Projects Info | 29 September - 5th October, 2008

Transport Info

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PORTs/SHIPPING

Sikkim Govt's proposal for new highway
The Union Ministry for Roads and Transport will be shortly submitted a proposal for new highway to hills by the Sikkim Government. The proposal is for an alternative highway in a bid to reduce its dependence on the National Highway 31A.The need for an alternative highway has arisen because the political disturbance in Darjeeling hills from time to time that often spills over to the NH31A, causing suspension of movement along it choking Sikkim's lifeline. The proposed alternative route will be through Aritar, East Sikkim, near the Indo-Bhutan border, and will open up at Chalsa in Dooars to avoid the troublesome areas in Darjeeling hills. The road map seeks to make a detour into the extreme corner of East Sikkim near West Bengal and Bhutan border and then drop into Tante and Jaldhaka and connect NH 31 at Chalsa near Sevoke in Siliguri of West Bengal. The proposal, prepared jointly by the Sikkim Government and Project Swastik of the Border Roads Organisation, was submitted by the Sikkim Roads and Bridges Secretary, GP Sharma, to the regional office of the Union Ministry at Guwahati. The alternative route will push up the travelling time from Gangtok to Siliguri to at least six hours compared to the present three and half hours along the NH 31A. The distance from Gangtok to Siliguri through the proposed route is estimated at more than 250 km.

Govt directs NHAI on eligibility conditions
The government has directed the National Highways Authority of India (NHAI) to include additional eligibility conditions in the model document of 'request for proposals'.This direction has been made with respect to the 53 project packages for four/six laning of National Highways stretches under NHDP phase III and V and located in different parts of the country, a Shipping, Road Transport and Highways Ministry statement said. The NHAI is presently pre-qualifying/short-listing prospective bidders for these projects, for which applications have been invited following the model 'Request for Qualification' (RFQ) document published by Planning Commission based on guidelines of Ministry of Finance for prequalification of Bidders for Public Private Partnership (PPP) Project. The process of award of concessions for these 53 projects is targeted to be completed by January 2009, it added.

Controversial limiting clause discarded
The Finance Ministry has decided to delete the controversial clause that limits the number of financial bidders to five or six for all future PPP highway projects. The proposed 3.5.2 clause - stating that only the top five or six technically qualified applicants can be invited for participation in the financial bid stage for PPP projects - was a part of the model RfQs document, issued by Finance Ministry and prepared by Planning Commission. The Planning Commission was keen to include this clause, as it felt that that this process will remove the non-serious players. However, the clause, which impacts all PPP projects has been legally contested by companies in the port sector as well as road developers. So, following the complaints from highway and port companies, the Finance Ministry had set up a committee to review the clause. The Finance Ministry, in its order, said that the 60 projects, which the NHAI is already processing should be dispensed with as per the RfQs with 3.5.2 clause. As for the rest, the NHAI should undertake the process after deleting the clause.

Re-inviting bids for Jaipur ring road project
Jaipur Development Authority (JDA) will re-invite fresh bids for developing the 143 km ring road project as Reliance Infrastructure, who emerged as the sole bidder for the project decided not to make the Rs 2,700 crore reverse payment to JDA. Earlier, JDA had issued a deadline to the company to submit a final report of the project by 12 September 2008. JDA had invited bids for the project in 2005 and Reliance Energy (later renamed Reliance Infrastructure) was the sole bidder. The company had submitted a draft project report with project cost then estimated at Rs 6,470 crore. The draft report was to be followed by a detailed project report that is yet to be submitted. So far JDA has acquired land for the ring road's 47 km stretch (Ajmer Road -Tonk Road-Agra Road link).

Opus to improve road connectivity
The Punjab government will engage the services of Opus International Consultants, New Zealand to devise a strategy for future implementation of Output & Performance based Road Contracts (OPRC) to rehabilitate, improve, maintain and manage a portion of its road network of about 650 km in the southern districts of the state through the Punjab Roads & Bridges Development Board. Under the Opus contract, the contractor will be responsible for upgradation, renewal and maintenance of the network as required and payments will be based primarily on measured outputs reflecting the target conditions of the roads under contract, rather than unit prices for works inputs.

IR mulls prospects of hi-speed trains
Indian Railways has been forced to act fast on development of high-speed lines. At a recent meeting, the informal committee deliberated on the need for investment in both high-speed passenger and cargo transport. The advisory committee comprising former railway officers has called for increase in speed and capacities on the existing lines. The committee, mandated to develop future strategies, has recommended optimisation of road and railway transport and integration of various logistics all over the country. It has suggested an increase in the use of double-decker coaching stock on busy sectors as well as the need to evolve a strategy for substantially increasing the speeds of goods trains. The railways should develop Greenfield locations, preferably within the city limits, for big passenger stations using railway land which is not presently being put to optimum use, the committee stated in its recommendations. It has also asked the railway ministry to evolve a policy to increase the participation of state governments in public private participation projects It has also urged Rail Bhavan to seek increased budgetary support from the government on the ground that the railway is an environment-friendly means of transport. It has also asked the railways to take quick action on the provision of railway over-bridges and under bridges across the country and to handle the problem of level crossings, particularly on the dedicated freight corridor routes.

Railways offer freight cut on chemicals
The Indian Railways have decided to offer 5-6 per cent freight rebate on caustic soda, caustic soda liquor and alumina. The discounts would be applicable to privately-owned wagons only. A reduction in transportation cost of caustic soda is expected to ease prices of various commodities. Caustic soda is a raw material for paints, dyes, chemical compounds and metal. The move would particularly benefit companies like Nalco and Hindalco. "Companies would avail of discounts from the Railways only when they enter into agreements with the Railways for transport of traffic," a Rail Bhawan official said. The rebate, starting from October 2008, would continue throughout the year. The Railways have also decided to offer discounts of 4.8 per cent on carriage of ammonia and phosphoric acid. These commodities are part of raw materials used by the alloying, chemical, fertiliser and pharma industries. Most of these are used as inputs at various stages of processing in the metal products industry. The Railways' move would also ease pressure on economy hit by runaway inflation caused due to steep rise in prices of essential commodities. The government has been fighting inflation due to rise in prices of various raw materials. Earlier, the Railways had cut freight rate for iron ore. Similarly, it had placed a ban on private loading of wheat in rail wagons in April to allow the Food Corporation of India (FCI) to complete procurement and prevent rise in prices that would have resulted if excessive grain went to private traders.

Railways to transport coal in Mozambique
Railways for the first time will be extending its expertise in coal transportation in foreign shores. RICON, a joint venture by IRCON and RITES, has been given a 25 year concession to rehabilitate, operate and upgrade 850 km long rail line in Central Mozambique including Beira Port to carry 12 million tonne of coal annually at an estimated cost of about $ 440 million. IRCON and RITES are two leading PSUs of Indian Railways. While the upgradation of the rail line requires to sustain the coal movement, is to cost about $ 260 million, while the rehabilitation and operation of the line will cost $ 180 million. The south eastern African country of Mozambique has one of the largest coal reserves in the world. Indian companies including Coal India, SAIL are keen to bag the mining rights in Mozambique. However, currently a Brazilian company has been given the mining rights. There will be a high-level meeting at Railway Board on September 15 to decide the issue relating to the coal mining rights and upgradation of railway network in Mozambique. The meeting is to be attended by senior officials from Ministry of External Affairs, IRCON, RITES, Coal India and SAIL among others

Concession agmnt for Hyd metro
The Andhra Pradesh government and the Maytas-Nava Bharat consortium is expected to sign a concession agreement for the Rs 12,000 crore Hyderabad metro rail project by end September 2008. Simultaneously, they will also sign the shareholders' agreement. The project will be implemented by a SPV in which the state government will have 11 per cent (not exceeding a sum of Rs 250 crore) in the company, the two major consortium partners will have 26 per cent each.

Railways to transport coal to Mozambique
Railways will be venturing into transporting coal in foreign shores. RICON, a JV by IRCON and RITES, have been given a 25 year concession to rehabilitate, operate and upgrade 850 km long rail line in Central Mozambique including Beira Port to carry 12 mln tpa of coal at an estimated cost of about $ 440 million (approximately Rs 1,760 crore). IRCON and RITES are two PSUs of Indian Railways. The upgradation of the rail line, required to sustain the coal movement, is to cost about $ 260 million (approx. Rs 1,040 crore), while the rehabilitation and operation of the line will cost $ 180 million (approx. Rs 720 crore).

Changes in Western DFC route
The alignment of the first phase work of the Western Dedicated Freight Corridor has been finalised with about 20 changes from the original route plan. Deviations have been made at a few places to avoid congested areas and railway junctions between Rewari and Vadodara. Changes in the alignment were necessary because heavy settlements were coming on the way along the 917 km long route, said a source from IR. The route was diverted at many places including Bangugram, Makrena, Mahesana, Palanpur, Marwar and Phurela to avoid heavy displacements. The total length of the electrified Western Corridor from Rewari to JN Port Trust is 1426 km out of which work will begin between Rewari to Vadodara in the first phase. The Japan Bank International Corporation (JBIC), which is to fund 85 per cent of the total cost, is currently conducting an environment and social impact study of the first phase project. The report is likely to be submitted by November and after that a loan agreement will be signed with JBIC, said the official. The first phase is estimated to cost about Rs 25,000 crore.

RGIA prepared to emerge as a cargo hub
MK Airlines' charter flight on behalf of Lufthansa Charter and FedEx's charter plane will pick-up cargo at RGIA. The first two air charters - Boeing 747-200 freighter and - Boeing 747-400 F, one of the world's biggest cargo planes - have landed at the Rajiv Gandhi International Airport (RGIA). "These flights mark the first step in GMR Hyderabad International Airport Ltd's (GHIAL's) endeavor to make RGIA a truly world-class cargo hub in this part of the country," Viswanath Attaluri, Chief Commercial Officer, GHIAL said. "Being at the geographical centre of India, Hyderabad offers a great advantage for logistics movements of cargo both within India and connecting South East Asia and the Middle East, Europe and the US," Attaluri added. The standard 747-400 freighter can carry 1,13,000 kg (124 tonne) of cargo up to 8,240 km (4,450 nautical miles) with a maximum takeoff weight of 412,770 kg. The excellent cargo facilities available at RGIA have opened up exciting opportunities for attracting large- freighter planes to Hyderabad. Earlier, such cargo freight services were available to Chennai, Mumbai and Bangalore. The biggest cargo planes have started coming to RGIA and the number of such cargo charters is hound to increase in the near future. In addition to the general cargo, there has been a spurt in the export and import cargo handling at the RGIA since the airport commenced commercial operations on March 23, 2008. This has become possible due to the aggressive marketing efforts of both GHIAL and Hyderabad Menzles Air Cargo P Ltd to develop the charter cargo to achieve their goal of increasing the tonnage throughout of the terminal. The Air Cargo Complex at the RGIA currently has a capacity to handle 1,00,000 tonne per annum of cargo. The ultimate cargo handling capacity will be 1.3 million tonnes per annum. The RGIA has dedicated cargo apron facilities both for handling regular and freighter operations with four code 'C' freighter aircraft.

Shell-MRPL to began India operations
Shell-MRPL Aviation Fuels and Services Pvt Ltd announced the start of commercial operations in India with the fuelling of Jet Airways and Lufthansa aircraft at the Bengaluru International Airport. The company recently signed a MoU to supply aviation turbine fuel to Jet Airways at the BIA and Hyderabad airports, a Shell-MRPL release said. It had also signed an MOU with Lufthansa, to supply part of its ATF requirements at BIA.

Cargo carriers to continue ground handling
The move comes after cargo carriers told government last week that it would become difficult and uneconomical for them if the ground handling of cargo is delegated to airport developers as planned under a new ground handling policy scheduled to come into effect Jan 1. On this the government is likely allow cargo carriers to continue handling their own cargo at airports following a representation from them last week, a senior Airports Authority of India (AAI) official has reportedly indicated. Airport developers have been approached by both foreign and domestic ground handling companies for sub-contracts. Like the cargo carriers, airlines too insist on handling their own cargo. The ground handling market in India is estimated to be of Rs 30 billion, according to an E&Y report. Sensing a business opportunity, both foreign and domestic ground handlers are making plans to enter Indian airports. These companies believe that with more airports becoming functional, there will be enough space for all players to compete and thrive. Subsequently, about 25 ground handlers from India and abroad are reported to have expressed interest in handling ground services in over 40 airports, where modernization work is underway. Multinational handlers such as SATS, Menzies, Dnata (the ground handling wing of the Emirates Group), Globe Ground, Swissport and Equity Aviation are among those eager to enter the Indian ground handling segment on their own or through joint ventures with Indian ground handlers.

Auto business revs up air cargo movement
International cargo movement to and from Calcutta airport has increased by around 25 per cent in the past year, prompting foreign airlines to add more freighters on certain routes. "There has been a 25 per cent growth in international cargo movement to and from Calcutta airport and a 15 per cent increase in outward transit. Automobile parts accounted for the bulk of the growth in the movement of cargo from the city to other countries," a senior official of the Airports Authority of India said. Singapore Airlines has already added another freighter to the Calcutta-Amsterdam route and a weekly cargo service to Brussels was inaugurated this week. "Movement of auto parts from the factories in Jamshedpur to Japan and Korea has driven our growth," said Amin Khan, the manager of Singapore Airlines' cargo division in eastern India. An official of TKM, the logistics handling unit of Tata factories, said more than 100 tonnes of raw materials, mainly steel sheets, had been sent to Japan and Korea by air and ship in the past three months. "These raw materials are moulded at the factories there and the finished products are sent back." He declined comment on whether the Singur stand-off would affect cargo movement. "Export of steel and automobile parts has increased because of the Singur small car factory. Software components and high-technology automobile parts have to be sent by air," said Rakesh Shah, the chairman of the Engineering Export Promotion Council (EEPC). The increase in the number of airlines operating from Calcutta, too, has played a role in the growth of the business. "Automobile components from Brazil for the Tata Motors' factory in Lucknow are now routed through Calcutta airport on a regular basis. It is convenient to handle the cargo at Calcutta, as compared to Delhi, because it is faster here," said Anup Choudhury, the regional manager (east) of Wilson Sandhu Logistics.

IATA concerned over high airport charges
The International Air Transport Association (IATA) has expressed concern over the high user charges at Indian airports and burgeoning jet fuel prices in the country but hoped that corrective measures would be taken soon. "We have worked very closely with the Government of India to work out measures to lower costs in the aviation sector. Still, the user charges are among the highest," Giovanni Bisignani, chief of IATA, the body of global airlines. He expressed hope that the user charges would be made compliant with the norms laid down by the UN affiliate International Civil Aviation Organisation (ICAO).

Jet Air loses Mumbai airport contract
Jet Air is disqualified from the ground-handling contract for Mumbai International Airport (MIAL). Jet Air had tied up with UK-based ground-handling company ASIG for the project. US-based Evergreen Aviation, which had tied up with InterGlobe, was also disqualified on the grounds that it owns low-cost carrier IndiGo. The EoI clearly stated that no company having any connection with an Indian carrier will be allowed to bid for the contract. Seven national and international companies had submitted EoIs for the contract, which included Swiss Port International of Spain, Menzies Bobba, which does ground-handling at Hyderabad airport, and Turkey-based Celebi. The bidding process for the Rs 700 crore contract is in its last stages and the winner is likely to be announced by the end of next month.

AAI's GAGAN project gets approval
The Cabinet Committee on Economic Affairs (CCEA) has approved the Airports Authority of India (AAI) and ISRO's proposal for the implementation of the GPS-Aided Geo Augmented Navigation (GAGAN) project for seamless navigation over Indian airspace at an estimated cost of Rs 774 crore. An ex-post facto approval has also been given by the CCEA for Rs 148 crore that has already been spent in the first phase of the project. The implementation of the system is expected to change the complete aircraft route system in the country allowing for seamless travel for the entire Southeast Asia. Due to this system, any aircraft will not have to realign itself before landing and can straight away land on a turn. Currently, AAI is using ground based terrestrial navigation system for providing safe navigation over the Indian airspace.

Korean shipyard bags SCI's order
South Korean STX Shipbuilding Co. Ltd will build four new ships for Shipping Corp of India Ltd (SCI), India's largest shipping firm by fleet size and revenue. It has won $ 376.4 million (Rs1,728 crore) bid to build four new ships for Shipping Corp of India Ltd (SCI), India's largest shipping firm by fleet size and revenue. STX quoted $ 94.10 million for each of the so-called cape-size ships. China's New Times Shipbuilding Co Ltd had quoted $ 96.5 million, said a person with knowledge of the bids, which were opened on 12 September. They are the largest vessels capable of carrying dry bulk goods, typically as much as 1,75,000 tonnes. STX bid $ 94.10 million for each of the four capsize ships, beating its Chinese rival for the Shipping Corp. of India order. South Korea is the world's top shipbuilder by number of orders. STX has lately become the preferred destination for Indian fleet owners, largely because of prices, building capacity and early delivery. The company is building a new yard in Vietnam, in addition to its existing facilities in South Korea. SCI has ordered 16 ships from STX. These include six petroleum tankers, six medium and four large dry bulk cargo carriers. The Mumbai-based firm has ordered 32 new ships worth more than $ 1.88 billion at various global yards to replace some of its ageing fleet that have to be decommissioned in line with global maritime regulations. SCI has started buying bigger dry bulk cargo ships because shippers prefer them to transport larger quantities of cargo in a single trip to economize on freight costs. The Union government has recently granted navratna status to the firm, which gives full autonomy to SCI for capital expenditure without any ceiling. It allows SCI to make capital investment decisions and enter into joint ventures without prior approval from the shipping ministry. The firm plans to buy another 40 new ships worth close to $ 2.6 billion in the next four years, said Umesh C Grover, Director of SCI's technical and offshore services unit

Essar Shipping to raise $ 1.9 bn
Essar Shipping Ports and Logistics will raise $ 1.9 billion by the end of this year for its various expansion plans. The company has laid out an expansion plan for $ 2.5 billion in the next three years. The amount would be invested with a mix of equity of $ 600 million and the rest through debt. "We will raise the money by the end of this year. For the port business, we will borrow from Indian banks and for shipping and logistic businesses we will borrow from abroad," V Ashok, Director, Essar Shipping Ports and Logistics said. At present shipping contributes 65 per cent of revenues to the group. After 2010-11, Essar expects shipping revenue to come down to 50 per cent. "Over the last year, we have reorganised our businesses from a mere shipping company. As shipping is a cyclical business, it becomes too difficult to manage," he added. So the company decided to enter the port sector, which would bring in revenues throughout the year and is looking at building terminals at ports. Simulta-neously, it entered logistic business working for Essar Steel and Essar Oil.

Gateway to get 2 new cranes
Two new quay cranes, to be supplied by ZPMC of China, will start functioning at Gateway Terminals India's (GTI) existing berth at the Jawaharlal Nehru port from April next year, according to Prakash Tulsiani, COO of GTI. With this, the number of cranes at GTI terminal will rise to 10. The installation of the new cranes will push up GTI's handling capacity by an additional five lakh TEUs annually. The cranes, estimated to cost $ 6.9 million, would arrive some time in December, Tulsiani said.


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