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Transport & Logistics News

World Bank agrees to support PPP highways - 03 Dec 2009 -

DNA India

New Delhi: The World Bank has agreed to support the government's public-

private partnership (PPP) programme in the highway construction sector.

Hitherto, the international funding agency's exposure was limited to

government-funded road projects

"World Bank has agreed to look at funding in our viability gap and annuity

projects, which was not the case before. So we are identifying new areas of

cooperation and looking forward to institutional support," road transport and

highways minister Kamal Nath said after a meeting with World Bank chief

Robert Zoellick, who is here on a visit.

Viability gap, or the amount the government pays to a private sector

highway developer to make the project viable, is an essential component in a

PPP project. In annuity mode of highway construction, a developer gets paid

half-yearly by the National Highways Authority of India for the capital cost

incurred by him.

The government has also sought the agency's support for mega road

projects. "The World Bank is keen to deepen its engagement in infrastructure,

particularly the road sector. We are also looking at institutional support inbest practice. We are looking at World Bank assisting us in formulation of our

mega projects," said Nath.

"We have proposed working with the International Finance Commission (IFC)

for our expressways plan right from the beginning to figure out what will be

viable projects for us because it is new to us. And we want to take the

advantage of the experience of World Bank and the IFC not only in terms of

their financial resources but also sharing with them the wide spectrum of

issues they have dealt with globally," said Nath.

The road is being prepared for frictionless collaboration on PPP projects with

the World Bank. "There are two aspects of the World Bank assistance on PPP

projects. A technical assistance programme will be held in December this

year relating to the best global practices on VGF. Secondly, for technical,

financial and legal issues related to the expressways, we will closely interact

with the Bank whole of next year," transport secretary Brahm Dutt said.

On the $3 billion loan the government is negotiating with the World Bank,

Nath said, "We are working with the Department of Economic Affairs for World

Bank assistance for converting our 6,000 km one-lane highways to two-lanes.It is at an advanced stage." "The plan for two-laning of single lane highways
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has been sent to the World Bank for scrutiny. Detailed progress report for

upgrade of 4,000km has already been prepared by the ministry," Dutt said.

As for the finance ministry's reservations on the quantum of the loan, Nath

said, "The $3 billion loan is over a period of time. Obviously, there are so

many projects in India from social sector and other areas. We may take it intranches."

Extensive reforms in roads a must: Deepak Parekh - 03 Dec

2009 -

Economic TimesMUMBAI: HDFC Bank chairman Deepak Parekh has called for extensive

reforms in the road sector, including setting up of an independent

regulator and removal of ceiling on returns for the private sector investmentin highway projects.

Speaking at an IDFC Investor Conference on Monday, Mr Parekh, who is also

the chairman of IDFC, said: Institutional reform of National Highway

Authority of India is essential to make it more effective, and enhance its

capacity to undertake the public-private partnership projects. Some of the

measures that may be considered are appointment of independent directors,

decentralisation of operations by devolving more powers to regional offices,

and strengthening its internal cadre.Describing the present pace of road-

building in India as anaemic, Mr Parekh said significant time delays occur inthe bidding process.

India has one of the worlds largest highway development programmes to be

implemented on a PPP basis. Under the National Highway Development

Project, the government has taken up the target of constructing more than

54,000 km of highways. At present, around 20% of the target has been

completed at the rate of 3 kms a day. The other four-fifth is targeted for

completion in the next five years at the rate of 20 kms per day or about 7,000

kms a year.

Achieving such ambitious targets against the anaemic pace of highway

development over the past 2-3 years will entail eliminating major constraints

to PPP in roads. One of the primary reasons for the slowdown was the

premature attempt to control the private sector returns on road investment

by capping the upside revenue potential due to higher-than-projected actual

traffic, he said.

Going forward, this programme would rely heavily on the private sector

funding. Combine this with the fact that there is a proven track record of

public-private partnership in the roads sector through the toll and the annuitymodel, and it becomes very clear that the roads sector provides tremendous
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opportunities that no can afford to miss - may he be a contractor, a banker, or

an investor, said Mr Parekh.

Pvt equity funding for rail coach factories mooted - 24 Nov 2009 -Steelguru.com

Mr E Ahamed Minister of State of Railways informed the Rajya Sabha thatExpert Committee headed by the FICCI President Dr Amit Mitra hasrecommended setting up of rail coach factories by accessing privateequity funding.

The Minister said that The first set of recommendations of the ExpertCommittee headed by Dr Amit Mitra has been received. Theserecommendations inter alia relate to setting up of multi functional

complexes across Indian Railways by bringing in appropriate PrivateEquity, development of world class stations over Indian Railways throughPublic Private Partnership mode and setting up of locomotive and railcoach factories through joint venture/private equity models.

The minister said that the recommendations of the Expert Committeehave been accepted and action for the implementation of the same hasbeen initiated.

Column : How to pay for roads and airports : [Shyamala Shukla] -

17 Nov 2009 - The Financial Express

Indias public-private partnership (PPP) programme in infrastructure hasacquired substantial size over the last few years. To fill the gap in publicinfrastructure investments, the government created future obligations inthe shape of the PPP programme, which started with a large annuity-based road sector programme. The government committed a part of itsfuel cess for 25-plus years for payment of annuity and for facilitatingadditional borrowing by NHAI. In addition, various clauses of concessionagreements in user fee-based PPPs were framed such that thegovernment undertook guarantees to lend comfort to investors and

lenders entailing substantial levels of future payments contingent uponspecified events. These are off-balance sheet.

The findings of a study on infrastructure financing that commercial banks,with public sector banks as major contributors, have provided a large partof debt financing so far have additional implications for the governmentsfiscal management, especially because many of these institutions arecharacterised by substantial government interests. Out of the totalavailability of debt financing for infrastructure in the Eleventh Plan of$206.38 billion, almost 70% would come from domestic bank credit, non-

banking financial institutions and pension/insurance companies, againmany would be institutions with government interests.
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Considering the model concession agreements (MCA) for the road,railways (container), urban metro and port sectors currently in use, thetransmission service agreements and the share purchase agreements ofthe power sector and limited clauses of the draft MCAs for the airport and

railway sectors, the contingent liabilities of the authority are in threemajor categories: compensation for change in law, penalties for authoritydefault and termination payments, of which the first and the third aremore important.

The concessions in different sectors provide coverage for change in lawwith minor differences. For the road sector, for example, theconcessionaire is to be compensated if aggregate financial effect exceedsthe higher of Rs 10 million or 0.5% of realisable fee.

The basis for termination payments in all agreements is the debt due orbook value or replacement value. A partial answer to the obvious questionon why the GoI did not consider market value as a basis lies in the level ofcomfort demanded by lenders. The substitution agreement which formspart of the concession agreement states that: Lenders are entitled toreceive from the concessionaire, without any further reference to orconsent of the concessionaire, the debt due upon termination of theConcession Agreement.

This means that government, through termination payments, isessentially paying its banks or itself. Bluntly, it means that private debt

will almost fully be paid for by government should the private sector fail todo its job. Over the course of time, with more financing coming from othersources, the situation would change, but the prospects of large contingentliabilities are indeed alarming.

A draft World Bank report, GoI: Managing the fiscal implications of PPPs,states that GoIs exposure to PPP termination payments is approximatelyRs 40,000 crore ($10 billion, 1% of GDP in 2007) with current value ofobligations at about 1% of the exposure, which is relatively low at present.Under similar assumptions, we can calculate somewhat loosely that thecombined exposure of 17 state governments could be around $16 billion

and additional exposure of GoI and the state governments combinedcould increase by approximately $50 billion in the next five years.

PPP experts in GoI have suggested the notion of Net ContingentLiabilities based on the reasoning that most PPP projects are monopolies;services rendered cannot be replaced and demand inelasticity will keeprevenue streams intact. On termination, the asset reverts to governmentand a new operator can be procured. Therefore, net contingent liabilitywould take into account the current value of the asset and the NPV ofearnings for the remaining period. This reasoning has an obvious flaw: a

project with intact revenue streams would probably not requiretermination.


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An institutional framework for controlling contingent liabilities wouldconsist of investment planning, sector strategy, adequate project design,risk appraisal involving other than line ministries, risk sharing, limitingcontingent liabilities overall, disclosure, separate promotion and oversight

functions, tracking variables impacting probability of termination, trackinglifetime budgetary implications of PPPs and creating a reserve fund forcalled liabilities.

The author is working as advisor to Indias executive director, at TheWorld Bank. These are her personal views...

Railways make committee to promote PPP projects - 21 Nov2009 - PTI

Mumabi, Nov 21 (PTI) Indian railway has set up a committee toformulate strategies for faster implementation of public-privatepartnership (PPP) projects, Railway Minister Mamata Banerjeesaid.

"We have set up a committee, which will look after the projectsunder public-private-partnership. This committee will look afterthe speedy implementation of PPP projects in railways," Banerjeesaid after inaugurating the 15-car trains here.

The government decided to set up the committee with a view totake up PPP projects at a faster pace, besides reducing the timetaken to clear project proposals to three months, she said.

"The proposal under PPP should be cleared within three months.We also have to make investments in innovative ideas," theminister said.

Railways plans to raise Rs 1,00,000 crore under the 11th five-yearplan to develop rail infrastructure under the PPP across thecountry, Banerjee said.

Report of Railways Expert Committee --Rajya Sabha - 20 Nov2009 - Press Information Bureauhttp://pib.nic.in/release/release.asp?relid=54327The first set of recommendations of the Expert Committee headed by Dr.

Amit Mitra has been received.These recommendations inter alia relate tosetting up of multi-functional complexes across Indian Railways by
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bringing in appropriate Private Equity, development of world class stationsover Indian Railways through Public-Private Partnership (PPP) mode, andsetting up of locomotive and rail coach factories through JointVenture/Private Equity models. Recommendations of the ExpertCommittee have been accepted and action for the implementation of the

same has been initiated.This information was given by the Minister of State in the Ministry ofRailways, Shri E. Ahamed in a written reply in Rajya Sabha today.

Byappanahalli to have SWRs biggest station - 04 Nov 2009 -Expressbuzz.com -

BANGALORE: South-Western Railways will be constructing a world classrailway station that can handle around five lakh passengers every day at

Byappanahalli, shortly.

The Railway Board recently approved the plan for the proposed railwaystation which will be the biggest in the zone. This station will have thecapacity to handle around 100 pairs of trains.

At present, Bangalore city railway station is the biggest railway station inthe city and it can handle around 1.5 lakh passengers every day.

The railway station will be designed to become a nodal point as it can beeasily connected to all the major railway routes in the region. The

concerned railway authorities and other state government agencies aremaking plans to provide easy access to the other modes of transport likeBMTC and Metro for the passengers from the railway station. Provisionswould be made to connect both Yeshwantpur and Bangalore City railwaystations from the new railway station.

At present both Yeshwantpur and Bangalore City railway stations arehandling more passenger traffic than their capacity and it is not possibleto introduce new trains from these stations.

On an average, seven to eight new trains are introduced to the city everyyear and the new railway station is expected to meet the needs of the cityfor another 15 years.

South-Western Railways Chief Administrative Officer S Vijay Kumar said,"For the first time in the history of the Indian Railways, this railway stationwill be constructed on publicprivate partnership basis. According to ourestimates it will cost Rs 400 crore for laying the tracks and other railwayworks in the station. It may cost much more to provide passengeramenities and services. Indian Railways is planning to develop 16 suchrailway stations in different parts of the country.
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Logistic hubs to dot freight corridors - 19 Oct 2009 - BusinessStandard

http://www.business-standard.com/india/news/logistic-hubs-to-dot-freight-corridors/373624/

Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) has decidedto develop four multi-modal logistic hubs through public-privatepartnership (PPP) along the dedicated freight corridors, by 2018.

This move will facilitate smoother transport of goods in the region. Spreadover 300-1,000 acres, the logistic parks will be set up in Navi Mumbai,Ahmedabad, Rewari (Haryana) and Kanpur.

The first such facility will come up in Rewari, where preliminary work has

already begun.

We have signed a memorandum of understanding with the HaryanaState Industrial and Infrastructure Development Corporation (HSIIDC). Wewill subsequently form a special purpose vehicle (SPV) with HSIIDC toregulate the concessionaire when the project is awarded, DFCCILManaging Director V K Kaul said.

HSIIDC will assist DFCCIL in acquiring land for the project, which will be setup on 1,000 acres. While DFCCIL will compensate for about 50 per cent ofthe expenses for land acquisition, the remaining expenses will be borne

by HSIIDC.

The private operator in this project is expected to invest around Rs 900crore in phases to develop the facilities at the Rewari logistic park. Thetotal expenditure of setting up the park is still awaited.

Infrastructure Leasing & Financial Services Ltd, or IL&FS, has beenappointed as consultant to finalise the location and the details of theinfrastructure at the site, taking into account the traffic projections. IL&FSwill also assist in preparation of bidding documents, the concessionagreement and in selection of the concessionaire for the project.

P N Shukla, director (operations and business development), DFCCIL, said:We want to commission the logistic park in Rewari along with the firstphase of the freight corridor. Rewari is located at a strategic juncture, witharms connected to Delhi, Ludhiana, Tughlakabad and Dadri. We areworking to develop the project quickly.

DFCCIL has entered into a similar agreement with the Gujarat StateIndustrial and Infrastructure Development Corporation to constructanother such facility in Ahmedabad. Feasibility studies are also on to set

up logistic parks in Kanpur and Vapi (Maharashtra).
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The multi-modal logistic parks would house rail sidings with sheds, largeinland container depots, warehouses for storage, office buildings forlogistic operators and assembly units for processing raw materials forexport.

Such state-of-the-art integrated logistic facilities, with mechanisedhandling and intelligent inventory management at strategic locations, areseen as a medium to reduce the overall logistics cost in the supply chainfor customers by leveraging the high-capacity rail connectivity of thededicated freight corridors.

Tuticorin Port lines up Rs 1690 cr projects - 18 Jan 2010 - Business

Standard

http://www.business-standard.com/india/news/tuticorin-port-linesrs-1690-cr-projects/382914/

Move aimed at increasing cargo handling capacity

The Tuticorin Port Trust (TPT) is planning to award projects worth Rs 1,690 crore over the

next two years. The proposed investment would enable the port to increase its cargo

handling capacity by another 20 million tonnes.The port handled 22.41 million tonnes of

cargo last year and had set a target of 22.81 million tonnes for the current financial

year. Speaking to Business Standard, GJ Rao, chairman, TPT, said that over the next two

years the port would take up projects worth Rs 1,690 crore, of which some would be

through the public private partnership (PPP) mode.The port had called for tenders todevelop North Cargo Berth III, which will be given on a built, operate and transfer (BOT)

basis. The project is likely to attract investment worth Rs 332 crore.

On January 18, it has invite tender for dredging work on the main channel and across all

the berths inside the port. TPT is planning to increase the draft to 12 mt from the current

10.7 mt with an investment of around Rs 400 crore. The port in the next 48 months

would develop a second container terminal inside the premises with an investment of Rs

312 crore. The capacity of the project would be 600,000 twenty foot equivalent units

(TEUs) a year.

The other projects include a construction of a Rs 65 crore shallow berth for handling

construction equipment. Once these projects are complete, it would add another 20

million tonnes to the port traffic, said Rao. This apart, the port is planning to invest in

rail and road connectivity at a cost of Rs 200-250 crore. Though this will not increase

the capacity, it will help the trade since the logistics system will improve, said Rao.

Nod for Rs 3686 crore terminal at Chennai port - 12 Jan 2010 -Business Standard
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http://www.business-standard.com/india/news/nod-for-rs-3686-crore-terminal-at-chennai-port/382360/

The public private partnership appraisal committee has given its nod for the proposed Rs3,686 crore mega container terminal at Chennai port. The port trust is likely to award the

project by March this year. Chennai Port Trust chairman Subhash Kumar confirmed thedevelopment and said nine companies had shown interest in the project, of which eightqualified. By the end of this month or early February, the port would call for request forproposal and by March we would place the order, he said.

The project would be developed in phases between 2013 and 2018. Upon completion,the total capacity of the mega container terminal will be 4 million twenty foot equivalentunits (TEUs) per annum. Of the total cost, Rs 963 crore would be spent for breakwaterconstruction, Rs 500 crore for berths, Rs 360 crore towards dredging and Rs 124 crore forreclamation, he said. The port would contribute Rs 561 crore.

Chennai port currently has two private container terminal operators -- Dubai World andPSA Sical. The two operators are likely to handle around three million TEUs per annum bythe end of 2013, he said. The companies that evinced interest in the proposed terminalare: L&T Transco Pvt Development Project Ltd, Chennai; Navayuga Engineering Co Ltd,Chennai; DP World Pvt Ltd, Mumbai; IL&FS Maritime Infra Co Ltd, Mumbai; Vadinar OilTerminal Ltd, Mumbai; Mundra Port & SEZ Ltd, Ahmedabad; Lanco Infratech Ltd,Hyderabad; FGI Group of Companies, Malaysia, and GVK-Leighton Consortium, Mumbai.FGI Group failed to qualify.

Railways devise strategy to utilise their land bank better - 11 Jan2010 - Financial Chronicle

http://www.mydigitalfc.com/plan/railways-devise-strategy-utilise-their-land-bank-better-724Railways will embark on a major campaign to better utilise the land bank that is in itspossession. It will dovetail the budget announcements made in this regard by therailways minister Mamata Banerjee. The railway board has given four months to thegeneral mangers (GMs) of railway zones to review the land acquisition and transfer in thepast 40 years and reconcile the details of open lines and construction organisations.The GMs have also been asked to ensure that the vacant plots of land, which have anarea of more than one acre, are listed and the details are sent to the railway board forincluding such areas into railways land bank.

There have been some instances of poor management in land acquisition of Sankrail insouth eastern and Thaltej in western railways plots. There have also been cases wheremany railways zones have got lands, which cant be utilised, are also listed in the newplots list. The instruction to review old land acquisitions is to avoid any mal-functioning,a senior railway ministry official told Financial Chronicle.Banerjee, in the last railway budget, had announced that railways would set up a specialcommittee on innovative ideas for land and air space utilisation.The minister had announced setting up ofmulti-functional complexes (MFCs) at 50stations throughpublic-private partnership and to develop 375 adarsh stations (modelstations). Though the zones have already identified 67 sites for MFCs, there are certainissues related to a few sites. The ministry has asked the GMs to submit the proposals for

entrustment of land to Rail Land Development Authority (RLDA) soon, the official, whodid not want to be named, said.
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Indian Railways has around 43,000 hectares of vacant land, which is not required foroperational purposes. The ministry has already entrusted 1,500 hectare land to RLDA.While consultancy work for 51 sites is in progress, another 70 plots are under inspection.

14 firms bid for Mormugao project - 10 Feb 2010 - The Hindu

http://beta.thehindu.com/business/article104631.ece

Mormugao Port Trust (MPT) is looking forward to sign a concession agreement with thefinally selected bidder of its proposed Rs. 7210-crore iron ore export terminal project atWest of Breakwater (WOB), latest by August. Chairman of MPT Praveen Agarwaldisclosed here on Wednesday that the port had received an excellent response for itsproposal to set up the project on a public-private partnership (PPP) model.

A total of 14 companies/ consortiums have bid for the project, which is considered as thesingle biggest PPP project initiated by MPT. The terminal is expected to becomeoperational by March 2014 and will provide the much needed mechanised facilities for

direct export of the Karnataka iron ore through MPT, the leading iron ore exporting portof the country.

In response to the RFQ (Request for Qualification) floated by MPT, 14 applicants who bidsingly or in consortium, include Larsen & Toubro, Adani, Salgaocar, Essar, Lanco, MSPL,IMC, Gangavaram, Gammon, IL&FS, Jindal, Sterlite, GVK and Shapoorji Pallonji & Co., saidMr. Agarwal.

The MPT chairman said that the design of the terminal incorporated high ratedmechanised equipment for smooth and safe handling of the ore, and also had the mostmodern pollution control and dust suppression systems, which would ensure zeropollution and spillage. The plan was to load the empty railway rakes, after discharge ofore, with imported coal on their return leg of the journey. The iron ore export project had

been designed to facilitate quick and pollution-free evacuation of the imported coal fromMPT, explained Mr. Agarwal.

Keeping this project in view, South Western Railway had taken up the doubling of theHospet-Vasco rail connectivity, said Mr. Agarwal.

PM estimates port capacity addition at 40% below Eleventh Plantarget - 08 Feb 2010 - Financial Express

http://www.financialexpress.com/news/PM-estimates-port-capacity-addition-at-40--below-Eleventh-Plan-target/576861/

New Delhi: A high-level meeting chaired by Prime Minister Manmohan Singh hasobserved that the government will fall short of the 11th Plan target for capacity additionin major ports by around 40%. The target was to add a capacity of 511 million tonnewhich would have taken the total capacity of the 12 major ports to over 1,000 mt. Themain reason for the slippage is the delay in awarding the public-private partnershipprojects, which the shipping ministry and the Planning Commission have blamed eachother for. With its inability to meet the target for current Five-Year Plan ending March 31,2012, the government will also fail to meet the capacity addition projection under theambitious National Maritime Development Programme (NMDP).

The conclusion that a 40% slippage is certain was arrived at after Planning Commissionmember BK Chaturvedi made a presentation to Singh, who is also the Commissions
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chairman. Planning Commission deputy chairman Montek Singh Ahluwalia and shippingminister GK Vasan were also present in the meeting that took place on February 3.According to official sources, the Commission criticised the shipping ministry for itsfailure in ensuring timely award of port development projects in the last two years. The11th Plan target was to create an additional capacity of 511 mt in the 12 major ports. Inthe meeting, it was decided that the target would stand revised to 311 mtwhich means

total projected cargo handling capacity of major ports would be 815.75 mt by the end ofthe Plan.

While Vasan admitted to the delay, he held Planning Commission responsible for thesame, a senior government official told FE, requesting anonymity. Vasan said the firsttwo years of the Plan period, 2007-08 and 2008-09, did not see much action in the portsector due to absence of proper documents like model concession agreement, requestfor qualification and request for proposal.

The ministry was in continuous discussion with the Planning Commission for finalisingthese documents, Vasan informed Manmohan Singh. Since these documents are inplace now, the implementation of port projects would gather momentum, the ministersaid. But he conceded the plan target could not be met. Highlighting the performance of

shipping ministry in the current financial year, Vasan said his ministry has awarded 10projects so far in the current fiscal. However, most of these projects pertain to 2008-09which were carried forward to this fiscal.

DP World expects relaxation in Indian cabotage policy - 08 Feb

2010 - Moneylife.in

http://moneylife.in/article/8/3604.html

The company expects that the Indian government will soon take a decision on the

relaxation of the cabotage policy, given its huge investment in the Vallarpadam port

project. A relaxation in the cabotage policy to improve trade volumes at the planned

Vallarpadam port and other major ports in India is being considered. Company officials

from DP World are hopeful about such relaxation soon.

Dubai-based DP World, one of the largest marine terminal operators in the world with 49

terminals, is the private operator set to run the terminal at Vallarpadam in Cochin port in

India.The port is being developed as a trans-shipment hub on a public-private

partnership model. The project involves a total investment of Rs2,200 crore, with an

investment of Rs1,000 crore by the Indian government and Rs1,200 crore by DP World.

The trans-shipment hub is being built in phases and the first phase is expected to be

commissioned by June 2010. On being questioned whether contracts with various clients

for using this port have been finalised, Anil Singh, senior vice president and managing

director for the subcontinent at DP World Pvt Ltd, said, We are just waiting for the Indian

government to relax the cabotage issues. We will sign the contracts after that (the

relaxation of the cabotage policy).

Their proposal is under consideration. We will have to verify their projections. We need

to see what lies in favour of the overall economy. When the issue is under consideration,

it is a little difficult to opine. They (DP World) are talking of business that will be added tothe existent business available in Indian shipping. Their projection is that it is a win-win
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opportunity, as it will bring (in) added business. Now, we need to discuss it with the

remaining stakeholders. The only problem will arise when people object on the

differences in the share of added business that each one will get. I hope we will be able

to convince them (stakeholders) that it is an overall win-win situation, said Dr Satish

Balram Agnihotri, joint director general, department of shipping.

For the port to be commissioned in 2010, such relaxations in the policy will have to be

worked on soon. We are very hopeful (that the relaxation will happen before the

commissioning date), because it involves a huge investment from the government, said

Mr Singh. We should be able to decide on it before June 2010, added Dr Agnihotri. DP

World officials claim that the new transhipment hub will help attract around a million

tonnes of cargo towards India. This will help bring back Indias cargo from ports like

Colombo and Jebel Ali, said Mr Singh in a presentation made at a Confederation of

Indian Industry conference on costal shipping.

Cabotage is the transport of goods between two points in the same country. At present,

the cabotage policy in India allows first preference to Indian flagships over cargo. Foreignships are allowed to carry this cargo only when no suitable Indian flag vessel is available

for the same. Relaxation in the cabotage policy is expected to bring more trade to

Vallarpadam and other major ports in India. However, PTI news reports on the cabotage

policy suggested that barring of foreign ships on the Indian coast for security reasons is

being considered.

NHAI plans to up road building outlay 62% - 07 Feb 2010 -

Business Standardhttp://www.business-standard.com/india/news/nhai-plans-toroad-building-outlay-62/384855/

The National Highways Authority of India (NHAI) plans to increase the outlay on buildingroads for 2010-11 by 64.6 per cent to Rs 47,736 crore. The target for the currentfinancial year is Rs 29,000 crore, subject to revisiosn.

Out of the total sum for the year, over Rs 25,000 crore will come through public-privatepartnerships and the rest from oil cess and borrowings. The authority borrows moneyfrom tax-free infrastructure bonds and external agencies. An NHAI source said theoriginal estimate (Rs 29,000 crore) for this financial year would come down. The sourcealso added that the revised estimate for the next financial year would increase as anumber of initiatives taken this year would be implemented next year.

Also, the road transport ministry has demanded an increase of 62 per cent in its grossbudgetary support, from Rs 15,450 crore (Budget Estimate for the last financial year) toRs 25,050 crore. Sources in the know say the revised Budget Estimate for the currentfinancial year will be Rs 20,000 crore. Meanwhile, NHAI has been able to register asubstantial rise in the number of projects awarded in the current financial year so far.The authority has so far been able to award 28 projects against a target of 126 for theentire financial year. Only eight projects were awarded in the last financial year.

After setting a target of 20 km a day, Road Transport and Highways Minister Kamal Nath

announced a number of steps to arrange resources to meet the target of about 7,000 kma year. One of these was announcing a shift from awarding road projects on the basis ofthe National Highways Development Programme to develop roads across the country
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in seven phases to awarding them on an annual basis. NHAI has made two work plansfor 2009-10 and 2010-11.

Under its Work Plan I, which is a target of projects to be awarded in 2009-10, theauthority plans to award the 126 projects worth Rs 1 lakh crore and cover 11,928 km.

Rail prefers public-private track - 07 Feb 2010 - The Telegraph

http://www.telegraphindia.com/1100207/jsp/business/story_12076584.jsp

New Delhi, Feb. 6: Mamata Banerjee today held an interaction with industry leaders toencourage private investment in railway projects. Responding to the rail ministersinitiative, industry leaders suggested a number of measures, among them a greaterthrust on public-private partnership for more investments in infrastructure, technologyupgradation in Indian railways and the rationalisation of interface between the railwaysand the suppliers to the sector.

Todays interaction is significant as the rail minister is scheduled to present her budgetfor 2010-11 to the Lok Sabha on February 24. Mamata urged the private players to set upwagon manufacturing units to reduce the scarcity of rail wagons and come up withproposals to assist building of 49,000 km of rail tracks.

According to a Vision 2020 document, the ministry will require Rs 14 lakh crore in thenext 15 years for expansion and development. Railway Board chairman S.S. Khurana andother senior railway officials were also present at the meeting. Apart from chamberssuch as Ficci, Assocham and the CII, around 150-200 industrialists attended the meeting,including heads of the Food Corporation of India, SAIL, Bharat Petroleum, Adani Ports,Siemens, Asea Brown Boveri, GE Infrastructure, GE Electric, Sumitomo, Hutchison and

private shipyard builders.

On industry observation about railways safety measures, officials said the ministry wasplanning to revive the special railway safety fund with a proposal to the finance ministryfor Rs 20,000 crore for the next 10 years. The dedicated safety fund was set up in 2003with a corpus of Rs 17,000 crore for a period of 10 years.

The ministry plans to use the proposed Rs 20,000 crore for upgrading and maintainingtracks and the signalling system. Officials said over the years collisions had reducedfrom 30 in 2001-02 to 13 in 2008-09. Similarly, derailments have dropped sharply from280 in 2001-02 to 85 in 2008-09.

The Confederation of Indian Industry (CII), in its pre-budget recommendation, asked the

railway ministry to broaden its scope for public-private partnership (PPP) and share risks.The PPP engagements need to be segregated from outsourcing tasks of the railwaysand must essentially involve sharing of risks and rewards on investments between bothpartners in the process, said CII.The PHD Chamber said more freight would come torailways only if they become more price competitive, provide economical rates,adequately address capacity constraints on the high density corridors.

Railway Minister seeks cooperation of private sector in the

development and expansion of Indian Railways - 06 Feb 2010 -

Press Information Bureau

THE HISTORIC PRE-BUDGET INTERACTION WITH TRADE AND INDUSTRY CONCLUDES
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TODAY

http://pib.nic.in/release/release.asp?relid=57677

The Minister of Railway Mamta Banerjee has called upon the representatives of industryand trade to work in close partnership with Railways for the development of Railway

infrastructure to meet growing aspirations of people and increasing needs of this

important sector of transportation. The Railway Minister was speaking at a pre-budget

interaction with trade and industry and the representatives of Chambers of Commerce

and Industry, major industry associations, both national and state level and important rail

customers, here today. Chairman, Railway Board, Shri S.S. Khurana and all the Board

Members were present on the occasion.

The minister said that investments are required in the field of producing more railway

coaches, more railway locos, more wagons and various ancillary components. She said

that there are ample opportunities for the industry to make investments and developtheir own business and at the same time facilitate development and expansion of Indian

Railways. Referring to the Vision-2020 document of Indian Railway presented by her in

the last session of the Parliament, the Railway Minister said that the document has spelt

out the future needs of Railway Sector and the possible areas requiring massive

investments. She said that Vision document has chalked out a very ambitious plan of

creating 25000 Kilometres of Railway Network in a period of ten years. She invited

industry to come forward to make investments to help Indian Railways achieve this mega

target. She said that the investment opportunities are existing right from Port

Connectivity Projects, Industrial Hub Connectivity Projects to the projects for facilitating

increased transportation of core items like Coal, Cement, Iron ore etc. She emphasised

that augmentation of wagon manufacture capacity is the need of hour to meet increasing

demand of rakes by the industry and Railways will do its best to facilitate availability of

sufficient wagons for transporting bulk commodities. She said that private participation

could also be considered in activities like Road Over Bridges and manning of unmanned

level crossings. She also talked of commercial utilisation of surplus land and space. She

also categorically clarified that core service sector will remain with the Railways and

Private Participation will be invited in infrastructure, tourism, logistic park etc. She also

stressed on the need to reduce red-tapism and to simplify the procedures and to remove

bottlenecks coming in the way of facilitating private sector engagement with the

Railways. She also said that representatives of the Industry & Trade will also be included

in the Railways Users Consultative Committees at all levels.

In his opening remarks, the Chairman Railway Board Shri S.S. Khurana said that todays

historic interaction has been organised in view of Railway Ministers ardent desire to

involve all the stake-holders in an honest dialogue as an integral part of the formulation

of major policy initiatives. Referring to Indian Railways Vision-2020 document, Shri

Khurana said that this path breaking visionary plan has been prepared under the

guidance of Railway Minister and the forthcoming railway budget would attempt to

embark on the challenging journey by taking the first step to achieve the goals

mentioned in this document. He said that expansion of the network to connect un-served

areas at a very ambitious rate of 2500 KM per annum, doubling/quadrupling and

electrification of key routes, completion of gauge conversion, raising of speed for both

passenger and freight traffic, elimination of shortages of any kind in freight and

passenger service, prevention & elimination of accidents and equipment failurestechnological upgradation & modernisation are some of the major goals set in the Vision.
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It has been assessed that Railways would require an investment of the order of

Rs.14,00,000 cr. over the next ten years. He said that there are therefore great

challenges for growth and generation of internal resources and execution of identified

projects through PPP.

This pre-budget interaction was aimed at obtaining innovative ideas for placing theIndian Railways on a sustained and rapid growth path.The interaction session provided a

forum for receiving suggestions and inviting proposals for investment through Public

Private Partnership (PPP) in various ongoing and future projects on Railways.

More than 200 representatives of trade and industry and Chambers of Commerce and

Industry from across the country participated in the historical interaction which saw

Railway Minister in a direct two-way dialogue with the Captains of the Industry. The

participating agencies among others included FICCI, ASSOCHAM, CII, PHD Chamber of

Commerce & Industry etc. The event assumes significance in the light of the fact that

Railway Minister, the entire Railway Board, the representatives of Railway Employees

Associations and the members of various expert committees of Railways andrepresentatives of Trade and Industry sat together to deliberate upon building the Indian

Railway System as the powerful means of transportation and developing future needs of

the Railways.

Dr Amit Mitra, Secretary-General, FICCI and Chairman of expert Committee of Railways

for developing Business models and innovative funding through PPP instruments and Shri

Samar Jha, Additional Member (Budget) Railway Board moderated and conducted the

proceeding of the meeting.

Major Ports capacity up by 48 per cent in last five years - 03 Feb2010 - Press Information Bureau

A THREE-FOLD INCREASE PROJECTED BY 2025-26

http://pib.nic.in/release/release.asp?relid=57587

The traffic handling capacity of Major Ports has gone up by about 48 per cent in the last

five years. It has increased from 389.5 MT in 2003-04 to 574.77 MT in 2008-09. A three-

fold increase is projected in traffic handling capacity of Major Ports by 2025-26 by

augmenting the capacity to 1595.07 MT. Shri G. K. Vasan, the Union Minister of Shippinggave this information in his opening remarks in the first Consultative Committee meeting

of the Ministry held today after the constitution of 15th Lok Sabha.

He further informed that the traffic handled by Indian ports have registered a growth of

5.14 per cent in the period from April to December 2009 compared to the same period in

2008. Despite recessionary trends in the world economy, the traffic in India had

registered a growth of 2.1 per cent during 2007-08, said Shri Vasan in the meeting of the

Consultative Committee.

The 12 Major Ports, six each on the West and the East coast handled 72 per cnet of the

total port traffic while 28 per cent of the port traffic was handled by 66 non-major ports.

The first meeting of the Consultative Committee held today deliberated on the issues

relating to development of Major Ports in the country. The National Maritime
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Development Programme (NMDP) and other major initiatives of the Government in the

port sectors were discussed at length. The Committee was informed that NMDP spreads

over a period of seven years starting from April 01, 2005. The programme will conclude

in March 2012. 276 projects in all have been identified under the project with a total

investment of Rs. 55804 crore. Of 276, 48 projects have already been completed and 70

are at various stages of implementation.

The Public Private Partnership (PPP) in Major Ports has been given priority in order to

infuse funds, induct latest technology, improved management practices and for addition

of capacity. FDI up to 100 per cent is also permitted for construction and maintenance of

ports and harbours.

Revision of wage structure for port and dock workers has been another major initiative of

the Government of India to incentivise the workforce and motivate it for better results.

The wage structure settlement reached with the representatives of five major federations

of port and dock workers on January 19, 2010 envisages an increase of 23 per cent in the

wages of Class III and IV employees of Major Port Trusts and Dock Labour Boards. Thissettlement will be in force for five years from 2007 to 2011. The Members of the

Consultative Committee in general appreciated the performance of the Major Ports. The

Members underlined the importance of emphasis on road-rail connectivity of the ports,

other projects under NMDP as also the steps taken for revisioning wage structure of the

workforce. Improvement in river connectivity with Major Ports along with road and rail

connectivity, priority on employing local people at Class III and IV levels, increase in

number of berths etc., were among the important suggestions that emerged during the

meeting.

Shri Mukul Roy, the Minister of State for Shipping, Secretary, Ministry of Shipping and

Chairmen of the Major Ports, among others, attended the meeting.

Kamal Nath expects $3bn funds from UK - 03 Feb 2010 - Times of

India

http://timesofindia.indiatimes.com/biz/india-business/Kamal-Nath-expects-3bn-funds-

from-UK/articleshow/5529379.cms

LONDON: Minister of road transport and highways, Kamal Nath expects $3 billion of the

$10 billion of funding required per annum from foreign sources in the public-private-

partnership will come from the UKs financial markets to build a modern infrastructure inIndia.

On his third visit to London in five months, Nath confirmed that the Indian and British

governments will sign a Memorandum of Understanding (MOU) within two months, which

will include subjects like construction, investment, road safety, training, licensing and

inspections. This followed a meeting between him and the Secretary of State for

Transport in the UK administration, Lord Andrew Adonis.

On Monday, Nath attended the launch of a Britain India Roads Group (BIRG), a

consortium of British firms representing specialists in the highways sector, including law

firms. The minister said several British firms had indicated interest in bidding for

concession agreements for Build Operate and Transfer (BOT) projects. We would like to

see British participation, he declared.
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Addressing the Forum, Nath admitted: Our (Indias) biggest deficit is our infrastructure

deficit. This deficit has to be bridged. The challenge is to make the next decade the

decade of infrastructure.

Nilekani may head panel for choosing toll technology - 31 Jan2010 - Economic Times

http://economictimes.indiatimes.com/news/economy/indicators/Nilekani-may-head-panel-for-choosing-toll-technology/articleshow/5519669.cms

DAVOS: The government has decided to rope in IT experts, including UIDAI chairmanNandan Nilekani, to develop an India-specific technique forcollection of tolls on highways. "I have requested Nandan Nilekani to head a committeeas its chairman to decide on the best tolling technology, most appropriate for India,"

Road Transport and Highways Minister Kamal Nath told.

Nilekani had left India's premier IT company Infosys to head the Unique IdentificationAuthority of India (UIDAI), entrusted with the task of providing unique identificationnumber to over one billion people in the country. The country has embarked on a majordrive to build highways, including toll roads, under the Public Private Partnership (PPP)mode.

Nath said institutions in the West, including Japan's Nomura, have shown interest ininvesting in India. He added that talks were also on with Malaysian government forroping in construction companies for the road sector. Sources said an MoU could besigned between the NHAI and a Malaysia consortium of road firms. India has over 70,000km of highways and proposes to significantly enhance the network by constructing 20

km of roads every day in the next five years. Currently, NHAI has been able to put undertoll about 10,000 km of highways

Govt invites consultants for an international airport in Meerut - 29Jan 2010 - Indian Express

http://www.indianexpress.com/news/Govt-invites-consultants-for-an-international-airport-in-Meerut/572869/

The state Department of Civil Aviation has invited bids to appoint consultant for theproposed international airport at Meerut in western Uttar Pradesh.The project will be known as Dr Bhimrao Ambedkar International Airport. The consultantswill have to prepare a comprehensive feasibility report, bid document and concessionagreement for the airport, which would be set up in Public Private Partnership model ondesign, build, finance, operate and transfer basis. The bidders can submit theirproposals till February 8.

The project has already received in-principle approval from the Union Ministry of CivilAviation. The nodal agency for the project in the state is the Meerut DevelopmentAuthority (MDA). Vice-Chairman of MDA, Ram Nawal Singh, said: We had got the in-principle approval from the Centre in September 2009. The proposal is to make aninternational airport, which would include the existing airstrip as well. We had sent theproposal and details of the air traffic density study, conducted by the state government,to the Union ministry in June 2009. The project will cater largely to western UP.
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Cabinet approves Rs.7,296 crore for Jawaharlal Nehru Port Trust -28 Jan 2010 - Sify.com

http://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.html

The Cabinet Committee on Infrastructure (CCI) Thursday approved projects worthRs.7,296 crore for the Jawaharlal Nehru Port Trust (JNPT) in Mumbai and upgrading a coalhandling facility at Visakhapatnam Port. Briefing reporters after the cabinet meeting,Urban Development Minister S. Jaipal Reddy said the JNPT project for development of afourth container terminal will be done on Design, Build, Finance, Operate and Transfer(DBFOT) basis. The estimated cost of the project is Rs.6,696 crore and is being developedthrough the Public Private Partnership (PPP), he said. JNPT in Mumbai is one of the 12major ports under the Ministry of Shipping.

The first phase of the project will be commissioned within a period of three years fromthe date of signing of the concession agreement, while the Phase-II will be implementedin two years, he informed media persons. The CCI also approved the project estimated tocost Rs.600 crore for development of a atandalone container handling facility at the JNPTon DBFOT basis.

'The project is to be implemented within a period of 24 months from the date of award ofthe concession,' the minister said. The CCI also cleared another project for developingcoal handling facilities and upgradation of general cargo berth at Visakhapatnam Port inAndhra Pradesh. The estimated cost of the project is Rs.441.1 crore. 'The project wouldhelp the port cater to handle more coal and help in de-congestion of the port due tofaster unloading of coal after mechanization and strengthening of the berth and will

facilitate handling capsize vessels resulting in economies of scale,' the minister said.

Half of port expansion projects yet to be awarded - 27 Jan 2010 -

Business Standard

http://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-

awarded/383779/

With private players deliberating on investing in infrastructure projects in the aftermath

of the global slowdown, nearly half of the projects for capacity expansion at ports,

scheduled for awarding this year, are likely to spill over into the coming financial year

(2010-11).

The Ministry of Shipping has considered awarding 30 projects in 2009-10 at an estimated

cost of over Rs 20,000 crore, through public-private partnership (PPP).These projects are

expected to enhance capacity at the centrally-regulated 12 ports by 46 per cent. Of

these, only 10 projects worth Rs 2,000 crore have been cleared, which constitutes one-

tenth of the investment target.

However, the government hopes to clear six more projects worth Rs 5,000 crore by theend of the March deadline. Even with that, only 35 per cent of the investment target set
http://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-awarded/383779/http://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-awarded/383779/http://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-awarded/383779/http://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://sify.com/finance/cabinet-approves-rs-7-296-crore-for-jawaharlal-nehru-port-trust-news-default-kb2vucichah.htmlhttp://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-awarded/383779/http://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-awarded/383779/http://www.business-standard.com/india/news/halfport-expansion-projects-yet-to-be-awarded/383779/


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out by the ministry for clearing PPP projects would have been met. in terms of numbers,

nearly half the projects worth around 13,000 crore are likely to be carried forward for

awarding in 2010-11.

Industry sources attribute the slow privatisation of infrastructure development projects in

ports to the guidelines for tendering, which make mostly international players eligible foroperating terminals in the country. An official with a consultancy firm said on condition of

anonymity: In the initial quarters of 2009-10, conditions of the global market were not

conducive for development of such projects. Private sector players did not evince much

interest, but with the economy showing an upward trend, the bidding process can be

expected to pick up this year.

Vishwas Udgirkar, executive director at PricewaterhouseCoopers, adds: PPP projects for

capacity expansion at ports get delayed because of the long decision-making process.

Unlike in road development projects, which are regulated by one central agency, in the

ports sector, major port trusts forward proposals to the ministry, which are then passed

on to the Public Private Partnership Appraisal Committee (PPPAC) for approval.

He added that the model concession agreement (MCA) framed by the Planning

Commission makes no provision for viability gap funding of these projects.

A senior official at the ministry concurs: The initial two years of the Plan period were

spent in finalising MCA. However, there are irregularities in the document for which

projects often get held-up.

Of the seven projects approved by PPPAC recently, two are held up due to litigation

issues. They include a Rs 6,700-crore container terminal construction project (the biggest

considered for development in the country) and a Rs 600-crore container handling facility

development project at Jawaharlal Nehru Port in Mumbai.

Stringent norms for PPP port bidders - 27 Jan 2010 - Financial

Express

http://www.financialexpress.com/news/Stringent-norms-for-PPP-port-bidders/572207/

New Delhi: The shipping ministry has issued stricter norms on the prospective bidders forpublic private partnership projects in major ports to prevent private monopoly in the

sector. The fresh policy is also aimed at reducing the number of court cases and

expediting the award of projects envisaged under the National Maritime Development

Programme (NMDP).

As per the new guidelines, the private operator of a cargo terminal in a major port cannot

bid for another terminal for the same cargo within the port. In addition to this, the norms

also limit the number of build, operate and transfer projects that a private player can

have at a port. To ensure that this is not subverted in maritime states, these limitations

will apply to the players operations in all ports within a radius of 100 km of the major

port. An existing private operator of the port is allowed to bid for the project, only if,

with the award of the project, the operator does not have more than two BoT projects,

i.e. container terminal or berths or single point mooring or SEZs etc, at the port or any
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port within a radius of 100 km of port limits, the draft policy document states.

The Financial Express had first reported on December 31, 2009 that the government was

preparing a tough policy to reduce litigation by bidders of maritime projects. As per the

earlier policy, the operator of any one terminal at a major port was barred from bidding

for another platform being awarded immediately after the first one. But the policy couldnot prevent a flurry of litigation from private firms. There have been various cases in the

past, which hampered the award of contracts. We have further sharpened the existing

norms to prevent such situations in the future and stop private operators from having a

monopoly in a port, Rakesh Srivastava, joint secretary in the Shipping Ministry, told FE.

The ministry has invited comments from stakeholders within 15 days, after which the

guidelines will be notified. The RFQ and RFP documents for port projects will change

accordingly.

Despite the earlier policy, firms including Gateway Terminals India Pvt Ltd, P&O Australia

and PSA-Sical dragged the government in various courts, seeking permission to bid for

more projects. Although, the government won most of the cases, delays in award of PPPprojects could not be avoided.

India's Road to Progress - 26 Jan 2010 - Wall Street JournalBuilding infrastructure will pave the way to faster economic growth.

http://online.wsj.com/article/SB10001424052748703808904575026043518922322.html?mod=WSJ_Opinion_LEFTTopBucket

By KAMAL NATH

In the first decade of the 21st century, India seized the opportunities of the newknowledge economy and sped off down the information superhighway. Now it's time todeal with an urgent task left over from the old low-tech days. Infrastructure must beIndia's focus today, for its overhaul will drive our economic growth in this new decade.Above all, we need good roads. And we need to build them quickly to maintain our edgeas Asia gets set to lead the world to economic recovery.

As the world's biggest program of public-private partnerships to build roads, India'sNational Highways Development Project offers huge opportunities to foreign investors,consultants and manufacturers. I am confident we can attract $10 billion of foreign directinvestment over the next two to three years. We will do this by offering anunprecedented array of investor incentives ranging from a 10-year tax holiday to cuttingred tape and allowing automatic FDI of up to 100% of projects and no government

approval required. This mammoth task is already under way. Work has started onupgrading the entire highway system of India over the next five years.

As highways minister, I am setting a record pace to get the job done. The first $20 billionof contracts will be awarded by June this year and $50 billion within the next 18 months.My target is 7,000 kilometers of new roads per year. When I took over as minister lastMay, progress was slow at 3-4 kilometers a day. Currently the figure is nine kilometers aday, but I aim to hit our goal of 20 kilometers a day by April.

I am proposing a paradigm shift, making road development an integral feature, indeedthe engine, of my country's growth. A World Bank study has assessed that every singlerupee invested in the highways sector yields seven rupees in economic value. I believehighways have the potential to contribute around 1.5% to 2% of gross domestic product.Demand driven by a youthful population, an established middle class and an emergingrural sector guarantee returns on investment. Traffic is already increasing 7% to 10%
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annually, and our auto industry grew around 12% in the last five years including animpressive 20% cumulative growth between April and December 2009, even as majorauto companies around the world suffered in the slowdown.

Plans include several mega-roads, which we define as projects of at least $1 billion androads and highways stretching over 400 kilometers in length. In total, 17,000 kilometers

of expressway network will link new growth centers and change the face of the country.The National Highways Authority of India is currently developing nearly 6,000 kilometersof road. Work on the Golden Quadrilateral, connecting Delhi, Mumbai, Kolkata andChennai, is 99% complete. Together with north-south and east-west arteries, this willprovide the backbone to the highway network. All other economic centers of our countrywill be linked to one of these roads. Ultimately, every village will be linked through therural road network.

Quality roads will connect ports, airports, tourist destinations and religious places. Allstate capitals will be connected to four-laned national highways. Once this network isready, we believe it will ensure higher living standards by making better employmentavailable to the rural masses, giving them the opportunity to be true participants in oureconomic success. One of the aims of the government is to have inclusive growth, and

there is nothing more inclusive than roads. They touch all sections of society and theeconomyimpacting trade, industry, and agriculture. They traverse all parts of thecountry, and go through even the most rural areas. Roads are all about connectingpeople.

We are working hard to address issues such as land acquisition, which I believe to be ourbiggest challenge. The task of buying from multiple landowners, across several states,can complicate and delay plans. But the government is strengthening processes toovercome obstacles. In addition, rules and regulations relating to investment in the roadsector are being changed to make it more attractive to financiers. Cutting red tape andstreamlining processes are matters I will personally follow closely as we enter this newand exciting phase in India's history and future.

Mr. Nath is India's minister of road transport and highways.

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