22 August 2019

Ticker Tape- Infrastructure

NAVI MUMBAI AIRPORT PHASE I COST ESCALATES BY 50 PER CENT TO Rs 135.6 BN

The first phase of Navi Mumbai airport will now cost Rs 135.6 billion, which is about 50 per cent higher than the earlier estimate of around `90 billion made by the planning authority. GVK group, which is constructing the airport, announced it has tied up funding for the project with YES Bank as lead lender. Credit rating agency CRISIL has accorded an A+ stable rating for the project’s Rs 103-billion bank loan facilities. According to a report, Phase I of the project is expected to be completed at a cost of `135.6 billion and will have a capacity to handle 10 million passengers annually. A GVK spokesperson refused to comment on cost escalation. Navi Mumbai airport, which is being developed under the public-private partnership model, has been under planning since early 2000, but pre-development work began only last June as the project was stuck due to litigation and land acquisition issues. City and Industrial Development Corporation (Cidco), which is the planning authority for the airport, had prepared a master plan for the airport to be developed in four phases at a projected cost of `160 billion. The cost estimate was prepared in 2012-13 and initial bids called in 2014. According to the Cidco estimate, the project’s first phase cost is Rs 55 billion. However, this does not include pre-development work such as flattening of a hillock, diversion of rivers, shifting of transmission lines, and land reclamation which would cost another Rs 34 billion.

 

 

DEVELOPMENT PROJECTS WORTH Rs 3,685.35 CR LAUNCHED AT VIZAG PORT

The Union Minister for Road Transport, Highways and Shipping, Nitin Gadkari, recently launched development projects under the Sagarmala and Bharatmala projects worth Rs 3,685.35 crore here. The minister inaugurated two new Post Panamax Rail-Mounted Quay Cranes and allied equipment at Visakhapatnam Container Terminal Pvt Ltd. According to reports, these two have been installed at a cost of Rs 150 crore. The minister also inaugurate the upgraded and modernised iron ore handling complex at VPT, built at a cost of Rs 580 crore, under the public-private partnership model. He also inaugurated a fire station complex at VPT and a high-rise wall (to prevent pollution) and launch a 2,000 sapling plantation programme. The `10.35-crore project is a part of VPT’s measures to curb air pollution. Foundation stone for a `549-crore four-lane road connectivity project to the Visakhapatnam port under the Bharatmala programme was also laid. These three projects were being taken up by the Visakhapatnam Port Trust through a joint venture with the National Highways Authority of India.

 

 

 

NHAI LIKELY TO SET BASE PRICE FOR TOT RIGHTS AUCTION AT $1 BILLION

 

NHAI’s TOT right auction for the second bundle, which features 7 stretches of operational toll roads totaling 566 km, is likely to feature few new names, including Cube Highways, the Canada pension fund The National Highways Authority of India (NHAI), which will begin to invite bids for the second package of toll-operate-transfer rights (TOT) auction within the week, is likely to set the base price at $1 billion (Rs 6,800 crore). The auction for the second bundle, which features seven stretches of operational toll roads totaling 566km across Tamil Nadu, Telangana, Rajasthan and Gujarat is likely to feature a few new names, including Cube Highways (a Singapore-based joint venture between I Squared Capital and International Finance Corp.) and the Canada Pension Plant Investment Board (CPPIB). The first auction of TOT projects featured five highways in Andhra Pradesh and four in Gujarat, with a total length of under 700km. The auction, a fairly new mechanism by the government to monetize operational roads it owns, met with wild success in February when Australian private equity investor Macquarie won the auction by bidding Rs 9,681 crore against the initial estimated concession value (or base price) of Rs 6,258 crore. NHAI has identified 75 operational highways that will qualify for the TOT model. The new round of auctions is a continuation of this monetisation programme. The government has set a target of raising Rs 2 lakh crore via this route in the next five years.

 

 

 

 

MUMBAI TRANS HARBOUR LINK TO BE READY BY 2022: JAPANESE DIPLOMAT

 

According to media reports, the ambitious Mumbai Trans Harbour Link (MTHL) work on which started in April, will be completed by 2022. For the 22-km six-lane bridge along the Mumbai harbour to the mainland providing direct access to the upcoming new international airport and the Mumbai-Pune Expressway, Japan is a partner with a commitment of Rs 9,000 crore or nearly 80 percent of the estimated project cost of Rs 14,260 crore, through the Japan International Cooperation Agency (JICA). Besides the MTHL, Japan has committed Rs 4,500 crore for the 33.5-km-long Mumbai-Metro 3 project running from Colaba-Bandra-SEEPZ, for which 5.1 kms of underground tunneling work has just been completed, as per an announcement by the Mumbai Metro Rail Corporation. The line, with 27 stations en route, is expected to be completed by December 2021. Estimated to cost Rs 1.1 lakh crore ($16 billion), the work on the Bullet Train project has already been initiated in Maharashtra and Gujarat, creating a huge controversy with strong resistance from various quarters including the villagers, tribals and opposition parties.

 

 

 

IL&FS ENGINEERING AND CONSTRUCTION COMPANY LOWEST BIDDER FOR 7-KM LINE

 

IL&FS Engineering and Construction Company Ltd has emerged the lowest bidder for constructing the 7-km Silk Board-Bellandur section of the metro corridor on the Outer Ring Road. The Bangalore Metro Rail Corporation (BMRCL) is yet to open bids for the remaining stretches of the 18-km ORR line. The Hyderabad-headquartered construction firm will take up the work at a cost of Rs 433.26 crore, which is 1.39 per cent higher than BMRCL estimates. The work comprises constructing elevated structures and four stations at Central Silk Board, HSR Layout, Agara lake and Iblur. Other companies that participated in the bid to construct the 7-km line had quoted estimates which were Rs 40 - Rs 90 crore higher than BMRCL’s own estimates. The prices quoted were: Nagarjuna Construction Company (Rs 486.51 crore), JMC Projects (`484.96 crore), Simplex Infrastructure (Rs 498.14 crore) and ITD Cementation India (Rs 525.72 crore). IL&FS Engineering and Construction Company is constructing the 4-km Mysuru Road-Pattanagere stretch of Phase II. The section is expected to be ready by June 2019. The original deadline to complete the work that involved building the viaduct and four stations was mid-2018.

 

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TELANGANA GOVT TO SPEND Rs 55,000 CRORE ON HYDERABAD, OTHER CORPORATIONS

 

In the next three years, the Telangana government plans to spend Rs 55,000 crore on development projects in Hyderabad and other corporations in the State. Local media quoted the Chief Minister K Chandrasekhar Rao after a review meeting on infrastructure facilities in towns and cities. At Rs 45,000 crore, the bulk of the proposed sum will be spent on the State capital, at `15,000 crore every year. The remaining Rs 10,000 crore will be earmarked for the development of other corporations. Rao had also directed the officials to prepare an action plan in this regard. The CM also stated that illegal layouts will be taken seriously, and regularising them will be done away with.

 

 

 

GVK TIES UP DEBT FOR FIRST PHASE OF `55 BN NAVI MUMBAI AIRPORT PROJECT

 

GVK group has tied up debt for first phase of `55 billion Navi Mumbai airport project and is in talks with banks to raise $ one billion via bonds to refinance Mumbai airport project loan. The Hyderabad based infrastructure major recently announced it has achieved financial closure for the construction of the Navi Mumbai airport. Yes Bank is the lead bank for providing debt for the project. GVK refused to disclose the loan amount.The project is being executed as a public private partnership between GVK-owned Mumbai International Airport Ltd (MIAL) and the City and Industrial Development Corporation. As per the concession agreement signed between MIAL and CIDCO, 2021-end has been set as a deadline for commercial launch of Navi Mumbai airport. However, Maharashtra government is keen to launch the operations by December 2019.

 

 

 

SAGARMALA DEVELOPMENT COMPANY TO INFUSE Rs 125 CRORE IN KRCL

 

Sagarmala Development Company (SDCL) has decided to infuse Rs125 crore in special purpose vehicle KRCL, formed to provide rail connectivity between Krishnapatnam Port and Obulavaripalle in Andhra Pradesh. Krishnapatnam Railway Company Ltd (KRCL) is a joint venture (JV) of Ministry of Railways, in which Rail Vikas Nigam (RVNL) has equity contribution. SDCL is a company formed under the government's ambitious Rs14 lakh crore Sagarmala initiative for identifying port-led development projects and provide equity support for the SPVs. The total cost of the rail connectivity project between Krihsnapatnam Port and Obulavaripalle is estimated to be at Rs 2,198.50 crore, of which Rs 1,458.9 crore will be met through debt, as per the financial information memorandum by SBI Capital Markets, which was roped in for the equity investment.

 

 

 

IL&FS IN TALKS WITH CUBE HIGHWAYS TO SELL TUNNEL IN J&K

 

IL&FS Transportation Networks (ITNL), the road development arm of infrastructure development and finance major IL&FS, is in talks with I Squared Capital-backed Cube Highways to sell a majority stake in the recently completed Chenani-Nashri tunnel way (CNT) in Jammu & Kashmir (J&K). The deal is being valued at about Rs 4,000 crore. The cost for construction of CNT, also known as Patnitop tunnel, was originally estimated at about Rs 2,600 crore, but due to cost escalations, went up to around `4,000 crore. ITNL has invested a little less than Rs 400 crore as equity in the project. The cost escalations, in part, were attributed to problems with the subcontractors, snowfall and bad weather conditions as well as the note ban, which hit the payment of daily wages. The project carries an annuity of Rs 635 crore, which is the highest awarded by the NHAI for a road project till date. The concession period is for 20 years. The tunnel was inaugurated on April 2, 2017, and is India’s longest road tunnel with a length of 9.28 km. It is also the country’s first tunnel with a fully integrated control system and cuts the distance between Jammu and Srinagar by 30 km and reduces travel time by two hours. The all-weather tunnel bypasses 44 snowfall, landslide and avalanche-prone areas in winter.

 

 

 

WORLD’S BIGGEST PROJECT IN TELANGANA SET TO WATER STATE’S CROPS, VILLAGES

 

The Kaleshwaram project evisages to irrigate 18 lakh acres in 13 districts and stabilise another 17 lakh acres in another seven districts of Telangana. The country’s biggest irrigation project, the Kaleshwaram Lift Irrigation Scheme, in Telangana which holds several national and world records will start receiving water from the Godavari River from the first week of August. The `80,000-crore project will create history in a state where the second-highest number of farmers commits suicide after Vidarbha in Maharashtra due to failed monsoons and lack of water for irrigation. The Kaleshwaram project evisages to irrigate 18 lakh acres in 13 districts and stabilise another 17 lakh acres in another seven districts of Telangana. It will also provide drinking water to several towns and cities, especially Hyderabad and Secunderabad, and water for industries in many districts. Through this project, Telangana will harness water at the confluence of three rivers with Godavari by constructing a barrage at Medigadda in Jayashankar Bhupalpally district and reverse pump the water into the main Godavari River and divert it into a huge and complex system of reservoirs, water tunnels, pipelines and canals. The project had to be built at such a size and scale because while the Godavari flows at 100 metres above mean sea level (MSL), Telangana region is located at 300 to 650 metres above MSL.

 

 

 

NITIN GADKARI SAYS BANKS KEEN TO PUMP Rs 1.3 LAKH CRORE IN BUILDING HIGHWAYS

 

Reports suggest that Nitin Gadkari has declared that banks are willing to invest Rs 1.3 lakh crore in building national highways, now that stalled projects have been resolved. Gadkari met top bankers last week to get them to lend more to the road sector. Bank funding to the sector dried up after a large number of highway projects got stuck before 2014. Most projects undertaken during the past four years have been under the government-funded engineering, procurement and construction model. Banks said they would be open to lending to public-private partnership projects. It is also learnt that the government had resolved stuck projects worth about `4 lakh crore in the past four years and it was completely safe for banks to lend for highway projects.

 

 

 

COST OVERRUN OF 343 PROJECTS VALUE Rs 2.16 LAKH CRORE

 

As many as 343 infrastructure projects, each worth Rs 150 crore or above, have shown cost overrun of Rs 2.16 lakh crore owing to delays and other reasons, a report said. It has also been observed that "project agencies are not reporting revised cost estimates and commissioning schedules for many projects, which suggests that time/cost overrun figures are underreported", according to the report.. Of the 1,304 projects, 343 reported cost overrun and 262 times escalation. According to the report, the expenditure incurred on these projects till February 2018 is Rs 6,36,212.47 crore, which is 34.60 per cent of the anticipated cost of the projects. While 14 projects are ahead of schedule, 307 are on schedule, 262 are delayed, 343 projects are showing cost overrun and 100 projects are showing both time and cost overrun with respect to original implementation schedules, the report said. However, it said the number of delayed projects decreased to 222 if the delay is calculated with reference to latest revised schedules of completion.

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NABARD SANCTIONS OVER `735 CR FOR BENGAL FOR RURAL INFRA PROJECTS

 

NABARD recently declared that it has sanctioned a sum of Rs 735.53 crore in the first quarter of the current fiscal under the Rural Infrastructure Development Fund (RIDF) for West Bengal for facilitating the execution of 86 projects. According to media reports, they include six solar power, one medium irrigation, five minor irrigation and 12 flood protection projects, besides 57 projects for the widening and strengthening of roads and five rural bridges. It is learnt that the National Bank for Agriculture and Rural Development (NABARD), the entire loan amount was provided to the state at a concessional rate. The work on the irrigation projects is expected to benefit 11,554 hectares of land besides addressing the problems of water wastage in the upstream areas, seepage loss, deposition of silt and insufficient height of canal, which have been resulting in erratic and short supply of water in the command area.

 

 

 

MUMBAI COASTAL ROAD CONSTRUCTION TO START FROM OCTOBER

 

The Municipal Corporation of Greater Mumbai (MCGM) is aiming to start construction of the proposed Rs 15,000 crore Mumbai coastal road project from October this year. As per media reports, the MCGM’s standing committee is expected to examine the bids in July, following which the municipal body would issue the work orders for construction to begin after the monsoon. According to sources, Larsen & Toubro is the lowest bidder for Package 4 with a bid of Rs 3,500 crore. The deadline for opening the bids for Package 4 had been deferred and had four pre-qualified entities — the Dogus–Reliance–NMDC consortium, China Gezuhouba Group Company, ITD Cementation with HyundaiEngineering & Construction and L&T. This fourth package is for connecting Princess Street Flyover to Priyadarshini Park.

 

L&T has already emerged as the lowest bidder for Package 1, which will connect Priyadarshini Park to Baroda Palace. Package 2, for which a joint venture between HCC and Hyundai Development Corporation emerged as the lowest bidder, will connect Baroda Palace to the Worli end of the Bandra-Worli Sea Link. To ensure the project remains on schedule, MCGC has already filed a caveat in the Mumbai High Court in anticipation of any public interest litigation (PIL) that may be filed against the project.

 

 

 

AFTER A LONG LULL, MAHARASHTRA TRIES TO CATCH UP ON INFRA DEVELOPMENT

 

With Rs 1.6 trillion worth of projects underway, industry experts say finance will be a key challenge. Most of Mumbai's roads, at present, have a 'work in progress' board greeting its city dwellers. Under implementation is the city's biggest metro plan, to be executed in different phases. The infrastructure activity in Mumbai is also symbolic of the more than `1.6 trillion worth of projects underway across Maharashtra. These projects have opened up contract work opportunities worth `1.6 trillion for infrastructure developers. However, the tie-up of finance for this amount will be the key challenge. In terms of a timeline, most of these projects are to be commissioned between 2019 and 2022. Industry officials and experts, both, agree that the city and the state are witnessing a huge thrust on infrastructure development, which was missing for the past few years. In the past one year or so, the state has got the ball rolling on various infrastructure projects. According to data compiled by a local media agency, nine of its key projects alone will entail an investment of Rs 1.6 trillion.

 

 

 

BUILDING A FUTURE BASED ON INFRASTRUCTURE

 

India’s infrastructure spending is projected to accelerate to at least `50 lakh crore between FY18 and FY22, making a visible impact on service delivery and providing a foundation for rapid and inclusive economic growth in the country, according to Crisil.

The western region — comprising Maharashtra, Gujarat and Goa along with the Union Territories of Daman & Diu and Dadra & Nagar Haveli — has attracted a major chunk of infrastructure investments, both domestic and foreign. Each of the western States, with its unique potential and capabilities, has contributed significantly to India’s growth story.

Gujarat, the frontrunner in terms of industrial development, ranked fourth among the top 10 States in terms of ease of doing business as per the Business Reforms Action Plan 2017 prepared by the Commerce Ministry’s Department of Industrial Policy and Promotion (DIPP), in partnership with the World Bank Group. Maharashtra and Goa ranked 13th and 19th respectively. While infrastructure investments are crucial for industrial growth in Gujarat and Maharashtra, Goa requires road development to boost its tourism industry, besides investments to expand its mining and pharmaceutical sectors.

 

 

 

GMR INFRA TO BUILD COMMERCIAL PORT NEAR KAKINADA

 

GMR Infrastructure has announced securing the contract to build a greenfield commercial port near Kakinada through the Swiss Challenge mode.

In a statement, the infrastructure firm said that the all-weather, deep-draft and multi-cargo port will come up at some 30 km north of Kakinada, located as one of the nodes of the proposed Visakhapatnam-Chennai Industrial Corridor.

The port, spread across 1,950 acres with an initial capacity of 16 million tonnes (mt) once operational, is expected to become the gateway to the east coast of India, the company said. The Andhra Pradesh government will get a revenue share of 2.7 per cent for a period of 30 years in the terms of the agreement. Under this, the AP government will provide external infrastructure that include roads connecting to the nearest highway, water and power supply to the port boundary.




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