HYBRID ANNUITY MODEL
First section of Varanasi ropeway to be ready by August 2024
India's first urban ropeway project, the Varanasi Ropeway Project, is set to complete a section linking Varanasi Cantonment Railway Station to RathYatra by August 2024, under the National Ropeways Development Programme, 'Parvatmala Pariyojana'.
Ind-Ra expects stable operating performance for most infrastructural projects in FY25
India Ratings and Research (Ind-Ra) anticipates stable operating performance for infrastructure projects this financial year, maintaining a stable outlook for the sector, especially in transportation. It assigned a positive outlook for airports, indicating potential rating upgrades. Ind-Ra expects the power sector's installed capacity to reach 476 GW by FY25. Toll roads may see a growth moderation, and ports are projected to grow at 6-7%.
Revamping of BOT model is tactical move to attract private capex: Ind-Ra
India's government is revamping the built-operate-transfer (BOT) model to attract private capital, which is expected to surpass Rs 1 trillion by 2030. The government has successfully implemented 400 Hybrid Annuity Model road projects worth over Rs 4 trillion in the past seven years, balancing risk between private and public partners. The government's focus on monetization via the National Monetisation Pipeline has attracted foreign investors.
Govt evaluating RBI proposal for higher infrastructure provisioning; bankers, NBFCs voice concern
Lenders may oppose the draft rules, which proposes provisioning of up to 5% from current 0.4%, due to concerns over rising interest rates and potential disruption to capital expenditure. Banks plan to lobby against the steep increase, arguing it could affect project viability and economic momentum. State-owned NBFCs and infrastructure firms are also raising concerns, emphasizing the need to balance risk and support for infrastructure financing.
Road construction in India to witness 7-10% slowdown in FY25 due to challenges in execution: CareEdge Ratings
Road construction in India is expected to slow down by 7-10% in FY 2024-25, with daily construction dropping to 31 km from 34 km in FY 2023-24, due to challenges in execution. Delays in receiving appointed dates and complexities in projects contribute to a longer completion cycle, hindering infrastructure development.
Road execution to grow 5-8 per cent in FY25 to 12,500-13,000 km: Icra
India's road construction is expected to grow 5-8% this year to 12,500-13,000 km, driven by government investment and project completions, rating agency Icra said. A healthy project pipeline exists despite awarding delays in FY24. EPC remains the dominant contracting method, it added.
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Road ministry amends model concession agreements for BOT and TOT projects
Some of the key amendments for capacity augmentation on BOT, aimed at incentivising the private sector, include construction support to the concessionaire to complete projects on time and longer tolling period to tide away losses on account of competing roads.
Highways Ministry identifies 53 road projects worth Rs 2.1 lakh crore
The Ministry of Road Transport and Highways (MoRTH) will come out with a modified build-operate-transfer (BOT) project document in the next one month to attract private companies for investments in the highways sector, the statement said.
NHAI to amend model concession agreement for BOT projects
The move is aimed at removing discrepancies in built-operate-transfer (BOT) projects and attract investments from the private sector as it aims to bid out 53 projects worth over Rs 2.2 lakh crore and covering a length of 5200 km under BOT.
CDPQ, Actis vie for Ashoka Concession's BOT road assets
Ashoka Buildcon holds 66% stake in Ashoka Concessions, with SBI Macquarie holding the rest. SBI Macquarie had invested Rs 800 crore in Ashoka Concessions in 2012 through Macquarie-SBI Infrastructure Fund. Once the deal is materialised, SBI Macquarie will get an exit, receiving about ₹1,200 crore.
Govt eyeing shift to BOT as private cos show interest in roads sector: Nitin Gadkari
The Indian government plans to bid out road projects worth over ₹2 lakh crore through the build-operate-transfer (BOT) model by March 2024. This shift from the engineering, procurement, and contract (EPC) model will encourage private players to build high-quality roads that they will be responsible for maintaining for 15 years.
National Highways to be pothole free by December this year: Nitin Gadkari
The ministry of road transport and highways plans to shift from engineering, procurement and construction (EPF) model to build-operate-transfer (BOT) model and the hybrid annuity model (HAM) for government projects as the maintenance responsibility lies with the contractor in BOT mode. However, this will be applicable for projects above Rs 500 crore while the EPC mode will continue for construction of small patches.
Gadkari asks officials to prepare road map for projects worth Rs 3 lakh crore for immediate execution
The direction came after the Union minister of road, transport and highways (MoRTH) reviewed the performance of the regional officers of the ministry as well as projects carried out by National Highways Authority of India (NHAI) and National Highways & Infrastructure Development Corporation Ltd (NHIDCL) in the national capital.
Highway building gathers pace in Q1
Highways would have been constructed at a faster pace but for the irregular rains, said officials. Sector watchers said the upcoming state assembly elections in December could also cause some delays once the model code of conduct for the polls kicks in.
Sekura in talks to buy Ashoka Buildcon's $670 million road assets
"Sekura has started diligence on these roads," one of the sources said. "Ashoka's portfolio is one of the bigger HAM portfolios available and hence it had evinced interest from multiple players," the person said. The portfolio is expected to fetch an enterprise value of close to ₹5,500 crore with equity value of up to ₹1,300 crore, he added.
KKR unit plans to buy road assets from PNC for $1 billion
Private equity firm KKR's Highways Infrastructure Trust is in talks to buy a 12-road project portfolio from construction firm PNC Infratech for an enterprise value of $1.1bn. The deal would see KKR acquire 11 HAM roads and one BOT road located across the Indian states of Uttar Pradesh, Madhya Pradesh and Rajasthan. Seven of the 12 road projects are already operational, while the others are expected to become so within the next three to four months.
KKR and Sekura among companies in fray for Ashoka's road assets
"While many HAM assets are on sale in the market, they are small two-three asset portfolios. Ashoka's portfolio is one of the biggest HAM portfolios available and hence it has seen interest from multiple players such as KKR, Edelweiss, Cube as well as Shrem," said one of the people.
Centre brings uniformity in smoothness of national highways
Roughness of a road is measured in millimetres per kilometre (mm/km) a lower value means smoother driving experience. It has been decided that roughness for a flexible pavement road is desirable at 2000 mm/km and acceptable to 2400 mm/km. For a rigid pavement road, the desirable roughness has been fixed at 2200 mm/km and acceptable is 2400 mm/km.
NHAI road award in H1 FY'23 drops 60%: Crisil
The state-owned road building agency has floated tenders worth about 2,200 km so far this fiscal, which is 36 per cent higher than the corresponding first half of the last fiscal.
IRB Infrastructure Developers offers Vadodara Kim Expressway to IRB InvIT Fund
The company, in its board meeting, has approved the preliminary non-binding proposal for transfer of the said project to the IRB InvIT Fund, which is a publicly offered and listed Infrastructure Investment Trust, sponsored by the company.
Welspun Enterprises bags Rs 4,636-cr order from civic body BMC
Part of the Welspun Group, Welspun Enterprises is a infrastructure development company with specialisation in road and water projects under the Hybrid Annuity Model (HAM) and via large-value Engineering, Procurement and Construction (EPC) contracts. It also undertakes Build-Operate-Transfer (BOT) projects. In the highway sector alone, the company has successfully completed six BOT (Toll) Road projects with a total length of over 500 km.
Government allows ownership change for BOT toll projects after one year of operations
The Ministry of Road Transport and Highways (MoRTH) has approved changes in Model Concession Agreement (MCA) of Build-Operate-Transfer (BOT-toll) projects, permitting the change of ownership from existing two years to one year after Commercial Operation Date (COD), according to an office memorandum.
Huge market available for surety bonds in India: NHAI member
Addressing an event organised by industry body Assocham, NHAI member Manoj Kumar further said the NHAI is working to expand the construction market because "as a country, we had a certain level of construction capability in a strategic manner by having contracts of various sizes".
Karnataka High Court stays retro tax call on annuity to infra companies
A host of summons have been issued by the GST authorities since the issuance of clarification after the GST Council decided to exempt toll payments from GST.
CII makes case for replacing bank guarantees with surety bonds in infra sector
CII urged the government to consider replacing bank guarantees with surety bonds and also develop the municipal bond market so that urban local bodies can raise funds for investing in infrastructure.
NHAI to double down on road project awards in second half
The pace of awarding is expected to more than double in the second half of the current fiscal year compared with 1,900 km in the first six months.
NHAI extends bidding deadlines for Rs 50,000 crore projects
While new bids will continue to be invited, postponement of existing bid deadlines could hurt the authority’s target of awarding about 2,500 km of road projects in the first quarter of FY22.
Another infra boost: Road projects may see easier exits, frequent milestone payments
The Ministry of Road Transport and Highways has made changes to the concession agreement for projects built on the hybrid annuity mode (HAM), permitting exits in six months as opposed to two years earlier.
Changes to hybrid annuity model will help protect returns for road project developers: Icra
Currently, the prevailing low bank rate is expected to reduce the overall inflows for a HAM project thereby adversely affecting its debt coverage metrics and returns to the investors, the rating agency said in a statement.
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