Toll on two-lane roads to drive costs down

June 30, 2009

More than 10,000 kms of roads may get tolled across the country. In what may be called a first, the ministry of road transport and highways is considering a proposal to toll two-lane roads. This is being done to not only recover the cost of construction but also ensure funds for their maintenance and upkeep. According to a senior government official, the move has come as a part of the government’s attempt to attract more road developers and also reduce the burden on annuity and build operate transfer (BOT) projects.

So far two-lane roads are not tolled across the country. But the idea is being considered especially because the government may award the construction of two-lane national highways on certain lean traffic areas across the country. This is being done to reduce the cost at a time when developers have been shortage of funds, as the official said.

The move will require making changes to the toll policy of the government, which provides for tolling of four and six lane highways currently. The ministry had introduced a new toll policy in December 2008 by the way of which toll rates had been doubled or trebled on certain stretches.

The current toll policy stipulates a fee of Rs 0.65 per kilometre for cars jeeps etc, Rs 1.05 per km for light commercial vehicles, Rs 2.20 for buses and trucks, Rs 3.45 for heavy construction machinery and Rs 4.20 for vehicles with over seven axles. However, these are the recommended rates for four and six lane highways and a similar schema would have to be prepared for two lane highways, if the proposal gets implemented.

The fee for two-lane highways is expected to be much lower but the location will also matter in determining it. For instance, it may be higher for hilly terrain roads.

The government has been working on a plan to re-engineer roads and thereby reduce their cost. The National Highways Authority of India (NHAI) is considering the removal of a number of additional structures on highways that escalate the cost. Taking this further, the minister for roads recently suggested that even in areas where two lane roads are being considered tolling should be implemented.

However, there is a flip side two lanes as well. They are less safe than four or six lane highways as there is no divider to prevent head on collisions. Even though we support the idea, the viability of tolling two lane highways would have to be considered in the light of the administrative cost of collection, a road expert from the National Highways Builders Federation (NHBF) said.

Currently there is a network of over 70,000 kms of national highways in the country, the maintenance of which comes under the central government. Even though national highways are only 2 per cent of the total road network, they carry bulk of the country’s traffic at over 65 per cent.

Source:indianexpress.com

Written by ITW Editor · Filed Under Uncategorized

NHAI projects Rs 28,000 cr expenditure

March 25, 2008

The National Highways Authority of India (NHAI) has projected an expenditure of Rs 28,000 crore for 2008-09 to complete its ongoing projects and the new projects announced under the National Highways Development Project (NHDP). To meet this projected expenditure, the authority is in advanced stages of talks with the Asian Development Bank (ADB) for a loan of Rs 400 crore. This is in addition to the Rs 1,900 crore it is expecting from multilateral institutions through the central government’s budgetary allocation. Rs 14,000 crore is expected to be contributed by the private sector through public-private partnerships (PPPs) while Rs 7,000 crore is projected to come from fuel surcharge. Besides, the NHAI is planning to refloat the 54 EC tax-free capital gains bond for 2008-09 with a ceiling of Rs 3,700 crore. NHAI officials say the new 54 EC tax-free bonds will be launched once the Finance Act is passed in Parliament. In the current financial year, the NHAI has managed to mop up more than Rs 200 crore through the 54 EC bonds. Officials expect it to mop up nearly Rs 300 crore by the end of the current financial year. Didar Singh, member (finance committee), NHAI, said: “We are quite comfortable with our financial position to meet all the requirements of the various projects under implementation.” Some ongoing projects that are expected to be completed in 2008-09 include the 56.25-km Garhmukteshwar-Muradabad expressway, the 32-km Chennai bypass, the 15-km Chennai-Ennore expressway and the 14.35-km Jawaharlal Nehru Port (phase-II) project. In 2005, the Committee on Infrastructure had prepared a comprehensive plan envisaging a mammoth investment of Rs 2,20,000 crore under the NHDP on concessions or contracts to be awarded by 2012. According to the plan, projects under second, third and fifth phases of the NHDP are expected to be completed by December 2012, while concessions or contracts for fourth, sixth and seventh phases would be awarded by December 2012 and work completed by December 2015. Source: http://www.business-standard.com

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EXPANSION OF NH-9 IN ANDHRA PRADESH

March 19, 2008

Four-laning of National Highway (NH)-9 in Andhra Pradesh is being taken up in a phased manner. Hyderabad-Machillipatnam section of this NH is being taken up for four-laning by National Highways Authority of India (NHAI) on Build, Operate and Transfer(BOT) basis under National Highway Development Project(NHDP) Phase-III. Four-laning in a length of 31 km from Hyderabad to Sangareddy is in progress on BOT basis. These works are targeted for completion by December, 2011. Consultancy services for examining the viability of 4/6 laning of Sangareddy-Zaheerabad section of this NH on Design, Build, Finance and Operate(DBFO) pattern is under progress. Further action in this regard will depend upon the outcome of the said study. This information was given by the Minister of State for Shipping, Road Transport and Highways, Shri K.H. Muniyappa in a written reply in the Lok Sabha today. Source: http://pib.nic.in

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NHAI likely to issue contracts for 10,000km of highways soon

March 16, 2008

These contracts will be a part of phase III and phase V of the government’s highway project New Delhi: The United Progressive Alliance government wants to award, in the next few months, contracts to build up to 10,000km of national highways, equal to almost 70% the 14,500km of national highways on which similar contracts have been issued since 2000.Long Road Ahead (Graphic)The decision to award the contracts, worth at least Rs70,000 crore, comes with the general election likely to be held either late this year or early in 2009, although an official at the agency that regulates the highways sector in India claimed that this was because procedural issues related to the contracts had now been “ironed out”.The official at the National Highways Authority of India, or NHAI, added that since 2000, when the country’s National Highways Development Programme or NHDP was launched, the regulator had awarded contracts for the construction of 14,500km of highways worth around Rs80,000 crore and that work on 8,500km had been completed.The contracts that will be issued are part of phase III and phase V of NHDP and involve upgrading existing national highways into four-lane and six-lane ones. Five of the seven phases of NHDP involve upgrading existing highways.The stretches will first be offered to private companies to be developed under the ‘build-operate-transfer’ model where the companies will build the highways, operate them and collect toll for a certain period of time, and transfer them to the government at the end of a certain period of time called the concession period. In case this fails to draw bids, the projects will be offered on the ‘engineering-procurement-construction’ method, where private companies build the roads for a stipulated fee but will not have any stake in the project.“Detailed project reports are being created for these stretches and they are expected to be awarded in the next few months,” said a senior government official, who did not wish to be identified. “There was a lull in award of projects because the policy was being ironed out. But now that things are falling into place, you will see more and more projects on offer,” the official added.For almost a year, NHAI has gone slow in awarding projects.“Till now we were waiting for ironing out procedural issues such as preparation of the new model concession agreement and setting up a two-stage bidding process. Those matters have been taken care of now. And now the only serious impediment in the way of awarding these contracts is clearing of the toll policy,” said an NHAI official.The toll policy is to be cleared by the law ministry and this could take a couple of months, the official added.Analysts however said that while the agency was capable of awarding 8,000km of construction a year, exactly how much would get done depends on a number of factors including a legal challenge to the government’s bid process.The National Highways Builders Federation, an industry body, filed a suit in January against guidelines issued by the finance ministry and ratified by the Prime Minister’s committee on infrastructure that favour bidders who have executed large projects. The norms, reported by Mint on 28 December, cap the number of bidders at six, with some individual exceptions.“There are three factors that could affect the process (of awarding contracts),” said Kuljit Singh, a partner with the transaction advisory services practice of audit and consulting firm Ernst and Young Pvt. Ltd.“Technical detailed project reports usually take a while to prepare. Also, things generally slow down a little in an election year. Also, depending on what the court finds (in the case where the National Highways Builders Federation has challenged NHAI’s bidding norms), the process could be affected,” he added.Source: http://www.livemint.com

Written by ITW Editor · Filed Under Investment and Finance

Govt planning toll on two-lane highways too

December 17, 2007

NEW DELHI: Driving on national highways is set to get more expensive with the government planning to start tolling even two-lane stretches besides intensifying the fee-collection across the golden quadrilateral (GQ).

Tolling was so far confined to four and six-lane highways and expressways where upgradation work has been completed. But soon, you would be stopping at toll plazas even on incomplete stretches of highways that link the four metros – Delhi, Mumbai, Kolkata and Chennai.

However, a major change in policy is the move to charge users for driving on two-lane highways that form nearly 55% of the national network of 66,590 km. Under the new toll policy, the ministry of road transport and highways intends to levy toll on 20,000 km of highways which are to be taken up for upgradation through the public-private partnership route.

“On a four-lane highway, a car user has to pay about 65 paise per km. Now, the plan is to provide the same quality road surface with paved shoulders on two-lane highways and have proper signages. The cost that we are proposing will be 60% of the four-lane cost (roughly 39 paise per km),” road & highways said secretary Brahm Dutt.

Source: timesofindia.indiatimes.com

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