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Infrastructure & PPPs in India - Q1 2022 Update - Transport and Urban Infra

YOG INFRA Q1 2022 insights

INDIA's transport and urban infra sector developments have seen first-of-kind an innovative PPP projects - these include riverfront PPP, transit oriented developments around LRT PPP, air tourism PPP etc. This is in addition to transport PPPs with a greater focus on greenfield logistics and connectivity projects. Some of the innovate PPPs have a potential for scalability and pilot projects will provide successful precedent transactions.

Read more in our latest insight for the country.

This is second publication on a 2-part insight series on India

 

January 2022

DP WORLD TO BUILD JAMMU & KASHMIR DRY PORT

Dubai-based DP World will build a dry port in India's Jammu & Kashmir. Representatives of the multinational port and logistics operator will soon visit the 101ha site set aside for the inland facility.

DP World runs six port terminals in India, apart from free trade warehousing zones and a logistics network comprising of container freight stations and cold storage facilities. The Dubai government signed a memorandum of understanding with the Jammu & Kashmir administration in October 2020 to develop facilities including industrial parks, logistics and hospitals.


PRAKASH ASPHALTINGS HIGHEST BIDDER FOR STRESSED BRIDGE PROJECT

Prakash Asphaltings & Toll Highways (India) has emerged as the highest bidder for a stressed bridge project in the country's south. The company's offer of INR 4.25 Bn (USD 56.7 Mn) for Gammon India's Rajahmundry Godavari Bridge (pictured) beat Kochi Aroor Tollways' proposal of INR 3.8 Bn and Kalyan Toll Infrastructure's INR 3.6 Bn, as well as PNC Infratech's INR 3.26 Bn. The lowest bid was GR Infraprojects' INR 2.6 Bn.

Prakash Asphaltings' proposal offers to repay INR 4.14 Bn to the project's creditors, which is 44.8% of their disclosed claims of INR 9.24 Bn.

All bidders also proposed to provide the creditors 50% of the proceeds that the bridge project may receive from an ongoing arbitration with concession authority Andhra Pradesh Road Development Corp (APRDC).

The asset's committee of creditors will vote on the bids next week, adding that Prakash Asphaltings is proposing to pay its entire amount within six months of its plan being ratified by the Mumbai bench of the National Company Law Tribunal (NCLT). The tribunal is a quasi-judicial body that adjudicates on matters involving corporate companies.


INDIAN STATE TO BUNDLE REAL ESTATE WITH LRT PPP

India’s Andhra Pradesh state is likely to offer about 250 acres of land for development to participants in a light rail transit (LRT), public-private partnership (PPP). The corporation is planning an INR 143 Bn (USD 1.9 Bn) LRT network comprising of four corridors with a total length of 77km. Most of the bundled land is in the suburbs, a small amount is also alongside the LRT route.

The project has an internal rate of return of about 14%, the state government is looking at ways to ensure private participation when the bid documents are published.


INDIAN STATE PLANS WILDLIFE TOURISM PPP

The tourism board of India’s Madhya Pradesh state is planning an INR 5 Bn (USD 67 Mn) wildlife tourism public-private partnership (PPP). The Madhya Pradesh Tourism Board intends to establish a wildlife air safari covering four tiger reserves.

Government-approved commercial hot air balloon operator SkyWaltz Balloon Safari currently runs the service, The Tourism Board has about 10 other projects in its pipeline. These are mostly for setting up hotels, resorts, and convention centres and some of these will be tendered out this year.

The central Indian state has five national parks, six tiger reserves and more than a dozen sanctuaries, some of which are well-known tourist destinations.


INDIAN STATE NEARS TRAMWAY FINANCING DECISION

India’s Andhra Pradesh state is planning a tramway system in the coastal city of Visakhapatnam along the beach corridor.

The corporation estimates the cost of the project at INR 59.9 Bn (USD 809 Mn), adding that the cost of acquiring land, rehabilitation and resettlement, and environmental management will be an additional INR 2.5 Bn. The project has been planned as a catenary-free modern tramway comprised of three corridors adding up to a little more than 61km, the network could be extended to the suburbs in its second phase.


INDIA'S ANDHRA STATE TO SEEK BIDS FOR AIRPORT PPP India’s Andhra Pradesh state will call for bids to develop a new airport within the next two months. The corporation estimates the cost of the airport to be about INR 3.5 Bn (USD 47 Mn).

The aerodrome will be located at Dagadarthi in Nellore district and is the state’s second attempt at constructing the facility.

The APADCL signed a concession agreement in June 2018 with the SCL-Turbo Consortium comprising a local company and French airport operator Groupe ADP’s subsidiary ADP Ingénierie.

The consortium could not secure financing and volunteered to withdraw from the project, which was accepted by the state government in 2020.

The land meant for the project was not fully acquired so banks were not willing to finance the project. The issue has since been resolved with land acquisition almost complete.


NHAI HIGHWAY AUTHORITY OF INDIA HAS INVITED AND AWARDED VARIOUS PROJECTS UNDER HAM

The National Highways Authority of India (NHAI) has invited proposal as well as awarded various highway projects under Hybrid annuity mode. The name, location and status of the projects are as follows:



February 2022

CUBE AND ADANI AMONG BIDDERS FOR INDIA HIGHWAY CONCESSION

Singapore-headquartered Cube Highways and Infrastructure, and Indian developers Adani, DP Jain and Prakash Asphaltings and Toll Highways (India) have bid for a highway concession in Maharashtra state.

The 20-year concession is for a 139km stretch between Borkhedi village and the Telangana state border. The NHAI is offering the asset in the toll, operate, transfer (TOT) model in which investors pay an upfront amount in exchange for the right to collect tolls for a pre-determined period. The model allows the authority to recycle assets and raise funds that it uses to build new highways. The NHAI called for bids for the highway along with another 67km road in Odisha state in August 2020. The second project was dropped as it has low toll revenue.

This is the eighth auction in the TOT model since the NHAI first sold a bundle of nine roads to Macquarie in early 2018 for INR 96.8 Bn (USD 1.3 Bn) for a 30-year concession. It awarded another nine assets to Singapore-based Cube Highways in November 2019 for INR 50 Bn.


ADANI LOWEST BIDDER FOR INDIA BOT HIGHWAY CONTRACT

The Adani Group has emerged as the lowest bidder for a project to upgrade a 67km stretch of road in Maharashtra state to six lanes from four. Adani offered to share 15.57% of the project’s revenue, beating the second-highest proposal of 15.5% by IJM India, the local subsidiary of Malaysian infrastructure conglomerate IJM Corporation.

The two other bidders, GR Infrastructure and IRB Infrastructure Developers, offered a much lower share of revenue. The project’s cost is estimated to be INR 20 Bn (USD 265 Mn). The contract will be handed out in the build, operate, transfer (BOT) model with a concession period of 20 years.

The stretch lies on National Highway 4, which connects Kagal town to Satara city.


INDIA CITY AUTHORITY PLANS USD 2.7 BN PPP ROAD PROJECT

The Bangalore Development Authority aims to complete land acquisition and secure environmental approval for a INR 206 Bn (USD 2.7 Bn) public-private partnership (PPP) road project, by the end of this year. The authority will issue a final notification in about two months for the land it needs to acquire after which it will host a mandatory public hearing, and then seek environmental clearance.

The approximately 70km Peripheral Ring Road will connect Hosur Road in southern Bengaluru to Tumakuru Road in the north-west and is meant to ease congestion. The concessionaire will need to bear the land acquisition cost of INR 150 Bn in addition to the cost of construction of INR 56 Bn. To compensate for the extra burden, the state government has approved the extension of the concession period to 50 years from the usual 30.

The authority needs to acquire about 1,000 hectares for the project.


March 2022

INDIA'S PUNE MUNICIPAL CORPORATION PLANS PPPS

The Pune Municipal Corporation (PMC) in India's Maharashtra state will adopt a public-private partnership (PPP) model for most projects that it plans for the 2022.

These include a hospital to treat cancer, the second phase of a riverfront development project, 13 urban roads and another alongside the Mula-Mutha river connecting the areas of Kondwa and Mundhwa.

An Indian state authority has received two bids to develop a INR 150 Bn (USD 2Bn) greenfield port project but will continue accepting proposals till 14 March. The two bidders so far are Adani Ports and Special Economic Zone, India’s largest ports operator by capacity; and JSW Infrastructure, the infrastructure arm of the Mumbai-based conglomerate JSW Group.


INDIAN STATE RECEIVES TWO BIDS FOR GREENFIELD PORT PPP

An Indian state authority has received two bids to develop a INR 150 Bn (USD 2 Bn) greenfield port project but will continue accepting proposals till 14 March. The two bidders so far are Adani Ports and Special Economic Zone, India’s largest ports operator by capacity; and JSW Infrastructure, the infrastructure arm of the Mumbai-based conglomerate JSW Group.

The project, to be located in Purba Medinipur district, will be built in the design, build, finance, operate and transfer (DBFOT) model, with a concession of 99 years.

 

List of key transactions - Transport and Urban Infra - India


Source: YOG INFRA analysis

 

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