The three-day ‘Infrastructure Conference 2012’ being organised by the Kerala Public Works Department is under way at the Bolghatty Palace in Kochi from Thursday.
The timing could not have been more apt coming as it does exactly a year after the previous event, which affords an opportunity for serious reflection and productive planning.
‘WORKING’ MINISTER
V. Ebrahim Kunju, who has already made a mark as a ‘working’ minister for public works, says that a number of suggestions/recommendations made at last conference are currently being implemented. One instance is where the department is moving ahead with a plan to laying concrete roads in the State on a pilot basis.
“It is not as if we are suggesting something that is not known to the State already; in fact, we used to have concrete roads here in the past,” the minister says. “It is just an issue of revisiting the past purely for reasons of advisability and practicality.”
He points to major metropolises such as Mumbai which have plumped for concretised roads with a comparatively longer life span. So public works department is essentially dusting up the concept here and proposes to implement same in Kochi - from HMT Junction in Kalamassery to Manalimukku in Kochi.
On another front, the public works department is looking at ways to ensure people’s participation in infrastructure development.
LOCAL BODIES
This is sought to be achieved through the vehicle of local self-government institutions after suggestions to the effect were floated at the Emerging Kerala Global Connect meet that Kochi hosted in September last and also in view of increasing opposition to land acquisition, the minister says.
So, the department is seeking to suitably tweak the public-private partnership (PPP) mode to public-private-people-partnership (PPPP) mode, Ebrahim Kunju says. The department believes that many of the imponderables to development issues, including vexed land acquisition, could be more effectively dealt with in this manner.
An exclusive session has been earmarked to discuss this issue at the Infrastructure Conference 2012, the minister said. The main theme, ‘An integrated approach to infrastructure development,’ has been carefully chosen to rhyme with the comprehensive revamp that the department is currently undergoing with a view to assimilating technological and conceptual advancements.
BUILDING ON 2011
According to the minister, the last edition of the conference helped the department to adopt latest technologies, construction techniques, and management systems for sustainable development.
He attributed various path-breaking initiatives launched since – concretising roads, revising the public works department manual, launch of e-tendering, and inclusion of road safety and maintenance aspects in the contract terms on a long-term – to the successful conclusion of the year 2011 event and the result-oriented follow-up thereafter. The department officials may have just got another opportunity to acquaint themselves with modern techniques and approaches in the infrastructure and construction sectors, Ebrahim Kunju points out.
The public works department manual has been revised after a long gap of 40 years. E-tendering and e-payment options will improve transparency and efficiency of the tendering transactions and also speed up connected procedures.
PERFORMANCE GUARANTEE
Despite spending huge amount of money for maintenance, the roads in the State are in a state of disrepair, not to speak of despair, the minister says. It is with an intention to meet this situation fair and square that the State Government has proposed to implement a performance-based guarantee in the road building sector.
According to the minister, the State Government has envisaged five-year performance-based guarantee for all heavy maintenance works. As per this package, maintenance of roads for a period of five years after building them would have to be done by the contractor who undertakes the project. This would help in improving the quality of roads, Ebrahim Kunju says.
One other feature that the minister sought to proudly highlight is the fact that there is hardly any delay to speak of in work/projects. “Works are completed on time and sometimes even before time. Our hardworking and dedicated staff are committed to providing quality work and enhancing the comfort level of road users,” the minister said.
But he was aware of the major challenges that the department is faced with, not least of which is land acquisition and resettlement. But here again, the minister had reason to sound hopeful and optimistic. He agreed that there is apprehension in the minds of people in the State about land acquisition.
BEST PACKAGE
“But I’m happy and proud to say that, among the States, we offer the best rehabilitation and resettlement package. Those who sacrifice land for public good – for construction purposes in this case – will get market value for the parcel parted with. No other State in the country has anything better to offer,” Ebrahim Kunju says.
District level purchase committees with collector as the chairman will decide on the amount to be compensated and the recommendation is escalated to an empowered committee. The latter will have the final say on the amount payable, which would be paid out to the concerned person. According to the minister, rehabilitation packages have been designed for shopkeepers and street vendors, who will be given six months income as compensation without delay.
The minister was equally forthcoming on the issue of sustainable development, which is something close to his heart. Since sustainable construction is the running theme of the times we are in and gaining more and more prominence, the State Government has endeavoured to promote green building concepts and practices in a planned manner. Being an environmentally sensitive geographic region with meagre resources, it is desirable and only in the fitness of overall scheme of things that the State should promote green building technology in a systematic manner.
SUSTAINABLE GROWTH
While energy performance of the building is the primary focus in the green-building context, water conservation and use of sustainable materials also need most attention considering the peculiar characteristics of our State. Public works department buildings will play an important role by demonstrating this commitment by fully adopting the green building in all new buildings, the minister avers.
Meanwhile, timing of Infrastructure Conference 2012 assumes significance viewed against the backdrop of the multiple challenges that the road sector in the country at large has continued to face in recent times. These range from high interest rates, reduced availability of funds and execution slowdown to increased competitive intensity, according to an assessment by rating agency, ICRA.
Award of new projects has picked up during the last two quarters with the National Highways Authority of India awarding some mega projects.
However, execution on many of the projects awarded over the last one year has remained slow primarily because of delays in land acquisition, clearances, and financial closure. Projects that had the requisite approvals and funding reported healthy execution.
ROUGH PHASE
While both developers and contractors are going through a rough phase over the last one and a half years, the challenges were higher in the case of companies that had recently entered the project development space. While developers with a portfolio of operational toll road projects were partly hedged from high interest rates due to inflation-linked toll rates, those with projects in the developmental phase faced challenges in achieving financial closure due to weakened project viability owing to high interest rates besides delays in land acquisition and approvals.
Road construction companies continued to face long working capital cycles, which put a strain on their liquidity position and increased their indebtedness. The operating margins of several road contractors also witnessed pressure because of rising commodity prices (for fixed-price contracts) and idling of capacities as execution could not begin in many new projects.
With the National Highways Authority increasingly awarding projects under the public-private partnership model, engineering, procurement and construction (EPC) contractors have struggled to maintain their order-book growth and many have chosen to enter the PPP space by undertaking projects on build-operate-transfer basis.
The equity requirement for BOT projects, along with the weak capital markets that have made raising capital difficult, has increased their dependence on external borrowings. Further, many of these companies have raised debt at the parent or holding company level to meet the equity requirement in BOT projects thus significantly increasing the indebtedness at the group level.
9 sessions proposed
Infrastructure Conference 2012 has been structured to host nine technical sessions where experts of renown would share their experience.
Apart from Ministers, bureaucrats, engineers, and domain experts would attend the meet. Among the topics being discussed are institutional preparedness for a paradigm shift; new dimensions in land acquisition; asset management with special emphasis on performance-based maintenance approach; and pre-fabrication technology in modern construction.
Multi-modal integration of transport systems, road safety issues, participatory approach, and innovative financing for infrastructure development would also come up for discussions.
‘Vox populi,’ a special session, with an open debate on national highway development under build-operate-transfer (BOT) and road safety rules and a presentation on development of monorail projects would also be organised.
Among those who would be making special addresses are K. M. Mani, Minister for Finance; Aryaden Muhammed, Minister for Transport and Power; P.J. Joseph, Minister for Water Resources; K.C. Joseph, Minister for Rural Development; and Manjalamkuzhi Ali, Minister for Urban Development.
After the felicitation addresses, Parveen Kumar, Senior Vice-President, IL&FS Rail Ltd, will make a presentation on monorail projects.
The post-lunch session will be chaired by Manoj Joshi, Joint Secretary, Government of India, who will make the introductory address.
Arnab Bandyopadhyay, Senior Transport Engineer, World Bank, will present the paper on ‘Institutional preparedness – Need for paradigm shift.’
This will be followed by a panel discussion. Later, S.V.R. Srinivasan, additional metropolitan commissioner and managing director, Mumbai Metro, will make a presentation.
The topic will be on ‘New dimensions in land acquisition – A participatory approach.’ Ajith B. Patil, secretary, Kochi Corporation, will join him.
This will be followed by ‘Vox Populi,’ an open debate on national highway under BOT (build, own, transfer) and road safety issues.