Indian Tollways

Ramky Infra Bags Rs.1,248.95 Orders

ITW Editor — Mon, 14 May 2012 10:49:05 +0000

(RTTNews) – Ramky Infrastructure Ltd. said it had bagged new orders aggregating to Rs.1,248.95 crore across the nation covering the State of Arunachal Pradesh, Bihar, Chandigarh, Gujarat, Karnataka, Madhya Pradesh, Odisha, Tamil Nadu, Tripura and West Bengal and across industrial, irrigation, road and power verticals.

Some of the major projects secured by the company are furnished below.

In Arunachal Pradesh, it has secured orders for Rs.192.01 crore – one for Rs.99.42 crore from HSCC (India) Ltd. for strengthening and up-gradation of General Hospital at Naharlagun and another one for Rs.92.59 crore from the Government of Arunachal Pradesh for 2 laning from Yingkiong to Gobuk in Arunachal Pradesh under Arunachal Pradesh package of SARDP-NE.

In Bihar, it has been awarded a project valued Rs.109.38 crore by NTP Ltd. for SG Area Balance Civil Works Package for Barh STPP State-1 (3×660 MW).

In Gujarat it has secured a project for Rs.98.60 crore from Gujarat Water Supply and Sewerage Board for design, build, operate and construct of Kadana Dam based bulk pipe line scheme for Dahod City.

In Madhya Pradesh, the company has been awarded projects totaling Rs.425.46 crore – one for Rs.131.43 crore from Narmada Valley Development Authority for execution of the Nagod (Satna) Br. Canal and its completed distribution system up to 40 hect. Chak of Bargi Diversion project on turnkey basis, and the second one was for Rs.123.08 crore from Narmada Valley Development Authority for execution of the Rewa Branch Canal and Sanaura Sub Branch Canal, including its complete distribution system up to 40 hect. Chak of Bargi Diversion Project on turnkey basis.

The third one was for Rs.87.18 crore from Madhya Pradesh Road Development Corporation Ltd. for regarding, strengthening, widening, maintaining and operating of Jabalpur-Patna-Shahpura Road on BOT (Toll plus Annuity) basis. The concession period for the project is 15 years including two years construction period.

M.P. Paschim Kshetra Vidyut Vitaran Co. Ltd. placed an order for Rs.83.77 crore for supply of materials, survey, installation, testing and commissioning of 33/11kV substation, augmentation of capacity of power transformer and providing additional power transformer in existing 33/11lkV S/s with extension of 33kV and 11kV Bay along with VCB, laying of single circuit/double circuit 33kV and 11kV lines, augmentation of conductor of existing 33kV and 11kV lines and renovation works of existing 33/11kV S/S, installation of new 63 KVA/100 KVA/200 KVA/315 KVA DTRs at identified location along with associated 11kV line.

(RTTNews) – In West Bengal, it had been awarded a project for Rs.152.69 crore by the Government of West Bengal Irrigation & Waterways Department for reconstruction, remodeling & improvement of embankment in Sundarbans and adjoining areas in the districts of North & South 24-Parganas, West Bengal, damaged by severe cyclone ‘Aila’.

At the BSE, Ramky Infrastructure shares are currently trading at Rs.195..40, up 2.25 percent from the previous close.

Source: http://www.rttnews.com

IRB Infra acquires MVR Tollways for Rs 130 crore

ITW Editor — Mon, 14 May 2012 10:45:52 +0000

IRB Infrastructure said it acquired 100 percent stake in road BOT firm MVR Infrastructure and Tollways in Tamil Nadu for about Rs 130 crore.

“This is the first time that any company has acquired a road BOT company. Going forward, we will continue to look at such opportunities,” IRB Infrastructure Chief Financial Officer Anil Yadav told PTI here.

Source: http://articles.economictimes.indiatimes.com

ITNL, IRB: Strong project pipeline enhances visibility

ITW Editor — Mon, 14 May 2012 10:43:35 +0000

With ongoing projects getting commissioned and the road ministry setting higher targets, the two companies should be able to deliver robust growth India’s top two road infrastructure companies, IRB Infrastructure Developers Ltd (IRB) and IL&FS Transportation Networks Ltd (ITNL), reported better-than-expected results for the period ending on March 31. Unlike in the other infrastructure segments, companies in the road space have benefited largely from a strong inflow of new orders and improving execution skills. On the flip side, they have seen a drop in profitability due to higher input costs and increase in interest burden.

Analysts are hopeful both IRB and ITNL will stand out in the infra space, given that valuations are attractive and the project pipeline strong. For 2011-12, the Ministry of Road Transport and Highways had set a target of awarding contracts to build 7,300 km of roads. Though the ministry awarded projects for only 6,500 km in 2011-12, it was still a commendable job compared with the 5,083 km of projects awarded the year before. For 2012-13, the ministry has set an ambitious target of 8,800 km, which shows that the project pipeline is strong.

INTEREST COST BITES
Rs crore	IRB Infra		ITNL
Rs crore	Q4′ FY12	FY12	Q4′ FY12	FY12
Net sales	848.0	3130.7	1988.7	5605.6
% change y-o-y	10.6	28.4	19.9	38.5
Ebitda	380.9	1373.5	457.1	1465.6
% change y-o-y	21.0	25.6	10.5	27.0
Ebitda (%)	44.9	43.9	23.0	26.1
Bps change y-o-y	390.0	-100.0	-196.0	-236.0
Interest costs	150.0	550.5	230.8	728.2
% change y-o-y	7.3	54.1	28.9	46.2
Adjusted PAT	120.4	496.0	177.3	497.0
% change y-o-y	17.1	9.6	11.4	14.8
Source: Capitaline

IRB Infrastructure
IRB has benefited from its improving execution skills in the construction business and higher revenues from the toll business as a large number of projects went on stream. For 2011-12, revenue from the engineering, procurement and construction (EPC) business grew 36 per cent, followed by 18 per cent growth in revenue from the build-operate-transfer (BOT) segment. However, in the March quarter, the trend shifted with the BOT segment reporting a stronger 21 per cent year-on-year revenue growth, while the EPC sector clocked just eight per cent growth. During the quarter, IRB also announced acquisition of MVR Infrastructure and Tollways for Rs 128 crore, which, it believes, could generate an internal rate of return (IRR) of about 21 per cent (on equity investment). This is far better than the expected IRR in some of the new or upcoming projects. Analysts believe this will directly add to the profitability of the company from 2012-13.

In the current year, analysts expect IRB’s revenue to grow about 20 per cent, led by a strong jump in BOT revenue as about 1,000-1,100 lane km of projects are expected to be operational. Also, the full impact of the 114-km Tumkur project (commissioned in June 2011) will be felt in the current year. In the construction segment, too, growth in revenue could be in the region of 14-18 per cent, backed by a strong order book of Rs 8,500 crore (3.7 times its revenue from the construction business).

In the near term, analysts believe the issue related to a murder investigation, in which chairman and managing director Virendra Mhaiskar has consented to undertake a polygraph test, could keep the share prices under pressure. IRB’s stock, which outperformed the Sensex in the last 12 months (till April 18 when the investigation news broke), has tanked 39 per cent since then to Rs 121.65 currently. Clarity on this issue could be a big boost for the stock as fundamentally the company is well placed to leverage the opportunities in the road segment, say analysts.

“There is a corporate governance issue, given the ongoing investigations. But if one can take that risk, this is a good opportunity to invest given that the company on a fundamental basis is on a strong footing and valuations are attractive,” says Manish Kumar of SBICAP Securities. Its strong balance sheet, strong project profile and leading positioning in the industry make its case strong. Meanwhile, Citi Investment Research in its post-results report has valued IRB’s stock at Rs 238 on a sum of parts basis, including the value of BOT assets at Rs 149 and construction business at Rs 84 a share.

IL&FS Transportation Networks
ITNL, too, reported a good set of numbers for 2011-12, with 39 per cent growth in revenue. Improvement in execution of some ongoing projects led to higher revenues in the EPC business, which led to the better-than-expected performance. However, net profit grew just 15 per cent, largely affected by a 200-basis point drop in operating profit margins and higher interest cost, which grew 46 per cent in 2011-12 due to debt drawn for projects under construction.

Meanwhile, in the two months of the current year, ITNL secured projects worth Rs 3,269 crore, taking its total order book to Rs 12,057 crore, which provides strong revenue visibility. Importantly, a large part of these projects is under construction and expected to be commissioned over two years.

With new projects getting commissioned, the company’s operational base will increase from 4,300 km to 5,900 km (an increase of 1,600 km) in 2012-13. This also means that in 2012-13, ITNL will report a good increase in revenues in the EPC business, leading to strong growth in overall revenues. In terms of earnings, analysts estimate it to grow by 23 per cent each in FY13 and FY14. “We believe the company is poised for a significant re-rating, as the number of operational road projects double over the next 24 to 30 months, raising per day toll or annuity income to Rs 4.73 crore a day from the existing Rs 1.38 crore a day,” says Abhinav Bhandari of Elara Capital. Most analysts have a ‘buy’ rating on ITNL, which at Rs 169 is trading at six times its FY13 estimated earnings.

Source: http://www.business-standard.com

3,000 km of 2-lane roads a lifeline for smaller builders

ITW Editor — Mon, 14 May 2012 10:35:18 +0000

The National Highway Authority of India (NHAI), the government-backed autonomous manager of highways, plans to build one-third (or 2,800 km) of this fiscal’s target of 8,800 km long of road network in the form of two-lane roads on cash contracts.

JN Singh, member-finance of the NHAI, said, “As most of the two-lane roads lack heavy traffic, the projects would be awarded on EPC (engineering procurement and construction) or cash contract basis rather than on BOT (build-operate-transfer) or BOOT (build, own, operate and transfer) basis.”

The two-lane projects, therefore, may not attract big BOT developers that covet only mega highways that yield higher margins.

So, smaller road construction firms ravaged by stiff competition, margin pressure, high interest cost and stretched balance sheets may find the cash contracts manna from heaven.

For, the two-lane projects may entail work orders worth up to Rs15,000 crore.

A report by Merrill Lynch said pure road contractors such as IVRCL and NCC could benefit.

Agreed Pankaj Kumar, senior analyst at KJMC Capital Market
Services. This fiscal, he said,
could prove to be a good year for BOT players-cum-road contractors such as IVRCL, HCC, Nagarjuna Construction. But pure BOT developers may find the going tough.

Last fiscal, the NHAI awarded 35 projects. All were for four-lane or six-lane roads, and 23 projects garnered premium status, fetching Rs24,200 crore in net present value (NPV) for the NHAI. (NPV is the difference between the present value of cash inflows and outflows.)

Singh said projects this fiscal would not fetch such huge NPV. Value of orders will also decline due to shift to two-lane orders.

The NHAI will fund the two-lane projects with capital raised from tax-free infrastructure bonds.

Land acquisition and annuity projects should not pose a problem as it had raised Rs10,000 crore last fiscal through bonds.

It has also received approval for an additional bond issue of Rs10,000 crore this fiscal.
Besides, a recent report by Motilal Oswal Securities said the NHAI rakes in Rs9,200 crore in cess, Rs3,000 crore in toll collections and Rs3,000 crore in premium, which would help it in meeting recurring EPC obligations and annuity projects.

The report also stated that intense competition in the road sector is likely to ease due to challenging macroeconomic environment and with established players committing their capital to large infrastructure projects.

The road sector may see consolidation as aggressive bidding, lower-than-expected tariffs, rising funding cost and execution delays have considerably lowered returns on projects, the Motilal report added

Source: www.dnaindia.com

Funny Rides

ITW Editor — Tue, 24 Apr 2012 12:31:52 +0000

Delivering Hot Food

Dare Devils

Circus Training

Better than walking home

Public transportation

No helmet -?no problem. I got what I need.

'Star Wars VII-?MasterYoda..'

Public School bus. Off to school.

Ox Ride

Delivering Dogs

Pig's ride

Ride home

Street Vendor on a moped

Honey, what did you call me last night?

Moving Day

Vegetable Ride

Carriage for 2?

My pimped-out Toyota

Single engine ox

Now road toll can be paid without stopping at plazas

ITW Editor — Fri, 20 Apr 2012 05:13:24 +0000

Union Minister for Road Transport and Highways C.P. Joshi on Thursday unveiled India’s first Radio Frequency Identification (RFID) technology-based Electronic Toll Collection (ETC) Plaza at Chandimandir here. He also inaugurated the four-lane Zirakpur-Parwanoo section of National Highway 5 passing through Punjab, Haryana and Himachal Pradesh.

Calling for coordinated efforts by the Central and State governments for making India a developed nation, Dr. Joshi said: “A qualitative infrastructure development is the need of the hour.”

Stating that a thrust to infrastructure development had been given in the 11th and coming 12th Five-Year Plans to increase the national Gross Domestic Product, he said the endeavour was to facilitate the common man with new technology and better road transportation facilities.

Dr. Joshi said all the highways in the country would be enabled with RFID technique that “helps users to pay the toll tax without stopping at toll plazas and reduces traffic congestion and commuting time.”

“Toll statements can also be made available online to the road users and they need not stop for the receipt,” he added.

He said his Ministry would consider giving exemptions and concessions to a certain category of users as per the request of Haryana Chief Minister Bhupinder Singh Hooda and his Punjab counterpart, Parkash Singh Badal, besides that of Union Culture Minister Kumari Selja and Haryana PWD Minister Randeep Singh Surjewala.

Dr. Joshi, however, asserted that the need of the hour was to rise above populism as the companies which had created huge infrastructure had to recover their costs through toll collection.

Referring to the “bottlenecks” faced by residents of Panchkula, he said these would be technically examined.

He disclosed that the National Highways Authority of India (NHAI) has completed projects worth Rs. 1,913 crore in Haryana, Rs. 1,419 crore in Punjab and Rs. 50 crore in Himachal Pradesh. He added that the NHAI would take up major road projects measuring 1,167 km in Haryana, Punjab and Himachal Pradesh during the current financial year.

Mr. Hooda said this project would benefit the people of Haryana, Punjab and Himachal Pradeshas they would not have to face traffic jams on the highway. He urged the Union Minister to formally approve various roads in Haryana as National Highways which had been approved in-principle.

Local MP Kumari Selja demanded the conversion of the Saha-Ambala stretch into a national highway.

Mr. Badal stated that the payment of toll, though unpalatable to the public, had become a necessity and there was no way out.

RFID tags

Meanwhile, ICICI Bank officials said the bank was working with the toll operators for issuing RFID tags to road users to be read at the toll plazas. Users, who need to register themselves, could use the tags across multiple toll plazas; they could be updated and would act as a record for settlement of financial transactions of the toll operators.

KNR Constructions completes NHAI project in record time

ITW Editor — Thu, 19 Apr 2012 08:15:28 +0000

HYDERABAD: Hyderabad-based construction firmKNR Constructions has completed the Bijapur-Hungund toll road of National Highways Authority of India (NHAI) nearly 11 months ahead of schedule and claimed it a record in the history of Indian highways.

The four lining of 97.22 kilometres of road project, valued at Rs 905.5 crore, was completed in 582 days as against the scheduled duration of 910 days.

NHAI had awarded the project on design, build, finance, operate and transfer (DBFOT) basis to a special purpose vehicle of Sadbhav Engineering, which in turn awarded the project to KNR Constructions, an EPC (engineering, procurement and construction) contracting firm.

“The primary motivation to complete the project much ahead of schedule was the attraction of earning a bonus of Rs 16 lakh per every single day of early completion. In the process, we ended up with earning a bonus of around Rs 50 crore for early completion,” Executive Director K. Jalandhar Reddy told ET.

As a part of achieving the target, he said, the company has paid additional compensation to the land owners towards expeditious land acquisition, apart from deploying modern imported construction equipment and adopting best sourcing and keeping a strong supply chain of raw material.

“Most of the concessionaries are bagging the road projects these days at very thin margins owing to aggressive bidding and early execution of projects by EPC contractors will significantly help them improve their financials,” said Reddy.

Further, he said in the backdrop of not securing BOT road projects from NHAI owing to not so aggressive bidding strategy, KNR will now focus largely on EPC road contracts and help the BOT players with its strong execution skills.

KNR, with Rs 1,051 crore revenue last fiscal, now has an order book of Rs 3,396 crore comprising of Rs 3,253 crore of road EPC contracts, said Reddy.

Source: http://economictimes.indiatimes.com

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ITW Editor — Wed, 18 Apr 2012 05:16:48 +0000

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At 8,000 kms, Road Ministry awards 57% more work in FY12

ITW Editor — Tue, 03 Apr 2012 08:33:02 +0000

NEW DELHI: Road ministry has ended the year on a high as it has awarded 62 projects covering 7,957 kms in the current fiscal, 57% higher than the previous year. The government is all set to achieve its earlier announced target of building 20 kms of road per day by 2013-14, as it has completed construction of 2,250 kms road in 2011-12, in comparison to 1,784 kms in the previous year.

In 2011-12, National Highways Authority of India(NHAI) has awarded 49 projects of 6,491 kms and the ministry awarded 13 projects for 1466 kms through state agencies. In all, 62 projects of 7,400 kms have already been awarded as against the target of 7,300 kms.

Some of the projects awarded have offered premium to the government and is likely to result in additional revenue generation of Rs 30,400 crore during the concession period.

“We want to accelerate this achievement further in 2012-13. We are confident of achieving the target of 8800 kms, said CP Joshi, Union Minister of Road, Transport and Highways. Joshi added that bids for 1,500 kms are either under evaluation or due in April,2012.

In the recent bids, which opened on March 28 and March 30, NHAI received a phenomenal response with road project developers providing premium on seven projects that would earn Rs 6,451 crore whereas one project sought a premium.

Companies like L&T, Sadbhav Engineering and IVRCL were amongst some of the successful bidders for 8 projects entailing highway development of 1,144 kms, having an estimated cost of Rs 11,500 crore. IVRCL will provide the highest premium at Rs 145 crore. “The bids are far better than what we had anticipated. Even the single project which asked for grant, it was much lesser than our estimates,” said an NHAI official.

These companies have opted to provide premium to the government, instead of taking viability gap funding. The government provides VGF or grant to the project developers for ensuring viability of the projects.

L&T won two bids and thus would be completing the full stretch from Gujarat border to Amravati. This road connects Hazira port -Surat to Paradip and eventually Kolkata.

In addition, 3 projects in NHAI of 318 Kms. and 5 projects in the Ministry of 664 Kms. i.e. 982 Kms. in all, bids have been received, which are under evaluation and decision is to be taken soon. It is possible that the government may award a few hundred kms if some of these projects are cleared tomorrow.

Source: http://economictimes.indiatimes.com

Ministry bid to meet highway target is a boon for infra cos

ITW Editor — Mon, 02 Apr 2012 06:39:41 +0000

The timing chosen by the Highways Ministry — the last four days of the fiscal just ended — to open bids worth Rs 11,564 crore would end up fattening the order-books of many listed infrastructure companies, apart from helping the ruling UPA-II alliance meet its target of awarding 7,400 km of highways.

“In what may be an unprecedented move, the Highways Ministry and NHAI issued the Letters of Intent (LoI) the very next day after the bids were opened, that too on a Saturday, a Government holiday. The LoIs will help companies book orders, and maybe earn revenues, for fiscal 2011-12 — without raising any eyebrows. Earlier, firms have booked orders without LoIs in hand, but with a disclosure.

The listed companies that gained from the year-ender round of bidding include Larsen & Toubro Infrastructure, Unity Infraprojects, IVRCL and Sadbhav Engineering. Over Rs 7,600 crore of projects, or 65 per cent of total bids opened, were bagged by firms listed on the stock exchanges.

IMPACT ON L&T

With these bids, Larsen and Toubro, the parent firm of the largest beneficiary of these bids, L&T Infrastructure, will inch closer to achieving its order-book guidance of five per cent year-on-year growth. L&T Infra grabbed projects worth Rs 4,500 crore, or 40 per cent of the bids opened in value terms, was the largest gainer from the last four days of bids.

“As on March 30, L&T (parent company) required about Rs 34,340 crore inflows in the fourth quarter of fiscal 2012 to achieve its stated guidance,” an analyst of a brokerage firm tracking L&T told Business Line, requesting anonymity as he is not permitted to speak to media.

In the nine months ended December 2012, L&T had reported inflows of Rs 49,420 crore, which implies flat year-on-year growth. Even before these bids were opened on March 30, L&T had announced orders of Rs 12,090 crore during the fourth quarter of financial 2012, added the analyst.

Due to these bids, order-books of Sadbhav Engineering would increase by Rs 1,102.48 crore, IVRCL Rs 1,617 crore and Unity Infraprojects Rs 438.75 crore.

SPECIAL RELAXATION

These projects, which would help develop 1,100 km of highways, were a part of the Highway Ministry’s award list firmed up early in fiscal 2012. But to ensure that the projects did not spill over to FY 2013, an empowered Group of Ministers (eGoM) stepped in to allow relaxation of a required approval process.

The relaxation ensured that the Ministry could approach the Cabinet Committee of Infrastructure directly for approval, instead of the Public Private Partnership Appraisal Committee (PPPAC). The Highways Ministry made this proposal a day after Mr Pulok Chatterjee asked it to expedite awarding 15 major projects requiring construction of 1,547 km during fiscal 2012.

The mandatory PPPAC approval for these projects had got delayed for months. The Highways Ministry was informed that the nod was getting delayed because the appraisal note had not come in from the Planning Commission, one of the members of the PPPAC. This made the Ministry escalate the issue as it was affecting project targets.

This relaxation has helped the UPA-II Government achieve its target of awarding highway projects of 7,300 km, with the Finance Minister, Mr Pranab Mukherjee, announcing in the Budget that the Government is on track to meet its target of awarding 7,300 km of highways.

The bidding process did follow the annual pre-qualification and e-tendering methodologies, both aimed at removing discretionary powers and increasing competition.

Source: http://www.thehindubusinessline.com