By Express News Service –
The widening of 136-km stretch between Salem and Ulunderpet had been completed and collection of toll has begun, said Reliance Infrastructure Limited which executed the project.
The project, executed on the Build-Operate-Transfer (BOT) pattern, under the aegis of the NHAI, was awarded to RInfra to operate and maintain for a concession period of 25 years.Built at a cost of Rs 1,061 crore, the Salem- Ulunderpet corridor connects major tourist destinations and industrial zones in Salem district with Chennai International Airport. Sudhir R Hoshing, CEO (Roads), Reliance Infrastructure, said, ‘‘The Salem- Ulundurpet road will provide a hassle-free, safe and smooth driving experience.’’
Source-http://www.indianexpress.com
Written by ITW Editor · Filed Under BOT, NHAI
Manu Balachandran |
Industry players say cancellations could deter private investments
The Centre’s ambitious plan to kick-start development of critical infrastructure, including roads, during an election year has hit a barrier with the National Highways Authority of India (NHAI) deciding to scrap six projects worth Rs 4,000 crore due to land acquisition hurdles.NHAI is mandated to acquire land to develop national highways. It has so far scrapped four projects in Goa and Kerala and has now decided to let go off two more this year in Kerala, said a senior NHAI official. The projects could have added more than 420 km to the highway network. NHAI was looking to widen the national highways running through these states.
V K Sharma, chief general manager for land acquisition at NHAI, told Business Standard: “So far, we have terminated four projects in Kerala and Goa and we are in the process of terminating two more in Kerala. Land acquisition also remains a hurdle in West Bengal, but we have not scrapped any project there.”
Kerala and Goa are the only states where the authority has given up projects due to land acquisition troubles this year. This could be a deterrent to private sector investments in the country, according to industry players.
“These decisions send out a wrong message to investors. Land acquisition has to be done with coordination between state governments and NHAI,” said M Murali, director-general, National Highways Builders Federation (NHBF). The enactment of a new land acquisition law could help make acquisition easier for public utility projects, he added.
Undeterred by the six projects being scrapped, NHAI is now looking to acquire 10,000 hectares during the current financial year. It has acquired 4,000 hectares and looks to award 9,000 km of road projects during the year. “We have already acquired 4,000 hectares this year and we have set a target of 10,000 hectares for the year. We are certain that we can achieve that,” said Sharma.
The land acquisition target for the year is more than 50 per cent over the last years achievement when NHAI acquired 6,669 hectares.
Last year, the road transport ministry could award only a little more than 1,000 km of road projects and the prime minister had expressed concern over the delay in road development. The delay, largely caused by environmental clearance and land acquisition problems, had kept many private sector investors away from road projects. Last year, as many as 13 projects received no bids from the private sector.
According to the road transport ministry, a little more than 30 projects are delayed due to land acquisition troubles. West Bengal, Kerala and Assam each accounted for at least six projects. According to the existing norms, NHAI should take over 80 per cent of the total land before inviting bids from investors to develop projects. The remaining 20 per cent has to be completed within three months of awarding the project.
According to the National Highways Builders Federation, the criterion is not met in most instances with NHAI struggling to acquire land on a stretch and instead acquiring in a fragmented manner, which makes development difficult.
Experts have also pointed to NHAI’s inability to plan well after it had to scrap the projects in the states. “Kerala and Goa have limited land availability and the state governments have been opposing the plans to acquire land for roads. The NHAI should have studied the situation more closely before planning to undertake the projects. But with the number of vehicles on the rise, the state governments should also look at a sustainable model,” said Vishwas Udgirkar, senior director at consultancy firm Deloitte Touche Tohmatsu.
The Ministry of Road Transport has been trying to revive interest in the road sector through a slew of measures including amendments in the exit policy for private developers and rescheduling the premium that the developers owe the National Highways authority.
Source_http://www.business-standard.com
Written by ITW Editor · Filed Under NHAI
DEEPA H. RAMAKRISHNAN -SOUNDARIYA PREETHA
Decides to hand over Coimbatore-Mettupalayam road project to State Highways
In what could be its first salvo at the State government, the National Highways Authority of India (NHAI) on Tuesday withdrew from a project to extend National Highway-67 in Coimbatore district between Kangeyampalayam to Mettupalayam. A top NHAI official described it as the first step towards the national agency withdrawing from Tamil Nadu.
This decision could have a bearing on major projects in Tamil Nadu, where the NHAI alleges it is encountering a series of hurdles from the State government. Especially at stake is the Chennai Port-Maduravoyal elevated corridor project. The NHAI has approached the Madras High Court for help in early execution of the Rs. 1,800-crore project.
The NHAI has withdrawn from the project to four-lane the Coimbatore-Mettupalayam road in the State. It has written to the Ministry of Road Transport and Highways that this stretch of NH-67 be handed over to the State Highways for widening and maintenance.
“This is the first step towards the NHAI withdrawing from the State. The State government had asked for too many changes in the proposal including shifting of toll plaza. But we could not accede to their demands,” NHAI Chief General Manager (technical) I.G. Reddy told The Hindu. The letter of acceptance for the project was issued in July 2012, but the concession agreement was not signed as land was not available. The State government had made two requests for shifting of the toll plaza, but NHAI objected the second time as many structures would have to be demolished. The State government also withdrew its consent for the alignment.
According to Project Director of NHAI in Coimbatore Ganesh Kumar Saride, the Rs. 617-crore NH 67 (National Highways) extension project was mooted in 2006. It was proposed as a four-lane project from Coimbatore to Mettupalayam. Later, the NHAI decided to begin the extension from Kangeyampalayam, near Sulur. The alignment was for a greenfield project over a total stretch of 53.93 km till Mettupalayam. The proposal was to have a toll plaza at Narasimhanaikenpalayam. The project included four bypass roads, three road overbridges and one major bridge across the Noyyal. The land to be acquired was 875 acres. But no land has been acquired yet. Now, the Letter of Award for the project, issued in 2012, has been withdrawn.
Farmers’ associations and several residents on the proposed stretch have been opposing the project. They had sought a modified alignment for the project as the land acquisition for the project would have taken away many farms lands and displaced residents.
K. Kathirmathiyon, secretary of Coimbatore Consumer Cause, told The Hindu on Tuesday that the main objection to the project was against collection of toll on the existing Mettupalayam Road. Handing over the stretch to the State government was a welcome move and the Chief Minister should give special attention to widening of the Mettupalayam road and developing a bypass road for Mettupalayam.
National Highway projects worth over Rs. 9,300 crore running to a length of 1,037 km across the State have been delayed due to various reasons, including slow pace of land acquisition.
Source-http://www.thehindu.com
Written by ITW Editor · Filed Under NHAI
Timsy Jaipuria |
SUMMARY
The IDFC-led consortium’s R1,600-crore loan to the Delhi-Gurgaon expressway project could be in jeopardy as its loan agreement does not allow it to substitute DS Construction, the concessionaire for the project.
The IDFC-led consortium’s R1,600-crore loan to the Delhi-Gurgaon expressway project could be in jeopardy as its loan agreement does not allow it to substitute DS Construction, the concessionaire for the project. National Highways Authority of India (NHAI), which has been fighting a running battle with DS Construction over the poor management of the expressway, had served a termination notice to DS Construction last year — in case NHAI wins the case, currently in court, the IDFC-led consortium will find it difficult to enforce its rights and bring in another concessionaire. This is vital since the consortium’s loan has been based on the future revenue stream of the expressway project.IDFC refused to comment on the matter.
NHAI which had, in January this year, backed a proposal to allow IDFC to buy out 74% of the project’s equity — IDFC was to take on the project’s entire debt and buy 74% of DS Construction’s equity for a token R1 –— has now done a U-turn, and said it does not even recognise IDFC as a bona fide lender to the project.
The other four in the lenders’ consortium are Bank of India, PNB, Oriental Bank of Commerce and State Bank of Bikaner and Jaipur.
The project has an interesting history, with an initial loan of R383 crore given by a Hudco-led consortium. In January 2009, however, DS Construction had approached NHAI to substitute this consortium with one led by SBI — the loan component was then raised to R1,275 crore. NHAI’s consent was required, since under such concessions, NHAI agrees to pay most of the debt in case a project is terminated.
NHAI agreed to the change in lenders in September 2009 subject to certain conditions being fulfilled.
It is after this that the problem started. A year later, in October 2010, DS Construction proposed to change the consortium from an SBI-led one to an IDFC-led one – given the growing traffic on the expressway, the consortium felt the receivables could service a much larger loan.
NHAI had reservations about the changeover and did not sign on to the change in lenders. It said the loan amount had to be related to the size of the project. NHAI was reluctant to let the project’s revenues be used to service the larger loan since, under the agreement it had with DS Construction, were the traffic to exceed 1.3 lakh passenger car units per day, part of the additional revenues were to accrue to NHAI. In which case, even if the project has a high income stream, the IDFC-led consortium will not have access to it after it is terminated.
In September 2012 – two years after the IDFC loan had been given – when negotiations were going on between DS Construction, NHAI and IDFC, NHAI said that DS had given Rs 676 crore of loans to its parent company and this needed to be brought back into the project. Were this to be done, NHAI would have, in all probability, signed on to the tripartite agreement, but DS failed to bring back this money and NHAI did not sign the tripartite agreement.
At a meeting on Tuesday, attended by road minister Oscar Fernandes and Haryana chief minister Bhupinder Singh Hooda, the government decided to take the service of the attorney general in the matter.
Source-http://www.financialexpress.com/
Written by ITW Editor · Filed Under NHAI
MAMUNI DAS
(Premium is the amount offered by a highway developer to the NHAI for the right to develop and operate a highway for 20-30 years.)
Slowdown, rising costs are the real reasons
NEW DELHI- Highway developers cannot cite delay in environment clearances as a reason to exit from road projects.
Earlier, many developers including GMR, GVK and Ashoka Buildcon had cited pending Environmental Clearances as a key stumbling block for backing out of projects.
But, in the last six months, with Environment Clearances coming through with the intervention of Cabinet Committee on Investment (CCI) for these highway projects the developers are left with no excuses for not making investments.
In fact, GMR and GVK are already in Court to prevent National Highway Authority of India (NHAI) from encashing their bank guarantee for not executing the project.
NHAI had earlier taken a stance that developers were using pending regulatory clearances as a veil to not do those projects that have become unviable.
NHAI VINDICATED
In mid-January, when GMR and GVK had issued termination notices, NHAI Chairman RP Singh had stated, “Basically, in our view, as to why they are walking out of these two projects is the change in economic scenario and escalation of cost and not delays in environment clearance.”
Singh had added that these firms are exiting because the projects have turned unviable. He had also said that NHAI “sympathises” with the two major players but was not ready to accept the reasons for termination of contracts.
“Unfortunately, the escalation is becoming too high because in the last few years, the rates of aggregates have gone up high,” Singh had said then.
PREMIUM REJIG
Now, the developers are waiting for the Government to take a decision on allowing postponing of premium payment.
Premium is the amount offered by a highway developer to the NHAI for the right to develop and operate a highway for 20-30 years. Premium, which is payable every year, is arrived through a competitive bidding process.
With the slowdown setting in, many highway developers who had won projects two-three years ago promising high premium, are now unable and unwilling to implement them. To continue building the highway, they want to postpone their premium payments in a manner that the net present value of the premium is not changed.
Road Ministry has referred the matter to Finance Ministry for a decision. Earlier, the Law Ministry had shot down the proposal to permit rescheduling.
On the GMR case, taking note of the fact that a settlement is being worked out, the Delhi High Court has given an interim order stating that the bank guarantee will be alive till November 6. The interim order will be subject to the bank guarantee being kept alive.
Source-http://www.thehindubusinessline.com
Written by ITW Editor · Filed Under NHAI
OUR BUREAU
NEW DELHI, : The National Highways Authority of India (NHAI) has asked the Highways Ministry to deal with developers in a way that project contracts are cancelled amicably and insulated from future claims.
The NHAI’s move comes in the backdrop of road developers rejecting the conditions put forward by the Finance Ministry for allowing postponement of premium payment for highway projects that are currently stalled.
CANCEL PROJECTS
Instead of having a solution that is unworkable, it would be better to foreclose these projects amicably and re-bid rather than waste time in trying to revive these projects, said R. P. Singh, NHAI Chairman, in a letter last week to Vijay Chhibber, the Road Ministry Secretary. Singh suggested that the Ministry may form a committee to deal with developers.
According to an official source, the Road Ministry, in a proposal for the Unions Cabinet’s consideration, has suggested various options for rescheduling the premium, including cancelling the projects.
NO MORAL HAZARD
The Chairman also objected to the use of the term “moral hazard” by the Department of Economic Affairs (DEA) in reference to the proposal for rescheduling premium.
“Use of lexicon such as moral hazard, penalty, haircut, convey the impression that we are doing something out of the way for the concessionaires (developers). On the contrary, NHAI is trying to salvage contracts, which are in our favour,” Singh has said.
The Finance Ministry, while using these terms for the proposal, had supported one-time renegotiation, subject to from the Law Ministry as well as imposition of penalties.
The NHAI Chairman suggested that instead of financial penalties, the Government could use this opportunity to impose more stringent conditions, which would help the public and prevent developers from raising further financial claims against NHAI.
These conditions include stopping developers from charging toll for four-to-six projects in case they do not meet project milestones. Similarly, developers who seek such premium rescheduling, can be asked to commit that they will not raise any claims on account of any delays by NHAI in getting regulatory clearances.
At stake are several highway development projects awarded about three years back , which had committed a premium of over Rs 90,000 crore to be paid to the Government over 20-30 years.
The premium offered had a net present value of about Rs 26,000 crore.
Due to the slowdown, many developers, who had won highway development projects two to three years ago promising high premium, are now unable to implement the projects.
To continue operating the projects, the developers now want to postpone their premium payment in a manner that its net present value (NPV) is unchanged.
Premium is the amount offered by a highway developer to NHAI in exchange for the right to develop, maintain and collect toll from a highway for 20-30 years. The amount, which is payable every year, is arrived at through competitive bidding.
[email protected]
Written by ITW Editor · Filed Under NHAI
Neha Sethi
NHAI and BRO will have to deposit the cost with the legal bar office
(“We must notice that in the affidavit filed by NHAI, it is claimed that ‘there is no section of National Highway entrusted to NHAI for construction in Uttarakhand where there are chances of land sliding’. This statement is factually incorrect and is a matter of public knowledge,” the tribunal noted in its order. Photo: AP)
New Delhi: The national green tribunal on Monday imposed costs of Rs25,000 each on the National Highways Authority of India (NHAI) and the Border Roads Organisation (BRO) in a matter related to the recent Uttarakhand floods.The bench headed by chairperson Swatanter Kumar said a statement in an affidavit submitted by NHAI was factually incorrect.
“We must notice that in the affidavit filed by NHAI, it is claimed that ‘there is no section of National Highway entrusted to NHAI for construction in Uttarakhand where there are chances of land sliding’. This statement is factually incorrect and is a matter of public knowledge,” the tribunal noted in its order.
NHAI and BRO will have to deposit the cost with the legal bar office.
In its previous hearing on 26 August, the green court had pulled up BRO and NHAI for not conducting a study before widening highways in the Himalayan state.
The Supreme Court had on 13 August directed the environment ministry not to grant forest or environment clearance for hydroelectric projects in Uttarakhand till a panel submits a report on the impact of such projects on the biodiversity of the region.
The committee has not been constituted yet.
“It is further surprising that even in terms of the Orders of the Hon’ble Supreme Court of India dated 13th August, 2013, the Committee has not been declared as being constituted so far,” the green court said on Monday.
The tribunal directed the secretary at the environment ministry to ensure that the committee is constituted within one week because no orders of the tribunal can proceed without the committee being in place.
Source-http://www.livemint.com/
Written by ITW Editor · Filed Under Legal, NHAI
HT Correspondent, Hindustan Times Gurgaon,
The Gurgaon councillors have alleged that the two plazas on the Delhi-Gurgaon expressway, located within the municipal limits, violate the NHAI’s guidelines.
“The two toll plazas should be shifted to some other place — beyond the Gurgaon municipal limits. We will launch agitation against the Union and the state governments,” said a local councillor. Councillor RR Rathee told Hindustan Times that the two tolls on the Delhi-Gurgaon expressway and the one on the Gurgaon-Faridabad highway were a big mockery of the NHAI guidelines.
“It seems the governments connived with the concessionaire by allowing it to put up toll plazas,” Rathee said.
It is worth noticing that the notification of the department of road transport and highways, dated December 5, 2008, clearly states that the executing authority or the concessionaire should establish toll plazas at least 10-km from the municipal limit.
“How did these toll plazas came up on the expressway within the Gurgaon municipal limit despite the clearly laid guidelines? The Haryana government should have considered this aspect and lodged protest while the concessionaire had entered into the agreement with the NHAI,” said another councillor.
The Toll Hatao Sangharsh Samiti, a body consisting of local residents and leaders, has already raised this issue in the Delhi High Court.
“We are hopeful that the court will take this aspect into account and bring relief to lakhs of Gurgaon residents. We are leaving no stone unturned to do away with this menace,” said Pushpa Joshi, a social activist.
The Delhi High Court will hear the case on September 20.
Meanwhile, the 35 councillors of Gurgaon are also planning to give a representation to the Union and state governments.
Source-http://www.hindustantimes.com
National Highways Authority of India has issued a default notice to the developer of the Gurgaon-Jaipur highway for its failure to complete work
in time and poor maintenance even after the end of the 60-day deadline for remedial measures. Sources said since the developer failed to remedy the defaults within the cure period, the authority is now free to take action, including taking over the toll collection for at least 180 days, as per the contract norms. The authority in its letter to Pink City Expressway Ltd has cited a dozen notices issued by the independent engineer of this project since May 13 highlighting defaults on the developer’s part.
The developer maintains that non-availability and late availability of land slowed down the highway work but NHAI officials said PCEL failed to complete some structures years after getting enough land. In its letter to the highways ministry NHAI has mentioned that the developer has made only about five percent progress in the past six months despite assuring to do more. The developer has also failed to provide 4-lane facility “at all times” during the construction period. NHAI has said that many structures are incomplete, forcing numerous diversions. As the crust thickness of these diversions is inadequate to cater to heavy traffic for long and they are poorly maintained, travel time has increased considerably. However, the authority admits that factors such as non-availability of land, non-cooperation of state agencies such as revenue, forest and irrigation departments, and frequent interventions by public representatives demanding modification and incorporation of new structures, have resulted in dismal progress. It has also said that the main reason for the poor progress is a funds crunch. The lenders for this project have stopped releasing money and even the escrow account, in which the collected toll is deposited, has been frozen. PCEL said NHAI “has intimated occurrence on the concessionaire’s deemed default based on the independent engineer’s wrong interpretation of the provision of the agreement and invalid and illegal advice”. It said that NHAI can’t take over the project after this notice since the dispute resolution mechanism is stipulated in the concession agreement. While NHAI and PCEL are caught in a blame game, industry sources said both are at fault. The developer, they said, has a huge financial problem and NHAI has defaulted on getting clearances and providing land.
Written by ITW Editor · Filed Under NHAI
THRISSUR: The National Highways Authority of India (NHAI) has mooted a 10% hike in the toll rate at Paliakkara toll plaza on the Mannuthy-Edappally stretch.
The proposal, if implemented, will see an increase of Rs 5-25 in the toll rates. NHAI project director (Palakkad) P Ramanathan said the revision was proportionate to the rise in overall price index in the country. “As per the agreement signed between NHAI and the construction company ( Guruvayur Infrastructure Pvt Ltd), the latter is eligible to hike the toll rate every year. We have submitted the proposal to our higher officials and we will discuss it with the state government after receiving the permission. The new rates will be implemented only after that,” he said.
The toll rates were raised in last March amid strong public protest. As of now, light weight vehicles pay Rs 50 for a single journey and Rs 80 for multiple passages. With the proposed hike, it will be Rs 65 and Rs 95 respectively. Small scale commercial vehicles pay Rs 105 for single journey and Rs 155 for multiple passages, which will go up to Rs 110 and Rs 165. Large vehicles pay Rs 335 for a single journey and Rs 505 for multiple passages, which will go up to Rs 355 and Rs 530. For trucks and jeeps, the toll rate is Rs 210 for single journey and Rs 315 for multiple passages, which will go up to Rs 220 and Rs 330 respectively.
Ramanathan said a decision on the proposal was expected in another 10 days and the toll rates of private buses will remain the same. Anti-toll protestors said the proposal to hike the rates was in violation of a promise by the chief minister Oommen Chandy that the rates would remain the same till the road operator completed the construction of service roads, installing traffic lights and other facilities.
Source-http://timesofindia.indiatimes.com
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