Cabinet approves Rs 6,000 cr infusion in NIIF debt platform

Source: The Economic Times, Nov 25, 2020

The Union Cabinet approved the government’s capital infusion of Rs 6,000 crore in the National Investment and Infrastructure Fund (NIIF) over two years.

“The cabinet took an important decision for Rs 6,000 crore of capital infusion in the National Investment and Infrastructure Fund in next two years,” said Prakash Javadekar, union minister of information and broadcasting, during a briefing on Wednesday.

Under the NIIF, two firms, Aseem Infrastructure Finance Limited (AIFL) and NIIF Infrastructure Finance Limited (NIIF-IFL) will mobilise the funds, the minister said.

While AIFL will finance under construction green field and brown field projects with less than a year of operations, NIIF-IFL will finance mature operating assets by helping infrastructure investors to replace high cost bank finance with cheaper finance post-commissioning, according to an official statement.

The Centre, who’s investment will go into the NIIF’s strategic opportunities fund, has allocated Rs 2,000 crore for the current fiscal, the statement said.

“However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing Covid-19, the proposed amount may be disbursed only if there is readiness and demand for debt raising,” it said.
NIIF-IFL is a AAA rated company while AIFL was AA rated. The NIIF debt platform will put in Rs 7,000 crore equity while about Rs 1 lakh crore will be mobilised through global bond markets to make Rs 1.1 lakh crore available for infrastructure projects in the first tranche, Javadekar said.

Govt infuses Rs 6,000 cr in NIIF debt platform to increase infra funding

Source: Business Standard, Nov 12, 2020

New Delhi: As part of efforts to provide proper funding to infrastructure projects, the government on Thursday decided to infuse Rs 6,000 crore equity in NIIF debt platform.

The NIIF Strategic Opportunities Fund has set up a Debt Platform comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company. The Platform has a Loan book – Rs 8000 crore and deal pipeline of Rs 10,000 crore.

With the fresh infusion of equity by the government and finance including NIIF’s own equity infusion of Rs 2,000 crore and further equity from the private sector, the debt platform is expected to raise enough resources to extend debt support of Rs 1,10,000 crore to projects by 2025.

NIIF AIFL (AA rating) and IFL (AAA rating) will raise Rs 95,000 crore debt from market, including project bonds.

“By 2025, it will provide infra project financing of Rs 110,000 crore,” a government statement said.

Awarding of NH projects doubles despite pandemic

Source: The Economic Times, Nov 08, 2020

NEW DELHI: The pace of award of national highway (NH) projects has almost doubled in the past seven months compared to last year despite the Covid pandemic situation.

Overall construction is nearly 90% of last year and road transport ministry officials said it would be at par by December. They said a couple of steps have been taken including the relaxation in norms for release of funds to highway builders for the actual work done as part of Atmanirbhar Bharat initiative.

Awarding of national highway projects has touched 5,679 km in the past seven months compared to 2,982 km during last year.

Official data also show that construction has increased significantly from 210 km in April this year, which was barely 7 km per day, to 4,628 km by October end. This translates to nearly average construction of 22 km per day during the past seven months.

“Construction was severely impacted due to complete lockdown. It has picked up as the restrictions on construction activities were lifted from April 20. We are confident of surpassing the total construction of last year,” said a senior ministry official.

Officials from the ministry and NHAI told TOI that relaxations in release of funds to highway builders was made considering the extraordinary situation. “Earlier, the norm was to release the payment linked to a particular stage of construction. Now we are releasing funds based on the work done by the highway builders every month. This has improved their cash flow and it has a direct impact on the pace of construction,” said I K PandeyDG (roads).

Cabinet approves Rs 10,000 crore project to improve dams in India

Source: Business Standard, Oct 29, 2020

New Delhi: The cabinet committee on economic affairs on Thursday approved a Rs 10,211-crore project to improve the safety and performance of select dams across India.

The dam rehabilitation and improvement project (DRIP)–phase II and phase III–is financially supported by the World Bank and Asian Infrastructure Investment Bank. India is the third ranked country in terms of total number of dams, next after the US and China, and it has 5,334 big dams and another 412 dams under construction. “Almost 80 per cent are over 25 years old. There is a need for rehabilitation and improvement of these structures,” the minister said.

DRIP will be implemented over a period of 10 years in two phases – each of six years with two years overlapping from April 2021 to March 2031. The first phase of this project started in 2012.

Shekhawat said 207 dams have been repaired in the six years, but their ownership lies with states that will priortise dams to be included in DRIP. “This project is on a challenge mode…The states which will make more progress will get more funds.”

The share of external funding in the total cost of the project is Rs 7,000 crore. The balance Rs 3,211 crore will be borne by the concerned implementing agencies. Government will contribute Rs 1,024 crore as loan liability and Rs 285 crore as “counterpart funding for central component.”

The objective of the project is to improve selected dams and associated structures in a sustainable manner and strengthen the dam safety institutional setup in participating states as well as at central level. “Dams where water based tourism can be started or fisheries revenue be generated is something we will explore as part of this project now,” Shekhawat said. The project would also work towards institutional strengthening and system wide management approach for the rehabilitation and improvement of dams and associated structures.

Centre amends law to establish J&K Industrial Development Corporation

Source: Business Standard, Oct 27, 2020

Jammu: The Centre on Tuesday amended the Jammu and Kashmir Development Act, 1970 for setting up an industrial development corporation for rapid establishment, growth and development of industries in the union territory.

The amendment to the Act was made through a notification issued by the Ministry of Home Affairs, which inserted a new chapter in the law for setting up the Jammu and Kashmir Industrial Development Corporation.

According to the notification, the Jammu and Kashmir Industrial Development Corporation will be set up for the purposes of securing and assisting in the rapid and orderly establishment, and organisation of industries in industrial areas and industrial estates in the union territory.

It will also help in establishing commercial centres in connection with the establishment and organisation of such industries.

The corporation shall acquire and hold such property, both movable and immovable, for the performance of any of its activities, and to lease, sell, exchange or otherwise transfer any property held by it on such conditions as may be deemed proper, the notification stated. It will establish and manage industrial estates, develop industrial areas and make them available for undertakings to establish themselves.

26 industrial projects in Tamil Nadu worth Rs 25,213 crore approved

Source: The Economic Times, Oct 21, 2020

Chennai: Twenty six industrial projects worth Rs 25,213 crore, assuring creation of just over 49,000 jobs, were on Wednesday accorded approval by a high power committee headed by Tamil Nadu Chief Minister K Palaniswami. The companies which committed the investments had already signed Memorandum of Understanding with the state government.

The approval for the projects would ensure creation of 49,003 jobs, an official release said.

The committee, in the last two rounds of meetings, had already given its consent for 34 projects worth Rs 15,000 crore that would see creation of 23,000 new jobs.

Some of the significant investments include ENES Textile Mills (RAMRAJ), MRF Ltd, Wheels India Ltd, Ather Energy, Integrated Chennai Business Park (DP World), Seoyon E-HwA Automotive India Pvt Ltd, Mobis India Ltd, the release said.

The projects would come up in Chennai, Chengalpet, Kancheepuram, Thiruvallur, Ranipet, Tiruppur, Namakkal, Coimbatore, Perambalur and Krishnagiri.

Deputy Chief Minister O Panneerselvam, electricity minister P Thangamani and senior government officials took part in the meeting, the release said.

441 infrastructure projects show cost overruns of Rs 4.35 lakh crore

Source: The Hindu Business Line, Oct 25, 2020

New Delhi: As many as 441 infrastructure projects, each worth Rs 150 crore or more, have been hit by cost overruns of over Rs 4.35 lakh crore owing to delays and other reasons, according to a report.

The Ministry of Statistics and Programme Implementation monitors infrastructure projects worth Rs 150 crore and above. Of the 1,661 such projects, 441 reported cost overruns and 539 time escalation.

“Total original cost of implementation of the 1,661 projects was Rs 20,90,931.27 crore and their anticipated completion cost is likely to be Rs 25,26,063.76 crore, which reflects overall cost overruns of Rs 4,35,132.49 crore (20.81 per cent of original cost),” the ministry’s latest report for August 2020 said.

The expenditure incurred on these projects till August 2020 is Rs 11,48,621.70 crore, which is 45.47 per cent of the anticipated cost of the projects.

However, it said the number of delayed projects decreases to 440 if delay is calculated on the basis of latest schedule of completion.

Further, the report said that for 907 projects neither the year of commissioning nor the tentative gestation period has been reported.

Out of 539 delayed projects, 128 have overall delay in the range of 1 to 12 months, 128 have delays of 13 to 24 months, 167 reflect delay in the range of 25 to 60 months and 116 projects show delays of 61 months and above.

The average time overrun in these 539 delayed projects is 43.18 months.

The brief reasons for time overruns as reported by various project implementing agencies are delay in land acquisition, delay in obtaining forest/environment clearances and lack of infrastructure support and linkages.

Besides, there are other reasons like delay in tie-up of project financing, delay in finalisation of detailed engineering, change in scope, delay in tendering, ordering and equipment supply, law and order problems, geological surprises, pre-commissioning teething troubles and contractual issues, among others, the 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 under-reported, the report stated.

Construction of highways gets big push! Govt relaxes BOT/HAM norms to attract more participation

Source: Financial Express, Oct 17, 2020

In a move that will attract more participation in the construction of highways, the government has relaxed technical and financial qualifications for bidders of national highway projects under hybrid annuity mode (HAM) and builds, operate, transfer (BOT) mode.

Under the modified rules, a bidder will be qualified to bid for a HAM project if it has a minimum net worth of 15% of the estimated project cost (EPC) at the close of the preceding financial year. Earlier, it was 25%.

Also, for both HAM and BOT projects, “the capital cost of the project should be more than 5% of the amount specified as the estimated project cost,” the ministry of road transport and highways said in a notification. This was “more than 10%” earlier.

It has also said that no prior experience of the bidder is required for constructing tunnels up to 200 meters and bridges up to 60 meters length.

The ministry has also widened construction experience in segments such as stadium, hospitals, hotel, smart city, warehouse/silos, oil & gas and real estate development work as part of the technical qualification for both HAM and BOT projects.

Earlier, this was confined to areas like civil construction of power sector, commercial set ups, airports, industrial estates, logistic parks, pipelines, irrigation and water supply as part of pre-requisite technical expertise. “The widening of the scope for technical bids and relaxation in financial capacity will certainly enhance competition in the highways sector,” said Rajeshwar Burla, vice president, Icra Ratings.

Nitin Gadkari to lay foundation stones for Rs 11,571 cr projects in Kerala

Source: Business Standard, Oct 12, 2020

New Delhi: Union Minister Nitin Gadkari will lay the foundation stone of seven highway projects worth Rs 11,571 crore in Kerala on Tuesday, the government said.

In addition, the Road Transport, Highways and MSMEs minister will inaugurate a 27 km highway project – Kazhakoottam to Mukkola, built at a cost of Rs 1,121 crore.

Gadkari will inaugurate and lay the foundation stone for 8 National Highway projects in Kerala tomorrow through video conference, Ministry of Road Transport and Highways said in a statement on Monday.

These include laying of the foundation stone for seven projects to be built at a cost of Rs 11,571 crore, the statement said.

Over 200 km long highways worth Rs 12,692 crore will give a big boost to the economic prosperity of the state, it added. The event will be attended by the Governor Arif Mohammed Khan, Chief Minister Pinarai Vijayan and Union Ministers V K Singh and V Muraleedharan, Ministers from the State, Members of Parliaments, MLAs and senior officers from the Centre and the state.

Ministry of Highways nearly doubles fund allocation for highways development programme in North East

Source: The Economic Times, Oct 08, 2020

New Delhi: The government on Thursday said it has nearly doubled fund allocation for Special Accelerated Road Development Programme in North Eastern Areas (SARDP-NE) in the current fiscal to Rs 760 crore. A sum of Rs 390 crore expenditure was envisaged to be incurred from National Investment Fund for the region during 2020-21.

The Ministry of Road Transport and Highways (MoRTH) in a statement said it has enhanced the allocation of funds for expenditure under SARDP-NE related works during the current financial year and under the revised allocation, almost double the amount originally allocated has been allowed.

“Against the earlier Rs 390 crore expenditure envisaged to be incurred from the National Investment Fund during 2020-21, a sum of Rs 760 crore has been set aside for the same period. Of this, Rs 300 crore is specifically marked for the Arunachal Pradesh package,” the statement said.

Additionally, the allocations to National Highways in the North Eastern Region under 10 per cent mandatory Pool Fund has been on an upward route in the last five years, it said.

A sum of Rs 4,520 crore was allocated for the year 2016-17, Rs 5,265 crore for the year 2017-18, Rs 6,210 crore for the year 2018-19, Rs 6,070 crore was allocated for the year 2019-20, and Rs 6,780 crore has been allocated for the year 2020-21 under the said Fund, it added.

“The government of India has undertaken a massive road development programme under SARDP-NE Scheme in NE Region.
“Under SARDP-NE (Phase -A and Arunachal Pradesh), 6,418 km (5,998 km actual design length) has already been identified for development at an estimated investment of about Rs 30,450 crore, out of which 3,356 km has been completed and 1,961 km is under construction,” the statement said.