Tag Archives: Brigade enterprises

Land only for expressways, not realty

Posted on by Track2Realty

By: Ravi Sinha

Infrastructure development, Purvankara, Phadnis, Brigade enterprises, National highway, indian real estate news, realty news india, india property news, india infrastructure news, track2realty, track2media, ravi sinhaIn view of the farmers agitation in Greater Noida, the surface transport ministry is learnt to have taken a U-turn from its earlier stand of facilitating land acquisition for both infrastructure development and real estate projects. Track2Realty has learnt that the ministry has decided to give infrastructure developers only land for paving expressways and not for real estate development along the corridor.

Transport ministry has proposed that land for laying the expressway will be acquired by the government and handed over to the developer as is the general practice in highways. However, the developer will have to acquire land adjoining the pre-decided entry/exit points on the expressway for realty development himself.

Expressways are high-speed corridors that are access-controlled (pre-determined entry and exit points) to ensure safety and speed consistency. The recent unrest at a Greater Noida village over land acquisition for the 165km Yamuna expressway connecting Delhi and Agra seems to be the trigger for the central government’s move. Villagers clashed with the authorities demanding higher compensation for land. The Uttar Pradesh government has given land rights to develop 6,000 acres to the Jaypee Group.

According to a study conducted by the National Highways Authority of India (NHAI), the investment per km in expressway will be to the tune of Rs.25 crore a km, compared with Rs.7-8 crore a km in case of the highways.

The transport ministry, which still does not have a funding model ready for the ambitious expressway development plan, has also approached the National Innovation Council, a body appointed by the prime minister under the chairmanship of Sam Pitroda, for suggesting revenue enhancement models.

The panel, on its part, has suggested measures like exploiting advertisement opportunity on the corridor as well as construction of state-of-the-art wayside amenities having internet as well as video game parlours.

The ministry’s ambitious expressway plans have hit a roadblock owing to lack of an appropriate funding model. It planned to award expressways spanning 18,000 km by 2022. For the first phase till 2012, it had planned to award eleven greenfield expressways connecting 3,140km.

However, none of them has kicked off. Even bidding for six expressways in the phase VI of National Highways Development Programme is not in sight. Despite this, transport minister C P Joshi has added two more to the list, Delhi-Jaipur and Delhi-Chandigarh.

South Indian realtors eyeing booming infra sector

Posted on by Track2Realty

Infrastructure development, Purvankara, Phadnis, Brigade enterprises, National highway, indian real estate news, realty news india, india property news, india infrastructure news, track2realty, track2media, ravi sinhaNearly four years back when the real estate market was at its peak all the developers tried to diversify into other greener pastures. However, in their quest to diversify and route the funds into other greener pastures most of them burnt their fingers following the market slowdown. Now the trend seems to have reversed at least among the realtors in South India.

The otherwise over cautious real estate companies in South India are slowly entering the infrastructure segment by setting up subsidiaries to cash in on the emerging opportunities in this space.

Presently, most of these subsidiaries handle the EPC (engineering, procurement and construction) work of their parent companies and are building capacity by hiring professionals even as they are forming separate teams to take care of their future assignments.

Bangalore-headquartered, Brigade Enterprises has recently floated a subsidiary, Brigade Power and Infrastructure Ltd to enter into the infrastructure sector. This infra entity would concentrate on power and road projects within the infra vertical, he added. He, however, declined to give a time frame for bidding for new projects under the road and power verticals.

Similarly, Puravankara Projects has a wholly-owned subsidiary namely Starworth Infrastructure to bid for infrastructure projects. “We have entered the infrastructure space as we see a lot of value in this sector in the coming times. Presently, our infra wing helps us to manage a lot of backend work,” Ravi Puravankara, chairman of Puravankara Projects, said. He also said the company was building capacity to bid for infra projects in the near future. “Rural infrastructure like roads and bridges are pretty much in our radar for which Starworth will bid in future,” he added.

Talking of the rationale behind the realtors foray into the infrastructure space, experts believe with the kind of infrastructure spending proposed over the next decade, there are ample of opportunities that will come our way. Also, there are a lot of operational synergies.

India is expected to spend around $1 trillion on infrastructure during the 12th Five Year Plan (2012-17) which is likely to open up numerous opportunities for private players under the public-private partnership model.

Some of the industry watchers feel that the higher capital expenditure is holding back many developers from entering this space.