Costain is an international engineering and construction group with a reputation for technical excellence founded on more than 140 years of experience.

Strategy for Highways Sector

- India

Contents:

1. Introduction: 1

2. Costain Highways Sector Strategy: 1

3. Solution: Business expansion in India 3

4. Client: National Highways Authority of India (NHAI): 5

5. Business Strategy and Action Plan: 10

6. Proposed Action Plan: 13

7. Appendices: 14

7.1 Appendix 1: Types of Projects in NHAI 14

7.2 Appendix 2: Details of projects under NHDP (phase II, III ) 19

7.3 Appendix 3: Sample list of contractors 32

7.4 Appendix 4: IRCON INTERNATIONAL 34

7.5 Appendix 5: Rail sector opportunity: Dedicated Freight Corridors: 39

1. Introduction:

Costain highways sector vision is “to become the No 1 Provider of Highways Solution

Services to ‘Blue Chip’ customers.” The financial objective is “to maintain double digit

growth in annual turnover and Profit”.

At present, Costain is largely a UK based business with almost no presence

internationally. In the short-term, due to the forthcoming Olympics in London this

growth may be achieved despite the fears of economic recession. However, in the

medium to long-term, a sustained double digit growth may be difficult to achieve

without resorting to new markets and new services. Expanding Costain’s business into

India can help achieve this objective.

This report assesses the current Highways sector strategy for Costain, assesses the

market potential for Highways sector in India, suggests different strategies for launching

business in India, and assesses future potential for business growth in other allied

sectors and other markets.

2. Costain Highways Sector Strategy:

Vision:-

‘To be the No 1 Provider of Highway Solution Services to “Blue Chip” Customers’

Mission:

Health and safety: Ensure the health and well being of our staff and those

affected by our activities

Environment: Minimise our direct impact on the environment and continue to

raise awareness, internally, with our supply chain and our key external

stakeholders, of the importance of protecting and where possible enhance the

environment.

Our People: Create a shared culture and work ethic driven by strong leadership,

sustained through career progression and enhanced through talent identification

and management, personal development, recognition and reward.

Page 1

Community: Enhance the reputation of the company and its clients, partners and

suppliers through active stakeholder engagement and the delivery of legacy

projects, which offer long term benefits to the community and meet society’s

needs.

Marketplace: Improve our supplier and subcontractor selection and management

enabling us to continually deliver improved efficiencies and added value for

sustained business performance. Work to achieve success and so provide our

stakeholders with the high quality outcomes they expect.

Objectives:

Zero Accidents

Delighted Customers

Minimum impact on the environment

Maximum contribution to the communities in which we work

Maintain Double Digit growth in annual Turnover & Profit

Current problem:

‘Challenge is to maintain sustained growth and profitability’.

Highly competitive UK Highway sector

Investment opportunities in Capital Projects likely to reduce particularly after

London Olympics.

Maintenance projects give lower profit margins

TUPE regulations create “people” issues and drain resources in terms of

management time.

Page 2

3. Solution: Business expansion in India

Roads are the dominant mode of transportation in India, carrying 90% of the country’s

passenger traffic and 65% of its freight. The density of India’s highway network is 0.66

km of highway per square kilometre of land.

(Source: http://web.worldbank.org accessed on 23/7/2008).

India has accorded very high priority to investments in Transport Infrastructure. In

October 2006, the Indian Prime Minister had indicated that India needs investments in

infrastructure to the tune of US$320 billion in the next 5-10 years. Out of this, at least

US$ 50 – 60 billion is required to improve road infrastructure in next 5 years (Source:

India Investment Commission 2006).

Roads sector in India:

The road network aggregating to 3.3 million KM consists of National Highways, State

Highways, major and other district roads and village/rural roads.

Table 1:

National Highways/Expressways 66590 Km

State Highways 128600 Km

Major and other roads 470000 Km

Rural Roads 2650000 Km

(Source: India Development Report 2008)

National Highways:

The National Highways is made up of

Single lane (3.75m width) 32%

Double/ Intermediate Lane (3.5 m width

per lane)

56%

Four/Six/Eight Lane (3.5 m width per

lane)

12%

(Source: India Development Report 2008)

Page 3

The Central Government is responsible for development and maintenance of the

National Highways and it carries out the work using 3 main agencies:

1. National Highways Authority of India (NHAI)

2. State Public Works Departments (PWD’s)

3. Border Roads Organisation (BRO)

Government Strategy for Highways:

Launching ‘National Highway Development Program’ with its seven phase

program ending in 2015

Operationalising the National Highways Authority to act as infrastructure

procurer and not just provider

Amending the National Highways Act to expedite land acquisition, permit

private financing and allow tolling.

Public-Private Partnerships:

Several initiatives have been taken by the government to encourage private sector

participation in the NHDP, which includes:

Provision of capital subsidy up to 40% of the project cost to make projects

commercially viable.

100% tax exemption for 5 years and 30% Tax relief for 5 years.

Provision of encumbrance free site for work, i.e. the Government shall meet all

expenses relating to land and other pre-construction activities

Foreign Direct Investment up to 100% in road sector

Duty free imports of high-capacity equipment for construction projects

Higher concession period (up to 30 years)

Right to collect and retain toll

Page 4

4. Client: National Highways Authority of India (NHAI):

The type of projects NHAI1 undertakes is given in appendix 1.

From the details in appendix 1, it can be seen there are 3 types of projects are that NHAI

are may be of significance to Costain.

Build operate and Transfer (BOT)

Multilateral agencies aided Project (World Bank, ADB etc)

NHAI funded project

International Competitive bidding is carried out for projects funded by Multilateral

funding agencies and for larger projects for which sufficient nos. of domestic

consultants/contractors/consortium is not available.

NHAI awards consultancy services projects for

IT Services

Feasibility studies and project preparation

Construction supervision

Highways sector studies, etc

The details of the steps in selection of Consultants are shown in appendix 1.

National Highways Development Project: NHAI is mandated to implement the

National Highways Development Project (NHDP), the largest highway project ever

undertaken in India. This project is being executed in 7 phases to be completed by 2015.

NHDP Phase I& II: The Phase I & Phase II of NHDP comprises of

(i) Golden Quadrilateral (GQ), i.e. National Highways connecting four metropolitan

cities --Delhi, Mumbai, Chennai & Kolkata having an aggregate length of 5,846 km.,

(ii) North-South & East-West Corridor (NS-EW) which comprises 4-laning of 7,300

km of National Highways connecting North-South corridor from Srinagar to

1 NHAI is responsible for the development, maintenance and management of National Highways

entrusted to it and for matters connected or incidental thereto. The Authority was operationalised

in Feb, 1995.

Page 5

Kanyakumari with Cochin-Salem spur and East-West corridor from Silchar to

Porbandar,

(iii) 380 Km length of National Highways are proposed to be upgraded to 4-lane

standards for providing connectivity to 10 major ports of the country to

NHDP,

(iv) Up gradation of 831 km of other important National Highways.

The total estimated cost of the NHDP Phase I & II having a total length of 14,357 km

is about Rs.64,639 crore (US$161 billion)

NHDP Phase-III: NHDP Phase-III involves 4-laning of 12,109 km of NH having

High-density corridor connecting State capitals, important tourist places,

economically important areas etc. on PPP basis. The Government has approved

implementation of 4,815 km under NHDP Phase-III A. The proposal for

implementation of the balance length of about 7,294 km under NHDP Phase-IIIB

has been approved recently.

NHDP Phase-IV: Phase IV of NHDP comprising 2-laning with paved shoulders of

20,000 kms of National Highway.

NHDP Phase-V: Phase V of NHDP comprising six laning of 6,500 km of existing 4

lane highways on Design Build Finance & Operate (DBFO) basis was approved on

5.10.2006. This includes 5,700 km of GQ and other selected stretches.

Consultancy works for a length of 1,225 km has already been awarded for

feasibility study and bids for 180 km length are under evaluation. Civil works for a

length of 148 km was awarded on BOT Concessions and for balance follow up

actions are being taken to award the contracts on BOT basis.

NHDP Phase-VI: Government has recently approved the proposal for development

of 1000 kms of access controlled four /six lane divided carriageway expressways

under NHDP phase-VI on BOT basis at the cost of Rs. 16,680 crore (US $4170 million)

Status of NHDP:

Page 6

NATIONAL HIGHWAY DEVELOPEMENT PROJECT(NHDP)

National Highways Development Project is being implemented in 4 phases I, II ,IIIA & V at present. The present phases under Phase I,

II & IIIA envisages improving more than 25,785 km of arterial routes of NH Network to international standards. NHDP Phase I & II are

likely to be completed by December 2008 whereas NHDP Phase IIIA is scheduled for completion by December 2009. In addition to

above, 6 laning of 148 km has been awarded 6 laning is proposed under NHDP Phase V. The project-wise details NHDP Phase I, II, IIIA

& V

NHDP & Other NHAI Projects 

(Status :30th June, 2008)

NHDP Port

ConnectivityOthers Total by

NHAIGQNS - EW

Ph. I & II  

NHDP Phase

III  

NHDP Phase

V   NHDP   Total

Total Length

(Km.)5,846 7,300 12109 6,500 31755 380 962 33097

Already 4-Laned

(Km.)5,689 2620 498 - 8,807 179 573 9559

Under Implementation

(Km.)157 3701 1577 1030 6465 195 369 7029

Contracts Under

Implementation (No.)18 143  25 2 188 8 15 211

Balance length for award

(Km.)- 821 10,034 5470 16,325 6 20 16,351

Page 7

Page 8

Offered Projects:

The NHDP Phase I programme is operational from December 2000 and most of the

projects are already being implemented. Currently, there are large number of projects

being offered for NHDP phase II, Phase IIIA, Phase IIIB, and Phase V. The detailed list

of these projects is in appendix 2. It is clear that opportunities are endless in the

foreseeable future.

Contracts competition:

Already large numbers of firms are operating within the NHDP. A sample list of the

contractors who have already undertaken various projects is given in appendix 3. Most

of the global firms have formed JV with Indian firms for carrying out construction

projects. The NHDP project has attracted large number of international construction

firms/consultants, and they have been operating successfully in India.

Future Outlook:

The Government has formulated an ambitious plan for investment of Rs.2, 35, 430

Crore (US$ 58.9 billion) for up gradation of National Highways under various phases of

NHDP in a phased manner in the years to come. The details of this plan are as under:-

Phase Project Likely cost in Rs

(in crore)

Likely cost in US$

(million) (1US$=

40 Rs)

NHDP phase I &

II

GQ and ES/NS

corridor

52434 13108.5

NHDP phase III 4 laning 80826 20206.5

NHDP Phase IV 2 laning 27800 6950

NHDP Phase V 6 laning 41210 10302.5

NHDP Phase VI Expressways 16680 4170

NHDP Phase VI Flyovers, ring road 16680 4170

(Source: India Development Report 2008)

Page 9

Based on the lines of Central Government’s NHAI, various State Government’s have

also created their own agencies to carry out Road construction works. Among the

prominent agencies are:

1. Maharashtra Road Development Corporation Ltd: The details are provided in the

official website http://www.msrdc.org/tender.aspx.

2. Andhra Pradesh Road Development Corporation: The details are provided in the

official website http://www.aprdc.in/

3. Karnataka Road Development Corporation Ltd: The details are provided in the

official website http://www.krdcl.co.in/index.html

Thus, the Road sector in India is a very attractive market. Although there are several

global players operating in the market, the total investment and number of projects

being offered is so large that there is enough room for more players. The biggest client

is the National Highways Authority of India, but there are many State level agencies

that have very ambitious plans for investments.

Costain plc may like to explore business growth opportunities in India in the Highway

sector.

5. Business Strategy and Action Plan:

Business strategy for Highway sector: Costain’s present Highway sector

The Highways sector in India is a very attractive market and offers business growth

potential for Costain plc because:

1. India’s Highway sector is growing at a phenomenal rate

2. Very high demand for Services in the form of consultancy like Planning,

feasibility studies, Design, cost appraisal, project management,

construction supervision etc.

3. Opening up of business opportunities in other sectors like Rail, Airports,

Property, Retail etc, which are potentially high growth areas in India.

India can become a base for business expansion in the nearby growth

Page 10

markets like UAE and Qatar because bulk of the labour force in the

Middle-east is from India.

4. In-sourcing of the human capital from Indian business to take care of

Highways maintenance sector in UK, so that Costain can focus their

resources on the more lucrative Capital works projects.

A large number of firms from UK, USA, Australia, China, Japan, Korea etc are active

players in India’s Highway sector and so the risk of entering in India has got drastically

reduced. In fact, Costain plc may have lost out on opportunities in the last 7-8 years.

However, it is believed that even today there is enough potential for business expansion

in India.

Entering India Highway sector market will mean that there will have to be an upfront

investment and a commitment of long-term business expansion plan in India.

Market Entry strategy for Costain:

There are 3 ways for market entry:

1. Organic growth: India has allowed 100% FDI in the Road sector. Costain can

incorporate their subsidiary in India, build systems and procedures afresh,

recruit locally (from a rich pool of technical workforce available), and start their

operations. This will be cautious move but may be time consuming. Given that

Costain has already lost out on valuable time, and the fact that many foreign

firms are already operating successfully in India, the avenue of organic growth

may not be most desirable.

2. Acquisition: Costain may offer to acquire an Indian firm of sufficient scale and

size, which is active in the Highways sector. Many firms would be willing to be

acquired by a UK based large firm like Costain. The local knowledge and

experience of the acquired firm can be retained while the systems and

Page 11

procedures may be reconfigured and rationalised. Costain can in reasonable time

operate in the Indian market, with its brand and values intact.

3. Strategic Alliance: A joint venture can be formed with a strategic partner in

India, like many other foreign firms have done before. One such firm that may

be interested is IRCON INTERNATIONAL2. The profile of this firm is in

appendix 4. IRCON has previously worked with ATKINS in UK and the

Middle- east, and is highly reputed within India. This is the recommended

strategy because with a strategic partnership with IRCON, the low value

maintenance works in UK as well as India can be managed by IRCON, and

COSTAIN can focus on high value capital projects in UK and Capital

projects and consultancy projects in India. This business model can be

expanded in all other markets where IRCON already has a presence.

6. Proposed Action Plan:

1. Create a Business Strategy plan for Highway sector in India, and launch the

business expansion in India at the earliest.

2 IRCON International is a public sector enterprise carrying out turnkey solutions in the Infrastructure

markets in India as well as Malaysia, Middle east , Central Asia and Africa.

Page 12

2. In the first phase, consultancy services practice to be developed for India,

using the in-house talent already available within Costain.

3. In the second phase, focus will be on the global tenders which will be

awarded based on international competitive bidding.

4. After a prominent presence in the Indian highways sector is gained, new

sectors can be explored for business expansion. For example, a $10 billion

project in India called the ‘Dedicated Freight Corridor’ has been launched.

Details are in appendix 5.

5. Business opportunities in nearby markets like UAE and Qatar, to be tapped

by using India as the base.

7. Appendices:

7.1 Appendix 1: Types of Projects in NHAI

Types of Projects NHAI undertakes 

Page 13

1. Build Operate and Transfer (BOT):

In order to promote involvement of private sector in construction and maintenance of National Highways,

projects are offered on BOT basis. Concession period, which can range up to thirty years, road is transferred

back to NHAI by the Concessionaire. Projects of Delhi - Gurgaon Section (Access Controlled 8/6 Lane) and

Nellore - Tada etc. are being executed on BOT basis.

 

2. Externally Aided Projects:

NHAI is the implementing agency for executing projects for which loan assistance is available from Multilateral

Development Agencies like ADB and World Bank or JIBC. In case of these projects, majority of the funds are

transferred by Ministry of Road Transport & Highways to NHAI through budgetary route and NHAI receives

agency charges for executing these projects.

3. NHAI funded Projects:

NHAI receives funds for augmenting its capital base from the Government through annual budgets or by Market 

borrowing.

Bidding process :

General procedure for selection is a two-stage bidding comprising of:

Stage 1:

Pre-qualification - on basis of technical and financial expertise of the firm and its track records on

similar projects.

Stage 2:

Commercial bids from pre-qualified bidders. There is a time lag between stage 1 and 2.

Wide publicity is given to NHAI tenders so as to attract attention of leading Contractors / consultants.

Notice inviting tenders is posted on this web site and published in leading newspapers.

Final selection :

If a project is funded by Multilateral funding agency like World Bank, ADB, selection is with consultation /

concurrence of the funding organisation. For other types of projects selection is as per standards work

procedures.

Different Procurement Procedures

International Competitive Bidding(ICB)

Projects financed by international lending agencies & for larger projects for which sufficient nos. of domestic

consultants /contractors/consortium are not available.

Local (National) Competitive Bidding (LCB/NCB)

Projects financed by NHAI (in general)

Consultancy Services

What are Consultancy Services?

IT Services

Feasibility studies and project preparation

Construction Supervision

Highway Sector Studies

Others

Page 14

Procurement of Consultants is mostly on

Quality and Cost based selection

Quality based selection

Single Source Selection  (sometime)

What Constitutes a Consultancy - Technical Proposal (TP) & Financial Proposal (FP)?

Technical Proposal

Background information ,experience in similar works

Approach & methodology, work programme

Manning schedule ,bio-data of key-personnel

Comments on TOR & Associated arrangements if any

Financial Proposal

Lump Sum, Cost plus fee basis ,out-of-pocket expenses ,man month rates

Traveling & transport, Office accommodation, Stationery

Computer & Equipment charges, supply of equipment

Support Staff

Steps in Quality & Cost Based Selection of Consultants

Preparation of Terms of Reference (TOR)

Preparation of Short List

o Open Advertisement  On & of entire pre-qualification document

o Long List from : Lending Agencies & Available with NHAI

Issue of Letter of Invitation and TOR and Draft Agreement

Receipt of Technical Proposal (TP) & Financial Proposal(FP)

Evaluation By Committee of TP

Opening of FP of Consultants who qualify in TP

o In the Presence of Representatives of Consultants

o Marks obtained in TP are informed prior to opening of FP

Combined Evaluation of TP & FP

Negotiations on technical issues with highest ranked consultant

Work Award

How and When Quality & Single Source Selection of Consultants

Quality Based Selection : Adopted by ADB & JIBC

o After Evaluation of Technical Proposal , the financial proposal of Highest ranked consultant is

Page 15

negotiated, by a committee

o After Successful negotiation, work is awarded

Single Source Selection : In Urgent Cases Only

o Where Work An Extension of Existing study ,by same firm...

o Where rapid Selection is Essential

o Where the firm has excellent experience in the particular field

Steps in Civil Works Contract Procurement

Invitation to Contractors to Pre-Qualify

o Pre-Qualification of Contractors

o Issue of Tender (BID) documents to pre-qualified contractors

o Receipt of tenders &opening of tenders in the presence of tenderers

o Evaluation of Tenders

o Award of Contract

Details of Civil Works Contract Procurement

Pre-Qualification of Contractors

o Press Notification & Entire PQ Document on www.nhai.org

o Submission of PQ Applications

o Evaluation Parameters

Financial

Average annual turnover, bid capacity, liquid assets

o Technical

Personnel Organization ,plant and equipment

o Experience in Similar Works Track Record

Satisfactory timely completion &litigation

o Evaluation of Tenders

Bid Security ,Completeness and signed ,correction of computational errors.

o Technical Security

Substantial Responsiveness

A tender which confirms to all the terms, conditions and specifications of

the tender documents , without material deviation

o Only Substantially bids are compared Award of work to the lowest evaluated bidder

Page 16

What generally Constitutes a BID document?

Volume I

o Instructions to Bidders ,conditions of contract ,special conditions

Volume II

o Technical Specifications

Volume III

o Form of BID, bill of quantities,schedules,model forms

Volume IV

o Drawings

key parameters of procurement of civil works under International Competitive Bidding

Currency Conversion

o All Amount are converted into single currency at the exchange rate on the date of BID

opening

Price Preference

o - Price preference for domestic bidders.

Page 17

7.2 Appendix 2: Details of projects under NHDP (phase II, III )

PROSPECTS FOR INVESTMENT STATEWISE PROJECTS

UNDER NHDP PHASE II

S.NO STRETCH NH LENGTH(Km.)

ESTIMATED PROJECT COST

RS. (CRORES ) USD

(MILLION)

STATE: Assam

1. Udarband to Harangajo 54 31 202.12 43.9

STATE: Jammu Kashmir

1. Banihal- Batole-Udhampur 1A 122 1035.00 230.00

2. Srinagar- Khanbal-Banihal 1A 32  129.00 28.60

3. Two tunnels on Udhampur-Banihal-Srinagar Section 1A 19  5000.00 1111.10

4. Udhampur Jammu (0-66) 1A 86 1011.00 224.60

STATE: Kerala

1. Walayar-Vadakkancherry  47 55 600.00 132.00

2. Vadakkancherry -Thrissur 47 29  515.00 114.00

Page 18

STATE: Maharashtra

1. Nagpur Bypass 7 21.26 183.48 40.77

2. MP/MH Border to Manasar 7 37.40 157.90 35.09

3. Manasar to Nagpur I/C Kamptee Kanoon 7 36.46 227.00 50.44

STATE: Punjab

1. Jallandhar -Amritsar 1 20 190.00 42.20

STATE: Tamil Nadu

1. Salem-Coimbatore Kerala Border Section 47 82 540.00 120.00

STATE: Uttar Pradesh

1. Agra Bypass Km176-800 of NH-2 to Km 13.03.0 of NH-3 2,3 32.800  345.00 75.99

PROSPECTS FOR INVESTMENT STATEWISE PROJECTS

UNDER NHDP Phase III-A

S.NO STRETCH NH LENGTH(Km.)

ESTIMATED PROJECT COST

RS. (CRORES ) USD

(MILLION)

STATE: Andhra Pradesh

1. Vijaywada-Machhlipatnam 9 65 423.80 92.13

2. Hyderabad-Vijaywada 9 176 1141 248.04

3. Tirupati - Tiruthani - Chennai 205 138 899.76 195.6

STATE: Bihar

Page 19

1. Patna-Muzaffarpur 19 & 77 60 391.20 85.04

2. Patna-Bakhtiarpur 30 53 345.56 75.12

STATE: Delhi

1. Delhi-Meerut 58 46 299.92 65.20

2. Delhi -Hissar (Delhi Portion) 10 20 130.4 28.34

STATE: Gujarat

1. Surat-Hazira Port 6 29 189.08 41.10

2. Kandla-Mundra Port 8A 73 475.96 103.47

STATE: Haryana

1. Rohtak-Hissar 10 80 521.60 113.39

2. Panipat-Rohtak 71A 73 475.96 103.47

3. Rohtak-Bawal 71 97 632.44 137.49

STATE: Jharkhand

1. Hazaribag-Ranchi 33 75 489 106.30

STATE: Karnataka

1. Mulbagal-Kamataka/AP Border 4 11 71.72 15.59

2. Bijapur-Hospet 13 194 1264.88 274.97

3. Balgaum-Goa /KNT Border 4A 84 547.68 119.06

4. Kundapur-Surathakal 17 71 462.92 100.63

5. Mangalore-KNT/Kerala Border 17 18 117.36 25.51

Page 20

STATE: Kerala

1. Charthalai-Paliakad 47 50.5 329.26 71.58

2. Pallakad- Thiruvananthapuram 47 123.5 805.22 175.05

3. Trivendrum -Kerala/Tamil Nadu Border 47 43 280.36 60.95

4. Kerala/Tamil Nadu Border -Kanyakumari 47 70 456.4 99.22

STATE: Maharashtra

1. Nagpur-Wainganga Br 6 60 391.20 85.04

2. Pimpalgaon-Nasik-Gonde 3 60 391.20 85.04

3. MP/Maharashtra Border-Dhule 3 97 632.44 137.49

STATE: Orissa

1. Chandikhole-Duburi 200 39 254.28 55.28

2. Panikoili-Roxy 215 249 1623.48 352.93

3. Duburi-Talcher 200 98 638.96 138.90

4. Roxy-Rajamunda 215 20 130.40 28.35

STATE: Punjab

1. Amritsar-Wagha Border 1 35 228.20 49.61

2. Chandigarh-Kurali 21 30 195.60 42.52

3. Parwanoo-Shimla (Punjab, Haryana and HP) 22 110 717.20 155.91

STATE: Rajasthan

1. Reengus –Sikar 11 41 267.32 58.11

Page 21

2. Tonk -Kota -Deoli 12 64 417.28 90.71

3. Deoli –Jhalawar 12 178 1160.56 252.30

STATE: Tamil Nadu

2. Nagapatnam -Thanjavur 67 74 482.48 104.89

5. Krishnagiri -Tindivaram 66 170 1108.4 240.96

6. Trichy -Puddukotai -Ramanathapuram 210 200 1304 283.48

STATE: Uttaranchal

1. Muzaffernagar -Haridwar 58 & 72 77 502.04 109.14

2. Haridwar -Dehradun 72 69 449.88 97.80

STATE:West Bengal

1. Barasat –Bangaon 35 60 391.2 85.04

Total 3346 21679 4712.82

PROSPECTS FOR INVESTMENT STATEWISE PROJECTS

UNDER NHDP PHASE V

S.NO STRETCH NH LENGTH(Km.)

ESTIMATED PROJECT COST

RS. (CRORES ) USD

(MILLION)

STATE: Andhra Pradesh

1. Chilkaluripet-Vijayawada-Elluru-Rajamundri 5 270 1712 417.17

2. Tada-Neliore Bypass 5 130 824 201.02

3. Vishakapatnam-Ankapalli- Rajamundri 5 200 1268 309.27

Page 22

4. Srikakulam-Vishakhapattnam Ankapalli 5 100 634 154.63

5. Neliore-Chilkaluripet 5 184 1167 284.53

6. Icchapuram-Srikakulam 5 140 888 216.49

STATE: Bihar

1. Aurangabad-Barwa Adda 2 70 444 108.24

1. Vanarasi-Aurangabad 2 140 888 216.49

STATE: Gujarat

2. Ahmedabad-Vadodara Expressway NE-1 95 602 146.90

1. Samaikhiali-Gandhidham 8A 56 355 86.60

3. Surat Dahisar(Gujarat portion) 8 120 761 185.56 

3. Udaipur - Ahmedabad 8 140 888 216.49 

STATE: Jharkhand

1. Barwa Adda - Panagarh 2 100 634 154.63

1. Aurangabad- Barwa Adda 2 150 951 231.95

STATE: Haryana

1. Gurgaon-Kotputli-Jaipur(Haryana portion) 8 126 799 194.84

2. Panipat-Jalandhar 1 116 735 179.38

2. Delhi – Ahmebad 1 140 888 216.95

STATE: Karnataka

1. Bangalore-Tumkur 4 65 412 100.51

Page 23

2. Hubli-Chitradurga 4 200 1268 309.27

3. ChitradurgaBypass-TumkurBypass 4 145 919 242.22

4. Bangalore-Krishnagiri 7 55 349 85.05

5. Belgaum-Hubli 4 110 697 170.10 

5. Kagal - Belgaum  4 77 488 119.07 

STATE: Madhya Pradesh

1. Indore-Dewas 3 55 349 85.05

STATE: Maharashtra

1. Satara-Kagal-Belgaum 4 133 843 205.66

2. Pune Satara 4 145 919 224.22

3. Surat Dahisar (Maharashtra portion) 8 125 793 193.29

STATE: Orissa

1. Chandikhol-Paradeep 5A 77 488 119.07

2. Chandikhol-Jagatpur- Bhubaneswar 5 70 444 108.24

3. Balasore Chandikhol 5 140 888 216.49

4. Bhubneshwar-lchchaDuram 5 185 1173 286.07 

STATE: Punjab

1. Ludhiana-Chandigarh 95 & 21 82 520 126.80

1. Panipat - Jalandhar 1 184 1167 284.53 

STATE:Rajasthan

Page 24

1. Kishangarh Udaipur 79A 79 & 76 315 1997 487.10

2. Gurgaon-Kotputli-Jaipur (Rajasthan portion) 8 104 659 160.82

3. Udaipur-Ahmedabad 8 95 602 146.90

STATE: Tamil Nadu

1. Chennai-Tada 5 50 317 77.32

2. Krishnagiri-Poonamalee 7 & 4 240 1522 371.12 

2. Bangalore -Krishnagiri 7 40 254 61.85

STATE: Uttar Pradesh

1. Agra-Etawah Bypass 3 125 793 193.29

2. Etawah -Allahabad 2 310 1965 479.37

3. Allahabad Bypass-Varanasi 2 160 1014 247.41

4. Varanasi-Aurangabad 2 50 317 77.32

5. Hapur-Moradabad 24 110 697 170.10

6. Delhi-Hapur 24 60 380 92.78

7. Delhi-Agra 2 130 824 201.02

8. Agra-Gwalior 3 85 539 131.44

STATE:West Bengal

1. Dhankuni-Baleshwar 4 & 6 240 1522 371.12

2. BarwaAdda-Panagarh 2 20 127 30.93

3. Panagarh-Dhankuni 2 135 856 208.76

Page 25

Total 6304 39967  9748

PROSPECTS FOR INVESTMENT STATEWISE PROJECTS

UNDER NHDP Phase PHASE III B

S.NO STRETCH NH LENGTH(Km.)

ESTIMATED PROJECT COST

RS. (CRORES ) USD

(MILLION)

STATE: Andhra Pradesh

1. Cuddapah-Mydukur-Kumool 18 192 1251.84 272.14

2. Hyderabad-Yadgiri 202 30 195.6 42.52

STATE: Arunachal Pradesh

1. Itanagar-Arunachal Pradesh/Assam Border 52A 22 143.44 31.18

STATE: Assam

1. Doboka-Assam/Nagaland Border-Dimapur 36 124 808.48 175.76

2. Baihata Chariali-Banderdewa 52 314 2047.28 445.06

3. Badardewa-Assarn/Arunachal Pradesh Border 52A 9 58.68 12.76

4. Assam/Meghalaya Border to Assam/Tripura Border 44 116 756.32 164.42

5. Silchar-Assarn/Mizoram Border 54 50 326 70.87

STATE: Bihar

1. Muzaffarpur-Sonbasra 77 89 580.28 126.15

2. Motihari-Raxaul 28A 67 436.84 94.97

3. Bakhtiarpur-Begusarai-Khagarai-Purnea 31 255 1662.6 361.43

Page 26

4. Gopalganj-Chapra-Hajipur 19 & 85 153 997.56 216.86

5. Forbesganj-Jogwani 57 A 13 84.76 18.43

6. Mokama-Munger 80 70 456.4 99.22

7. Patna-Buxar 84 130 847.6 184.26

STATE: Chhatisgarh

1. Kumud-Dhamtari 43 23 149.96 32.60

2. Raipur-Simga 200 28 182.56 39.69

STATE: Goa

1. Panaji-Goa/KNT Border 4 A 69 449.88 97.80

2. Maharashtra/Goa border- Panaji Goa/KNT Border 17 139 906.28 197.02

STATE: Gujarat

1. Jetpur-Somnath 8D 127 828.04 180.01

2. Gujara/Maharashtra Border-Surat 6 84 547.68 119.06

3. Gujara/MP Border-Ahmedabad 59 210 1369.2 297.65

STATE: J & K

1. Srinagar -Baramula -Uri 1 A 101 658.52 143.16

STATE:Kerala

1. KNT/Kerala border-Khozikode-Eddapally 17 451 2940.52 639.24

STATE: Maharashtra

1. Kalamboli-Mumbra (6 Laning) 4 20 130.4 28.35

Page 27

2. Talegaon-Amravati 6 58 378.16 82.21

3. Pune-Sholapur 9 170 1108.4 240.96

4. Panvel-indapur 17 84 547.68 119.06

STATE: Madhya Pradesh

1. Bhopal-Rajmarg crossing -Jabalpur 12 297 1936.44 420.97

2. Bhopal-Sanchi 86 (Ext.) 40 260.8 56.70

3. Indore-Jhabua-Gujara/MP Border 59 169 1101.88 239.54

4. Obaiduliaganj-Bheembetka 69 13 84.76 18.43

5. Jhansi-Khajuraho 75 100 652 141.74

STATE:Manipur

1. Nagaland/Manipur Border-imphal 39 140 912.8 160.17

STATE:Mizoram

1. Assam/Mizoram Border-Aizawl 54 113 736.76 198.43

STATE:Meghalya

1. Shillong (excluding Shillong Bypass)-Assam/Meghalaya Border 44 136 886.72 192.77

STATE:Nagaland

1. Kohima-Nagaland/Manipur Border 39 28 182.56 39.69

STATE: Orissa

1. Sambalpur-Baragarh-Chattisgarh/Orissa Border 6 84 547.68 119.06

2. Bhubaneshwar-Puri 203 59 384.68 83.63

Page 28

STATE: Punjab

1. Amritsar-Pathankot 15 101 658.52 143.16

STATE: Rajasthan

1. Kishangarh-Ajmer-Beawar 8 82 534.64 116.23

2. Jaipur-Reengus 11 54 352.08 76.54

3. Jaipur- Tonk 12 86 560.72 121.90

4. Beawar-Pali-Pindwara 14 246 1603.92 348.68

STATE: Uttar Pradesh

1. Muradabad-Bareilly 24 112 730.24 158.75

2. Bareilly-Sitapur 24 153 997.56 216.86

3. Ghaziabad-Aligarh 91 106 691.12 150.24

STATE: Tirpura

1. Tripura/Assam Border to Agartala 44 195 1271.4 276.39

STATE:Tamil Nadu

1. Dindigul-Perigulam-Theni 45 (Ext.) 73 475.96 103.47

2. Madurai-Ramnathpuram-Rameshwaram -Dhanuskodi 49 186 1212.72 263.63

3. Coimbatore-Mettupalayam 67 (Ext.) 45 293.4 63.78

4. Theni-Kumili 220 57 371.64 80.79

Page 29

Total 6063 39530.76 8593.64-->

7.3 Appendix 3: Sample list of contractors

List of Contractors & Nationality of National Highways Developement Project - Phase III

 30th June 2008

S.no StretchNH

No

Length

(Km)Contractor & Nationality Status

NHDP Phase IIIA

1 Nagpur - kondhali 6 40 Atlanta - SREI Consortium (JV)-IndianUnder

Implementation

2 Khalghat - MP/Maharashtra Border 3 82.8 Navyuga Engineering Co. Ltd.-IndianUnder

Implementation

3 Meerut-Muzaffarnagar 58 79 Nagarjuna Construction Co. Ltd. - MAYTAS Consortium-IndianUnder

Implementation

Page 30

4End of Durg Bypass - Chattisgarh / Maharashtra

Border 6 82.685 Ashoka - IDFC Consortium-Indian

Under

Implementation

5 Amritsar - Wagha border 1 36.22 Rohan Builders Pvt. Ltd. - Rajdeep Buildcon Pvt. Ltd. - IDFC Ltd.

Consortium-Indian

Under

Implementation

6 Pondicherry - Tindivanam 66 38.61 Maytas - NCC Consortium-IndianUnder

Implementation

7 Trichy - Karur 67 79.7 Reliance Energy Limited-IndianUnder

Implementation

8 Kondhali - Telegaon 6 50 Oriental Structural Engineers Pvt. Ltd.- Delhi Brass Consortium-

Indian

Under

Implementation

9 Ambala - Zirakpur 21,

2236 GMR Energy Ltd. & GMR Infrastruture Ltd. Consortium-Indian

Under

Implementation

10 Jalandhar - Amritsar 1 49 IVRCL Infrastructure Projects Ltd.-IndianUnder

Implementation

11 Indore-Khalghat 3 80 Oriental Structural Engineers Pvt. Ltd.- Delhi Brass Consortium-

Indian

Under

Implementation

12 Zirakpur - Parwanoo 22 28.69 Jaiprakash Associates-IndianUnder

Implementation

13 Dhule - Pimpalgaon 3 118 IRCON-SOMA Consortium-IndianUnder

Implementation

14 Gonde-Vadape (Thane) 3 100 Gammon India Ltd. - Sadbhav - Billimoria Consortium-IndianUnder

Implementation

15 Kurali - Kiratpur 21 42.9 BSCPL - C & C Consortium-IndianUnder

Implementation

16 Mahua-Jaipur 11 108 IJM Corporation Berhad-MalaysianUnder

Implementation

17Elevated Highway from Silk board junction to

electronic city junction 7 9.98 SOMA - NCC - MAYTAS Consortium-Indian

Under

Implementation

18Neelamangala Junction on NH 4 with NH 48 to

Devihalli 48 81 Lanco Devihalli Highways Pvt. Ltd.-Indian

Under

Implementation

19 Salem-Ulundrupet (BOT-1/TN-06) 68 136.357 Reliance Energy Limited-IndianUnder

Implementation

20 Aurang - Raipur 6 45 Apollo(UK) - JLI(UK) - DSC(Indian) - LOR(UK) Consortium-UK -

Indian JV

Under

Implementation

21 Madurai-Arupukottai-Tuticorin 45B 128.157 Madhucon Projects Ltd. - SREI - Madhucon granites Ltd (JV)-

Indian

Under

Implementation

22 Banglore-Hoskote-Mudbagal Section 4 79.724 Lanco Hoskote Highway Pvt. Ltd.-IndianUnder

Implementation

23 Sitapur - Lucknow 24 75 Apollo(UK) - JLI(UK) - DSC(Indian) - LOR(UK) Consortium-UK -

Indian JV

Under

Implementation

24 Banglore - Neelamangala 4 19.5 Navyuga Engineering Co. Ltd.-IndianUnder

Implementation

Page 31

25 Bharatpur-Mahua 11 57 Madhucon Projects Ltd. - SREI-IndianUnder

Implementation

26 Agra - Bharatpur 11 45 Oriental Structural Engineers Pvt. Ltd.- Delhi Brass Consortium-

Indian

Under

Implementation

27 Delhi/Haryana Border to Rohtak 10 63.49 KCT - ERA consortium-IndianUnder

Implementation

28 Chattisgarh / Maharashtra Border - Wainganga Bridge 6 80.055 Ashoka - IDFC Consortium-IndianUnder

Implementation

29 Six Laning of Bangalore-Hosur Section of NH-7 7 14.38 GVR Construction Pvt. Ltd. Chennai-IndianUnder

Implementation

30 Thanjarur - Trichy 67 56 Madhucon Projects Ltd.-IndianUnder

Implementation

31 Trichy - Dindigul 45 88.273 Reliance Energy Limited-IndianUnder

Implementation

7.4 Appendix 4: IRCON INTERNATIONAL

Road / Highway / Air Port

Page 32

 1. Fields of Expertise  

For over last 18 years IRCON is engaged in execution of Highways and Roads of International

Standards both in India and Abroad, funded by accredited organizations like World Bank, ADB

(Asian Development Bank), ADB (African Development Bank), JBIC (Japan Bank for International

Co – operation), Arab Fund for Economic & Social Development, Kuwait Fund, KFW (Kreditanstall

fuer Wideraufbau) etc. The brief details of IRCON’s activities in this field are summarized

hereunder:

  Construction of flexible pavement to International Standards

 Construction of rigid pavements to International Standards

 Complete Mechanization of Highway Construction (Both rigid and Flexible)

 Usage of latest and World class technology in Highway Construction.

 Deployment of highly experienced man power

 Strict adherence to quality being “ ISO 9001:2000 “ Organization.

 Delivering the Projects as per schedule to the complete satisfaction of Customer

 

 2. Technological excellence in areas of activities  

 Usage of fully batch type automatic Hot Mix Plant for ensuring quality of bituminous

production

 Usage of fully automatic high capacity concrete batching plant for ensuring quality of

concrete production.

 Construction of bituminous pavement by using full width (9 meter) , Sensor Paver

 Construction of concrete pavement by using full width (9 M) paver for Dry Lean Concrete and

full width slip form paver for pavement quality concrete.

 Usage of high capacity, cone crusher for quality control of aggregates.

 Usage of WMM sensor paver at base course level for achieving workmanship and riding

quality of finished road.

 Application of innovative and appropriate methods for execution of Projects under extreme

topographical and climatic condition.

 

 3. Salient Features of completed Projects

Abroad

A. Bangladesh

 Construction of Sylhet Town Bye pass Road from Sylhet town to Haripur, at a cost of Rs. 240

Million .

Page 33

 Rehabilitation of Dhaka – Sylhet Road Bangladesh contract no 1-B at a cost of Rs 685 million.

Improvement of 11 intersections at Dhaka, Bangladesh, contract package No (W) C3, during

2002 to 2003 at a cost of Rs. 131 Million.

Reconstruction of Sylihet – Tamable – Jaflong road improvement project contract 1, Sylihet to

Haripur, Bangladesh during 1999 – 2001 at a cost of Bangladeshi Taka 410 Million

Second road Rehabilitation and maintenance Project between Nawabganj and Sona Masjid,

Contract No. W-4, during 1996- 1998 at a cost of Rs 324 Million

 Second Road Rehabilitation and maintenance Project between Navaraon and Satkhira,

Contract No. P-2, during 1994 – 1996 at a cost of Rs. 243 Million

Road Rehabilitation and Maintenance Project on Nagarbari – Pabna on National Highway No. 6,

Contract No. 2/3C, during 1993 – 1995 at a cost of Rs. 218 Million

 Road Improvement Project – Contract No.3, between Comilla and Feni on Nationally Important

Dhaka- Chittagong Highway ( 35 Kms ) during 1989 – 1994 at a cost of Rs. 600 Million

  Road Improvement Project, Contract No.1 between Daud Kandi and Chandina ( 28 Kms ) on

Nationally Important Dhaka – Chittagong Highway during 1989 – 1994 at a cost of Rs. 631 Million.

B. Nepal

  Road Rehabilitation and maintenance on Tribhuwan Rajpath, Thankot – Naubise section

during 1995-1998 at a cost of Rs. 138 Million

  Reconstruction of the East- West Highway Belbari to Chawharwa ( 140 Kms) during 1989 –

1994 at a cost of Rs. 302 Million.

C. Indonesia

 Toll Road Project for IV.4 Package (in JV with SMJ, Indonesia) during 2004-05 at a cost of Rs.

123 Million.

India

 Re - Construction of Bay No. 11 & 12 (Re - Designated as Bay No. 44) and Part of Taxi Track at

NSCBI Airport, Kolkata – Rs. 50 million.

 Four Laning of Khaga Allahabad Road on NH 2 (43 Kms) Contract No.TNHP 3, in the State of

Uttar Pradesh at a cost of Rs. 1720 Million

  Godhra – Shamlaji Road Project ( 121 Kms ) Contract No. GSHP-7 in the State of Gujarat at a

cost of Rs. 1530 Million

 Noida – Greater Noida Expressway during 1999 to 2003, at a cost of Rs 2024 Million.

 Construction of Outer Ring Road Between Magadi Road to Tumkur Road , in Bangalore during

2001-2002 , at a cost of Rs 233 Million.

 Bituminous Works on E.M. Bye pass from P.C. connector and R.B connector for CMDA Calcutta

during the year 2001 at a cost of Rs 47 Million.

Page 34

 Widening and Strengthening of Warrangal – Raiputnam Road ( 115 Kms) in State of Andhra

Pradesh during 1998 – 2000 at a cost of Rs. 900 Million.

 Widening and Strengthening of Cuddapah – Tadipatri Road ( 65 Kms ) in State of Andhra

Pradesh during 1998 – 2000 at a cost of Rs. 543 Million

 Construction of Jaipur Byepass ( 14 Kms connecting NH – 11 and NH- 8 in State of Rajasthan

during 1998 – 2000 at a cost of Rs. 641 Million

 Strengthening and Widening of Vadodara – Halol Road Project ( 18 Kms ) in State of Gujrat in

1999 – 2000 at a cost of Rs. 532 Million

 Construction of Outer Ring Road Varthur to Sarjapur in Bangalore during 1998-2000, at a cost

of Rs 248 Million.

 Construction of package-III of Kona Expressway of C.M.D.A , during 1997-1998 , at a cost of Rs

55 Million in Kolkatta region.

Construction of 2 Lane 11 Km long Cement Concrete Road for UPSIDC at Kasua , Greater Noida

and Loni, Gaziabad in state of Uttar Pradesh in 1997 – 1999 at a cost of Rs. 108 Million  

 Construction of Internal Roads for Industrial Complex at Irrungatta – Kottai, Chennai in the

State of Tamil Nadu during 1997 – 1999 at a cost of Rs. 125 Million

 Bhubaneshwar Runway Projects during 1996 to 1999 at the cost of Rs 763 Million.

 Extension of Runway and Apron with rigid pavement and provision of additional taxi track at

Indore airport in the State of Madya Pradesh during 1995- 1998 at a cost of Rs. 75 Million.

 Improvement and Strengthening of Varanasi – Shaktinagar Road Projects ( 184 Kms ) in state

of Uttar Pradesh during 1993- 1999 at a cost of Rs.1730 Million

 Strengthening and Widening to 4 Lane of NH-2, between Delhi and Mathura ( 111 Kms ) in

States of Haryana and Uttar Pradesh Pradesh in 1991 – 1998, at a cost of Rs. 1637 Million.

 Strengthening of existing two lane carriage way near Nasik in the State of Maharashtra during

1989 – 1992 at a cost of Rs. 100 Million.

 Strengthening and Widening of Four Lane of NH 1 between Khanna and Sirhind ( 24 Kms ) in

Punjab during 1987 – 1993 at a cost of Rs. 129 Million.

 

 4. Salient Features of On-Going Projects  

Abroad

A. Ethiopia

Construction of Dera - Mechara Road Upgrading - Cont. 1: Dera - Manga - ICB No.: 02 / 2003.at

a cost Rs. 1450 Million.

B. Nepal

Belbari - Chauharawa Pavement Strengthening Project at a cost Rs. 610 Million.

India

Page 35

4 - Laning of Siliguri - Islampur (including bypass) section of NH - 31 in West Bengal - Package :

EW - II (WB - 7) - Rs. 2110.72 Million.

Six laning of KM 66.000 to KM 86.000 of Panchi Gujran Panipat section of NH-1 in the State of

Haryana - Package : N S - 89 /Har. 1216.40 Million.

Extension of Secondary Runway at NSCBI Airport, Kolkata for Airports Authority of India 98.10

Million.

Development of adequate port road connectivity to New Mangalore port. Contract Package :

KR (New Mangalore)- Rs. 1682 Million.

Development of State Highways in districts of Darbhanga, Madhubani, Vaishali, Muzaffarpur

and Samastipur under RSVY(Rashtriya Sam Vikas Yojana)- Agreement entered into on 27.04.05

between IRCON and Govt. of Bihar ( Road Construction Deptt.), Govt. of India ( M/o Shipping,

Road Transport and Highway).

Rehabilitation and upgrading of Km 170.00 to Km 220.00 of NH - 25 to 4 - lane configuration in

the state of Uttar Pradesh: East -West Corridor - Package - EW - II-5 - Rs. 3030 million.

 UPSRP 01 , Upgradation of Katra to Bilhaur via Jalalbad-Bilgram (173 km) Contract No

24/PD/SRP-II/2002-2003 Dt 24-3-2003 at a cost of Rs 1501 Million.

  UPSRP 04 , Upgradation of Bhognipur–Ghatmpur-Chaudhagra Road

( 83Kms) Contract No 25/PD/SRP-II/2002-2003 Dt 24-03-2003 at a cost Rs 700 Million

  Construction / Commissioning & Maintenance of Rural Roads in the State of Bihar under the

Pradhan Mantri Gram Sadak Yojana(PMGSY).

  Tamil Nadu Road Sector Project- TNSP02 - Upgradation of Roads from Nagapattinam to

Kattumavadi & New Bypass at Nagapattinam, Tituthuraipundi and Muttupet (In JV with SMJ

Indonesia) at a cost of Rs. 198.77 Crores.

 Improvement, Operation & Maintenance of 4 laning of Pimpalgaon - Dhule section of NH 3 on

BOT basis. (In JV with M/s. Soma Enterprise) at a cost of Rs. 1200 Million (IRCON's share).

 

 5. Our Valued Clients (at present)

Domestic

National Highway Authority of India

Roads & Building Department ,Government of Gujrat

UPPWD , Nirman Bhavan , Lucknow -226001 Government of UP

PWD (R&B) Govt. of Andhra Pradesh

Noida & Greater Noida Industrial Development Authority

Kolkata Metropolitan Development Authority

U.P. State Industrial Development Corporation

Bangalore Development Authority

Page 36

Gujarat Toll Road Limited

Air Port Authority of India

Ministry of Rural Development, Govt. of India & Govt. of Bihar

PWD (R&B) Chandigarh

State Industrial Promotion Corporation of Tamilnadu

Tamilnadu Road Sector Project Highway Dept. - Govt. of Tamilnadu

Ministry of Home Affairs, Govt. of India

Port Trust of India

International

Ministry of communication of Roads & Highway Department (RHD) ,Bangladesh

Department of Roads, Ministry of Works & Transport, His Majesty Govt. of Nepal

PT JASA MARGA (Persero) (Indonesian Highway Corporation)

Ethiopian Road Authority, Govt. of Ethiopia

7.5 Appendix 5: Rail sector opportunity: Dedicated Freight Corridors:

(Source: Railway Gazette International website accessed on 26th July 2008)

Page 37

26 Jun 2008 | Raghu Dayal

 

“Following the approval of a funding agreement with Japanese banks, INDIA: the first

contracts for construction of the country’s two high-capacity dedicated freight corridors

are due to be awarded by October, reports Raghu Dayal

There is no doubt about the urgency of substantial capacity enhancement on the Indian

Railways network, as the rapid growth in both freight and passenger traffic over recent

years is forecast to continue. So the announcement on April 8 that tenders are being

invited for construction work on one of the country's two Dedicated Freight Corridors is

a welcome development.

In his budget speech on February 26 (RG 4.08 p245), Railways Minister Lalu Prasad

promised that work on the Eastern and Western DFCs would get underway during the

2008-09 financial year. The special purpose vehicle established to lead the projects -

Dedicated Freight Corridor Corp of India Ltd - has now invited expressions of interest

for the 300 km segment of the Eastern DFC between Bhaupur (near Kanpur) and

Mandrak (near Aligarh). A design-and-build contract valued at around Rs30bn is

expected to be awarded in September or October. This section of line is needed to

relieve a major bottleneck on the existing network, and will be funded directly by IR

from its own resources.

Two years ago the government approved in principle the construction of the first two

corridors totalling almost 2800 km (RG 10.06 p686). Dfccil was officially incorporated

in October 2006, and the 2007-08 railway budget provided Rs13·3bn towards the

estimated Rs282bn cost, but not much tangible work has materialised so far.

Page 38

However, a lot has been happening behind the scenes. A preliminary engineering and

traffic study by Rail India Technical & Economic Services has now been followed up

by a more detailed feasibility study by the Japan International Co-operation Agency,

determining the full technical specifications, agreeing the route alignments and cost

projections, and looking at sources of funding.

Boosting rail's competitiveness

Although the volume of rail traffic is continuing to increase, driven by India's strong

economic growth, IR's market share of both passenger and freight is actually falling.

According to figures issued by the Ministry of Shipping, Road Transport & Highways,

total freight movement in the country amounted to more than 1100 billion tonne-km in

2006-07 Of this, the roads handled around 60%, the railways 33%, coastal shipping

6·85% and inland waterways just 0·15%. Back in 1950-51, IR had no less than 89% of

the freight market. Citing the overall socio-economic interest, including energy

consumption and environmental conservation, the government recognises that rail

capacity needs to be enhanced and more customer-focused services introduced to

counter competition from other modes.

The 1483 km Western DFC will link JN Port near Mumbai with Dadri in the Delhi area,

and the Eastern corridor will run for 1279 km from Ludhiana to Sonnagar. These are

intended to relieve two of IR's busiest main lines. The Golden Quadrilateral routes

linking the four important metropolitan areas of Delhi, Mumbai, Chennai and Kolkata

represent just 16% of IR's network but carry more than 50% of the total freight and

passenger traffic. Much of the country's economic growth is also concentrated in this

region.

Described as IR's 'most ambitious project ever', the dedicated freight corridors are

expected to trigger a much-needed improvement of technical standards across the

network and lead to more cost-effective operation. This will see axleloads raised from

between 20 and 22 tonnes to 30 tonnes on the main routes, and at least 25 tonnes on

feeder lines connecting with the new corridors. Taller and wider wagons will improve

payloads. IR is looking for much higher productivity of its assets, leading in turn to a

reduced unit cost of transport.

Page 39

The DFCs are also expected to act as a catalyst for economic growth and encourage

value-added services such as the creation of logistics parks and industrial hubs along

their routes. These logistics parks will enable rail to compete more effectively with road

for break-bulk domestic container business, provide storage and distribution for

trainload commodities, and expand its carriage of automobile movements. There may

also be scope to develop piggyback business.

Containers in the west

Traffic on the western corridor is forecast at 38 million tonnes in 2013, rising to 106

million in 2023 and 157 million by 2033 (Table II). Corresponding figures for the

eastern corridor are 69 million tonnes in 2013, 145 million in 2023 and 155 million by

2033. To a considerable extent, traffic growth on the western corridor will be driven by

rising international container traffic through the ports; this is expected to increase by an

average 8·6% year on year to 43 million TEUs by 2031. If rail takes a 35% share, the

western DFC could be handling 10 million TEUs a year.

The best way to handle container traffic is a source of disagreement between Rites and

JICA. At an average of 90 TEUs per train, annual traffic of 10 million TEUs would

require 300 trains each way per day. The consultants agree that the answer is to adopt

double-stack. Rites favours conventional flat wagons and diesel locos, whereas JICA

cites experience in China and elsewhere of using well-wagons to accommodate double-

stack on electrified lines. This would require a catenary height of 6870 mm above rail,

compared to 4800 mm for single-stack and 7470 mm for double-stack on flat wagons.

Flat wagons could double the capacity per train, whereas well wagons would limit the

increase to around 50%. Nevertheless, JICA estimates the electric option would

generate a better internal rate of return, at 20·4% compared to 13·5% using diesel

haulage. Transport costs per TEU would be around Rs1·5 per TEU-km for either option,

against Rs1·8 for single-stacked boxes. The JICA report cites economic, environmental

and energy issues in support of electrifying both the eastern and western corridors,

pointing out that environmental clearance will be one of the essential requirements in

any project appraisal by international lending agencies such as the World Bank, Asian

Development Bank and Japan Bank for International Co-operation.

Page 40

Signifying its tacit acceptance of an electric option, IR has asked the Research,

Development & Standards Organisation to carry out trials with double-stack container

trains under the wires. Trials are currently underway on the Jakhapura - Daitari section

of the East Coast Railway, where trains carrying two containers on flat wagons are

being tested on this heavy haul mineral line.

Specifications agreed

Technical specifications for the new lines have largely been firmed up. Both routes are

being designed for a maximum speed of 100 km/h and a 30 tonne axleload. They will be

laid with UIC 60 kg/m rail and 90 kg/m UTS head-hardened rail on the curves.

Minimum main line radius will be 700 m. The rails will be carried on precast concrete

sleepers, laid at 1660 per km on the main line and 1540 per km on loop lines and

sidings. Turnouts will have cast manganese crossings and concrete bearers. Main line

and junction turnouts will have a 1 in 12 angle to permit diverging speeds of 60 km/h,

but the loop turnouts will be 1 in 8·5 with a diverging speed of 45 km/h. DFC tracks

would be laid at 5·5 m spacing, and at least 6 m from the nearest conventional track.

Whereas Rites favours building the lines for 1500 m long trains, JICA believes that 750

m loops at intervals of 30 to 40 km would provide sufficient capacity for the foreseeable

future. Shorter loops would also reduce the land take, and increase line capacity, it says.

Going against current trends towards full grade separation, JICA rejects Rites' call for

the construction of road overbridges throughout, arguing that level crossings with

automatic detection systems, would suffice in urban areas where bridge construction

could be difficult and would cause hardship for non-motorised road traffic. With 745

road crossings planned for the western corridor and 580 for the eastern, this is a

potentially significant issue.

JICA recommends that freight trains should run to a firm timetable to ensure a high

quality of service, particularly for intermodal business. Removing the requirement for

an assistant driver in favour of single-manning of locomotives will cut costs, as will the

elimination of brake vans through the use of end-of-train detectors. JICA also favours

an advanced train control system including CTC and balises for train detection. A fleet

of six-axle electric locos rated at 9000 hp is envisaged for the container trains and eight-

axle locos of 12000 hp for the bulk freight trains.

Page 41

Looking at operational and managerial aspects of the project, JICA recommends that the

DFCs should have a lean management organisation segregated from IR's existing

structure; this would contribute to reduced operations and maintenance costs. Proposed

staffing levels are in fact higher than those applying in Japan, but still less than half the

number of people that IR currently employs for the same tasks (Table IV).

The Japanese study team also looked at the socio-economic impact in each of the 37

districts along the two routes, calculating that 112 households and 237 squatters would

have to be resettled for every 100 route-km. This raises questions about compensation,

resettlement costs and job opportunities.

The issue of squatter encroachments is particularly severe on the western corridor

between Vadodara and the Mumbai area, with 1200 houses to be cleared in the 80 km

between Dadri and Rewari alone. The 92 km route through the Mumbai suburbs from

Vasai Road to J N Port has a further 560 dwellings. Nearer to Vadodara, up to 660 ha of

farmland must be acquired to create the corridor through the fertile coastal belt.

Squatters are also a big issue in the area around Delhi's main container terminal at

Tughlakabad. This is less of a problem on the eastern corridor except where bypass

lines are planned around Tundla and Aligarh.

Costs and financing

Compensation for land acquisition is one of several elements that are driving up the cost

of the project. In its preliminary study, Rites estimated the cost of building the western

corridor at Rs166bn and the eastern at Rs116bn. However, JICA now puts the total for

both routes at Rs559bn. This includes Rs269bn for construction, Rs100bn for electric

locomotives and Rs61bn for land acquisition, as well as financing and management

costs, inflation and contingencies.

JICA has recommended implementing the project in three phases, and financing it from

a number of sources: internal generation by IR (at 6·5% interest), a low-interest loan

from JBIC (0·4%), other international financial institutions (6%) and commercial

borrowing (12%). For the proposed funding split, the debt service coverage ratio would

be around 1·9, enabling Dfccil to earn a return on equity of around 11%.

Page 42

In its review of likely funding sources, JICA compared the DFCs with recent railway

construction projects in China. CR built up a Railway Development Fund by levying a

toll of 0·028 yuan/tonne-km on all traffic, and also issued government bonds, although

the lion's share of domestic debt has been raised through the National Development

Bank. Local and municipal railways in China have been able to attract private and local

government equity. Funding of 26·2bn yuan for the railway to Tibet included a 75%

contribution from central government and 25% from the Railway Development Fund.

Conversely, the Beijing - Shanghai high speed line will only have a 4bn yuan equity

contribution from the government. Similar sums are to be raised by issuing stock in

overseas markets and the sale of foreign bonds. The National Development Bank is

contributing 15bn yuan, another 12bn will come from as donor loans, and 3·5bn yuan as

international loan from commercial banks.

IR currently favours funding the DFCs from its own equity, supplemented by

borrowings as necessary. It has already committed its one-third equity contribution to

enable work to start on the eastern corridor. There is a strong likelihood of World Bank

providing funds for the this route, as well. By contrast, JBIC has shown particular

interest in the Western corridor, and will probably provide funding for the initial section

of this line between Rewari and Vadodara. “

Page 43