The year 2012-13 was one of the most challenging years in terms of awarding of projects, says National Highways Authority of India (NHAI) chairman RP Singh.

The original target of awarding 8,800 km was increased to 9,500 km by PMO mid-year; the target was lowered to 8,500 km and then to 5,000 km. However, NHAI ended up awarding 1,000-1,100 km. The poor performance was on a high base and construction per day was down from 16 km per day to approx 10-12 km per day.
Singh says award of projects is a market-driven phenomenon, adding that the NHAI is now looking to award projects only on EPC basis versus BoT as most developers do not want to bid for the latter due to funding constraints.
Banks are holding their funds towards the roads sector until assured of design and traffic growth details. NHAI believes the Indian road sector needs to get private equity players, along with other ways to pay premium. “We do not see NHAI taking up too many cash contract projects,” he told CNBC-TV18 in an interview.
However, in a major relief to the road development sector, the Supreme Court on March 12, 2013 ruled in favour of the NHAI by delinking the environment clearance (EC) and the forest clearance (FC). Now, the contracting companies do not have to wait for the FC and can commence the construction work once the EC is received. This will allow projects to get completed faster, Singh believes.
The work on 20 stalled highway projects worth Rs 27,000 crore, which were stuck for a long time for want of EC, would be executed soon after the clearance from the Ministry of Environment and Forests (MoEF) and the projects are set to get back on track.
Meanwhile, the government has asked banks to ease funding for the road projects and consider toll revenues as tangible assets. The finance ministry has proposed RBI to treat loans to the roads project as secured. NHAI says if government’s proposals are implemented, credit flows to the fund-starved sector could grow by at least 20-25 percent. The road ministry has been making a lot of representations to the Finmin lately to discuss sector issues.
On GMR exiting Rs 7,700 crore Ahmedabad- Kishangarh highway project, and GVK exiting the Shivpuri-Dewas Expressway in MP, Singh says NHAI is working out details to back-end premiums for GMR and GVK projects. “The companies exited the high profile projects as they turned unviable for them,” he says. GMR, however, had indicated fresh interest in the project if the premium terms are tweaked.

“The matter will go to the Committee of Secretaries, we want that the net present value of the project does not change,” a Road Ministry official told reporters.The difference between the present value of cash inflows and the present value of cash outflows is the net present value of a project.

The Ministry and the company are already in discussions to rescue the project.According to sources, GMR Infrastructure BSE 0.76 % was ready to start the project with some preconditions, including making piece-meal payments.The company has also said it would pay about 50 per cent of the amount to restart the work on project at present and pay the remaining sum in the subsequent years, including interest.The official added that the proposal from the Ministry is to ask the company to make the requisite payments in time and to seek its guarantee to ensure that the project is not abandoned mid-way, leading to the financial burden falling on the the government.

Earlier this year, GMR Infrastructure walked out of the Kishangarh-Udaipur-Ahmedabad project 16 months after securing the order.The project is estimated to have required an investment of Rs 5,387 crore. The Bangalore-based group had won the project in western India through international competitive bidding at Rs 636 crore annual premium for 26 years.It is believed that the company terminated the contract on account of difficulties in taking up the project due to regulatory hurdles, including delays in environment clearance and land acquisition.However, NHAI had said that the company exited the project on account of financial hurdles in arranging finance for the project and not due to lack of regulatory clearances.The company had won the project in September, 2011, through the international competitive bidding route. It is to be implemented through the Public Private Partnership (PPP) model on Design, Build, Finance, Operate and Transfer basis.

Source-http://economictimes.indiatimes.com

The Bhubaneswar Municipal Corporation (BMC) has roped in a private party to install upgraded signals called Intelligent Traffic System (ITS) on a build-operate-transfer (BOT) basis for 10 years. The private party, Stanpower, a Hyderabad-based company, known for its innovative technology applications, is likely to give a presentation on ITS to traffic and BMC officials next week. The BOT will facilitate the BMC to have full rights over the assets after 10 years. The company will only get advertisement rights and the cost of operation during the period.

The new system can assist traffic authorities in maximizing the operational efficiency of the signals, said BMC commissioner Sanjib Mishra. “ITS will help ease the traffic flow, reducing delays and fuel consumption of vehicles. It will also help monitor air and noise pollution,” said the commissioner. The ITS uses technology such as CCTV camera-linked traffic controllers and central operation centres, where the computers analyse the traffic flow and disseminate traffic management information, added the commissioner.

At present, the city has about 60 traffic posts of which 20 have signals, which can be operated both manually and automatically. However, human intervention is still required to monitor the violators. “At times we fail to penalize the violators as we have to run after them. Once the technology is installed, we can penalize the commuters later as the CCTVs will capture the registration number of violating vehicles,” said traffic ACP Binod Das.

The commissioner has written to Bhubaneswar DCP, National Highways Authority of India (NHAI), regional transport officers and chief engineer of roads seeking their cooperation to adopt the system in the city. “If the stakeholders are convinced about the benefits of launching the technology in Bhubaneswar, the company will be given the go-ahead,” said the commissioner.

“The traffic management in urban set-up has undergone many changes. It is no more limited to flashing of lights at intersections. Present system can’t monitor red light jumping and speed of vehicles. Secondly, there is human intervention while tracking the violators, who don’t wear helmets and drive without fastening seat belts. In many cities, the violations are documented by the technology,” said urban planer P R Rout.

“The ITS technology is so sophisticated that it is able to detect any solid object near traffic posts. The system runs through a central server, which can maintain the database of all traffic signals of the city,” said a BMC official .

 

http://timesofindia.indiatimes.com

 Infrastructure developer IVRCL Limited is going slow on its proposal to monetise three more build, operate and transfer projects in the light of expectations that the Union government will soon take a decision to allow 100 per cent stake sale in BOT projects. “It is just a matter of procedure. The decision will come soon as everybody, including the NHAI (National Highways Authority of India), is in favour of it,” IVRCL chairman and managing director, E Sudhir Reddy, told Business Standard. At present, the Centre allows only 74 per cent stake sale in BOT projects.

Reddy said IVRCL would expedite the process of selling more projects after Centre’s decision in this regard. The Hyderabad-based company recently sold three BOT projects – Salem Tollway, Kumarapalayam Tollway and IVRCL Chengapally Tollway – to the Tata group firm TRIL Roads Private Limited. The stake sale is yet to be approved by the NHAI and institutional lenders. The projects have been reportedly executed at a cost of Rs 2,200 crore and nearly two-thirds of this money had been lent by banks.

Reddy, however, said banks approving the stake sale should not be a problem as the projects were sold to a Tata group company, which has a good standing among the financial institutions. Last month, industry sources said, some of the operators of BOT projects hailing from Andhra Pradesh met the Prime Minister and apprised him of their problems.

More than the high interest rates, they were said to have told the Prime Minister that the rising cost of construction material due to sudden policy changes by state government was making development of BOT projects unviable.For instance, Reddy said, IVRCL was now securing sand from Jharkhand to execute a BOT project in Bihar as the Bihar government had banned sand mining in the state. There was also cost escalation on account of state governments delaying in execution of state-support agreement. These along with other factors were resulting in project costs spiralling by almost 15-20 per cent over the original estimates.

Besides, the developers had tendered for BOT projects assuming the GDP growth rate would be in double digits. With no such thing happening, only 5 per cent of the BOT projects in the country was now stated to be profitable.