Global biggies rush to invest in roads

[Yusuf]

NEW DELHI: Several global funds and equity investors are making a beeline for investing in the highway sector, a move that will free up thousands of crores for Indian developers - funds that were held up in the absence of a government decision to allow existing players to exit immediately after completing the project.

Sources said Uniquest Infra Ventures, the joint venture between Malaysian government sovereign wealth fund Khazanah Nasional Berhad and IDFC, alone has expressed interest in buying stake in nearly a dozen road projects.

Similarly, SBI Macquarie Infrastructure Fund has discussed the possibility of investing up to Rs 20,000 crore in projects that are nearing completion. Tata Realty is eying four projects, while Morgan Stanley is entering the space too. Sources said Morgan Stanley is in talks for buying into KMC Constructions, which is getting all its road projects under one company. Morgan Stanley is also buying a 15% stake in the Surat Hazira project.

In addition, the Canadian Public Sector Pension Board is acquiring interest in the special purpose vehicle executing the Panipat-Jalandhar highway project, said a source familiar with the developments.

For projects awarded after 2009, there is no restriction on companies to buy into projects that have been in operation for over two years. The National Highways Authority of India (NHAI) is now pushing for allowing developers to offload equity as soon as the project is completed. The change is being pushed in a way that it will also impact projects awarded before 2009, when the rules were last changed to allow for stake sale immediately after completion.

Just when NHAI got all government agencies to agree to the move, the department of economic affairs put a spanner but sources said it has been over-ruled by finance minister P Chidamabaram. Now, the highway developers are awaiting the final guidelines before going ahead with the transactions.

"It will not only free up capital for Indian developers but increase overseas participation. In addition, the Indian players will have resources to bid for new projects and help revive interest in the sector," said a top government official.

Several Indian companies that are linked to politicians from Andhra Pradesh, former Jharkhand chief minister Madhu Koda and ex-BJP president Nitin Gadkari would especially benefit from the move as banks have been reluctant to lend to them after allegations of their ties surfaced.
Global biggies rush to invest in roads - TOI Mobile | The Times of India Mobile Site

 

[DivineHeretic]

Which means I might just get a job.....
:thumb:

 

[Ray]

The problem is land acquisition.

 

[arya]

the main problem was govt will power , they did not wanted to carryforward nda work.

Well now they have to change there mind

 

[Yusuf]

Which means I might just get a job.....
:thumb:

Looks like you are a road contractor! Use proper material and make good roads. Best of luck!!

 

[Yusuf]

The problem is land acquisition.

Land acquisition is not a problem but the politicizing of it and creating issues out of it is. Like we saw in West Bengal by Mamta.

In Bangalore, the govt paid handsomely for land for the metro project. So much so that many people bought properties along the corridor and some land sharks actually tried to get metro to pass through their lands!

 

[Ray]

Land acquisition is not a problem but the politicizing of it and creating issues out of it is. Like we saw in West Bengal by Mamta.

In Bangalore, the govt paid handsomely for land for the metro project. So much so that many people bought properties along the corridor and some land sharks actually tried to get metro to pass through their lands!

I have worked with the Rural Development Ministry.

One of the biggest drawbacks to get any project going is Land and its acquisition.

The Govt rates are way lower than the real commercial rate.

In WB, of course, it is a story that one need not elaborate since it is too well known.

You are right that it requires political will.

I was seeing a clip on the TV where they showed how the Sabarmati has been cleaned up and the banks developed aesthetically. Amd they also showed the filth in the Jammuna where shovelling in money has been a total waste.

 

[DivineHeretic]

Looks like you are a road contractor! Use proper material and make good roads. Best of luck!!

Nope. Civil Engineering Student.

 

[satish007]

Roads building need money and hardworking workers, Chinese have first and Indian have some of second items.
Give us some contracts please

 

[Yusuf]

Roads building need money and hardworking workers, Chinese have first and Indian have some of second items.
Give us some contracts please

Chinese companies are already doing roads in India.

 

[arya]

Roads building need money and hardworking workers, Chinese have first and Indian have some of second items.
Give us some contracts please

well its china fault they are giving important to Pakist then india , China can earn lots of thing by changing its policy ..

They should not be anti india .. Win win for both

 

[Yusuf]

The focus of the Indian Government on infrastructure development especially in the surface transport sector has prompted construction companies from the world over to take notice. In a recent press release, Jatin Prasada, the Minister of State for Road Transport and Highways said that Chinese construction firms have expressed their interest to invest in road projects in India. With the government allowing for 100% of direct foreign investment in road development projects in India, companies from across the world can compete in the bidding process for road projects announced by the ministry.

Chinese construction firm, Jiangsu Provincial Transportation Engineering Group Co. Ltd, in collaboration with some Indian companies joined the bidding process for highway projects in the Indian states of Jammu and Kashmir and Bihar. The bidding was opened for the highway projects of Srinagar-Banihal, Udhampur-Ramban, Jammu-Udhampur in Jammu and Kashmir and Piprakothi-Motihari-Raxaul in Bihar. In 2011, the ministry had announced twin strategic tunnel projects of Quazigund-Banihal and Chenani-Nashri in the state of Jammu & Kashmir which would connect Jammu and Kashmir with the rest of India through all-weather roads. According to the ministry, security clearances for the Chinese construction firm have been obtained.

Putting aside strategic issues, the Ministry of Road Transport and Highways of India had agreed with its Chinese counterpart to sign a Memorandum of Understanding in 2010 for jointly working on highway constructions in India, technology transfer and the creation of investment opportunities for highway constructions. An India-China Highways Investment Forum was also proposed to be set up for construction companies, investors and developers.

Chinese road construction firms have performed brilliantly in building highways and roads in their home country. There is no doubt that China has built far more and better infrastructure than India in the same time. While awarding road contracts in India has been slow, China could build nearly 10,000 kms of highways in a year. Chinese firms have also successfully demonstrated their expertise in building roads in Kenya and Afghanistan.

Collaboration with Chinese construction companies for the construction of highways may uplift the project in several ways. Chinese road construction companies have built superior infrastructure in China as well as in other parts of the world as mentioned previously. India stands to gain from the superior technology and equipments used by Chinese firms in the process of constructing roads. On-time project completion is another major factor that puts Chinese companies ahead of Indian road construction companies.

It is as important to maintain the roads and highways as it is to build them. Maintenance of the constructed roadways and highways depends on the strategic model used such as PPP or Public Private Partnership model, BOT or Build Operate and Transfer model, etc. For the first time, the ministry has awarded the contract for the Banihal tunnel project under a PPP model. It is also the largest road tunnel project in India. With the PPP model, the risk is shared between the government and the private construction company. While Chinese construction companies have very good experience and come with little or no corruption as opposed to their Indian counterparts, it remains to be seen how well the projects awarded in Jammu and Kashmir and Bihar work out.

China's interest in Indian road development projects | India Transport Portal

 

[VIP]

Land acquisition is not a problem but the politicizing of it and creating issues out of it is. Like we saw in West Bengal by Mamta.

In Bangalore, the govt paid handsomely for land for the metro project. So much so that many people bought properties along the corridor and some land sharks actually tried to get metro to pass through their lands!

It's about policy, in Gujarat, govt has such handsome policy that there's no problem of land acquisition but you can't say same for other states, even in Gujarat before Modi, land acquisition policy was so poor that nobody wanted to give land. I know it because my father is a govt employee. He told me all about this.

 

[Coalmine]

Land acquisition troubles are generally created by opposition parties like tmc. They create a big mess out of some unwilling farmers and everything go downhill.