448 infra projects report cost overrun of Rs 4.02 trn; 539 behind schedule

Source: Business Standard, Feb 21, 2021

New Delhi: As many as 448 central sector infrastructure projects have reported a cost overrun of over Rs 4.02 lakh crore as of February 21, 2021.

The monthly Flash Report by the Ministry of Statistics and Programme Implementation said that 539 projects are running behind schedule.

“Total original cost of implementation of the 1,739 projects was Rs 22,18,210.29 crore and their anticipated completion cost is likely to be Rs 26,20,618.44 crore, which reflects overall cost overruns of Rs 4,02,408.15 crore (18.14 per cent of original cost),” it said.

The expenditure incurred on these projects till January 2021 is over Rs 12.29 lakh crore, which is 46.92 per cent of the anticipated cost of the projects.

“Out of the 1,739 projects, 12 projects are ahead of schedule, 247 are on schedule, 539 are delayed, 448 projects reported cost overrun and 209 projects reported both time and cost overrun with respect to their original project implementation schedules,” it said.

The report however, noted that the number of delayed projects decreased to 401 if delay is calculated on the basis of latest schedule of completion. Further, for 941 projects neither the year of commissioning nor the tentative gestation period has been reported.

NHAI plans to monetise projects worth Rs 3 lakh crore

Source: The Economic Times, Feb 16, 2021

NEW DELHI: The National Highways Authority of India is looking to monetise around 7,500 kilometres of road projects worth Rs 3 lakh crore, a senior NHAI official has said.

“If we were to look at our monetisation plans, all the greenfield projects we are making could be potentially monetised,” the official told ET.

These projects, which are mostly greenfield expressways and access-controlled highways, will be completed by 2024-25, and are likely to be monetised through different models.

The authority plans to raise Rs 20,000-25,000 crore through the SPV model, and Rs 10,000 crore through the toll-operate-transfer (TOT) model in 2021-22, the official said. A second infrastructure investment trust (InvIT) worth around Rs 6,000 crore is also in the pipeline for the next financial year.

“In terms of the model of monetisation, we are open. Depending on the mode which gets better response from the market, we will take a call on how we monetise the majority of our projects,” the official said.

A second official ET spoke with said the national highways building authority is ready with a pipeline of projects to be monetised in FY22, but the exercise will depend largely on market response to certain models.

NHAI has been keen on special purpose vehicle (SPV) as a model for monetisation. The SPV shall raise debt on its balance sheet, while NHAI will retain the operational control during construction and operation and maintenance periods. The toll on the projects housed in SPV shall be collected by NHAI and SPV shall get the annuity payments without any construction and tolling risks.

The authority had last year formed an SPV for financing the Delhi-Mumbai Expressway. “We are also planning to form an SPV for financing the Delhi-Katra expressway,” said the first official.

Govt eases curbs on steel for highway construction to reduce cost

Source: Business Standard, Feb 14, 2021

New Delhi: Doing away with restrictive conditions for use of steel in highways construction, the government on Sunday announced that all kinds of steel will be allowed for highways provided these meet the quality parameters.

Earlier, the contract provisions required use of steel produced by primary/integrated steel producers only. The move is aimed at ensuring cost reduction in highways construction using steel.

“The Ministry of Road Transport and Highways has issued orders that all steel whether produced from ore, billets, pellets or melting of scrap – would be allowed to be used for National Highway construction, as long as it meets the standards required for specific grades of steel,” the Ministry said in a statement.

The steel proposed to be used would be tested in NABL-accredited laboratories as a third party check before approval. The move is based on the analysis and discussions with stakeholders and also technical opinion.

In view of the increase in steel prices, which can impact the cost of building national highways, Road Transport & Highways Minister Nitin Gadkari had suggested the need to re-look at all conditions which could be restrictive, without impacting the quality of material used for highway construction.

With this step, the supplier base for steel used in the construction of national highways would increase, leading to more competition and better price discovery by the markets, the statement said. This is also part of the continuous effort by the Minister to reduce costs through use of new technology, reducing restrictions on suppliers and making the procurement system transparent, it added.

Commerce, urban affairs ministries to work on logistics planning in cities

Source: Business Standard, Jan 20, 2021

New Delhi: The commerce ministry will work with its housing and urban affairs counterpart to focus on 50 cities for logistics planning, a move aimed at promoting ease of doing business in the country, an official statement said on Wednesday.

The decision was taken during the National Conference with States on Logistics on Tuesday to initiate a consultative and collaborative framework for the central and state governments to work in a coordinated manner in the logistic sector.

The commerce ministry said that an 18 point agenda was presented to the states to improve the logistics.

The key areas for logistics improvements in the states were identified as city logistics, simplification of approvals for warehouses, facilitation for warehousing development, reducing the burden on truck movement and addressing the shortage of truck drivers.

“It was decided that the Ministry of Commerce will work with the Ministry of Housing and Urban Affairs to focus on 50 cities for logistics planning initially. A plan for facilitation to reduce enforcement burden on truck drivers will be developed,” the statement said.

State-level coordination committees on logistics will be formed, it added. “The Logistics Division of the Ministry of Commerce will embark on a survey to assess and rank states on logistics performance.The states’ ranking will focus on data in addition to perspective on logistics performance,” the statement said.

Govt targets to complete 11,000 km of national highways this fiscal

Source: The Hindu Business Line, Jan 17, 2021

New Delhi: Road Ministry hopes to complete 11,000 km –stated target–of national highways (NH) by end-March this fiscal.

The Ministry has constructed 8,169 km of NH from April 2020 to January 15, 2021, in the current financial year 2020-21, with a speed of about 28.16 km per day, an official release said.

This is 2 km a day higher than the stretch of roads constructed during the same period in the last fiscal ( when 7,573 km roads were constructed with a speed of 26.11 km per day).

The Ministry of Road Transport & Highways (MoRTH) has created a record by constructing 534 km of NH in the last week that started from January 8.

The pace of award for highway projects has doubled from April to January 15.

The Ministry also awarded NH projects of 7,597 km during this period (April 2020 to January 15, 2021), the release added. In 2019-20, projects of 3,474 km were awarded during the same period. Thus, the pace of award has also more than doubled this fiscal.

In total, projects of 8,948 km of roads were awarded in 2019-20 while 10,237 km of roads were constructed, the release said.

The achievement assumes significance given that the first two months of the current fiscal were lost due to nationwide lockdown in the wake of COVID-19 pandemic. The Ministry has taken several initiatives to increase the pace of construction. The pace of construction is expected to increase further in the remaining months of the current financial year, conducive to construction activities.

Maharashtra gets Centre’s nod for ₹5,801-cr national highway projects

Source: The Hindu Business Line, Jan 08, 2021

Mumbai: The Centre, under the Annual Plan, has given clearance for new national highway projects worth ₹5,801 crore for Maharashtra. The plan for national highways in Maharashtra was approved for ₹2,727 crore but it has been enhanced to ₹5,801 crore, which will improve and develop 1,035 km of national highways in the state, said Union Minister Nitin Gadkari on Thursday.

He reviewed the progress of highway infrastructure projects in Maharashtra with Chief Minister Udhhav Thackerey and senior officials in Mumbai.

Gadkari said at that meeting that a lot of construction work of national highways is underway in Maharashtra. In order to expedite these works, land acquisition and issuance of other permits should be expedited by the State Government. Also, a time-bound program should be decided for clearances by the state forest department for such highway projects.

He also asked the State Government to fast-track national highway projects, which are being built on the principle of ‘Build, Use and Transfer’ in the state. He also informed that ‘Palkhi Marg’ connecting Pandharpur ― Alandi and Pandharpur-Dehu Road will be constructed, which will have a parallel pedestrian track for members of the Warkari sect to undertake their pilgrimage to Pandharpur town in safety and comfort.

Govt considers creating bank with $13.7 bn equity to fund roads, ports

Source: Business Standard, Jan 06, 2021

The Centre is considering a proposal to create a bank to help fund port, road and power projects as Prime Minister Narendra Modi’s administration aims to lift Asia’s third-largest economy out of the recession.

The new entity, likely to be part of the Budget announcement in February, may have an equity capital of Rs 1 trillion ($13.7 billion), people with knowledge of the matter said, asking not to be identified as the matter isn’t public. The existing India Infrastructure Finance, which has a Rs 2,000 crore corpus, will be merged with the bank, they said.

Initially, the institution will be funded by the government, which will later invite investors, the people said. It could be on the lines of state-run National Investment and Infrastructure Fund, which counts the Canada Pension Plan Investment Board, Asian Development Bank and Abu Dhabi Investment Authority among its investors.

The finance ministry has prepared a note for the Cabinet to discuss the proposal. The spokesperson at the ministry declined to comment.

India faces the challenge of boosting spending on productive assets that aid economic growth after being forced to direct the bulk of stimulus last year on the poor and the farmers to protect them from a pandemic-induced slowdown. Citigroup economists wrote last year that spending should be directed on infrastructure, rather than populist measures, to cushion the economy headed for the deepest slump among emerging nations.

Attracting foreign investment is also crucial to meet Modi’s goal of spending $1.5 trillion on new roads, rail links and other infrastructure over the next five years as public finances deteriorate. The government pumped nearly Rs 1.7 trillion into public sector banks in the two years to March 2020. But a widening budget deficit and weak revenue growth put a brake on any further recapitalisation plans for the current financial year.

RBI sets Rs 345 crore corpus for developing payment infrastructure in rural India

Source: The Economic Times, Jan 06, 2021

The Reserve Bank of India on Tuesday announced the operationalization of the Payment Investment Development Fund (PIDF) with an initial corpus of Rs 345 crore for three years – extendable up to an additional two more years.

The objective of PIDF is to increase the number of acceptance devices multi-fold in the country, the central bank said in a notification.

“The Scheme is expected to benefit the acquiring banks / non-banks and merchants by lowering overall acceptance infrastructure cost,” RBI said.

The fund will be used for adding 30 lakh digital payments touch points which would include 10 lakh physical and 20 lakh digital payment acceptance devices every year with a special focus on tier 3 to tier 6 regions and the north-eastern states.

B P Kanungo, Deputy Governor, Reserve Bank of India is the chairman managing the fund, according to the central bank.

Sunil Mehta, Chief Executive, Indian Banks’ Association, D Nageswara Rao, Chief General Manager, DFIBT, NABARD, Dilip Asbe, Chief Executive Officer, National Payments Corporation of India and Vishwas Patel, Chairman, Payments Council of India are others among the nine-member committee.

U.S. financial body to invest USD 54 mn in India to support critical infrastructure projects

Source: Economictimes.com, Dec 23, 2020

WASHINGTON: An American financial corporation has announced to invest USD 54 million in India to support the development of critical infrastructure projects in the country in the wake of the COVID-19 pandemic.

India is one of the fastest growing countries in the previous three decades, but it suffers from a significant infrastructure deficit, holding back further growth for the country especially in the wake of COVID-19, the US International Development Finance Corporation (DFC) said on Tuesday.

The DFC said it will invest USD 54 million in equity for the National Investment and Infrastructure Fund (NIIF) in India to support the development of critical infrastructure projects. The financing is part of NIIF’s final round of fund-raising for the fund.

NIIF will work to mobilise capital to support economic growth and address critical development challenges in the country, according to a statement.

“DFC’s investment will support the growth and development of a key partner in the Indo-Pacific and allow DFC to facilitate investment in strategic infrastructure projects throughout India,” said DFC CEO Adam Boehler.

“DFC brings its commitment to high standards in all of our projects, and we are excited to establish this partnership with NIIF. We are pleased to announce that NIIF has completed fund raising for its Master Fund,” said NIIF CEO Sujoy Bose.

“We are delighted that DFC is investing in this final round. Their investment will strengthen infrastructure investment across India. We are excited at all that DFC brings to the table, including its high standards such as the Blue Dot Network and commitment to best practices with respect to transparency and management of environmental and social risks,” he said.

DFC said its investment will help NIIF invest in infrastructure projects that are important for the long-term sustainable growth of the Indian economy, supporting development and the US foreign policy.

Bihar to see massive infra boost! Highway projects worth Rs 30,000 crore underway; details here

Source: Financial Express, Dec 11, 2020

In Bihar, worth Rs 30,000 crore highway projects are underway! While addressing a virtual event after inaugurating Koilwar bridge over river Sone, which has been built at a cost of Rs 266 crore, Union Minister Nitin Gadkari said the three-lane structure of 1.5 km length is part of a six-lane bridge that is being constructed in place of the existing two-lane bridge which is 138 years old. This will be used for both road and rail traffic. The newly inaugurated bridge is a major road for transport between the states of Bihar and Uttar Pradesh.

According to Road Transport and Highways Ministry, at present, road works worth Rs 30,000 crore are ongoing in Bihar. For compensation against land acquisitions, a sum of Rs 4,600 crore has been released, the ministry said. Read the rest of this entry »