Plan to upgrade 19 State highways to NHs pending with Centre

March 18, 2008

Hyderabad, March 18:The proposal to convert 19 State highways into National Highways for a length of 4,832.7 km is pending with the Ministry of State Road Transport and Highways (MoSRTH).“We are waiting for their approval,” Roads and Buildings Minister T Jeevan Reddy informed A Uma Madhava Reddy (TDP) and others during the Question Hour in the Assembly on Monday.The minister said that seven roads for periodical renewal works of the length of 68.84 km at a cost of Rs 16.85 crore have been taken up and completed with the funds provided by MoSRTH. Extensive repair works to the badly damaged National Highways have also been taken up to ensure free flow of traffic.The widening of Hyderabad-Vijayawada section of National Highway-9 was being taken up by National Highways Authority of India on BOT basis and the prequalification bids have been invited, the minister said.To another question by P Rajanna Dora, the minister said that Kottaki bridge across Votti Gadda river in Vizianagaram district was in bad shape and a new bridge would be constructed at a cost of Rs 5 crore.Agriculture Minister N Raghuveera Reddy informed K Ramulu (Janata Party) that Chief Minister Y S Rajasekhara Reddy would write a letter to Prime Minister seeking Padma awards to best farmers. He said that awards to the best farmers would be given at mandal levels by the State Government. Source: http://www.siasat.com

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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

DF govt to spend Rs 3000 cr on road to power

March 3, 2008

Though its four-year rule in Maharashtra is yet to bring a visible change in the state, the Democratic Front (DF) government now wishes to make amends during its final year in office.

For the 2008-09 fiscal, the state will witness large-scale road construction works, senior officials of the Maharashtra State Road Development Corporation (MSRDC) and Public Works Department (PWD) told ET. The two agencies, which have been keeping a low-profile during the DF rule, compared to the 1995-1999 Shiv Sena-BJP government’s period, want to make up for the lost time. “We will have many more projects to showcase before the people,” Maharashtra chief minister Vilasrao Deshmukh had said earlier.

Road works amounting to more than Rs 3,000 crore have been initiated by these two agencies across the state. All projects are being undertaken on build, operate and transfer (BOT) basis and the state agencies are collaborating with the National Highway Authority of India (NHAI). Such is the project’s volume that the PWD, MSRDC and NHAI would upgrade around 900 km of roads across Maharashtra.

“Most of the roads under construction would be completed in a year or so. We are following a strategy of aggressive development in the road sector, which is one of the main drivers of socio-economic growth. Roads not only connect but also bring investment,” PWD secretary DB Deshpande told ET.

The state is using the Rs 2,000-crore grant sanctioned by the Union government to upgrade the corridors of national highways, which pass through Maharashtra. This allocation has to be used in the 2008-2009 fiscal. The work includes six-laning of the 90-km corridor between Dahisar-Talasari on Mumbai-Ahmedabad National Highway, the 275-km corridor between Satara-Karad-Kagal, which leads to Bangalore, the 86-km stretch between Igatpuri and Pimpalgaon and construction of an elevated 5.5 km long corridor bypassing the Nashik city.

“Maharashtra has always been regarded as the leading state as far as quality of road is concerned. But good roads have utility beyond the obvious connectivity point of view. The World Bank has estimated that an investment of Rs 20 lakh in road works creates one perpetual job.

We are looking at employment generation and economic potential of roads, which would be give an edge to Maharashtra in these industrially competitive times,” an MSRDC official said. Lot of action is also visible on the state highways. The PWD has got Cabinet approval for the Rs 800-crore four-laning of Shirur-Nagar-Pune-Aurangabad state highway, which is 300-km long. “Work has started on this project and should be completed by May 2009,” Mr Deshpande added.

Source: economictimes.indiatimes.com

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

Madhucon to transfer BOT projects to arm

February 22, 2008

Hyderabad: Madhucon Projects Ltd is planning to transfer its major infrastructure projects to Madhucon Infra Ltd, which shall be a holding company for its build operate and transfer (BOT) toll roads, power projects and coal mines.

The Hyderabad-based company is proposing to transfer its BOT toll road projects and other investments in infrastructure, power and coal mine businesses to Madhucon Infra Ltd and would be seeking the approval of shareholders for the transfer by way of postal ballot, according to a release.

The company to segregate the engineering, procurement had necessitated the transfer process due to a decision and consulting (EPC) business and the investments in BOT projects as the net worth and capital required for these would be substantial. The result of the postal ballot would be announced on March 25, the release added.

Source: sify.com

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Reliance Energy is top bidder for Mumbai trans-harbour link project

February 20, 2008

A consortium led by Anil Ambani group company Reliance Energy Ltd (REL) has emerged top bidder for the Rs6,000 crore Mumbai trans-harbour link project.Maharashtra State Road Development Corporation (MSRDC) today opened financial bids for the 25-km six-lane project. However, no confirmation could be obtained from either MSRDC or REL.

Mukesh Ambani-led Reliance Industries group was also in the race for the project to build a trans-habour link between Sewri in Mumbai and Nava-Sheva across the creek in Navi Mumbai.

Sources said the REL-Hyundai combine quoted a lower concession period for the build-operate-transfer (BOT) project of nine years and 11 months as against 75 years quoted by the Mukesh Ambani-controlled Sea King Infrastructure.

Phase-I of the project will comprise a six-lane dual carriageway linking Nhava to Sewri and Phase-II, which is expected to be added in 2015 -18, will consist of a double track rail link that will run parallel to the road link on the north side.

The Rs6,000 crore project is slated for completion in five years. The REL-led consortium can charge Rs250 per heavy vehicle and Rs120 for cars and light commercial vehicles as toll charges.

Source: domain-b.com

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Gayatri Projects to hive off invesments in BOT road projects

February 19, 2008

Gayatri Projects is planning to hive off investments in BOT road projects to its subsidiary company with an intention to dilute a part to strategic investors to raise funds for further investment into BOT projects.

A meeting of the board of directors of the company will be held on Feb. 26, 2008, to consider the issue of convertible equity warrants to promoters in accordance with the provisions of SEBI Guidelines, 2000 and allotment of equity shares to FCCB holders upon conversion.

The board will also consider incorporation of new objects clauses in the memorandum of association.

Shares of the company gained Rs 8.4, or 1.62%, to settle at Rs 527.75. The total volume of shares traded was 13,891 at the BSE. (Tuesday)

Source: myiris.com

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Punjab farmers bandh peaceful

February 19, 2008

The day-long bandh call given by around 17 pro-kisan organisations seeking waiving off debt and opposing privatisation of state electricity board passed of peacefully in Punjab.

Several farmers’ organisations are protesting the Government’s proposed move to privatise the state electricty board, put up toll plazas under the Build Operate and Transfer (BOT) schemes and sale of public property to generate revenue and demanding waving off Rs 26000 crore debt on state peasantry.

To lodge protest, farmers owing allegiance to Kirti Kisan Union, Bharti Kisan Union, Kisan Sangarsh Committee, Bharti Kisan Committee, Punjab Nirman Sabha, Naujwan Bharat Sabha, Paendu Mazdoor Union and Kranti Kisan union among others blocked vehicular traffic at several places on the national and state highways for about two hours, officials said here.

However, during the bandh call no untoward incident was reported from any part of the state, they said.

Activists of several kisan organisations staged dharnas in the middle of roads at several places across the state, putting commuters to lot of inconvenience.

However, the bandh failed to evoke any response in the cities as all commercial establishments remained opened throughout the day.

At several places, the traffic was diverted in advance by the authorities.

Reports of traffic blockades have been received from Kapurthala, Jalanndhar, Phagwara, Muktsar, Ferozepur, Bathinda, Moga and Faridkot.

Source: hindu.com

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Express highway project delayed due to departmental blockades

December 17, 2007

Lucknow, December 16 Even though the state government has started a number of road projects in the last six months, Amar Shaheed Path Express Highway, proposed and inaugurated by former Prime Minister Atal Bihari Vajpaee, still has a long way to go. Even after six years since its construction was started, the National Highway Authority of India (NHAI) could only finish 75 per cent of the work. The project was inaugurated on September 22, 2001 with a stipulated deadline of 36 months. However, due to various constraints, the road project work progressed at a snail’s pace.

A senior NHAI official said they had to face various hurdles like land acquisition and clearances from various government organisations, etc.

“It took us long to get clearances for constructing railway overbridges from the railway authorities. At some places, the land acquisition delayed the work. The authorities were not supportive,” he said.

Talking to The Indian Express, Deputy General Manager (technical), NHAI, J S Parmar said all bottlenecks have been removed and remaining work is expected to be over by June 2008.

“There were certain problems but they have been resolved. Of the total three overbridges falling in way of the highway, one is completed and work on other two will start soon. Left out road stretches would also be completed,” he said.

He added land acquisition or getting clearances were not the only reasons for the delay. “The project was revised a few times after work started. Like, two underpasses and 1.5-km-long viaduct near Gomti Nagar were added subsequently,” Parmar said.

Besides, the NHAI officials blame the contractor of the project, Atlanta Ltd, for slow progress of work. “We held meetings with them and asked them to carry out project in time. We also warned them if they didn’t work efficiently, their license will be cancelled. The work is going smoothly at the moment,” said another NHAI official.

The 22-km-long highway connects NH-25 (Lucknow-Kanpur) and NH-28 (Lucknow-Faizabad) via NH-56 (Lucknow-Sultanpur) passing through the city. “The highway will act as an outer ring road. It may not directly benefit local commuters, but traffic congestion will reduce on city roads. The heavy vehicles or the commuters going to Rae Bareli, Sultanpur, Faizabad and Kanpur could travel on it without entering the city. Only a few important crossings have been left on the highway so that the vehicles do not get slowed down, causing jams,” said Parmar.

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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

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