Showing posts with label infrastructure. Show all posts
Showing posts with label infrastructure. Show all posts
Friday, 6 April 2018
Thursday, 3 December 2015
Thursday, 5 November 2015
Infra and real estate firms in bright spot after recent govt push
In a big boost to the infrastructure sector, besides other initiatives, the government of India last week approved one-time financial assistance for incomplete and languishing national highway (NH) projects. The government says projects where 50 per cent of construction was completed till November 2014 will get this one-time financial assistance.
Moreover, a new policy has been introduced for highway developers to allow exit from projects after two years of completion. The government has also allowed debt-ridden road developers to reduce their loans by exiting some of the projects.
Actually, the road sector has been constrained by the economic slowdown and lack of private sector participation. It is good to see that in order to revive the sector, the government has decided to work on the engineering, procurement and construction (EPC) model, where the construction of roads would be funded by the government but executed by private developers.
Another good initiative for the infrastructure sector is that the government in September approved setting up of a committee to propose to the Exim Bank a scheme to offer concessional finance to those companies which are bidding for infrastructure projects abroad.
This will surely boost businesses of the infrastructure companies with healthy order books. With all these initiatives, the government's most ambitious 'Make in India' programme should also see a huge success and give fillip to the country's economic growth.
No doubt, the Modi government is promoting his policies of attracting the manufacturing industry to India under the slogan 'Make in India' and of creating smart cities. The efforts of the Modi government in pitching for overseas investments in various sectors, including infrastructure, have started showing results. If the news is to be believed, Malaysia recently proposed to invest $30 billion in Indian infrastructure.
Japan, too, has strengthened infrastructure ties with India. Japan International Cooperation Agency (Jica) has committed a loan of $4.58 billion for a mega railway project between New Delhi and Mumbai along the western corridor.
Despite turmoil in most global markets, India has emerged one of the fastest growing markets globally. The current moves by the government are a good push to the infrastructure sector. The government's focus on clearing infrastructure as well as road projects is expected to provide the much-needed lifeline to infrastructure companies.
Source: PropertyatNeoDevelopers.Wordpress.Com
Moreover, a new policy has been introduced for highway developers to allow exit from projects after two years of completion. The government has also allowed debt-ridden road developers to reduce their loans by exiting some of the projects.
Actually, the road sector has been constrained by the economic slowdown and lack of private sector participation. It is good to see that in order to revive the sector, the government has decided to work on the engineering, procurement and construction (EPC) model, where the construction of roads would be funded by the government but executed by private developers.
Another good initiative for the infrastructure sector is that the government in September approved setting up of a committee to propose to the Exim Bank a scheme to offer concessional finance to those companies which are bidding for infrastructure projects abroad.
This will surely boost businesses of the infrastructure companies with healthy order books. With all these initiatives, the government's most ambitious 'Make in India' programme should also see a huge success and give fillip to the country's economic growth.
No doubt, the Modi government is promoting his policies of attracting the manufacturing industry to India under the slogan 'Make in India' and of creating smart cities. The efforts of the Modi government in pitching for overseas investments in various sectors, including infrastructure, have started showing results. If the news is to be believed, Malaysia recently proposed to invest $30 billion in Indian infrastructure.
Japan, too, has strengthened infrastructure ties with India. Japan International Cooperation Agency (Jica) has committed a loan of $4.58 billion for a mega railway project between New Delhi and Mumbai along the western corridor.
Despite turmoil in most global markets, India has emerged one of the fastest growing markets globally. The current moves by the government are a good push to the infrastructure sector. The government's focus on clearing infrastructure as well as road projects is expected to provide the much-needed lifeline to infrastructure companies.
Source: PropertyatNeoDevelopers.Wordpress.Com
Friday, 4 September 2015
UK ready to help India build smart cities
British deputy high commissioner Andrew McAllister on Wednesday articulated his country's expression of interest to partner with India in realizing her vision of creating 100 smart cities.
Speaking at a round-table on 'Smart cities and inclusion' held here under the aegis of the British high commission, he expressed the UK's keen interest in key areas like sustainable energy, financial and professional services skills and urban smart cities.
McAllister asserted that the UK had pioneered in infrastructure innovation. "The London underground is more than 150 years old and yet it is still driving the heartbeat of the city of London well into the 21st century. Our strengths span into all aspects of design architecture and master planning to engineering consultancy, smart grids and project managements", he stated.
He further described the UK as a 'global leader' in digital technology and innovative financial solutions. The deputy high commissioner called for inclusion of the voiceless and the less privileged in the smart city and digital concepts. "In recent times, technology and knowhow have been great levellers. People are using ICT and social media to track, report and lobby on political issues. But how inclusive is it", he asked.
Krishna district collector Ahmed Babu said the district administration is planning to take up an initiative "Golden Mile project' on Mahatma Gandhi Road up to Benz Circle in the city as part of the smart city concept. Piped natural gas (PNG) has already become operational in Satyanarayanapuram area on a pilot project. Smart traffic concept would be introduced on the MG Road with facilities for parking of vehicles, citizen services and crime management.
Of 253 citizen services sought to be extended in the city under the smart city concept, 23 of them would be provided on the MG Road, the collector explained.
Saturday, 1 August 2015
National Investment and Infrastructure Fund to be operational by year end
India's own sovereign wealth like entity - National Investment and Infrastructure Fund, modelled on Singapore's investment vehicle Temasek, will be operational by the end of this year and provide equity finance to core sector projects to boost economic activity.
NIIF will be a commercially run organisation and operate at arm's-length from the government, Minister of State for Finance Jayant Sinha told reporters here.
Government will provide Rs 20,000 crore from Budget as seed money to the fund, which will provide equity support to infra project as well as funding agencies like IFCI BSE 3.31 % and NHB.
While the government would own 49 per cent of NIIF, which will be based out of Mumbai, equity participation from strategic anchor partners like sovereign wealth funds will be sought, he said.
NIIF will look at both greenfield as well as brownfield projects and "will fill the gap of equity financing," he said. It would also support stalled project.
The fund will have its own governing council and the management will be paid market salaries to attract best talent.
"We are looking for long-term investors in NIIF," he said, adding that provident funds, endowment and sovereign funds have expressed interest. "NIIF is like a sovereign wealth fund focused on infrastructure sector," Sinha said.
The Cabinet had earlier this week cleared setting up of NIIF, which was originally announced by Finance Minister Arun Jaitley in his budget for 2015-16.
Money from the fund would be routed to provide equity support to those NBFCs and financial institutions which are engaged in infrastructure financing across sectors, and corpus to JAMCs and equity/debt to commercially viable infrastructure and other projects.
NIIF's governing council will have government representatives and experts, eminent economists and infrastructure professionals.
Tuesday, 30 June 2015
Transit-based projects in E Delhi, Dwarka
After Karkardooma, the Delhi Development Authority has announced two more transit-oriented development projects - one each in east Delhi and Dwarka. For the east Delhi project, which will come up around Sanjay Lake, the land-owning agency has roped in National Buildings Construction Corporation. It signed a memorandum of understanding with NBCC on Friday.
The TOD project in east Delhi, called Lake View Complex, has been planned around the under-construction Trilokpuri Metro station. Spread over an area of 10.26 hectares, it will have multi-storey housing and commercial towers. "There will be twin signature towers with at least 50-60 storeys. A unique feature of the project will be its visual integration with Sanjay Lake. The complex, overlooking Sanjay Park, will be developed as a lakefront promenade. It will have sports facilities, housing projects, restaurants, markets and hotels, all in one area," said Balvinder Kumar, DDA vice-chairperson.
DDA claims that the project will not only lead to increase in property prices, but will also instill a sense of safety and "social pride" among residents of Trilokpuri, Mayur Vihar Phase-II, Kalyanpuri and neighbouring areas. Though the two government agencies plan to start work on the project soon, the actual process will start after the Union government has notified the TOD norms.
It is likely to be completed in three years. NBCC will also revive the lake and redevelop the green areas around it. As per a rough estimate, NBCC officials say, the project will cost Rs 1,500-1,600 crore. "As per our plan, we will start with designing of the Lake View Complex and in the next 5-6 months, work is expected start on the ground. The project is likely to be completed in within three years," Mittal said. But before NBCC start planning the project, it has to conduct a market survey to assess the demand for commercial and housing. "In TOD, minimum 30% component is residential. It is after the market survey, we will finalise the percentage of residential and commercial components," said Kumar.
Meanwhile, the tourism department of Delhi government has already planned an adventure park around the lake. But DDA is unaware of tourism department's project. "The land around Sanjay Lake belongs to DDA. We don't have any information about the tourism department's project. But if then government wants to redevelop the area, we are fine with it," Kumar said.
The TOD in Dwarka is another ambitious project. It will come up along the four-kilometre Metro corridor. DDA plans to develop a Dwarka central hub which will have three componentsbusiness hub, entertainment hub and eco-recreational hub. "We plan to develop a financial hub. Priority will be given to banks, financial institutions and non-banking financial institutions.
It will be spread over an area of 28 hectares. In Dwarka, the project will come up at three different locations. The commercial and entertainment hub will be along the Metro tracks while the housing component will be at walking distance," said a DDA official.
Apart from the TOD, DDA has also planned an adventure cycling park in Sector 5 of Dwarka. It will have dedicated tracks for cycling, a cycle museum, cycling boutique, children's zone and cycle circuit. "
Work on the project will start within two months and will be completed in one-and-a-half-years," Kumar said.
Monday, 15 June 2015
NHIDCL to award Rs 1.3-trillion highway projects in tough terrain
A government company mandated to fast-track road projects in tough terrain, including border areas, is set to award projects worth Rs 1.3 lakh crore over the next five years.
The National Highways and Infrastructure Development Corporation (NHIDCL) will also be laying out 1,500 km of highways in various states under Modi government's ambitious Bharat Mala project.
"NHIDCL has set a target to award projects worth Rs 1,30,000 crore, including 10,000 km of highways and 2,000 bridges," NHIDCL Director (finance) Sanjay Jaju said.
Jaju said the company at present is handling 74 projects of about Rs 35,000 crore. "In addition, we will be handling another 1,500 km for the Bharat Mala project in various states."
The Bharat Mala project envisages construction of 5,000 km of road network all along the borders and coastal areas at a cost of Rs 55,000 crore.
NHIDCL, a fully-owned company of the Ministry of Road Transport and Highways, awarded 18 projects last fiscal for building 600 km of roads at an expenditure of about Rs 8,500 crore in Tripura, Assam, Meghalaya and Arunachal Pradesh.
Last month, foundation stones were laid by the company for 10 projects for building 281 kms of highways entailing an expenditure of Rs 5,320 crore. The company plans to award road packages worth Rs 14,599 crore in Assam, Arunachal Pradesh, Meghalaya, Sikkim and Nagaland in the current fiscal while it has marked 10 projects worth Rs 6,936 crore for 2016-17 mostly for these states.
Of the current lot worth about Rs 35,000 crore being handled by it, mostly are in the North-East while the remaining are in Andaman & Nicobar, Jammu & Kashmir, Uttarakhand and West Bengal.
Earlier, Road Transport and Highways Minister Nitin Gadkari has said NHIDCL, on the lines of National Highways Authority of India (NHAI), will expedite projects mainly in the North-East and areas sharing international borders to boost economic activities, besides job creation.
NHIDCL was incorporated in July 2014 with the aim to fast-track highway projects that have been pending with the Border Roads Organisation (BRO) for several years.
Tuesday, 2 June 2015
Infrastructure push from overseas: Companies from friendly nations like Malaysia and Japan may build highways in India
The Narendra Modi administration wants companies belonging to friendly foreign governments to build India's highways.
The road ministry has sought the finance ministry's permission for a policy that will allow such investment.
The government has received feelers from public sector undertakings in Malaysia and Japan for investment in upcoming highway projects. The road ministry would not have to go through the process of seeking tenders and bids for a highway project under this arrangement, allowing for faster implementation.
"Exim banks of foreign countries cannot fund their own developers for our highway projects. But we are hopeful this restriction will be removed to kick start infrastructure development in the country," a senior official said. The ministry has set itself an ambitious target of awarding projects to the tune of Rs 3.5 lakh crore in this financial year.
The government is planning to launch 1,231 projects that will cover 37,000 km in the next two years. Having awarded more than five projects under the build operate transfer or BOT toll mode this year, the government is upbeat about the prospects of public private partnership (PPP) projects. However, a majority of projects are still dependent on government funding and are getting awarded through the engineering, procurement and construction ( EPC) route.
Experts agree that governmentto-government (G2G) funding opens up a new route of financing for the highway sector, which is in dire need of equity infusion. "Government may identify stretches which may not be viable on PPP but make economic sense for investment from foreign government agencies," said Vikash Sharda, associate director, infrastructure, PwC India. In April this year, road ministry officials had visited Malaysia to showcase 20 projects to the Construction and Industrial Development Board (CIDB).
Malaysian officials are expected to visit India soon to evaluate these projects for investment internally under the hybrid-annuity model. Under this, 60% of the project cost has to be borne by the private investor.
The remaining 40% will come from the National Highways Authority of India in five equal installments. The government will also bear the revenue risk in projects where there is a low anticipation of traffic flow. Highway projects covering 8,000 km stretch and worth Rs 1 lakh crore were awarded by the government in FY15. The government will be selling road projects covering 5,000 km worth about Rs 1 lakh crore after they are completed through the EPC route.
Monday, 1 June 2015
Board likely for proposed infrastructure fund
A board of directors could be in the driver's seat at the proposed National Investment and Infrastructure Fund (NIIF), announced by Finance Minister Arun Jaitley in the Budget.
The board would take decisions on all infrastructure projects and entities in which the fund's corpus would be invested.
However, there are likely to be other parameters.
For example, NIIF will only invest in projects, infrastructure companies or special purpose vehicles which guarantee a return on investment, according to government sources. The fund is also unlikely to invest in any public-private partnership (PPP) project.
Sources said the finance ministry had prepared a draft Cabinet note on NIIF, incorporating these points. The note is being circulated among other ministries for comments and might be taken up for approval by the Cabinet in a week or two.
"The NIIF might be headed by a chairperson, who will be chosen from the board. The board itself is likely to consist of senior serving or retired bureaucrats and experts in infrastructure, project financing and policy from the private sector," a senior government official said, adding the board might comprise seven or more members. "For welfare projects, there is the budget. The NIIF will focus on infrastructure initiatives that can generate a return on its investments," the person said.
Jaitley had said in his 2015-16 Budget speech, the NIIF will be set up with a corpus of Rs 20,000 crore and the fund will be used to raise debt and, in turn, be invested as equity in infrastructure finance companies such as Indian Railway Finance Corporation and National Housing Bank. That has now been expanded to include standalone projects as well.
As reported earlier, the finance ministry is likely to tap the dividend expected from state-owned companies to the Centre for this purpose.
While Rs 15,000 crore will come from the dividend paid by cash-rich public sector undertakings (PSUs) such as Oil and Natural Gas Corporation Ltd and Coal India, Rs 5,000 crore will be infused by the Centre.
The official added, however, that the full corpus of Rs 20,000 crore per financial year might be utilised from the next year. "This year, we can make do with a corpus of about Rs 10,000 crore, and then ramp it up," he said.
NIIF is part of the Centre's plans for greater public spending in infrastructure projects to push growth, at a time when weak earnings have curtailed the private sector's ability to infuse capital in projects.
By delaying the fiscal consolidation roadmap by a year, and by targeting fiscal deficit of 3.9 per cent of a gross domestic product for 2015-16, instead of 3.6 per cent as per the previous road map, Jaitley freed up about Rs 70,000 crore for additional investment in key infrastructure sectors, primarily railway.
The idea was first mooted by Chief Economic Advisor Arvind Subramanian in his mid-year economic analysis in December during the last financial year.
"It seems imperative to consider the case for reviving public investment as one of the key engines of growth going forward, not to replace private investment but to revive and complement it," he had stated in the report.
It was taken forward in the Economic Survey and the Union Budget.
Thursday, 21 May 2015
Dwarka Manesar expressway construction to restart soon, HUDA, land owners settle issues
The Punjab and Haryana High Court has cleared the way for the completion of the Dwarka Manesar Expressway in Gurgaon which had been held up because of land acquisition issues.
The court today finalised the settlement between land and home owners in the two kilometre stretch in the middle of the 18 kilometre expressway and the Haryana Urban Development Authority (HUDA). About 700 people whose homes and lands came in the way of the expressway had contested acquisition of the land. Negotiations between the owners and the authority had been on for the last four months.
Of the 15 writ petitions that have been filed, 11 that pertain to the New Palam Vihar colony have been disposed off while others related to a 200 metre stretch at the edge of the expressway close to NH8 and some others will be heard by the two-judge bench of justices SK Mittal and HS Sidhu next week.
The petitioners and the HUDA have come to a settlement whereby the home owners will get alternative land closeby, in sectors 110A and 37C of Gurgaon, as well as compensation to rebuild their homes.
"The settlement is very favourable to the land owners as they get larger sized plots, opportunity to pay for the extra land in eight years over eight interest free installments and also money for construction for those whose houses were already constructed," said Shailendra Jain, senior advocate who was the counsel for all the petitioners in the case.
Amar Vivek, additional advocate general for Haryana who was representing the state of Haryana and HUDAsaid that possession of vacant land has been given to the authority today and construction of the expressway can start immediately.
This settlement is significant because around 40,000 apartments are being built in residential projects along the expressway and some of them have been completed as well but their access was restricted because the road which was being built by Indiabulls Construction since 2011 was not completed in time.
Home owners in New Palam Vihar have been given time till January 31, 2016 to vacate their homes. In this period their new lands will be handed over to them and they can start construction if they wish.
"Residential and commercial office sales in this area were badly impacted as there was uncertainty around the road for a long time. The 40,000 home buyers will now be relieved," said Arjun Puri, managing director of Puri Constructions, which is building apartments along the expressway.
The 18-km long Northern Peripheral Road or Dwarka-Manesar Expressway as it is popularly known is being developed as an alternative link between Delhi and Gurgaon. Over the years, around 100 residential developments were launched in the stretch with close to 40,000 apartments.
Wednesday, 20 May 2015
Highway construction yet to gain momentum
Finance Minister Arun Jaitley, in his maiden Budget speech in July last year, stressed on the need for infrastructure development. The second time around, it was an explicit pronouncement of intent from him, an indication of the new government's focus on overall infrastructure.
According to the latest available data, however, the pace of road construction in the first year of the National Democratic Alliance government was comparable to the last year of the United Progressive Alliance government. The length of 4,410 km of highways constructed in 2014-15 reflected a marginal increase from the 4,260 km constructed in 2013-14. The pace of construction has also increased from 11.6 km/day to 12 km/day.
In line with the purposeful exhortation of focusing on infrastructure development, the budgetary support for 2015-16 jumped by almost 50 per cent, from Rs 28,881 crore in 2014-15 to Rs 42,912 crore in 2015-16. Of the overall amount allocated, capital expenditure saw a 109 per cent jump.
Union Minister for Road Transport and Highways Nitin Gadkari has announced in the Rajya Sabha, "We are targeting 30 km of road construction per day in the next two years". While at the current rate the target seems difficult to achieve, the rate at which projects are being awarded is stunning. The total number of km awarded during 2013-14 was 3,621 but it has more than doubled to 7,972 during 2014-15, out of which only 700 km is being built under the build-operate-transfer (BOT) model.
The government has targeted awarding 8,500 km per year over the next two years, with 10,000 km of roads set to be awarded in the current financial year.
"In the past year, we have seen some things move at a faster clip, clearances and permits among them. The bigger challenges will need some time to sort out," said Manish Agarwal, partner and leader of capital projects and infrastructure at PwC India.
Adding, "Easing bank lending to concessionaires, facilitating plug and play readiness, and quickening dispute resolution mechanisms need to be sorted out. I do not see private investment reviving in the next six months."
The subdued sentiment has necessitated increased public spending from the government, something experts argue will have a multiplier effect and effectively revive the former.
"We are looking at multiple things to revive investment in the sector. Mutual termination of awarded projects and re-bidding, overhauling the dispute resolution mechanism, and frequent reviews are some of the things we are exploring. I think the effort made in easing roadblocks will show changes on the ground the coming year," a ministry official said.
The government has also introduced a hybrid annuity model that seeks to reallocate risk-sharing between public and private parties. During the past three years, 1,427 road projects were sanctioned. Of them, 437 projects are running behind schedule, 101 are in dispute, 1,022 have been completed and 57 terminated.
Monday, 18 May 2015
Time-bound targets for major infra projects
To boost connectivity and lower congestion on key routes, the Railways plans to double or quadruple nearly 11,000 km of the total track length of 64,000 km by 2019-20.
The target was discussed at a recent meeting chaired by the prime minister, to review infrastructure projects. The Railways, it has been decided, should focus more on doubling and quadrupling of existing lines over the next four to five years, rather than new projects, except those in the Northeast and Jammu and Kashmir. The aim is to ensure existing tracks are decongested, rather than laying new projects.
The meeting, coordinated by the NITI Aayog, was attended by ministers from all key infrastructure sectors. It was held in two sessions and has fixed near-term and long-term targets for each sector, the progress on which is to be periodically reviewed.
Railways Minister Suresh Prabhu, in a recent interview with Business Standard, had acknowledged that with an investment plan of Rs 8.5 lakh crore over the next five years, they were focusing more on decongesting the network and improving the earning capacity.
Wednesday, 6 May 2015
Infrastructure companies keen to help re-build earthquake-hit Nepal
Indian infrastructure companies are keen to participate in the earthquake-struck Nepal's rebuilding programme, but fear that the country may take a while to rebuild its infrastructure.
The massive earthquake in Nepal, which killed over 7,000 people, has ruined roads, shattered buildings, damaged hydropower projects and transport infrastructure. While the immediate challenge is to clear the debris and evacuate people, the next step would involve rehabilitation of life, which will include rebuilding infrastructure.
The challenge for Nepal would be to arrange for funds for these projects and find engineering and construction companies to execute the projects. Also, Nepal's terrain is a dod gy one and the earthquake has raised security issues.
"Indian contractors would be the obvious choice for Nepal to re-build the infrastructure that has been destroyed. But the big challenge would be to arrange for resources to finance these projects. We hope bilateral and multilateral financing is channelised to help the country," said DV Raju, vice-president of the National Highway Builders Federation lobby group and vice-president of Hyderabad-based Soma Group.
The two bigger neighbours of the land-locked country, China and India, have in the past extended their support to Nepal to develop infrastructure, particularly roads and hydropower projects. Experts feel that these two countries may also lead the way in the country's rehabilitation. Even before the earthquake, Prime Minister Narendra Modi had committed to Nepal $1 billion in concessional loans to help build power plants and roads.
"With the experience of the recent earthquake, the country would have to do better planning for new infrastructure that will require participa tion from bigger and more technologically-developed companies," Raju said.
Some of India's biggest infrastructure companies such as state-run SJVN, GMR InfrastructureBSE -2.82 %, Tata PowerBSE -1.30 %, Jindal Power and Steel have been exploring hydropower opportunity in the country.
Industry experts feel that the hydropower projects may get delayed as the country would have to be more cautious about these projects in the wake of the earthquake. But Nepal may need to start rebuilding its buildings, roads and transport infrastructure on a priority basis to restore normalcy.
"Due to the earthquake, our ongoing work has got delayed by a month but we hope to resume soon. There is need for Indian companies to participate in Nepal's rebuilding work more than ever since the country does not have local appetite for such projects," said Mukund Sapre, executive director, IL&FS Transportation Networks.
In March this year, IL&FS signed a memorandum of understanding with the Nepalese government to prepare a detailed project report for a fast-track road project, with the option to build the road later. Indian companies may also offer their services for construction of airports and other urban infrastructure.
Friday, 1 May 2015
12th FYP's private investment in infrastructure will not materialise, says Rao Inderjit Singh
The projected private investment of Rs 26.83 lakh crore in infrastructure sectors during the 12th Five Year Plan (2012-17) is unlikely to materialise, Parliament was informed today.
"..investment in infrastructure sector particularly the private investment including PPPs has slowed down during the first three years of the Plan, the projected private investment during the 12th Plan is unlikely to materialise," Planning Minister Rao Inderjit Singh said in written Reply to Rajya Sabha.
Explaining further, he said: "This slowdown (in investment) has been attributed to various reasons including inadequate allocation of fuel to power stations, delays in environment and forest clearances and land acquisition, funding issues and economic slowdown etc."
The minister informed the House that of the total investment in infrastructure, the 11th Five Year Plan (2001-12) witnessed a share of 37 per cent of private investment, including PPPs, against a share of 22 per cent achieved in the 10th Plan (2002-07).
According to the 12th Plan document, government has envisaged an investment of Rs 55.74 lakh crore in the infrastructure sector including Rs 16.01 lakh crore from Centre, Rs 12.89 lakh crore from states and Rs 26.83 lakh crore from private sector.
The erstwhile Planning Commission was targeting USD one trillion investment (about Rs 63 lakh crore at today's price) in infrastructure sector during the 12th Five Plan. But at that time the exchangerate was Rs 44 for a US dollar.
The last Deputy Chairman of the Commission Montek Singh Ahluwalia had also made it clear that the investment target could not be achieved as for achieving this, Indian economy should grow at over 9 per cent per annual in 12th Plan period.
Thursday, 23 April 2015
Government approves road projects worth Rs 5,150-crore in Haryana, Uttar Pradesh and Maharashtra
The government on Wednesday approved three highway projects with a total cost of Rs 5,150 crore in Haryana, Uttar Pradesh and Maharashtra. "The Cabinet Committee on Economic Affairs cleared three important highway projects in Haryana, Uttar Pradesh and Maharashtra today with the total length of more than 300 km and with an approximate cost of Rs 5,150 crore," an official statement said.
All the three projects are to be implemented on BOT (toll) model, with the private sector investing upfront to meet the capital cost, to be recovered through collection of toll during the concession period. The projects include widening and strengthening of the stretch between Mukarba Chowk and Panipat in Haryana on National Highway 1.
"The second project connecting Agra with Etawah on NH 2 will improve the connectivity in an otherwise infrastructure deficient area in Uttar Pradesh," the statement said. This will help catalyse the economic development of the region, it said.
Friday, 3 April 2015
Need to tap new funding sources for infrastructure: Raghuram Rajan
The banking sector has already overstretched itself in lending to infrastructure, Reserve Bank of India Governor Raghuram Rajan said, underscoring the need to tap new sources of funding for this industry.
"Going forward, we need to develop new sources of risk capital so that our infrastructure needs can be financed with moderate amount of debt, even as we help the system deleverage," Rajan said Thursday in his inaugural address at a conference on financial inclusion, organised as part of the central bank's 80th anniversary celebrations.
India's infrastructure funding needs were estimated at more than $1 trillion (Rs 62.60 lakh crore) over the 12th plan period ending March 2017. To meet that, tapping other sources too would be required.
"Our tasks are far from over. The nation has enormous financing needs in infrastructure, and far too many of our banks already have too much exposure," he said. Moreover, big corporate infrastructure players have also taken too much debt. The government has already allowed mutual funds and non-bank finance companies to float infrastructure debt funds to cater to this sector.
Excessive reliance on the banking sector to fund infrastructure could potentially impact financial stability, Rajan warned. "The required national push to finance infrastructure should not override financial stability, which is key to national security."
Thursday, 26 March 2015
Metro connectivity proposed in Haryana Budget may push realty
The Faridabad metro link is predicted to function from this year. With the Haryana government’s monetary push as declared in the state budget, the NCR residents have welcomed the announcement with rejoice.
Capt. Abhimanyu, the state finance minister presented the budget in the Assembly that gave the much needed impetus on employment generation and infrastructure development. In fact, not just the Faridabad metro but the Bahadurgarh link also got monetary allocation and is scheduled to be completed by April 2016.
Once completed, Faridabad would also be one of those nodes of NCR that can boast about metro connectivity. Initially, the metro is being extended to areas such as Sarai, NHPC Chowk, Mewala Maharajpur, Sector 28, Badkal Mor, Old Faridabad, Neelam Chowk Ajronda, Bata Chowk, amongst others.
Owing to the metro connectivity, realtors are expecting better days ahead as the real estate market is yet to pick up in these localities and connectivity could be a the booster.
“Once the Faridabad metro gets operational, areas such as Neharpar and Greater Faridabad will be closer to metro route which is otherwise a 17km drive to Badarpur,” says Animesh Bhargav, one of the local property dealers in Faridabad.
Bhargav also quoted, that this might be the right time to invest as the prices would rise further once the metro gets operational.
“Although metro connectivity would change the ground reality but the area would be fit for use only after 2-3 years when infrastructure gets established completely and all basic amenities are available in close proximity,” says Bhargav.
Another property consultant in Faridabad, Rahul Suresh, said that currently the market is within affordable range where the prices varies between of Rs 3,000-5,000 per sq ft, equivalent to what is prevailing in Greater Noida, hence those investing purely for investment purpose can look for options in the area.
As per the surveyed data, there are number of plots and apartments available for sale in the area. Property values start from Rs 4 lakh and can go up to crores, depending upon the amenities and location of the property.
If you are someone looking forward to invest in Faridabad, this is the right time. Look for properties within your budget and book them before property values become unaffordable.
Wednesday, 25 March 2015
Hopes of revival keep infrastructure sector buzzing
A comparison of the valuation matrix of India's infrastructure companies with their global counterparts shows that, on average, India's infrastructure companies are trading at a CY15 EV/EBIDTA multiple of 13, while their global peers are trading at an average multiple of 9. This premium in valuation of Indian companies can be attributed to the expectation of revival in investments and business estimates in the sector which at present is at the lowest point of its business cycle.
According to the Twelfth Five Year Plan, an investment of $1 trillion is envisaged for the infrastructure sector. Out of these, the private sector is expected to contribute nearly 50 per cent. These investments should boost and revive projects stuck due to lack of funds, thereby driving the revenue growth of companies in the next four to five years. In addition to this, declining interest rates will also improve earnings of companies in the coming years.
However, a lot would depend on the execution, cash flow visibility of companies and how proactively the government acts in providing necessary clearances related to land acquisition. Going ahead, for India's infrastructure companies to sustain these valuations these factors would play an important role.
Wednesday, 11 March 2015
Shifting to cement roads will save crores of rupees: Nitin Gadkari
Thirty six cement makers have assured supplies of 95 lakh tonnes at prices lower than market rates for road building in the country, Union Minister Nitin Gadkari said today.
"Thirty-six cement manufacturers have committed to supplying 95 lakh tonnes through their 103 plants pan India at prices up to Rs 180 a bag against a market price of over Rs 300 a bag. This would boost road building and result in huge savings of crores of rupees," the Road Transport and Highways Minister told reporters here.
The Ministry has decided to build concrete cement roads in place of traditional bitumen roads. Cement roads are cost-effective and require less maintenance, he said.
"This will give a push to Prime Minister Narendra Modi's Make in India vision," he said, adding that cement is manufactured indigenously whereas bitumen is imported and costlier too.
"It is going to be a revolutionary step in the construction industry's history and would save crores of rupees," he said. A portal has been launched wherein a central or state government agency could register and procure cement directly from suppliers on cheaper rates on "cash and carry basis".
He said the method for making available cement through the portal was transparent and left no scope for corruption.
"Rajasthan government has already decided to build 2,000 km of village roads in the state using cement and concrete," he said adding, "I appeal to all state governments to utilise the facility in the larger interest of nation building and its development," Gadkari said.
He said cheaper cement and iron ore slag would also help translate Modi's dream of providing the poor affordable housing.
He said, he will also appeal to the Rural Development Minister to build cement and concrete roads under the Pradhan Mantri Gramin Sadak Yojana.
Gadkari also said that concrete roads would also be built in extreme Left-wing affected areas along with pre-fabricated material with the help of the army's engineering wing.
He said his Ministry was confident of achieving the target of building 30 kms of roads a day even before March 2016 and is set to construct 15 km a day by the end of this fiscal.
Earlier, he launched "INAM - PRO, the Platform for Infrastructure and Materials Providers" here.
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