group-Nagarjuna Construction Co. Ltd consortium, the Bajaj Hindusthan Ltd-Apollo Group-D S Constructions Ltd consortium, Jaiprakash Associates Ltd, Canadian firm SNC Lavalin with Progressive Constructions Ltd, Unitech Ltd, Punj Lloyd Ltd, Oman’s Gulfar Engineering & Contracting Llc., Zoom Developers Pvt. Ltd, Australia’s Leighton Group with Oriental Construction Co. Ltd, and PLUS Expressways Berhad, a subsidiary of Malaysia’s UEM Group, according to an official with the UP government overseeing the bidding process who did not wish to be named.

UP has taken inspiration for building the Ganga Expressway from legendary Afghan leader Sher Shah Suri, who built the Grand Trunk Road connecting Delhi with Kabul in the 16th century after temporarily displacing Humayun from the Mughal throne.

Suri’s road ran alongside the right bank of the Ganga; the new expressway will be built on the left bank of the river.

The eight-laned expressway will be constructed on an embankment to be built by the state’s irrigation department for controlling floods on the left bank of the Ganga.

The proposed expressway will start at Ballia-Gazipur and pass through Varanasi, Mirzapur, Sant Ravidas Nagar, Allahabad, Pratapgarh, Rae Bareli, Unnao, Hardoi, Farrukhabad, Fatehgarh, Shahjahanpur, Badaun, Bulandshahr, Gautam Buddhanagar and terminate at Greater Noida.

The expressway project will make available around 5,000 acres of land for real estate development including residential and industrial units. This will make the project economically viable for the developers.

The work on the expressway project will begin next year.

Source: livemint.com

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

Gayatri Projects achieves financial closure for 2 SPVs

December 5, 2007

Hyderabad-based leading infrastructure company, Gayatri Projects ltd, has achieved financial closure of Rs 932.71 crore ahead of the stipulated time for its two road projects, to be developed through special purpose vehicle (SPVs), at an interest rate of 11 %.

IL&FS has syndicated the entire debt and United Bank of India is the leader of the consortium of lenders for both the SPVs.

The projects undertaken by Gayatri Projects Ltd-led consortium are Hyderabad expressways pvt ltd (HEPL) and Cyberabad expressways pvt ltd (CEPL) with a project costs of Rs 430.96 crore and Rs 501.75 crore respectively.

While the total syndicated debt in case of HEPL is Rs 290.90 crore, it is Rs 376.31 crore for CEPL.

The infrastructure major-led consortium had won the bid for the HEPL and CEPL—the eight lane outer ring road projects— floated by Hyderabad Urban Development Authority (HUDA).

The construction period for both the HEPL & CEPL is 2 years and six months. HUDA will pay a semi-annual annuity of Rs 30.49 crore to HEPL during the annuity period of 12 years six months while the semi-annuity amount is pegged at Rs 39.50 crore in case of CEPL for the similar period.

Source: moneycontrol.com

Written by ITW Editor · Filed Under Investment and Finance

Gayatri Projects SPVs achieve financial closure

December 4, 2007

Gayatri Projects Ltd has announced that the Company has achieved the financial closure for the Company’s following Hyderabad Outer Ring Road Projects (SPV’s) at an interest rate of 11% p.a., ahead of the stipulated time given by the Employer namely Hyderabad Urban Development Authority (HUDA).

Financial Closure of Hyderabad Expressways Pvt Ltd (HEPL) – Total cost of the Project Rs 430.96 crores: M/s. Hyderabad Expressways Pvt Ltd promoted in Consortium, by the Company as lead technical member, with 50% share holding, bid and won road project (AP-IV) for design, construction, development, finance, operate and maintain eight lane access controlled expressway under Phase II programme of outer ring road (ORR) of Hyderabad Urban Development Authority. The concession Agreement was signed on August 17, 2007. The total debt syndicated for this Project is Rs 290.90 crores.

IL&FS (IL&FS Financial Services Ltd) has syndicated entire debt and United Bank of India is the Leader of the Consortium of Lenders for the SPV.

Details of the package awarded are as follows: AP IV – from Bongulur to Tukkuguda from km. 108 to km. 121 on BOT – Annuity basis. Estimated Project Cost incl. IDC is around Rs 430.96 cr. and the project has a positive Grant of Rs 71.86 crores. HUDA will pay a semi-annual annuity of Rs 30.49 crore to HEPL during the Annuity period. The concession period door-to-door is 15 years, with. a construction period of 2 years 6 months and Annuity period of 12 years 6 Months.

Financial Closure of Cyberabad Expressways Pvt Ltd (CEPL) – Total cost of the Project Rs 501.75 crores: M/s. Cyberabad Expressways Pvt Ltd promoted in Consortium by the Company as lead technical member with 50% share holding, bid and won road project (APII) for design, construction, development, finance, operate and maintain eight lane access controlled expressway under Phase II programme of outer ring road (ORR) of Hyderabad Urban Development Authority.

IL&FS (IL&FS Financial Services Ltd) has syndicated entire debt and United Bank of India is the Leader of the Consortium of Lenders for the SPV.

Details of the package awarded are as follows: AP II – from Kollur to Patancheru from km. 12 to km. 23.70 on BOT – Annuity basis. Estimated Project Cost incl. IDC is Rs 501.75 crores and the project has a positive Grant of Rs 81 crores. Annuity – Rs 79 cr. p.a. HUDA will pay a semi-annual annuity of Rs 39.50 crore to CEPL during the Annuity period. The concession period door-to-door is 15 years, with a construction period of 2 years 6 months and Annuity period of 12 years 6 Months. The concession Agreement was signed on August 17, 2007. The total debt syndicated for this Project is Rs 376.31 crores

The Company is a pioneer in construction of National Highways, Dams, Canals, Aquaducts, Flyovers, Coal handling plants, Bridges, Railway Projects, Airport Runways, BOT Toll and Annuity Road Projects as develop and Industrial Constructions.

Source: equitybulls.com

Written by ITW Editor · Filed Under Investment and Finance, Larsen & Toubro Ltd. (L&T)

Toll policy change may rationalize annual hikes

December 4, 2007

Under the proposed policy, only 40% of the WPI will be taken into account while revising the rates

New Delhi: Even as tolled roads are becoming a norm in the country with the government handing over more highway projects to the private sector, a new tolling policy is seeking to limit the annual increase in toll rates.

As of now, toll rates are revised every year and concessionaires are compensated in full as per the increase in the wholesale price index (WPI). But under the new policy, which is yet to be placed before the cabinet for approval, only 40% of WPI will be taken into account while revising the toll rate. This is apart from a fixed component of a 3% increase every year.

As many as 54 highway construction packages of around 320 projects awarded under the National Highway Development Programme were “build operate and toll” projects. According to Planning Commission member Anwar-ul-Hoda, the idea behind changing the structure of toll revision was to ensure that the concessionaires are paid only their due share while fixing annual hikes on toll.

“The input costs of the concessionaire mostly occur many years before they begin to collect toll. So why should the toll revision be based on the wholesale price index of the current year?” asks ul-Hoda.

An official with the National Highways Authority of India (NHAI) also said that many components of WPI did not directly affect the highway construction industry.

The CEO of the roads division of the GMR Group, Rajan Krishnan, said his company was neutral to the proposal as WPI was difficult to predict. “Even the best economists cannot clearly track the movement of WPI. This is just a matter of mathematical modelling,” said Krishnan.

According to Krishnan, however, concessionaires stood to gain from the new policy so long as WPI was less than 5%. But when WPI moves beyond 5%, the toll rate to be charged under the new proposal would be lower than what is currently collected, he added.

Nirmaljit Singh, member, technical, NHAI, said the proposal was with the ministry of road transport and highways, from where it would be sent to the cabinet for clearance.

“I just think you are increasingly reaching a situation where the risk-reward equation is being changed against the government,” said an analyst with a consulting firm, who did not wish to be identified. “The government is taking more and more of the risk. You don’t need to guarantee a 3% increase every year when concessionaires had already accepted the earlier policy (where fee revisions were tied only to WPI),” the analyst said.

According to accepted wisdom, the government passes on fewer risks—such as those associated with traffic—to the concessionaire when evolving a public-private partnership policy and as the market evolves, passes on more of the risks. However, this administration is doing the opposite, the analyst said.

The analyst cited the example of the recent move away from “negative grants”, a term for upfront money paid to the government for the privilege of winning a concession, over and above the cost of the project. Mint had earlier reported plans to do away with negative grants in favour of a revenue-share model, where NHAI would derive a percentage of revenues from toll roads. “By going for revenue sharing, the government is taking more risks,” the analyst said.

Source: livemint.com

Written by ITW Editor · Filed Under Investment and Finance

Work on ECR project resumes

December 2, 2007

It was suspended due to heavy rain

Project expected to be completed by March 2009 Estimated cost: Rs.2,160 crore

PUDUKOTTAI: Work on the World Bank-funded East Coast Road (ECR) project, which remained suspended for about a month following sharp showers in the coastal parts of the district, resumed recently.

Being a coastal belt with estuaries, rivulets and the Vellar, the major river of the district, the work involves construction of culverts and minor bridges at several places in the 36-km-long stretch. Work on construction of a minor bridge or culvert has been undertaken every couple of km between Kattumavadi and Kottaipattinam, about 70 km from here.

Authorities of the Tamil Nadu Road Sector Project (TNSRP), which is executing the Rs.2,160-crore project of laying the 742-km road from Arcot to Tuticorin, suspended the work as a vast stretch of newly laid and levelled earth on the ECR stretch turned slushy at places such as Kottaipattinam, Kattumavadi and Manamelkudi. The overflowing water from the culverts brought all work to a grinding halt.

The project, which started in February 2004, is expected to be completed by March 2009. Of the total outlay of Rs.2,160 crore, a sum of Rs.1,148 crore will be utilised to upgrade the ECR, TNSRP sources told The Hindu. The upgrading work includes strengthening of the earth and ensuring technical stability of the area to suit the huge volume of heavy vehicles. With the receding of rain water, work resumed last week, the sources said.

The project is being executed through meticulous planning, covering a stretch of 387 km between Arcot and Tiruvarur and 355 km between Nagapattinam and Tuticorin.

Source: hindu.com

Written by ITW Editor · Filed Under Investment and Finance

Kaushalya Infrastructure IPO oversubscribed

November 23, 2007

The IPO has so far received 6,11,97,500 bids, giving it a subscription of 7.20 times over the issue size of 85,00,000 equity shares

IPO The Public Issue of Kaushalya Infrastructure Development Corporation Limited (KIDCO) has been oversubscribed as per the information available on the websites of the stock exchanges. The IPO has so far received 6,11,97,500 bids, giving it a subscription of 7.20 times over the issue size of 85,00,000 equity shares. KIDCO is a diversified infrastructure development company from eastern India, and is offering the shares at a price band of Rs. 50 to Rs 60 per share. The net issue to the public would constitute 40.93 per cent of the fully diluted post issue paid-up capital of the Company. The issue closes on 23rd November.

As a part of its expansion plans, KIDCO will mainly utilize funds for acquisition of land, land development rights & real estate development, investment in BOT/BOOT projects and joint ventures and for the purchase of capital equipments comprising construction & infrastructure equipments for execution of projects .

The infrastructure development operations of the Company are organized in three major business divisions viz. Kaushalya Nirmàn (Specializes in construction of roads, highways, bridges and industrial infrastructure), Kaushalya Gràm (Specializes in Electrification and Irrigation projects focused on development of rural India) and Kaushalya Parivàr (Specializes in Construction of Commercial & Residential Complexes). The key clients of the Company include various Government Undertakings, State Public Works Departments, as well as State and Central Public Sector Undertakings.

Says Prashant Mehra, managing director of KIDCO, “We are on the expansion mode and would be focusing more upon diversified sectors so as to leverage and expand the operations. After our successful journey in the Eastern part of the country, we are spreading our operations to other parts like the Central India.”

KIDCO aims to operate into diversified sectors such as townships, offices, houses and other buildings, urban infrastructure, highways, roads, power systems, irrigation, dams and agriculture systems, etc. which will mitigate business risk in case of slowdown in any one particular field in the future.

The proposed issue will be lead managed by SREI Capital Markets Limited and the Registrar to the issue will be Intime Spectrum Registry Limited.

Source: indiainfoline.com

Written by ITW Editor · Filed Under Investment and Finance

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