YOG INFRA Q3 2024 insights
INDIA is set to see multiple road PPP projects, under the revamped BOT PPP concession model, and there is continud interest from international developers and funds to partner with local developers to support equity financing and investments for thses. We also see significant activity in port sector, both in terms of greenfield developments as well as improved mechanizations. Ropeways and multimodal logistics projects have been planned both at state and federal level, through use of PPPs to enhance efficiency and on-time delivery. Read more in our latest insight for the country.
This is second publication on a 2-part insight series on India
JULY 2024
USD 25 BN OPPORTUNITY SPURS TIE-UP TALK FOR INDIA ROADS
India's project pipeline of more than 5,000 km in the build, operate, transfer (BOT) model and needing an investment of USD 25 Bn has spurred global financial investors and local builders to explore potential partnerships. The developers will be responsible for construction, while the investor will provide financial support and acquire the project once it turns operational. Cube, with a portfolio of more than 8,400 lane km, is the only financial investor with a team large enough to take on the greenfield challenge.
The BOT model concession agreement will seek to address a majority of concerns, including ensuring adequate availability of land, standardizing traffic measurements, agreeing monetary compensation for delays, introducing financial support during construction, compensating lenders in case of project terminations, and mitigating financing risk for capacity augmentations. The government will extend concession lengths by 20% of their agreed tenures for every 25% shortfall in collections, compared with a 7.5% extension previously. The USD 25 Bn needed for the BOT pipeline will require equity capital of about USD 7.18 Bn, considering a 70:30 debt-to-equity ratio.
HYDERABAD EXPLORES PPP MODEL FOR MIR ALAM TANK AND TWO ELEVATED CORRIDORS
The Telangana government is aiming to take up the urban civic infrastructure projects in Public-Private-Partnership (PPP) mode, as evident from a few recent tender notifications by the Hyderabad Metropolitan Development Authority (HMDA).
The HMDA has invited proposals from the transaction advisory consultants for three of its projects construction of an iconic bridge across the Mir Alam Tank, and construction of two elevated corridors from Paradise, Secunderabad, all to be taken up in PPP mode. Such projects were being taken up in EPC (Engineering, Procurement & Construction) mode, whereby funding for the project would be the government’s responsibility.
The Mir Alam project includes construction of an aesthetically designed cable stayed bridge across the tank for a length of 2.65 kilometres, beautification of the lakefront, and development of supporting infrastructure such as parking, access roads, lighting, and retail outlets and eateries, apart from the development of tourism infrastructure, such as viewpoints, information centres and cultural installations highlighting the local heritage. The two corridors are being planned from Paradise -- one up to ORR junction of Shamirpet on the State Highway 01, and the other up to Dairy Farm Road on the National Highway 44.
JSW TUTICORIN, VOCPA SIGN CONCESSION AGREEMENT FOR MECHANISATION OF NORTH CARGO BERTH II AT VOC PORT, TAMIL NADU
JSW Tuticorin Multipurpose Terminal Private Limited, a subsidiary of JSW Infrastructure Limited (JSWIL) and V. O. Chidambaranar Port Authority (VOCPA) signed a concession agreement for the mechanization of the north cargo berth (NCB) III project at V. O. Chidambaranar Port. The scope of work includes the design, supply, installation, operation and maintenance of two shore unloaders at NCB-III berth and conveyor system from NCB-III berth to the stackyard at Hare Island and the development of the stackyard.
The project involves the mechanisation of NCB-III at VOC port for handling coal in Tamil Nadu through a Public-Private Partnership mode on a design, build, finance, operate and transfer basis. The capacity of the berth will be 6.96 Mn tonnes per annum. The estimated cost of the project is USD 42 Mn.
AUGUST 2024
INDIAN DEVELOPER SPML INFRA PLANS EQUITY RAISE
Indian infrastructure developer SPML Infra is looking to raise equity capital. The funds will mainly be used for projects in the water sector, which is its key focus area.
Kolkata-based SPML Infra is targeting projects worth USD 1.2 Bn, of which it expects to win contracts of at least USD 24 Mn this financial year. The Mumbai-listed company has built more than 650 projects in the engineering, procurement and construction as well as public-private partnership models. In the year through March 2024, SPML Infra reported a 50% increase in revenue to USD 160 Mn, from a year earlier.
The company has filed claims with various procurement authorities, totalling USD 490 Mn. India is facing a big water supply shortfall. While the demand is projected at 1,498 Bn cubic metres in 2030, supply is estimated at 744 Bn cubic metres.
CABINET APPROVED INFRA PROJECTS WORTH NEARLY INR 2 TRN
The Union Cabinet approved infrastructure projects to boost connectivity within cities through metro rail in Karnataka and assembly poll-bound Maharashtra and improving air connectivity to Bihar and north West Bengal. The Union Cabinet approved metro rail projects in Bengaluru in Karnataka, and Thane and Pune in Maharashtra.
The Phase-3 of the Bangalore Metro, comprising two corridors will be completed at a cost of USD 1.8 Bn -
JP Nagar to Kempapura
Hoshahalli to Kadabagere.
The Thane Integral Ring Metro, to be built at a cost of USD 1.4 Bn, will provide connectivity to the residential and industrial areas of the city with interchanges provided for the Mumbai Metro rail lines 4 and 5. The Pune Metro, which will be extended from Swargate to Katraj at a cost of USD 350 Mn, will provide underground connectivity to Market Yard, commercial and residential areas at Padmavati and Katraj, which has residential areas, a university campus and a zoological park.
The Cabinet also approved airport projects at Bagdogra in West Bengal and Bihta in Bihar at an estimated total cost of USD 350 Mn. A new civil enclave at Bagdogra airport has been approved at an estimated cost of USD 180 Mn. The project includes the construction of an apron capable of accommodating 10 parking bays suitable for A-321-type aircraft. A new civil enclave at Bihta in Bihar will be built at an estimated cost of USD 170 Mn.
SHIMLA TO GET INDIA’S LARGEST URBAN ROPEWAY, SECOND LARGEST GLOBALLY
In a bid to alleviate the growing vehicular traffic issues in Shimla, the Ropeway and Rapid Transport System Development Corporation (RTDC) has embarked on an ambitious project to establish an urban transportation network via ropeways.
The initiative, amounting to USD 200 Mn for a stretch of 13.79 kilometres with 13 boarding and de-boarding stations and one turning station, aims to revolutionize commuting in this hill resort city. The symposium focused on outlining a comprehensive framework for the ropeway project, underscoring its potential to significantly decongest Shimla's roads for the next four decades. This project marks a pivotal step towards enhancing Shimla's transport infrastructure with a focus on eco-friendliness and efficiency.
INDIA AND WORLD BANK COLLABORATE ON 781 KM GREEN NATIONAL HIGHWAY PROJECT
The Government of India and the World Bank have signed an agreement to construct the Green National Highway Corridors Project (GNHCP), as announced by the Ministry of Road Transport & Highways (MoRTH). This project spans 781 km across Himachal Pradesh, Rajasthan, Uttar Pradesh, and Andhra Pradesh, supported by a USD 500 Mn loan from the World Bank. The total project cost is around USD 1,288 Mn, with completion scheduled for May 2026.
The GNHCP promotes the use of local and marginal materials, such as lime, fly ash, and waste plastic. It also incorporates bio-engineering measures for slope protection, using innovative techniques like coco fiber, jute erosion control blankets, and shotcrete crib walls with vegetation. Additional methods include bamboo plantations, hedge brush layers, and geocells with hydroseeding. These techniques aim to reduce carbon emissions and conserve natural resources, especially in hilly areas, during both the construction and operation phases.
SEPTEMBER 2024
INDIA SEEKS USD 10 BN INVESTMENT FROM LONDON-BASED FUNDS
India is targeting USD 10 Bn in investments from London-based funds for key infrastructure projects, including highways and rapid transport systems in the National Capital Region by 2025. These initial investments from London fund houses are expected to bring long-term “patient capital” into India’s growing infrastructure sector. The aim is to deliver 4-6 marquee projects with the participation of a few big international players. A Financing Bridge agreement was signed between the City of London Corporation and Niti Aayog, aimed at channeling a portion of the trillions managed by London-based asset managers into Indian projects.
In the first phase, funds from London will be encouraged to bid on 8-10 National Highways Authority of India (NHAI) projects, and three multimodal hubs in the National Capital Region—Anand Vihar, Sarai Kale Khan, and Ghaziabad. These hubs are designed to integrate with Indian Railways, airports, Inter-State Bus Terminals (ISBTs), and the Delhi Metro for seamless connectivity.
India’s infrastructure development is largely funded through domestic sources, including government budgets. Global investors like the Canada Pension Plan Investment Board (CPPIB) have already invested significantly, with CPPIB contributing USD 30 Bn to India, USD 10 Bn of which is in infrastructure.
ADANI PORTS & SEZ TO DEVELOP MULTIPURPOSE BERTH AT GUJARAT’S KANDLA PORT
Adani Ports and Special Economic Zone Ltd (APSEZ), India’s largest port developer-cum-operator, has signed a concession agreement with Deendayal Port Authority (DPA) to develop Berth No. 13 at Deendayal Port, Kandla, Gujarat. APSEZ has incorporated a wholly owned subsidiary, DPA Container and Clean Cargo Terminal Limited (DPACCCTL), that will carry out operations at the berth.
In July 2024, APSEZ received the LOI for the berth's development, operation and maintenance for a 30-year concession period. APSEZ will develop the berth under DBFOT (Design, Build, Finance, Operate, and Transfer) model for multipurpose clean cargo, including container cargo. Berth No. 13 is 300m long and offers 5.7 MMT capacity annually. It is likely to be commissioned in FY27.
VADHAVAN PORT PROJECT MOVING ONTO THE NEXT STAGE
The project will be constructed by Vadhavan Port Project Limited (VPPL), an SPV formed by Jawaharlal Nehru Port Authority (JNPA) and Maharashtra Maritime Board (MMB) with a shareholding of 74% and 26%, respectively. It will be India’s biggest port project and is set to become among the top 10 container ports in the world – and as a green and smart port, it will also be a one-of-a-kind installation for India.
Royal HaskoningDHV has played a major part in this project – the company was assigned the task of planning and developing the port master plan and creating the detailed design including tender documents for the new port. Overall, the project includes the development of core infrastructure, terminals and other commercial infrastructure in Public-Private Partnerships (PPP) mode.
The new port will comprise nine container terminals, each 1000 meters long, four multipurpose berths, including the coastal berth, four liquid cargo berths, a Ro-Ro berth, and a Coast Guard berth. The project also involves the reclamation of 1,448 hectares of area in the sea and the construction of 10.14 km of offshore breakwater and container/cargo storage areas.
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