Search

Infrastructure & PPPs in India - Q12021 Update - Transport



This is second publication on a 2-part insight series

INDIA's transport sector, mote notably roads, has attracted private capital (both under PPP model and by institutional investors like pension funds). Roads sector has seen multiple new entrants under the Hybrid Annuity Model (HAM) which has favorable risk allocation due to defined cash flows in terms of annuity payments to private sector. Besides roads, we see increasing private sector participation in ports, airports and railways in line with the National Infrastructure Pipeline (NIP) announced by Indian government to boost economic development through infrastructure.


Read more about key developments in Infrastructure and PPPs in Q12021 in India in transport sector in our latest insight.

Jan - 21

INDIAN STATE ROADS BUILDER SEEKS CONSULTANT FOR LAND ACQUISITION

The government-owned roads builder in India's Maharashtra state called for bids from consultants to help it acquire land for a public-private partnership (PPP) project. The 178km Pune Ring Road will be a design, build, finance, operate, transfer (DBFOT) project. It has been revived after a gap of nine years. It did not go ahead with the project due to land acquisition problems due to which the route was changed.

The proposed road will serve the upcoming Chhatrapati Sambhajiraje Pune International Airport and will be built at a cost of about INR 140BN (USD 1.9BN). The MSRDC needs to acquire more than 2,000 hectares of land for the ring road project.


INDIAN AUTHORITY PLANS USD 2.9BN URBAN ROAD PROJECT­

An urban development authority in India’s Bengaluru city in Karnataka state invited global proposals to build an INR 210BN (USD 2.9BN) road project in a public-private partnership (PPP). The 65km project will likely carry a 30-year concession. The local government will also include an option to extend the concession to make it commercially feasible for the project’s concessionaire. The project is planned as a ring road encircling Bengaluru and will have eight lanes including lanes for pedestrians, cyclists, and a tree corridor.


ADANI PLANS CARGO AND LOGISTICS FACILITIES IN INDIAN STATE

Indian conglomerate plans to develop an air cargo complex and a multimodal logistics park in Gujarat state. The company signed a memorandum of understanding (MoU) with the state government. The park is proposed to be spread over 1,450 acres and will be connected to an upcoming industrial corridor via rail, adding that the government would like to have the project operational in 2023. The park will include facilities such as warehousing as well as an air freight station. The air cargo complex will also include a 4.6km runway. The state government expects the park will attract investments of about INR 500BN (USD 6.86BN).


INDIA'S WELSPUN TO SELL HIGHWAY PORTFOLIO INQ2 2021

Indian infrastructure developer Welspun Enterprises will offer a portfolio of five highway projects to investors in Q2 2021. The projects have a total value of INR 62BN (USD 850MN).

The company has five projects total 528km and are spread across the three states of Uttar Pradesh, Uttarakhand and Maharashtra, and the union territory of Delhi. All the projects were awarded under hybrid annuity model. The Mumbai-based infrastructure developer, part of textiles-to-energy conglomerate Welspun Group, had an order book of INR 53.5BN at the end of December 2020. Revenue fell 13.4% on-year to INR 4.65bn due to the limited availability of workforce and supply chain disruptions even after the end of the coronavirus-related lockdown.



Feb - 21

NINE SHORTLISTED TO REDEVELOP NEW DELHI RAILWAY STATION

Nine companies including Anchorage Infrastructure Investments Holdings, GMR Highways and Adani Railways Transport have been shortlisted to redevelop India's New Delhi Railway Station. The other companies are ISQ Asia Infrastructure Investments, Arabian Construction, BIF IV India Infrastructure Holding (DIFC), Kalpataru Power Transmission, Omaxe and Elpis Ventures.

Proposed to be developed in the design, build, finance, operate and transfer (DBFOT) model, the redevelopment requires a capital expenditure of around USD 680MN and offers multiple revenue streams to the developer, including revenue from real estate rights. It needs to be completed in around four years from the date of award and carries a concession of 60 years.

The station has a master plan area of 120 hectares, of which 88 hectares is being planned in the first phase. The RLDA is the approving authority for the plan. The authority is currently working on the redevelopment of 62 stations in a phased manner, while its subsidiary, Indian Railway Stations Development Corporation, has taken up 61 stations. In the first phase, the RLDA has prioritized prominent stations like New Delhi, Tirupati, Dehradun, Nellore, and Puducherry for redevelopment.

Stations across India are to be redeveloped in a public-private, partnership (PPP) as part of the government’s Smart Cities mission launched in 2015. The mission is an urban renewal and retrofitting program that aims to develop smart cities across the country, making them citizen-friendly and sustainable.


INDIAN ROADS MINISTER APPROVES HIGHWAY PROJECTS

Indian Minister for Road Transport and Highways has approved the development of two greenfield highway projects to be built in the public-private partnership (PPP) mode.

The projects are:

  • A 24km stretch between the Korlam and Kantakapalle villages costing INR 7.7BN (USD 106.5MN); and

  • A 19.5km stretch estimated at INR 8.24BN between Kantakapalle and Sabbavaram town

Approval for the projects, which form part of the six-lane, 464km greenfield Raipur-Visakhapatnam economic corridor. The highway aims to improve connectivity between central and southern India to facilitate freight movement and boost exports. It is part of the government’s flagship Bharatmala road building programme, which will construct 9,000km of economic corridors across India.


DP JAIN AND PEER MONTECARLO WIN TWO INDIA ROAD TENDERS:

Indian infrastructure developers Montecarlo Ltd. and DP Jain & Co Infrastructure have emerged as the lowest bidders for two public-private partnership (PPP) highway projects. Ahmedabad-based Montecarlo proposed INR 11.88BN (USD 162.3MN) for a 24km stretch between Gudipala village in Andhra Pradesh state and Walahjapet town in Tamil Nadu.

The company has won two other contracts: an INR 12.28BN project to widen a 38km stretch between the union territory of Puducherry and Poondiyankuppam village in Tamil Nadu state, and an INR 10.13BN bid for a 29km project between Puducherry and Villupuram town in Tamil Nadu. The NHAI is expected to step up awarding activity from March 21 till the end of the year 2021. The NHAI handed out 2,423km of national highway projects from April through 2020. In the fiscal year through March 2020, it awarded 3,211km, up from 2,222 km in the previous 12 months.



Mar - 21

INDIAN STATE CALLS FOR BIDS FOR GREENFIELD PPP EXPRESSWAY

A state roads development authority in northern India called for request for proposals (RFP) from shortlisted applicants for the greenfield Ganga expressway.

The Uttar Pradesh Expressways Industrial Development Authority (UPEIDA) has published four separate RFPs for the project after dividing its construction into different packages. The cumulative construction costs amount to INR 221.25BN (USD 3.05BN).

Bidders offering to pay the highest revenue share will be offered the project stretches. In case none of the applicants offer to share revenue, they will be awarded to the company seeking the lowest financial grant. To be built in the design, build, finance, operate, transfer (DBFOT) model, concessionaires will be responsible for the designing, financing, engineering, and construction as well as operations and maintenance of the expressway.

The expressway will connect Meerut-Bulandshahar in the National Capital region to Prayagraj, a metropolis in Uttar Pradesh state. The concession will be awarded for 20 years.


IRB INFRASTRUCTURE AWARDED INDIAN HIGHWAY UPGRADE PPPS

India's IRB Infrastructure Developers has won two highway projects in the country, to be developed in a public-private partnership (PPP). One of the projects – estimated to cost INR 24.21BN (USD 330.5MN) – will be constructed in the build, operate, transfer (BOT) model. The 68.3km stretch is between Dankuni town and Palsit village in West Bengal state and needs to be upgraded to six lanes from four lanes at present.

The Mumbai-based infrastructure developer will pay 10.8% of its annual revenue to the National Highways Authority of India (NHAI), starting a year after the completion of the project. The revenue share will increase by a percent every year for the duration of the concession, which is 17 years from the start of construction. This is the second time the project has been tendered.

IRB also won a project to be developed in the hybrid annuity model involving an upgrade of an existing road to four lanes between Pathankot city and the town of Mandi in Himachal Pradesh state in northern India. The company proposed a cost of INR 7.78BN for the 28.7km stretch, including operations and maintenance over a 15-year concession period.



INDIAN PORT AUTHORITY TO REPUBLISH EOI FOR GREENFIELD PROJECT:

A port trust authority in India’s Tamil Nadu state will republish a call for expressions of interest (EOI) for a greenfield transshipment port. The timeline to submit applications for the earlier document lapsed on 20 March.2021 The port trust authority did not receive any EOIs.

VOCPT had asked for EOIs to set up a deep-draught greenfield port in Kanyakumari district in Tamil Nadu state, capable of handling 6.5 million 20-foot equivalent units (TEU). A cruise terminal was also proposed. On 15 March 2021, the port authorities received a letter from the district collector warning of a law-and-order situation as local fishermen were opposed to the project.


KCC BUILDCON EMERGES LOWEST BIDDER FOR INDIA HIGHWAYS

Infrastructure company KCC Buildcon has emerged as the lowest bidder for two highway projects that will be awarded by India's federal roads authority. The Gurugram-based firm proposed INR 11.19BN (USD 153MN), beating 14 other companies for a greenfield project that requires the construction of a 30.6km, four-lane road between the national capital New Delhi and Katra in Jammu and Kashmir.

The National Highways Authority of India (NHAI) also opened bids for a 17.5km stretch to be constructed as part of the four-lane greenfield Bangalore-Chennai expressway for which KCC Buildcon proposed INR 8.63BN. The authority had estimated the cost for the project at INR 6.91BN.


LOCAL DEVELOPERS EMERGE LOWEST BIDDERS FOR INDIA ROAD PROJECTS

Three Indian privately held infrastructure developers have emerged as the lowest bidders for national highway projects in Maharashtra state. Gujarat-based Kalthia Engineering & Construction proposed INR 10.07BN (USD 138 MN) for a 67.23km stretch between Bodhre village and Dhule city, beating 19 other bidders.

For the second project, which has a length of 41.61km and is located between Ahmednagar city and Mirajgaon village, a joint venture of Anish Infracon and GHV (India) edged 10 other bidders with a proposal of INR 6.29BN, lower than the reserve price of INR 6.4BN estimated by the National Highways Authority of India (NHAI).

The third project - a 38.77km stretch between also between Ahmednagar and Mirajgaon - had 10 companies bidding for it, with the lowest bid of INR 6.05BN coming from GHVI India Pvt. Ltd.

List of key upcoming projects - Transport - India



Source: Inframation, YOG INFRA analysis

ABOUT YOG INFRA

YOG INFRA is an infrastructure focused financial advisory firm committed to support sustainable economic growth driven through infrastructure development. We have our offices in Singapore and India.

We work globally with Development Finance Institutions (DFIs), Private Sector and Government Agencies; and have a strong focus on Asia.


For more information about us, our service offerings and team, please visit www.yoginfra.com Contact us at info@yoginfra.com


©2021 YOG INFRA. All rights reserved.

#infrastructure #update #PPP

43 views0 comments