Latest news with #AbhijeetSinha
Hindustan Times
15-05-2025
- Business
- Hindustan Times
MoRTH's stricter bidding rules to ease competition in road projects: ICRA
The decision by the union ministry of road transport and highways (MoRTH) to introduce a new additional performance security (APS) regime last month for all central government road projects (such as national highways) is expected to result in better road quality. APS is a financial guarantee required to be paid by private contractors for quoting significantly below the estimated base price and acts as a safeguard for the government. This is over and above the standard performance securities, which are forfeited in instances of default. A higher APS ensures that only serious and financially stable contractors participate in bidding, ensuring better quality and timeliness. On April 30, MoRTH, in a circular, had said that this APS regime is being introduced to deter abnormally low bids in the national highway projects. Under this new circular, now APS will be triggered if bids are lower than 10% of the estimated project costs and it will be set at 0,1% for every percentage of bid price below 10% and 0.2% plus an additional 1% of the bid price in instances when the bid price is 20% or lower than the projected cost. This new circular, which is effective immediately, will remove the 3% cap (of the projected cost) on APS and remove the threshold of a 20% discount to be triggered, which was the case previously. The National Highway for Electric Vehicles (NHEV), a central government-promoted pilot for building electric highways' national project director Abhijeet Sinha said the previous cap of 3% was unrealistic to impose strict adherence to quality and timelines. He said, 'While it may increase upfront financial commitments for bidders, it serves a larger strategic purpose of preventing post-award costs inflation through change requests and claims. ' Ashish Modani, group head, corporate ratings at ICRA, said this move by the government will deter speculative bidding and promote realistic pricing. 'But in the near term, it is expected to put strain on the credit profiles of small and mid-sized contractors, particularly those with limited-sized bank guarantee limits. The requirement for cash margins to secure additional bank guarantees will increase working capital needs, potentially impacting bidding capacity, revenue growth, and coverage metrics due to higher finance costs.' But he said in the medium term, the policy will eventually result in better quality of road construction. Echoing Modani's comments, Prabhakar Kumar, government consulting head at REPL, a listed infra consultant company, said this move by the government sends a clear signal that only serious and financially sound players should participate in national-level tenders and cost-cutting at the expense of quality will no longer be rewarded. But he added, 'At the same time, the government should ensure timely payments to contractors for quality and timely work completed. A statement from ICRA said that most construction projects were awarded at significant discounts, at a median of around 25% between January 2024 and March 2025. Analysis by the ratings agency showed that the effective performance security will differ by 1% of the project cost at the 20% discount scenario to 2% at a 40% discount scenario due to the policy change. Currently, the government is facing challenges both in the of quality and timeliness of highway projects, with MoRTH lowering highway construction targets in recent years, and concentrate on quality. In January, the Parliament was told that since March 2024, nearly 44% of all national highway projects worth ₹150 crore and above, across 32 states and union territories, were facing delays. In a separate revelation, the government had said there were at least 59 cases of major deficiencies, including cave-ins during the previous five financial years ending FY 24, including provisional data for FY 25.
Indian Express
29-04-2025
- Automotive
- Indian Express
How India can build 5,500 km of e-highways by 2027: National Highways for EV's Abhijeet Sinha explains
Twenty-three national highways totalling 5,500 km could be upgraded to e-highways for electric vehicles by 2027, provided states submit eligible public-private partnership (PPP) proposals to the Centre, Abhijeet Sinha, programme director at National Highways for Electric Vehicles (NHEV), told The Indian Express. In her Budget speech this February, Union Finance Minister Nirmala Sitharaman had urged states to identify a three-year pipeline of infrastructure projects in PPP mode and seek support from the India Infrastructure Project Development Fund (IIPDF). Making a case for the development of e-highways under this model, Sinha said: 'The projects will be funded, land will be provided through the National Highways Authority of India (NHAI) for charging stations. What do states have to give? Just electricity and permissions, like for registering electric fleet operators. It's a win-win situation for them. The only thing they have to do is respond to this national clarion call.' Based on technical trials conducted by NHEV, a pilot programme under the government's Ease of Doing Business initiative, e-highways will feature public charging stations every 50 km. These will target at least 30 per cent utilisation of charging points, and achieve a breakeven period of three years. 'We came in because it was important to have an agency that does prototyping, testing, proof of concept, and pilot runs for these technologies so that they become commercially viable. If we hadn't done this, there would be more of what happened over the last 10 years of governments purchasing public chargers, which have utilisation of 3-5 per cent and the breakeven period is 45 years,' said Sinha, who is also president of the Charge Point Operators Society (CPOS). India's approach to EV infrastructure According to him, India's approach to developing EV infrastructure has been misdirected from the start, with greater emphasis placed on setting up charging stations within cities—where vehicle movement is less predictable—rather than on highways, where fleet-operated electric buses, cars, and trucks follow more consistent travel patterns. 'If we had worked in that direction, EVs would have been running on highways and that would have generated confidence within cities. People would've said EVs are running between Delhi and Jaipur, but why can't they go from home to office in an EV,' he said. NHEV has conducted extensive trial runs with multiple fleet operators across three routes—Delhi to Agra, Delhi to Jaipur, and Chennai to Tiruchirappalli—and gathered detailed data to give potential investors greater confidence in financing charging infrastructure. A template for building EV charging stations It has also developed charging station designs and projected potential earnings based on specific parameters, aiming to bring EV charging stations on par with petrol pumps in terms of investment clarity. 'For petrol pumps, standardised designs are readily available from multiple architects. But if you want to build a charging station tomorrow and start construction within a month, an architect might take six months just to finalise a design and get approvals from various ministries. Also, how much money do charging stations actually make? If people don't know that, they won't invest,' Sinha said. NHEV has also identified key metrics that define an e-highway, which include at least 30 per cent utilisation of charging infrastructure. 'How did we increase utilisation? We focused on two basics—an origin city and a destination city. You need two cities between which people actually commute, because that's what the calculation depends on. We analysed real-time running data, looked at how many buses and cars were available on apps—say, buses from Delhi to Jaipur—and how many travellers were booking. Then, we worked out how many buses and cars would be needed to keep utilisation at the desired levels,' he said. 'If your charger isn't hitting 30 per cent utilisation, don't commission it. You'll run at a loss. If someone had thought about this earlier, you wouldn't have been losing money for the last 10 years,' Sinha added. AHEM model for electric highways in India To finance India's e-highways, NHEV has developed a model called Annuity Hybrid E-Mobility (AHEM), based on the Hybrid Annuity Model (HAM) used for PPP road projects, to ensure a breakeven period of 3 years. Under this model, NHEV builds the charging stations with government support, and companies that supply chargers and EVs, like fleet operators, are paid a fixed amount in the first year to cover capital costs. After that, they earn variable payments depending on how much their fleets grow and how often the chargers are used. After the first year, charging stations are then offered to PSUs on priority, followed by the private sector, including family offices and high-net-worth individuals (HNIs), while NHEV continues to operate them. The model spreads financial risk between PSUs, insurers, and banks, giving suppliers the confidence and liquidity to invest. The development of e-highways with functional charging stations every 50 km will be pivotal in addressing a key concern with EVs—range anxiety. 'At a petrol pump, you are rarely refused petrol. In the current situation, there are such chargers for which there will be no electricity. As a fuel dispensing infrastructure, whatever the fuel may be, you can't upset a user with just 10 per cent charge left on a highway. It could be a lady driver, the time might be night. You can't create a volatile situation of this kind,' Sinha said.
