Postal highway project in limbo
October 9, 2013
SURESH YADAV
JANAKPUR, : Eight access roads that Nepal and India had agreed to complete in the Tarai this year under the postal highway project have completely fallen by the wayside.
According to a bilateral agreement inked around three years back eight access roads were to be constructed in Dhanusa, Mahotari and Sarlahi districts by this November 12. But only Birendrabazar-Mahinathpur road in Dhanusa is under construction.
India had released more than Rs 2.5 billion for the project 29 months ago.
A meeting was held in Janakpur a few days back to discuss the factors leading to the delay.
Indian ambassador Ranjeet Rae, who attended the meeting, held the construction companies and the government of Nepal responsible for the tardy pace of the project.
“Had the government of Nepal handed over the task to the construction companies and the contractors had taken their responsibility seriously, the work would have already completed by now,” said Rae.
International companies such as Vishma, Wivi and SR Joint Venture had bagged the tenders for the project.
Chief at Janakpur Division Office of the postal highway project, Kishore Roy blamed Nepal Electricity Authority (NEA) and the Department of Forests.
“Even though we allocated the budget to remove electrical poles and trees along the road sections, NEA didn´t take the work seriously,” he said. “Moreover, had the construction companies started the construction immediately after the agreement, the progress would have been satisfactory.”
The project includes the construction of the access roads of Janakpur-Jatahi (12.06 km), Janakpur-Yadukuha (17.05 km), Janakpur-Jaleshwore-Vitamode (19.75 km), and Birendrabazar-Yadukuwa-Mahinathpur (32.35 km) in Dhanusa.
Maisthan-Gausala-Sashi (26.90 Km) and Jaleshowore-Hardikhola (27.20 km) in Mahotari, and Nayaroad-Barhathwa-Madhubani (40.31 Km) and Nawalpur-Mangalwa (26.59 km) road sections in Sarlahi are the remaining access roads to be constructed under the postal highway project.
Source-http://www.myrepublica.com
Cabinet okays Rs.1,756 crore road project for Gujarat
October 9, 2013
None
The union cabinet Tuesday approved the development of a national highway between between Gadu and Dwarka in Gujarat at an estimated cost of Rs.1,756.36 crore.
The cabinet committee on economic affairs, at a meeting chaired by Prime Minister Manmohan Singh, gave green signal for the development of the road project on National Highway-8E.
Out of the proposed 209.89 km of the highway, 119.7 km will be four-laned and 90.19 km will be two-laned with paved shoulders.
“The project will expedite improvement of infrastructure in Gujarat and also reduce the time and cost of travel for traffic, particularly heavy traffic, plying between Gadu and Dwarka,” it said.
This road stretch links a number of sea ports on the western coast of India apart from coastal places like Dwarka, Porbandar and Somnath.
The mega road bailout – Rewarding corporate greed?
October 7, 2013
Nikhil Inamdar | Mumbai
When GMR wriggled out of a highway project for which it had paid a whopping Rs 636 Cr as premium, seeking a renegotiation of terms with NHAI last year, 2 notes of dissent from the Finance Ministry and the Planning Commission observed the following –
“Varying the payment schedule at this stage implies departure from a legally binding contract, an action that cannot be supported” – RS Gujaral, Finance Secretary
“Such whimsical changes in legally binding contracts is a poor reflection on the credibility of government and its agencies” – Sindhushree Khullar, Plan Panel Secretary
Gujaral’s note also expressed unease about this becoming a precedent for other contracts in similar distress.
His words must be ringing loud in the ears of road ministry officials today as the government sets to pick up the tab for a staggering Rs 1.5 lakh crore to bail out private developers, if a proposal mooted by the ministry goes through. A Business Standard report (read here) reveals that a total of 39 projects are likely be approved under this plan, which will entail rescheduling of premium payments to NHAI. Projects include ones bagged by marquee names like Larsen & Tubro, Ashoka Buildcon and IDFC among others.
Premium is the amount paid by a concessionaire to NHAI during the bidding of BOT (build-operate-transfer) projects which are expected to give very high returns. In the good times, when liquidity was abundant, corporate balance sheets were in the pink of health, India was growing at 9% and there was a slugfest among bidders for bagging lucrative contracts – private developers threw caution to the winds and paid hyper aggressive premiums for projects. They based their calculations on brash projections of future traffic growth, reflecting the audaciousness that’s often seen in a booming economy.
But as growth plummeted, that swagger evaporated, and traffic projections went out of whack (by as much as 45% on the down side in some cases according to Fitch) developers are being seen queuing up at the government’s doorstep for help, with the ministry more than willing to oblige, no matter that its own fiscal situation is more precarious than ever.
Think of what would have happened in a reverse scenario. Would the concessionaire have agreed to a revision of terms had profits zoomed higher than projected? Clearly not!
But the argument of the ministry seems to be that inaction will shake up the entire road sector and have a cascading impact on the rest of the economy, so this is the best way out of the mess. Experts agree.
“In this first phase of PPP in the last 15 years, there have been huge learnings for both the government and the private sector. While developers miscalculated projections, there were many things that the government did wrong as well, so I would argue for a one time reset and insist that policy be framed clearly and transparently” says Vinayak Chatterjee, Chairman of Feedback Infrastructure.
Government sources insist that it is a ‘one-time relief’ proposal indeed, and not a policy. But relief for some means a lost opportunity for others (companies that lost out on the bids because of undue aggression by winners) and an easy way out for the barrage of non-serious players who had entered this business to make a quick buck.
A more rigorous approach to this ‘reset’ could have entailed measuring the depth of stress of each developer minutely and granting only those genuinely unable to cough up the cash, a chance at premium renegotiation. But experts feel that would be impractical and also led to potential litigation for being discriminatory in nature.
Whatever be the satisfactory solution to this quagmire, what’s clear is that across the infrastructure arena, PPP projects have been battling similar issues – be it with the UMPPs (Ultra Mega Power Projects) in the power sector, or the entire gas pricing debate in the petroleum space. In each of the cases, whether it’s Adani and Tata with regards to higher compensatory tariffs for UMPPs, or Reliance Industries which would benefit from the Rangarajan formula – it is the developers who’ve gotten away relatively unscathed, despite a glaring divergence in what they’ve promised, and what they’ve actually been able to deliver. The government meanwhile, has been left with no choice but the renegotiate contract terms and conditions keeping the larger good of the economy in mind.
Having presumably learnt from these failures, the hope now is that phase II of PPP in India will be less thorny.
Survey for Silk City ring road begins
September 27, 2013
Hrusikesh Mohanty, TNN |
While 13-km Raghunathpur-Ratanpur bypass road would be constructed by the National Highways Authorities of India, 15-km stretch connecting Dakhinapur with Lathi and Haladiapadar and 17-km stretch connecting Mandiapalli-Karapalli and Phulta would be taken up by the works department.
Land acquisition is likely to made in some areas as the width of the ring road is proposed to be 300 metre, including green and commercial zones on side of the road, Das said. The cost of the project would be known only after preparation of the DPR.
The proposed road assumes significance as the city is witnessing heavy traffic congestion during peak hours. “The ring road will not only ease traffic in the city but also make plying of proposed city buses smooth,” said Berhampur Development Authority chairman Kailash Rana. The ring road is also important as the urban body has decided to construct a bus terminal at Haladiapadar, on the outskirts of the town, he added.
The city bus service in Berhampur and its adjoining towns will start soon as the government has sanctioned Rs 5 crore and formed a special purpose vehicle (SPV) for facilitating the project.
Panel holds talks on metro viaduct
September 27, 2013
By Express News Service – KOCHI
A committee constituted by the Ministry of Road Transport and Highways held detailed discussions and carried out site visit to settle issues related to permissions required from National Highways Authority of India (NHAI) for the construction of the proposed Metro viaduct.
The committee consists of Project Chief Engineer (Ministry of Road Transport and Highways) Nahar, Director Projects KMRL Mahesh Kumar and Project Director Palakkad NHAI P Ramanathan.
The site visit was held along the Aluva- Edappally stretch of the national highway for the construction of the proposed Metro viaduct along the central median of NH 47 on the stretch.
Issues like the width of the road during the construction with barricading and the width of the road after construction of viaducts and the ways to ensure smooth traffic near the Metro stations on the NH were the key points of discussions.
“The discussions were positive and we are hopeful of finalising the matter very soon,” said Elias George, MD, KMRL.
Source-http://newindianexpress.com
Road developers eye max relief from govt
September 27, 2013
Dipak Kumar Dash, TNN |
NEW DELHI: Private highway developers are trying to extract maximum relief from government, citing the continuing economic gloom that has impacted their projects. Developers want government to allow rescheduling of annual premium payment for all the 39 projects awarded since April 1, 2010, including projects which have taken off. Premium is annual upfront amount that developers pay to NHAI.NHAI has forwarded the fresh proposal of developers to the highways ministry at a time when Cabinet is likely to consider the premium rescheduling of 23 “stressed” projects where work has not yet started. A top ministry official said they have returned the proposal to NHAI and have asked it to put it before the authority’s board, which has representatives from road, Planning Commission and the finance ministry.
After receiving a proposal from the National Highway Builders Federation (NHBF) and IRB Infra that the proposed premium rescheduling scheme should be extended to all premium projects, NHAI has asked the ministry to put a supplementary note for Cabinet’s consideration. It has said half of estimated toll revenues have been hit due to the economic slowdown.
Delhi-Gurgaon toll road project gets more muddled
September 27, 2013
MAMUNI DAS
Ministry looking at making a criminal liability case
The Delhi-Gurgaon toll road project is getting further tangled in controversies. The Highways Ministry is considering whether a criminal liability case can be made on the project.
This is what emerges in a letter sent by Highway Ministry Secretary Vijay Chhibber to NHAI Chairman R.P. Singh on Thursday.
Simultaneously, the Haryana Government has backed off from its earlier stated intention of buying out the project to make it toll free and ease the pain for commuters facing jams on the toll road. With this, National Highways Authority of India (NHAI) will have to buy-back the concession agreement, at the earliest, the Secretary said.
On Wednesday, NHAI Chairman had written to Highway Secretary to decide how the project could be handed over to Haryana State Government.
A day later, on Thursday, the Road Secretary wrote back to NHAI that in a meeting between Highways Minister and Haryana Chief Minister – held in the presence of Highway Secretary, NHAI Chairman and Haryana Chief Secretary – it was “patently clear that the Government of Haryana is not pursuing its earlier intention of buying out that project”.
Given the importance of the issue and the prevailing uncertainty, the Ministry will also seek assistance from Attorney General to represent NHAI in pursuing this matter in Delhi High Court. This project is already under dispute due to the multiple issues and hearings are going in Delhi High Court.
Due to the toll road developer not meeting his commitments on road maintenance and commuters facing a lot of inconvenience, NHAI had decided to terminate the project.
But, the project lenders – currently led by IDFC – have given more money to the developer than the project cost agreed upon by the Government. So, if the contract is cancelled, they will get less money from the NHAI. Now, the lenders do not want NHAI to cancel the project as they have to chase the road developer – DSC Ltd – for the repayment, who is already financially stressed.
Indications are that the issue has been referred to Chief Vigilance Commissioner and the Enforcement Directorate to pursue whether the road developer had used inter-corporate deposit route to transfer funds from the escrow account, where toll money received from project were kept.
Rescheduling of premium: L&T, IDFC may also see their highway projects qualify
September 26, 2013
CCEA would soon be considering proposal to reschedule premium payment worth Rs 98,000 cr to be paid by private concessionaries to NHAI for 23 road projects
The union ministry for road transport and Highways may yield to a request by the National Highways Authority of India to consider 16 more projects for premium rescheduling if the Cabinet Committee on Economic Affairs decides to provide a one-time relief to 23 projects for rescheduling their premium.
The Cabinet Committee on Economic Affairs would soon be considering a proposal to reschedule premium payment worth Rs 98,000 crore to be paid by private concessionaires to NHAI for 23 road projects. If 16 more projects are approved for rescheduling then another Rs 53,000 crore premium payment due to be paid to NHAI would need to be rescheduled.
Companies including Larsen & Toubro, IDFC, Ashoka Buildcon and Oriental Structural Engineers are among the 16 companies looking to be considered for premium rescheduling for various projects, said an official. NHAI has been repeatedly holding meetings with officials in the ministry to take up the case of 16 projects as they fear a backlash from the project concessionaires.
“We can look at providing relief to the projects if CCEA agrees to reschedule premium in the first place. This is a one-time relief and not a policy, so we are hoping that they agree to it”, a senior official at ministry of Roads told Business Standard.
The issue of rescheduling for 16 projects emerged since these project developers had achieved the appointed date. It is the date on which the contract period begins. According to the norms, once a project is awarded to a concessionaire, it has to complete land acquisition and take clearances from the environment and forest ministry. The developer has to tie up funds besides meeting other norms. Once these norms are achieved, an appointed date for start of construction is said to have been achieved.
Meanwhile the official also added that the Finance Ministry has recommended that a stress test be conducted to find out the number of projects that are seriously affected due to various reasons before rescheduling their premium.“The finance ministry has recommended that we conduct a stress test to find out who are in real trouble and they have a valid point. With regards to the 16 projects, we feel that they need some help and we will see what we can do from our side”, the official added.
Premium is an amount that concessionaires pay to NHAI for a BoT (Build-Operate-Transfer) project as they feel that the returns from the project are expected to be very high and is usually decided on the basis of future traffic flow at the time of bidding.
The ministry is considering a premium rescheduling in a bid to give a breather to companies for a few years considering a slowdown in the economy. According to the premium rescheduling plan, concessionaires are expected to pay lesser premium for a few years and then subsequently increase their premium without affecting the total payment.
“Basically, it’s a breather so that we can kick start the projects and once traffic picks up, they can pay back higher amount in the future. At this point, we need these measures to encourage private sector investments”, an NHAI official said.
NHAI had in their board meeting proposed that 23 projects be considered for premium rescheduling and forwarded the request to the ministry of roads. Following concerns raised by the remaining project concessionaires, NHAI then requested that the remaining companies be added to the list.
The move to restructure premiums were proposed against the backdrop of some private infrastructure firms pulling out of road projects due to delays in regulatory clearances like land acquisition and environment clearances.
“Except a few cases, there is actually no need for premium restructuring. The government has actually taken a number of steps to ensure that the private sector is not affected and it is the companies who are at fault as they anticipated that the economy will continue to grow at the same pace as it did. There are some genuine cases where for reason such as a ban on mining, the traffic flow has fallen, But otherwise there is no genuine.
Source-http://timesofindia.indiatimes.com
October date for Khasmahal-Asanboni road project
September 25, 2013
B Sridhar, TNN |
It was after the demand from local MP Ajay Kumar and Potka and Jugsalai legislators, Menaka Sardar and Ramchandra Sahis respectively, that the then DC of East Singhbhum Himani Pandey asked the concerned department to prepare a project estimate for the road construction work and sent it to the state headquarters for approval.
“The construction work will commence from October and in six months time it would be completed,” said executive engineer of Rural Engineering Organization Rameshwar Kumar.
One of the busy streets on the fringes of the city which has thousands of vehicles particularly bi-cycles, two-wheelers and passenger mini buses plying on it during the day, the road was in dire need of re-construction for the past several years.
With the construction of the rundown road, the near one lakh residents of Khasmahal, Sarjamda, Barigora, Rahargora, Gadra and Asanboni area will benefit the most.
With two Greenfield projects, Bhushan Power and Steel Company Ltd’s 3MTPA integrated steel plant and 900MW captive power plant and Jindal Steel and Power Ltd’s 5MTPA steel plant coming up in Potka-Ghatshila stretch in the district, the proposed road is likely to witness manifold increase in traffic movement in the near future.
Work awarded for AIIMS-Digha elevated road
September 25, 2013
Faizan Ahmad, TNN |
The elevated road project will have major crossings at Bailey Road and Ashok Rajpath and will have connectivity with important places like Danapur railway station, proposed Patliputra railway station and AIIMS. Besides, it will also have connectivity with the Ganga Path and one railway bridge at Khagaul (Patna-Delhi) line. One minor bridge will also be linked to this project which is scheduled to be completed in three years from the start of the work.
Gammon India is already working on some projects in the state, including the state highways 69, 70 and 91 besides Muzaffarpur-Hajipur road, Ara-Buxar road, Munger bridge and Baluaha bridge. Some of these projects have been delayed, admitted company’s regional office vice-president B K Singh. He said the delay was due to land acquisition and other issues. “Almost all companies are facing these problems due to government policy,” he added.
Amrit said since this is one of the prestigious projects, the BSRDC will strictly monitor the schedule of the work and keep a close vigil on other related issues to ensure that the firm maintains the deadline.
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