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Infrastructure & PPPs in India - Q3 2021 Update - Transport and Urban Infra

INDIA is a very active market for infrastructure development & PPPs in Asia. Within transport and urban infra sector, there is a great momentum on greenfield asset development and re-development as well as monetization of existing assets. With large project developments, the financing is an important element, and bankability of such PPP concessions will be a significant factor for successful project implementation.

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

 

July 2021

INDIAN STATE PLANS ELEVATED BUS CORRIDOR PPP

The Telangana state government in southern India is planning an elevated bus rapid transit system (BRTS) in a public-private partnership (PPP). Estimated to cost INR 24Bn (USD 322Mn), the approximately 18km corridor will connect a financial district in Gachibowli, a suburb in Hyderabad city, to the Kukatpally Housing Board Colony.

There will be stations at every half kilometer, which will also be elevated but at a lower height than the BRTS. The state is aiming to call for bids in FY 2021-22 and is hoping it can turn operational in about two years.


NHAI SEEKS CONSULTANT FOR MULTIMODAL STATION

The National Highways Authority of India (NHAI) is seeking a consultant to prepare a project report to develop a multimodal station at Katra town in Jammu & Kashmir. The study will be used to help bid out the construction of the first phase of the terminal, after which the consultant will need to assist in the procurement process.

The project will be built in two phases, the first stage will include the development of the terminal, a public zone, and associated facilities, while the second stage will focus on commercial development. The station needs to be designed as a world-class passenger movement facility and should be a hub for interconnecting disparate inter-city, regional and local public transport systems.

The Indian government has approved the construction of multimodal transport and logistics hubs within Delhi and in the national capital region, notably in Noida. In January 2021, the Indian Railway Stations Redevelopment Authority received 10 applications from both foreign and Indian investors in response to a call to redevelop Mumbai's main railway station as a multimodal transport hub.


INDIAN RAILWAY AUTHORITY SEEKS PROPOSALS FOR STATION REDEVELOPMENT

India’s main railway stations development company is seeking prequalification proposals for projects to redevelop two facilities in Gujarat state. The total area to be developed is 10,78,219 sqm, with an estimated cost of INR 12.85 Bn (USD 172.6 Mn).

The revamp will be taken up in a public-private partnership (PPP) with an aim to transforming the facilities into multimodal hubs – points of interconnection between different transportation systems – as well as places to live and work through mixed-use real estate development.

The Indian government aims to privatise the redevelopment of railway stations across the country, with 125 facilities included in the programme so far. Of this, the IRSDC is working to invite bids for 63 stations while another government entity - the Rail Land Development Authority - is working on the others. The government estimates the total investment, along with real estate development, at over INR 500Bn.


August 2021

INDIA’S LAKSHADWEEP SEEKS DEVELOPERS FOR ISLAND VILLAS

India’s Lakshadweep islands called for bids to develop villas in an INR 8.06Bn (USD 108.3Mn) public-private partnership (PPP). The design, build, finance, operate and transfer (DBFOT) project will be located across the Minicoy, Kadmat and Suheli islands, and must comply with requirements for five-star rated properties as defined by India’s Ministry of Tourism.

The concession duration is 75 years, including three years of construction. The project will be awarded to the bidder offering the highest concession fee. A federal-administered territory in the Arabian Sea off the coast of Kerala sate, Lakshadweep is an archipelago of 36 islands. The proposed Maldives-styled water villas - or bungalows that are supported by stilts sitting in water - will be the first of their kind in India.

The scope of work includes the development of supporting infrastructure such as a water and sewage treatment plant, roads and drainage, power distribution, street lighting and solar power generation facilities.


MADHYA PRADESH INVITES BIDS FOR AERO SPORTS PPP

An aviation authority in India’s Madhya Pradesh state is seeking bids for a project to develop and operate an aero-sports and aviation academy in a public-private partnership (PPP). The project, which will carry a 15-year concession, will include associated aircraft repair and maintenance facilities. The bidders will have to provide cost estimates.

The academy will have to provide facilities for micro-light aircraft, motor and powered hang gliding, hot air ballooning, powered parachutes, skydiving, parasailing, and paragliding. It will also have to offer helicopter and aircraft training and have the resources to test for and award commercial pilot licenses.


INDIAN PORT TO PRIVATISE BERTHS

Indian central government-owned Jawaharlal Nehru Port Trust (JNPT) has appointed S&P Global’s Indian arm CRISIL as the transaction adviser for the privatisation of two berths. One is a general cargo shallow water berth commissioned in 2002. It is 445 metres long and can handle vessels with an overall length of up to 183 meters with draught of up to 10 metres. It has capacity of 4.5 million tonnes.

The other berth is dedicated to coastal shipping for domestic goods and is meant to decongest rail and road networks. It was trialled by after completing construction in November 2020. It can handle about 2.5 million tonnes of coastal cargo such as break and dry bulk. It has a back-up area of 11 hectares for storage. JNPT plans to set up silos to store cement, helping turn around vessels faster.

About 60% of the country's freight movement occurs on its roads network while domestic shipping routes - along India's approximately 7,500km coastline - account for less than 10%. India aims to privatise INR 5trn (USD 67Bn) worth of infrastructure assets in the next four years, saying that the country’s top policy planner has asked all ministries to identify a list of assets that can be sold to investors.


ZURICH AIRPORT SECURES FINANCING FOR INDIA PROJECT'S FIRST PHASE

Zurich Airport International’s India project subsidiary signed a financing agreement for the Indian capital region's second international airport. Yamuna International Airport raised INR 37.25Bn (USD 500Mn) from the State Bank of India. The debt, which will be repaid over a 20-year period, will have a year-long moratorium from the time the facility starts operating. The project has a debt-to-equity ratio of 65:35.

The financing signed is for the first of four phases, estimated to cost CHF 650Mn (USD 704Mn). The total cost of the airport at the end of the fourth phase is estimated at INR 296Bn. Zurich International signed the shareholders’ agreement to develop and operate the airport. It won the bid in 2019 with a fee of INR 400.97 per passenger. The company, the main shareholder of the project vehicle, will invest INR 20.05Bn as equity.


IFC PLANS LOAN TO INDIAN PORT OPERATOR

The International Finance Corporation (IFC) is considering lending up to USD 30Mn to Indian port terminal operator Kandla International Container Terminal (KICT). The company, which owns and operates two container berth terminals on the shores of the Kandla Creek on the west coast of Gujarat state, will use the money to refinance existing debt for the berths and fund an upgrade of the terminals.

The company will increase the container handling capabilities of the terminals by 0.15 million twenty-foot equivalents (TEU) from 0.6 million TEUs. The project is estimated to cost USD 32m and the remaining amount will be invested by KICT.


NORTH INDIAN CITY PLANS ROPEWAY PPP

The local administration of Varanasi district in India's Uttar Pradesh state is planning a ropeway project in a public-private partnership (PPP). To be located in Varanasi city, and also the district headquarters, the ropeway will connect a busy marketplace, Godowlia, with the Cantonment Railway Station, which is a distance of approximately 5km.

The project will cost an estimated INR 4.3Bn (USD 58Mn). The Varanasi Development Authority will call for bids before the end of the year 2021. This is a pilot project, and if successful, will be extended further to Khidkiya ghat. Ghats in Varanasi are riverfront steps leading to the banks of the river Ganges.


NHAI SEEKS PROPOSALS FOR TOT HIGHWAY AUCTIONS

The National Highways Authority of India (NHAI) is seeking investors for three highways totaling 341km that it has packaged into two bundles to be awarded in the toll, operate, transfer (TOT) model.

The authority published two requests for proposals: One for a 135km road called the Eastern Peripheral Expressway spanning the states of Uttar Pradesh and Haryana, and another for two roads, each in Maharashtra and Odisha. The stretch in Maharashtra is 139km long and runs from Borkhedi village to the Telangana state border. The highway in Odisha is 67km and connects the state capital of Bhubaneshwar to the coastal resort town of Puri.

All concessions are for 20 years and the NHAI will not publish the minimum bid values it expects for the assets until after it opens the financial proposals. In the TOT model, the NHAI offers operational highways to investors for an upfront amount in exchange for the right to collect toll for a pre-determined period. The model allows the authority to recycle assets and raise funds that it uses to build new highways.


GOA SET TO AWARD CONVENTION CENTRE PPP

The Goa state government will award a contract next week to a joint venture between local firms DCS Ltd and Vascon Engineers to build a convention centre in a public-private partnership (PPP). The cost of the first phase of the project is estimated to be about INR 8Bn (USD 107Mn). The state received two bids.

The convention centre - to be built in the design, build, finance, operate, transfer (DBFOT) mode - will host the annual International Film Festival of India, as well as other national and international exhibitions. It will include a main hall with 5,000 seats, a hotel, and a retail mall. Details of the second phase will be decided after the facility starts operating. The concession period for the project is 30 years.


DELHI METRO SEEKS BIDS FOR CENTRE AND CARPARK PPP

The Delhi Metro Rail Corporation called for bids to set up a knowledge centre and an adjoining car park in a public-private partnership (PPP). The 3,000 sqm centre will showcase Metro construction, operations and technological and engineering developments and will be located within the Vishwavidyalaya Metro station. The car park will cover 2,800 sqm.

The project will carry a concession of 31 years and six months, including a construction period of one and a half years. The building will be two-storied and include an additional parking area, a museum, seminar halls, a multimedia theatre, a simulator room, and a library. There will also be a commercial area comprising of a restaurant and bar, a café, a souvenir shop, and a plaza.

The museum portion of the building will be taken over by the Delhi Metro Rail Corporation after the concessionaire completes construction. The commercial area, including two basement parking levels and the adjoining carpark will remain with the concessionaire to operate and maintain throughout the concession.


September 2021

STATE AUTHORITY UPEIDA TO SEEK BIDS FOR USD 4.95BN HIGHWAY

An Indian state authority is preparing to call for revised bids for a greenfield project to develop the INR 362.3Bn (USD 4.95 Bn) Ganga Expressway. The Uttar Pradesh Expressway Industrial Development Authority cancelled an earlier process for the 594km project after potential bidders requested changes to the bid document published in March 2021.

Some of the amendments have been included in the new request for proposal RFP. The authority had shortlisted 11 companies in January at the prequalification stage. The project will carry a concession period of 30 years, including about 36 months for construction.


MEINHARDT WINS CONTRACT TO PREPARE INFRA BLUEPRINT FOR AGRA

Singapore-headquartered Meinhardt Group has been chosen to prepare an infrastructure blueprint for India’s Agra city - the location of the Taj Mahal. The contract will be awarded after the Agra Development Authority obtains approval from the Uttar Pradesh state government.

The authority first asked for proposals in May 2021. It received just two bids and called for applications again in July. The assignment involves the preparation of a master plan for the next three decades and identifying projects of importance that can be developed through private sector participation.

The consultant will have to map all the tourist attractions in the city, paying special importance to world heritage sites. It will also assess the city's infrastructure gaps and propose the development of civic facilities for water supply, sanitation, wastewater treatment, solid waste management and solar energy.


HIGHWAY AND LOGISTICS AUTHORITY SEEKS CONSULTANT FOR ROPEWAY STUDIES

A highway and logistics authority are looking for a consultant to prepare detailed reports to develop ropeways in Uttarakhand state in northern India. National Highways Logistics Management has identified a tentative list of four projects totaling 16.2km in the picturesque hill state which shares a border with Tibet on its northern side and with Nepal in the east. It is located at the foothills of the Himalayas.

The scope of the assignment covers the study of different ropeway technologies, current and demand assessment for 30 years, cost estimate and financial modelling, economic analysis, social and environmental studies, identifying and preparing a land acquisition plan, readying bid documents, and evaluating project risks.


DELHI MUNICIPALITY PLANS MULTI-LEVEL CAR PARKS IN PPP

The North Delhi Municipal Corporation plans to build multilevel parking facilities in four locations in public-private partnerships (PPP). The bids will be taken through an online tendering system.

Concessionaires will have to spend a minimum of INR 6.88Bn (USD 93.6Mn) on the facilities, the four locations proposed are Bank Street at Ajmal Khan Road, Old Rajinder Nagar, Shastri Park, and Pusa Lane. All are in the Karol Bagh zone, a popular shopping and residential area.

Of the total developed space, 75% has to be handed back to the municipal corporation and the concessionaire will be able to levy parking charges on the remaining. The builder will also be allowed to construct commercial spaces such as malls and shops that it can provide on lease, adding that these will be the main source of revenue.


INDIA'S IRB INFRASTRUCTURE AWARDED 20KM GREENFIELD HIGHWAY

IRB Infrastructure Developers has been awarded a 20km, six-lane greenfield project in India’s Tamil Nadu state. The Mumbai-based company put in a winning bid of INR 8.44Bn (USD 114.4Mn) for the stretch between Pondavakkam and Kannigaipair villages in Tiruvallur district.

The development is part of the longer 26km, greenfield highway between Chittoor and Thatchur, which has been divided into four packages, to be constructed in the hybrid annuity model. The road will be designed for speeds of up to 100km per hour and is envisaged as an alternative to an existing route that is congested.

 

List of key transactions - Transport and Urban Infra - India


List of Upcoing Projects - Transport and Urban Infra - India

Source: Inframation, YOG INFRA analysis

 

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