Tag Archives: National highway

Impetus on PPP models to fast track the infrastructure projects: Jitin Prasada

Posted on by Track2Realty

indian real estate news, realty news india, india property news, india infrastructure news, track2realty, track2media, ravi sinha, Infrastructure development, National highwayTrack2Realty: Government is coming out with new PPP models to fast track infrastructure projects, said Jitin Prasada, Union Minister of State for Road Transport and Highways, while inaugurating the Conference on Infrastructure Project Management, organised by Confederation of Indian Industry in New Delhi on Thursday, Sep 20.

“Our main emphasis is to build solid road network and good quality highways. In India out of a total of 4.1 million kms of Indian roads, just 2% is National Highway which bears 40% of total traffic in India. Over 4000 kms of roads would be built under the Operate Maintain Transport (OMT) & Engineering, Procurement and Construction (EPC) model”, he added. He also shared government’s plan of increasing the budget for Infrastructure Development in the 12th five year plan from 500 bn to 1 trillion.

Dr T C A Anant, Secretary and Chief Statistician of India, Ministry of Statistics and Programme Implementation, GoI, shared that “Government has directed that most of the infrastructure projects should be through PPP mode and private companies would play an important role in the overall Infrastructure Development of the country”. He further added that there are considerable important steps taken by government to mitigate the risk in project being taken up and shared the example of DMRC as the best example of project management in India.

Anshuman Magazine, Conference Chairman & CMD, CBRE South Asia felt that proper Infrastructure Project Management is one of the important challenges the industry faces today, in view of the massive infrastructure development which will take place in India for the next 20 years at least. He highlighted some of the recent successful developments in Infrastructure in last few years like Delhi Metro, Delhi Airport, etc and the need to increase the share of such quality project across the country.

Ajay Shriram, Vice President, CII and Chairman & Managing Director, DCM Shriram Consolidated Ltd. stated that “Urban Infrastructure projects provide great scope of growth in India. At present, infrastructure projects worth over 17,000 Crore are underway across India and as these are completed, it would soon lead to better standards of living and higher economic growth. “Government’s efforts to enhance PPP have yielded results. Industry is giving more and more importance to Project Management to face various challenges and achieve highest possible efficiency standards”, he added.

Other eminent speakers at the conference were Amit Bose, Vice President, Pepsi Co, Amit Gover, National Director, DLF, Syed Moinuddin, Senior Director – Corporate Real Estate-APAC, Aon Hewitt, R Shankar Narayan, Head – Corporate & Strategic Planning, L&T Ltd and Mr Ashok Rastogi, Senior General Manager, BPTP India. These speakers were from all diverse backgrounds and industries ranging from contractors to clients to developers; thereby presenting a comprehensive gamut of opinions and ideas at the conference.

MACQUARIE SBI Infrastructure Fund leads $US150 million investment into Ashoka Concessions Limited’s toll road portfolio

Posted on by Track2Realty

indian real estate news, realty news india, india property news, india infrastructure news, track2realty, track2media, ravi sinha, Infrastructure development, National highwayThe Macquarie SBI Infrastructure Fund (MSIF) has announced the completion of an investment into Ashoka Concessions Limited (ACL) for $US150 million1 (INR8 billion), along with a co-investor, the SBI Macquarie Infrastructure Trust (SMIT).

The seven toll roads portfolio held in ACL, the subsidiary of Ashoka Buildcon Limited (‘ABL’), is approximately 630 kilometres (3,018 lane kilometres) and represents a balanced mix of operating and under construction toll roads. Of the seven roads, six are part of the national highway network and one is a state road.

The investment will be used to develop the under construction road projects in ACL. MSIF is a $US910 million private equity fund focused on investing in infrastructure projects in India, and is managed by Macquarie SBI Infrastructure Management Pte. Limited (“MSIMPL”) in Singapore.

SMIT, MSIF’s co-investor, is a $US260 million2 (INR 11.9 billion) private equity fund focused on investing in infrastructure projects inIndia, and is managed by SBI Macquarie Infrastructure Management Private Limited (‘SMIMPL’) in Mumbai, India.

Suresh Goyal, Chief Executive Officer of SBI Macquarie Infrastructure Management, the adviser to MSIF’s manager said, “This transaction, the sixth MSIF has completed to date, continues the successful execution of MSIF’s investment strategy. MSIF invests in high quality assets in partnership with leading domestic companies that provide attractive risk adjusted returns on a portfolio basis.”

ABL is one of India’s leading road development companies and currently owns and operates 20 road projects on a Public Private Partnership (PPP) basis. ABL has a strong track record in the execution of various road projects and with an established management team, is well positioned to participate in the growth of India’s road network in the coming years.

Upon completion of this investment, MSIF’s portfolio will comprise six investments with total capital invested of approximately $US640 million3, including investments in telecom towers, airports, power generation and renewable energy. Including coinvestors, MSIF will have led the deployment of approximately $US840 million into infrastructure projects in India over three years.

MSIF’s acquisition of its interest in ACL is subject to customary closing conditions.

Xander to invest Rs 240 crore in HCC Concessions

Posted on by Track2Realty

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India PropertyInfrastructure development, National highwayUS-based investment firm Xander Group will invest Rs.240 crore in construction and civil engineering major HCC Infrastructure. HCC has reportedly agreed to dilute 14.5% stake in HCC Concessions. At present HCC has invested Rs.650 crore and additional investments of Rs.350 crore will be required in FY12 and FY13.

The company has six NHAI ((National Highway Authority of India)) concessions worth Rs.5,500 crore or $1.2 billion, of which one is an annuity project and five are toll roads.

This deal is the second known investment of the Xander Group in the Indian roads and highways space. Last year, it had invested Rs.400 crore in Sadbhav Infrastructure Project (an infra player primarily involved in roads and highways development), along with Norwest Venture Partners.

The Xander Group Inc. invests in infrastructure, hospitality, retail and real estate sectors, and has committed over $1.8 billion of equity in India across five dedicated India funds since 2005.

There have been a slew of big private equity deals in the Indian roads and highways space as investors look to tap the upcoming infra opportunities. India may require $1.7 trillion in the decade starting from 2010, to meet the country’s overall infrastructure demand and keep pace with the economic growth and urbanisation, a report by Goldman Sachs has stated. Of this, power and roads alone may require upwards of $700 billion.

Daiwa MF bullish on infra-space, but averse to realty

Posted on by Track2Realty

indian real estate news, realty news india, india property news, india infrastructure news, track2realty, track2media, ravi sinha, Infrastructure development, National highwayWith the government planning to invest a trillion dollars in the infrastructure space during the 12th Plan period, leading Japanese mutual fund house Daiwa is betting on the sector with a long-term view in mind.

“We have to get back to the infrastructure space. That has to be the space in India for the next couple of decades. But minus the infrastructure space, the growth story is going to take a hit in this market,” Daiwa Asset Management India Chief Investment Officer Sethuram Iyer told PTI.

He says the fund house would like to cherry pick its stock across the different sectors, for the short-term, but would be averse to do so in the realty space.

“As of now, most sectors look promising…the market has corrected across the board. Now it has moved down to individual stocks. We feel individual companies will do better than their respective sectors. It is going to be a completely bottomed-up kind of a market in the near term,” he said.

Daiwa India AMC, which has Rs 244 crore worth assets under management as of end March, is likely to keep away from investing in the stocks of real estate companies, though.

“Real estate has always remained a taboo for us. Real estate and interest rate-sensitive sectors need to be watched carefully,” Iyer cautioned.

He, however, pointed out that one could look at selectively investing in auto stocks and said the interest rate-neutral sectors such as pharma would be a better option.

Mirroring global peers, the domestic markets have been choppy since the beginning of this calendar year. Since the market barometer Sensex touched the life-time high of 21,1005 on November 6, it has been on a down hill rise.

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.