six changes needed for better transportation

July 24, 2014

It is just a welcome coincidence that a single party majority government has come in the centre at the time when the country just laid out its National Transport Development Policy for the next 20 years. As per the policy, if India has to grow its GDP at 8-9%, it needs to increase its investment in infrastructure six times from current USD 45 billion to USD 250 billion by 2032. This translates increasing the investment in infrastructure from 5.8% of GDP (during 11th FYP) to 8% of GDP by the end of 2031-32

Investment of this scale would not only require significant government funding, but also building enabling environment to attract private capital, domestically as well as foreign. This would require government to take quick, planned and timely reforms across levels – policy, operational, institutional and capacity.

Urgent need for investment

According to the Global Competitiveness Report 2013-14 of World Economic Forum, India stands at 85th and 61st position in the global ranking of infrastructure and transport, respectively amongst group of 148 countries.

Since, investment in infrastructure sector, particularly transportation has multiplier effect on the economic growth; there is an urgent need for investment in these sectors to bring back economy on high growth trajectory. Hence, when the new government will table its first budget in July, 2014, it will have to strike balance between the prevailing inflation and long waiting reforms to remobilize funds in the transportation sector, which shall lay foundation for a long-term growth. For example in highways, there is an immediate need to rebalance the concession agreements, to move the struck projects and attract private sector interest in the upcoming projects.

Concept of revenue guarantees, as being used in some of the Latin American and developed countries, where government shares with private sector, both upside potential and downside risk of traffic, beyond a threshold, should be brought in to attract investor confidence and lender’s comfort.

At the same time it is important for NHAI, if it is moving to EPC model, to build its own pool of resources. For this purpose, fast tracking implementation of electronic toll collection to maximize toll revenues and raising funds through long-term bonds and capitalize its toll revenue earnings for interest and principal repayments, can be explored. In fact, India can learn from experience of Japanese Expressway Holding and Debt Repayment Agency, which used bond funds to develop expressways in Japan. These bonds were duly backed by government guarantees to provide security to bond subscriber.

Special Projects for Rural Development

To increase penetration in villages, particularly for effective implementation of food security, it is critical to continue fillip programs like Pradhan Mantri Gram Sadak Yojana (PMGSY-II), which are critical for farm to market linkages and connectivity to rural growth centres.

An Integrated Transport System

Probably, it is right time for the government to think transport as an integrated system and all its components (rail, road, port and airways) should work in a holistic manner. Different modes of transport between two nodes should be developed based on the principles of demand-supply and balance between time and fuel cost. For instance, if time is not a constraint (non-perishable goods), goods can be transported using IWT or coastal shipping.To achieve this, coastal terminals at select ports and deeper stretches of the rivers (LAD) can be developed. For other routes, rail and road connectivity with ports should be enhanced on PPP basis.

Develop low-cost Airports

Similarly, low-cost airports in tier-II and tier-III cities can be developed which can be integrated with high speed rails at select stretches. This will provide faster connectivity to the entire country and thereby unlock growth potential .To move goods through airport, similar to inland ports and container depots, off-airport cargo processing facilities can be developed.

Moreover, these facilities to be ably augmented by cold chains in the vicinity of low cost airports, which can facilitate warehousing and dispatching cargo of perishable goods. This will help reduce congestion and delays at airports. Development of such off-airport facilities can be defined as infrastructure and the respective benefits should be extended accordingly.

E-vehicles to Boost Urban Transportation

There is also a need to boost urban transport within the cities. In this regard, recent announcement of government to treat e-rickshaws with motor power of 650mw as non-motorised vehicles in the NCR is a welcome step. However, government will have to be mindful that although e-rickshaws are environment friendly, their use should not go out of proportions to increase congestion in already cramped up roads.

Hence, government should promote setting up of state level funding agencies to finance urban transport projects. Central government should facilitate states setting up such bodies and providing government guarantees to securing funds from international financial institutions.

Implementation through Fiscal Incentives

However, to effectively execute the above ideas, it is also important to back them by suitable fiscal incentives. Some of these include:

– relaxation of ECB norms for borrowing by infrastructure companies,

– extension of tax incentives on major augmentation of existing infrastructure, in particular Maintenance, Repair and Overhaul (‘MRO’) services in airlines,

– extension of depreciation on expenditure incurred to develop public assets on BOT, which is not owned by

private sector, even for the sector other than roads

– exemption of MAT for infrastructure sector during 80IA period.

At the outset, there is a lot to be done, which poses a big challenge, but also presents an opportunity for the government for creating much needed transport infrastructure for doing business. Although, industry expects government to respond timely on the above hard-pressed reforms, in the upcoming budget Government will have to strike balance between its

revenues and easing of complex net of regulations and approvals to enhance the value-addition process and making us more competitive. .

Source:The Economic Times

Written by ITW Editor · Filed Under About, Blogs, developement

Metro Bus Service: Smart traffic signals still not operational

March 28, 2013

By Our Correspondent

Published: March 25, 2013

File photo of Metro Bus. PHOTO: EXPRESS/ ZAHOORUL HAQ.

LAHORE: The Intelligence Transportation System (ITS) installed for the Metro Bus System (MBS) might take another 20 days to become functional, The Express Tribunehas learnt.

Peter Jacob, an Australian SCAT (Sydney Coordinated Adaptive Traffic System) expert, supervised the installation of the modern fifth generation traffic signals for four days before returning to Australia on Sunday.

The signals have been installed at Gulab Devi Junction, Qainchi Junction, Gazi Road Junction, Kamahan Junction, Masjid Ibrahim Junction, Chungi Amar Sidhu Junction, Kalma Chowk and Azadi Chowk.

According to an MBS official, six of these signals are expected to become functional in 10 days but the signal at Kalma Chowk might take two more weeks. The Traffic Engineering Transport Planning Agency and the Sui Northern Gas Pipelines Limited were carrying out civil works at Chungi Amar Sidhu, he said.

ITS Urban Unit Project Coordinator Muhammad Razzaq said, “We will complete work on seven traffic signals in a week.” The traffic signal at Kalma Chowk would take some time but would be put in an adaptive mode soon.

The wiring for ITS at Chungi Amar Sidhu had been damaged during civil works…Repairs to the signal would be made after the civil works were finished, he said.

Published in The Express Tribune, March 25^th, 2013.

Source-http://tribune.com

Written by ITW Editor · Filed Under Default

Transport Infrastructure Projects Attract Big Investors

July 4, 2011

VietNamNet Bridge – A series of transport infrastructure projects managed by the Ministry of Transport have received rapid-fire investment registrations from both domestic and foreign investors.

The unusually high number of investors, who have registered to become the investors of the Ninh Binh-Thanh Hoa road, and Nghi Son-Bai Vot road, the parts of the North-South Expressway, has made the expressway project become the “hottest project” nowadays.

With the total investment capital of 59 trillion dong, the Ninh Binh-Thanh Hoa will have the length of 126.7 kilometers and six lanes, while Nghi Son-Bai Vot stretch of roads, will have the length of 92.7 kilometers and 4-6 lanes

In the period from March 2011 to June 2011 alone, the Ministry of Transport received the registrations from five investors and joint venture investors, including the foreign well known corporations in infrastructure like South Korean Keangnam Vina and Posco, Chinese Asian Investment Fund, and the Thai Bangkok Transport Public Company.

Meanwhile, to date, three Vietnamese independent investors have also registered the investments in the two projects, namely Xuan Truong Construction Company and Xuan Thanh Investment and Development Joint Stock Company, a subsidiary of Mai Linh Group.

There is a surprise that the La Son-Tuy Loan highway, the project which has been considered as less attractive, has also received the investment registrations from the joint venture of seven Vietnamese and South Korean investors, headed by Shinhan E&C, who plan to invest under the mode of BOT (build-operation-transfer).

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Old framework for transportation sector to be modernised: Nath

May 30, 2009

The “old regulatory framework” relating to the transportation sector will be modernised to make it “practical”, Minister for Roads Transport and Highways Kamal Nath said today.

“Some of the very old regulatory frameworks we have relating to transportation like multiple permit and others have to be looked at (anew)… We are looking at new models,” Nath told reporters here while taking charge of the Ministry.

He also said that the outlay for constructing roads and highways has to be utilised and the programmes and mechanisms for road development have to be made workable and practical.

Nath, who was Minister for Commerce and Industry in the previous Government, said he will work towards meeting the challenge of providing stimulus to the economy through developing roads and highways.

“With the current global recession and the (slowdown) in the country, it is important that this (development of roads and highways) provides economic stimulus, this provides jobs and this is going to the biggest challenge,” he said.

His ministry will also look at the impediments in implementing plans for infrastructure development in the country, Nath said.

Source: business-standard.com

Written by ITW Editor · Filed Under Investment and Finance

NHAI goes in for a board shake-up

April 3, 2008

The ministry of shipping, road transport and highways has been under severe criticism for NHAI’s inability to meet the deadlines for developing road projects in the country.

New Delhi: Ahead of plans to give out some 10,000km in road projects over the next year, the ruling United Progressive Alliance, or UPA, is replacing at least half of the six-member board of the National Highways Authority of India, or NHAI, the country’s apex road regulator.

The radical revamp of the board, the first of its kind, comes at a time when the ministry of shipping, road transport and highways, which works closely with NHAI, has been under severe criticism for its inability to meet the deadlines for developing road projects in the country.

The revamp comes at a time when the ministry of shipping, road transport and highways has been under criticism for its inability to meet the deadlines for developing road projects in the country

NHAI oversees the National Highway Development Programme (NHDP), under which, almost 33,097km of highways were to be four-laned. Barely 50% of the projects have been awarded so far. As of February this year, work on only 7,942km of highways have been completed; of this, work on around 5,500km was completed during the tenure of the National Democratic Alliance government, which preceded UPA.

NHDP, launched in 1996, was seen as a flagship programme for successive governments, especially since an estimated 60% of freight is still transported by road in the country. There are 66,000km of national highways in India.

Neither the minister, T.R. Baalu, nor the concerned officials, NHAI chairman N. Gokulram and road transport secretary Brahm Dutt, could be immediately reached for comment on Thursday evening. As a result, it is still not clear as to why the government has sought such an overhaul in the NHAI board. The changes have been effected over the past 15 days.

Mint has independently confirmed from various government officials who do not wish to be identified that three out of the six members on NHAI’s board were asked to return to positions at the ministry in the last fortnight. According to officers at NHAI who do not wish to be identified, one of the members C. Kandasamy has already been named a chief engineer at the ministry of shipping and road transport.

A.V. Sinha and Nirmaljeet Singh, too, are being forced to “come back” to their parent ministry. “In one case, the ministry said it would promote a junior officer thereby forcing an NHAI member—on deputation with NHAI—to seek repatriation (back to the ministry),” an officer at the regulator who did not wish to be identified added.

While Sinha could not be reached for comment, Nirmaljeet Singh and Kandasamy declined comment. “I am not with NHAI any more. And for any information pertaining to board members, please contact the chairman,” Kandasamy said.

The shake-up in NHAI’s board comes at a time when the regulator has been accused of not only failing to meet deadlines, but also misgovernance.

“In fact, one of the members was threatened with suspension because some projects in Tamil Nadu got delayed,” said the officer at NHAI.

Highway builders say working with NHAI is difficult primarily because officers refuse to make decisions. “You can say one contractor is bad or may be two contractors are bad, but how can all contractors be bad at the same time? It is the authority (NHAI) that refuses to make decisions for three years sometimes. We are tired of working for them,” said an executive with a highway builder who did not wish to be named. “Why is it, that the same contractors perform on time when it comes to work by the Delhi Metro Corporation?” the executive asked.

Contractors also claim that the authority is unwilling to release money for changes in the scope of work for fear of being investigated by the vigilance department. Mint had earlier reported that almost three in ten NHAI contracts end up in some form of arbitration or the other.

None of the contractors or highway builders contacted by Mint would speak on record, saying it could affect their chances of winning contracts from NHAI in the future.

Meanwhile, the NHAI officials said the board was being revamped because it did not agree with certain proposals made by the Planning Commission on guidelines for drafting tenders for upcoming projects.

“The fact is that the minister has been unhappy with the way the NHAI has functioned in the last year and so these changes are being contemplated,” said a senior government official, who did not wish to be identified.

NHAI has also been named in a court case filed by the National Highway Builders Federation, a trade body representing highway contractors, who claimed that recent pre-qualification criteria used by NHAI favour large bidders. The case is expected to be heard by the Delhi High Court on Friday.

One analyst said it was not fair to accuse only the board, saying that other organizations, such as the Planning Commission, were equally to blame for not ironing out policy issues related to work on NHDP. “The paranoia of the government (over being blamed for non-completion of highways in an election year) could be a factor,” said this analyst who did not wish to be identified.

Source: www.livemint.com

Written by ITW Editor · Filed Under Investment and Finance