Infrastructure

"The environment ministry in January had asked us to impose a moratorium in the Nazafgarh drain basin, identifying it as a critically polluted area based on Comprehensive Environmental Pollution Index (CEPI)," a senior Delhi government official said today.

The moratorium is also imposed on industrial clusters in Anand Parvat, Naraina, Okhala and Wazirpur which lie on the Nazafgarh drain basin and have exhausted their environmental capacity over the years.

The environment assessment of the industrial clusters by the CPCB and IIT, Delhi had found that of the 88 most-polluting industrial clusters, 43 had reached an upper limit in terms of air, water and land pollution.

Till the moratorium is in place, the environment ministry assisted by CPCB and local bodies will frame a guideline to improve the conditions in the clusters.

Similarly, construction and expansion in at least 22 industrial clusters in Ghaziabad and six in Noida in Uttar Pradesh has also been put on hold as they have been identified as critically polluted clusters, a senior environment official added.

Noida Phase I, II, III in Noida and Mohan Nagar, Rajinder Nagar, Kavi Nagar, Loni, Roop Nagar and Bulandshahar Road industrial areas are some of the clusters where further expansion has been banned.

In a major decision to boost industrialisation, the state government has simplified the existing procedure to give stamp fee relaxation for setting up industrial units and projects termed as infrastructural facilities in UP.

Under the new regulations, general manager, district industries centre will bea nodal officer for this purpose in his jurisdiction concerned. His job will be to ensure a hassle-free registration of land with the help of sub-registrar of the stamp and registration department.

Earlier, this was a cumbersome process in which the papers of land were to be submitted to general manager, district industries centre. These papers were then sent for the perusal of commissioner and director, industries, and managing firector, PICUP. These papers were then sent back to DMs concerned before the final order passed for the registry of land purchased by different industrial units. This was a long arduous process in which property registration used to take months together.

This proved a great deterrent to industrialists, who had to face immense hardship on account of this. The result of this was that a large number of industrialists had gone away from UP to neighbouring states like Uttrakhand, Haryana and even north-eastern states where the governments concernedhad not only announced tax-holiday schemes, but also made the registration of land easy.

However, cutting short the procedure, the property registration has now been made easier with removal of multiple monitoring at different levels. For this purpose, the government has also issued a government order and directed all concerned to act in accordance to the new policy of the government.

Source: Times Of India Setting up of industrial unit made easier in UP

To start the 13.1-km long line, which is an extension to the existing Line 3, Delhi Metro Rail Corporation (DMRC) needs an additional seven trains. "The new trains procured for the Noida line are still under commissioning and testing and will be ready for use only by the end of September. The opening of the line has been rescheduled accordingly,'' said a DMRC spokesperson.

The corporation recently got 11 new broad gauge trains, out of which two were airlifted from Germany. The new coaches are undergoing testing and commissioning at the Khyber Pass depot from where they will be taken to Yamuna Bank depot and tested on the new line.

There was speculation that the delay in opening of the line was due to the fresh cracks noticed in two piers with cantilevers near Noida Sector 14. But this was denied by officials. "We are yet to take a final decision on the strategy to be adopted regarding the fresh cracks. In all probability, the piers will only be strengthened and not demolished. The delay is not because of the cracks but shortage of trains,'' said the spokesperson.

Work on civil structures is complete and even the Over Head Electrical (OHE) lines were activated last month when DMRC started trial runs on the new line up to New Ashok Nagar. The stretch was tested for signalling systems, tracks, telecommunication, interfacing of train working with different systems and OHE supply, which was activated till the Noida Sector 15 station.

The Noida extension has 10 stations of which four are located in Delhi while six are in Noida. The line is elevated and the frequency of train operations will be the same as that of Line 3. About 7.3kms of the elevated line is in Noida. It is expected to ferry an estimated 53,000 commuters daily by 2011.

Elaborating on the decision, Mayawati said the 21 per cent reservation for the SCs and the 2 per cent for STs would be extended in construction contracts worth up to Rs 5 lakh that are being carried out by working divisions of various departments, corporations, enterprises, authorities and parishads in the state.

The chief minister said while earlier her government had been identifying new Ambedkar villages every year and working for their development, now on the government would concentrate on the maintenance and upkeep of the 2,000 identified Ambedkar villages.

"Despite taking up the development of the Ambedkar villages, their maintenance and upkeep had not been up to my expectations," Mayawati said, adding that emphasis would be given on Dalit localities while constructing roads and taking up other development activities. In the first phase for construction of roads in Dalit localities of the Ambedkar villages, Rs 800 crore would be invested, while another Rs 260 crore would be spent on the construction of community centres.

As per the order, the government has identified 22 departments related to all segments conducive to private investment in industrial, infrastructure and service sectors. Departments and agencies in infrastructure and industrial sector include small scale industries (IT & village included), Noida, Greater Noida, Uttar Pradesh Expressways, Industrial Development Authority (Ganga Expressway), Yamuna Expressway Authority, Industrial Authorities of Bhadohi, Satharia (Jaunpur) and Gorakhpur as well as UPSIDC.

Similarly, departments in service sector include all categories of educational institutions including basic, secondary, higher, technical and vocational and medical institutes; medical and health, transport, aviation, urban development, public works department (UP. State Highways Authority included), tourism & culture, housing and urban planning, power and irrigation.

According to the order, a collective private investment target of Rs 50,882 crore has been fixed for the above departments to achieve in this financial year (2009-10) in industrial, infrastructure and service sectors (Rs 13,682 crore in industrial and infrastructure sector and Rs 37,200 crore in service sector). However, it has been clarified that as and when required other government departments may also be included in this time-bound result-oriented exercise.

An eight member infrastructure monitoring committee has been formed under the chairmanship of chief secretary to keep a watch on the progress of infrastructure development projects all over the state. With infrastructure and industrial development commissioner (IIDC) and principal secretaries of different departments as its members, this top-level panel will meet on a monthly basis not only to review implementation of infrastructure projects but also to mitigate the bottlenecks by synchronising the functions of various agencies involved in the execution.

It is noteworthy, that in UP, numerous projects have been identified in different sectors like metro-rail, over-bridges, road, aviation, power, transport, health, education, tourism and urban rejuvenation and are at different stages of implementation. Main projects under public private partnership, where developer has already been selected and work is in progress, are 165 km long Yamuna Expressway between Greater Noida and Agra; Ganga Expressway, the 8-lane mega project linking Ballia in far east to Greater Noida near Delhi traversing 1047 km; big power projects like Bara (1980 Mw capacity) and Karchana (1320 Mw capacity) near Allahabad and input based franchisee power distribution system in Kanpur and Agra. While many infrastructural facilities are in the pipeline to be developed either by government development authorities and corporations or on public private partnership. A few are into the bidding process, while consultants have been selected for others.

Also, from now onwards, the progress of infrastructure projects pertaining to various departments will be directly scrutinised by infrastructure and industrial development department. For this purpose, principal secretaries of the departments concerned will be accountable to infrastructure and industrial development department and will work under its guidance for the implementation of infrastructure projects relating to their respective departments.

Source: Times Of India CS to head panel to monitor infrastructure projects

According to the UP industry department, the panel will not only review implementation of infrastructure projects, but will also mitigate bottlenecks by synchronising functions of various agencies involved.

In UP, numerous projects have been identified in different sectors like metro rail, over-bridges, road, aviation, power, transport, health, education, tourism and urban rejuvenation, which are at various stages of implementation.

The main projects under the public-private partnership (PPP) model, for which developers have already been selected and work is in progress, are the 165-km-long Yamuna Expressway between Greater Noida and Agra, Ganga Expressway, the eight-lane mega project linking Ballia to Greater Noida traversing 1,047 km, and power projects like Bara (1980 Mw capacity) and Karchana (1320 Mw capacity) near Allahabad and input-based franchisee power distribution system in Kanpur and Agra.

The progress of infrastructure projects pertaining to various departments will be directly scrutinised by the IIDC, according to sources. IIDC has also been authorised to take steps for monitoring and ensuring time-bound implementation of projects in the public and private sectors as well as various mega infrastructure projects under PPP.

Udyog Bandhu, the state-level infrastructure and industrial facilitation agency, will define the milestones and the corresponding timeframes in respect of all the infrastructure projects.

Banks have been slow to reduce lending rates even as there is no discernible improvement in the clients' ability to pay on time. For these players, therefore, it's a double whammy.

Indeed, though repeated action by the Reserve Bank of India in terms of policy rate cuts and constant urgings have compelled them somewhat to lower rates, the reductions are yet to reflect in the working capital cycle, which began expanding about six months back.

In fact, say the contractors, the cycle has stretched further in some cases.

For a contractor, working capital cycle is the period intervening the date it takes a loan from a bank to do some work for a client, and the date it gets paid by the client.

When the client defers payment, the contractor will not only find it difficult to repay the loan on time, but also need another loan to keep work going, leading to expansion of the cycle.

Real estate accounts for much of the troubles.

According to Arun Sahai, chief executive officer of New Delhi-based Ahluwalia Contracts, which is a contractor for real estate developers, things are going from bad to worse. "The lending for the real estate sector has been further squeezed."

Among others, Emaar MGF, which is developing the 2010 Commonwealth Games village in New Delhi, owes the company Rs 95 crore, says Sahai.

Notably, the squeeze had led to the working capital cycle expanding from 90 days to 120-140 days a few months ago, which hurt the contractors working for real estate developers the most.

Source: dnaindia.com Infra players are still stretched for working capital

The new rules have suggested increasing the number of shortlisted bidders, amending guidelines relating to conflict of interest for bidding entities and raising the bar on technical capacity of bidders.

These modifications -- finalised by a five-member task force headed by B K Chaturvedi, member, Planning Commission -- will be issued shortly, quoted an official in the shipping ministry in the report.

The revised rules would allow for seven shortlisted bidders (except for national highway projects) from the present six for projects costing more than Rs 500 crore. For projects costing less, eight bidders would be shortlisted.

In the case of national highway projects, all firms that qualify technically will be allowed to submit price quotations, the ministry official said.

Several firms that had qualified on technical and financial parameters but were excluded from auctions of many highway and port projects have challenged in courts the limit imposed on the number of shortlisted firms.

Source: Realty Plus Eligibility rules changed for infrastructure projects

In a note submitted to the Planning Commission and the RBI, Assocham secretary general D S Rawat has proposed that states and centre together should pool their resources to set up 'Infrastructure Financing Fund' exclusively to cater the requirement of infrastructure financing. Infrastructure financing through public undertakings is estimated to be around $35 billion which would be around three per cent of India's GDP by 2011-12, the note said.

"In totality, the financing for mega projects could work out to be $90 billion, 7.5 per cent of India's GDP in next three years," it said.

The best option available would be that centre and states come together to create a corpus based on consensus so that the infrastructure projects in state, centre and joint sector do not suffer on account of funds, it added.

The chamber also said that credit extension from banks for infrastructure projects should be doubled from the estimated 10 per cent.

Public-private-partnership should be strengthened in a manner between state-owned financial institutions and those in private sector so that the latter can pump in the projected $30 billion investment towards infrastructure projects, it said.

IIFCL chairman SS Kohli said that the impact of the slowdown would be reflected in the disbursements of financial year 2010-11. But that may be negated to some extent if the economy revives by then, Kohli added.

The number of projects sanctioned by IIFCL last year is not much lower from the previous year. This could mean the projects sanctioned were relatively of a smaller size. The amount disbursed in 2008-09 has almost doubled to Rs 3,207 crore, as some projects were in the pipeline.

KPMG executive director Arvind Mahajan said, "Infrastructure projects take time. To some extent slowdown has also affected infrastructure projects."

Gokul Chaudhri, partner at consultancy firm BMR Advisors, agreed slowdown might have led to fewer sanctions. "Promoters do not have the confidence to commit fresh investment if the markets are not doing well." Chaudhri showed optimism that the current year might see confidence returning, with the revival in demand for oil and power.

Asked whether the impact of ongoing slowdown would be seen in next year's disbursements, Chaudhri said it would mainly depend on the state of the economy post elections and the impact of the stimulus packages by the Western countries.

"(If all goes well), there might be a spurt of projects coming on board," said Chaudhri.

Proper checks must be initiated to curb corruption at various levels during the process of infrastructure development, says a FICCI-Deloitte Study on Indian Infrastructure: Challenges and Opportunities.

India needs to mobilise over $300 billion for developing infrastructure by 2012, of which about $65 billion is likely to be funded by public-private partnerships.

The study adds that corruption or unethical behaviour can occur at various stages in a contractual infrastructure project cycle, including project identification, contract award, negotiation, project finance and implementation.

Moreover, costs of corruption such as non-payment of tariffs resulting from bribery or collusion could be passed on to rate payers or utility owners. This could pose a challenge for regulators and undermine the confidence investors have in infrastructure projects. The study also says that private investments in the Indian infrastructure sector is held back due to concerns such as lack of clarity in policies, limited avenues of long-term finance, cost escalations and delays, among others.

Source: Realty Plus Check frauds to attract pvt investments in infrastructure'

The real estate sector in India has grown by 30% to 35% during the past five years, reflecting the rapidly increasing demand for office, commercial and industrial space, as well as for bigger homes, that coincided with the economic boom.

To some extent, property development may have failed to keep pace with demand because of an underdeveloped investment market.

Owing to oversupply, downward pressure on rents seems a likely outcome in the coming months, making occupier demand look vulnerable in the Indian property market.

On the retail front, the likely effect of an economic slowdown will be to depress discretionary spending and that may subdue retail rental growth, at least over the next year or so.

However, once the current global downturn is through, the Indian economy should rebound, supported by a large, young workforce; gradual but consistent liberalisation reforms; and a high rate of consumer and private-sector savings.

The growing population and economic expansion will mean that India needs not just homes but offices, schools, hospitals, and entertainment centres.

Addressing infrastructure needs is also an important priority to support this property market development. Special Economic Zones can play an important role. On the investment side, the expected development of real estate investment trusts (REITs) in the future could expand the property investment opportunities in India.

In the longer term, there is a great potential for more sophisticated infrastructure and a greener future.

Presenting the interim budget for 2009-10 finance minister Pranab Mukherjee allocated Rs 40,900 crore for the Bhart Nirman project aimed at strengthening the country's rural infrastructure, including water supply, power, housing and roads.

The minister also proposed an expenditure of Rs 11,842 crore for the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) apart from Rs 14,000 crore outlay for the Rural Infrastructure Development Fund (RIDF) with a separate window for rural roads to continue with a corpus of Rs 4,000 crore.

The interim budget also envisages a planned outlay of Rs 10,000 crore for the Pradhan Mantri Gram Sadak Yojna, Rs 8,800 crore spending on rural housing and a total of Rs 9,992 crore for highway projects in various states and union territories.

"During 2005-2009, the allocation to this (Bharat Nirman) programme has been increased by 261 per cent. For the year 2009-10, I propose an allocation of Rs 40,900 crore for this programme," Mukherjee said.

The Union cabinet approved the setting up of an electric locomotive manufacturing plant at Madhepura and a diesel locomotive facility at Marhowra in Bihar. The factories would be set up as a joint venture between the railways ministry and a private developer, to be selected through a two phase international competitive bidding. France's Alsiom, Germany's Bombardier and Siemens are the locomotive manufacturers shortlisted for setting up the electric locomotive factory. Either GE India or US-based EMD is likely to set up the diesel locomotive factory.

The government will also invest Rs 1,646 crore to set up two medical institutions on the lines of the All India Institute of Medical Sciences (AIIMS) in West Bengal and Uttar Pradesh. The cabinet gave its nod to the proposal, which also include upgradation of five existing government medical colleges in Amritsar (Punjab), Tanda (Himachal Pradesh), Madurai (Tamil Nadu), Nagpur (Maharashtra) and the Jawaharlal Nehru Medical College of Aligarh Muslim University.

The upgradation of each medical college would cost about Rs 150 crore. The central government would contribute Rs 125 crore, while the states will bear at least Rs 25 crore each.

The Cabinet Committee on Economic Affairs (CCEA) on Thursday approved four projects totalling Rs 3,230.80 crore for broadening of some sections of national highways in Rajasthan, Gujarat and Karnataka through publicprivate partnerships.

The projects include a Rs 1,661.9 crore project for four-laning of NH 6 at Surat-Hazra section in Gujarat. Four- and six-laning of Jaipur-Tonk-Deoli section of NH 72 in Rajasthan, estimated to cost Rs 1,203.64 crore, was also sanctioned by the CCEA, home minister P Chidambaram told reporters.

Other projects that got the cabinet nod are four-laning of BeawarGomti section of NH 8 in Rajasthan at Rs 200.54 crore, besides two-laning of Hospet-Bellary section of NH 63 at a cost of Rs 162.56 crore.

The "golden share", which will be owned by the government, will ensure that it has a say in all major decisions taken by the private concessionaire. It will also obviate the need for the government to invest in the equity of the company.

The proposal has been mooted by the Planning Commission in the new model concession agreement (MCA) that it has developed for the infrastructure sector. The agreement has been circulated among various stakeholders for consultation.

The MCA says the private infrastructure developer, or the concessionaire, will sign an agreement with the government for issue of one non-transferable equity share of the company ("golden share") in favour of the government. The share shall entitle the government to nominate a non-retiring director on the board of the concessionaire.

According to the Planning Commission, the golden share-holder will have the right to veto any board resolution aimed at following: altering the memorandum and articles of association; changing the name of the company; issuing sweat equity shares; purchasing the company's own shares or specified securities; reducing the share capital; entering any new business; applying for winding up the company, among others.

A bench comprising Chief Justice K G Balakrishnan and Justice P Sathasivam allowed the application of Greater Noida Authority for the project which will be set up on a 102-acre plot at the Mursheedpur reserve forest adjoining the Yamuna Expressway.

The Greater Noida Authority has already tied up with Singapur-based Bernard Harrison, which has been instrumental in setting up night safaris in the Asian countries.

The safari, which is planned to be kept open from evening till midnight, would be home to mostly nocturnal animals, like leopard, hyenas and owls sourced from within India. It also plans to import big cats from South Africa and South American countries.

The project has been pending since 2005 after it got clearance from the Central Zoo Authority and was waiting for a clearance from the apex court, which had banned setting up of fresh zoos due to poor condition of the existing ones.

Apprehensive about the possible impact of the Prime Minister's proposed Ganga Basin Authority on the Ganga Expressway project, the state government is busy drawing its own conditions.

The Prime Minister's Office (PMO) has called a meeting of its members on December 15. The meeting, which will be chaired by T K Nair, Principal Secretary, PMO, will be attended by the chief secretaries of the four states through which the river flows.

The members of the four states -- Uttar Pradesh, Uttarakhand, Bihar and West Bengal -- will

discuss the profile and the jurisdiction of the proposed river basin authority.

"The meeting will look into a whole gamut of issues from its implementation to the implications of its creations with the objective to increase the availability of water by increasing the flow in the river," said Alok Ranjan, Principal Secretary (Urban Development).

"There is a possibility that in future any project that comes up along the course of Ganga will have to obtain the clearance from the river basin authority," he added.

The Ganga Expressway, which will connect Noida in western Uttar Pradesh to Ballia in the east, could run into rough weather if the Centre decides to arm the river authority with strong regulatory powers.

According to official sources, as the Prime Minister had announced that the river basin

authority will regulate the "quantity and quality" of the water in the river, there are little doubts that this would affect the Ganga

Expressway and the future developmental projects along the river.

The state government has already obtained the sanction for the project from the Ganga Flood Control Commission in Patna.

In October, a delegation led by Swami Ramdev met Prime Minister Manmohan Singh drawing his attention to the plight of the river and demanded that Ganga be accorded the national river status.

A consortium of ITNL ENSO Rail Systems Ltd (IERS), a group company of IL&FS and real estate major DLF, has emerged the sole bidder for the 3.2-kilometre Gurgaon Metro rail project being implemented through public-private partnership (PPP) by the Haryana Urban Development Authority (HUDA).

This is the second project in the country in which a metro rail project is being undertaken through a PPP model after the 71-kilometre Hyderabad metro project was won by Maytas Infrastructure.

According to industry sources, infrastructure major Larsen & Toubro (L&T) had also initially shown interest for the project, but backed out finally.

The Rs 1,000-crore project envisages the development of a metro link for providing last-mile connectivity from Delhi Metro's Sikanderpur station on MG Road to NH-8 over a 60-metre-wide sector road (Vishwakarma Marg), where DLF Cybercity is located. The project provides further scope of extending the metro link to sector 55-56 in south Gurgaon and Udyog Vihar and Sector 21 Dwarka in the north.

Under the request for proposal (RFP), the contract was to be awarded to a company which would offer HUDA the highest revenue share of advertising and real estate rental which it earns from the project. However, it does not have to share revenue of the fare it collects. HUDA has offered 250 square metres of floor area in each of the six stations which the concessionaire can rent out to kiosks and retail outlets. The concession period is for 99 years. The land, however, would be owned by the Haryana government which would give it on lease to the concessionaire.

The two players are planning to set up a special purpose vehicle in which IERS will have 74 per cent equity holding, while the rest will be with real estate major DLF. The entire debt component of the project will be raised by IERS.

Sanjiv Rai, MD & CEO of IERS, said: "Yes, we are the sole bidder for the Gurgaon Metro rail project. We are awaiting the approval from the Haryana Urban Development Authority. Once the approval is received, we are expecting to achieve the financial closure of the project in the next six to eight months."

However, the company has not yet decided the debt equity ratio. "The debt equity ratio will be more similar to other infrastructure projects. However, a final decision will be taken only after consulting our bankers and seeing the market condition," said Rai.

The company will be required to finance, design and construct all the civil works. The concessionaire is also required to procure and install all systems including the rolling stocks, overhead electrification, track, signalling and telecommunication, ventilation, air-conditioning, automatic fare collection, depot and other systems and facilities required for a successful metro link.

The Public Private Partnership Appraisal Committee (PPPAC) on November 21, which was constituted in January 2006 under the chairmanship of secretary, economic affairs in the ministry of finance, has so far approved 87 projects with a total cost of Rs 89,891 crore. The committee has so far approved 77 highway projects, six infrastructure projects, two airport projects and one each in tourism infrastructure and railway sectors.

The highway development projects approved by the PPPAC include six laning of Kishangarh-Udaipur section at Rs 3,076.38 crore, Vijaywada-Eluru-Rajmundray section at Rs 2,426.65 crore and Chilkaluripet-Nellore section at Rs 2,163.90 crore.

In addition, the committee has approved six-laining, four-laining and development of various other sections of highways in Bihar, Kerala, Tamil Nadu, Haryana, Andhra Pradesh, Gujarat, Uttar Pradesh, Orissa and Rajasthan. The approval assumes significance as the government is trying to fight economic slowdown by stepping up investment in the infrastructure sector projects.

The government on Sunday approved a stimulus package that seeks to increase government expenditure by Rs 20,000 crore mainly in infrastructure projects like highways, rural roads and ports.