Presidential Elections: Support Dr.Meira Kumar

Bihar and Jharkhand governments have no choice but to support Dr.Meira Kumar. As defeat of "Bihar ki Beti" will invariably bring Shame to the Biharis and Jharkhandis (or erstwhile unified Bihar). Do you think that, people of Bihar will leave Nitish Kumar Scott - free, if Dr.Meira Kumar loses ? So, Nitish Kumar has very little option left but to support, Dr.Meira Kumar.

Moreover, if Nitish Kumar wants to fall in the BJP's well calculated electoral TRAP no one can save him in the next election.

Also, I am surprised to see Mr.Navin Pattanayak, so easily chewing the RSS bait. Orissa is a state, where there is large chunk of Tribal Christian voters loyal to the BJD (Biju Janata Dal). I am still to fathom, BJD's sudden electoral gamble of siding with the RSS and the BJP; when Mr.Pattanayak has been maintaining distance from them since some time.

Besides, the election of Dr.Meira Kumar, who is educated, experienced and very sober, might also correct some of the historical mistakes of not making her father, the Prime Minister of India.

Also, I don't think all the Muslim and Christian MPs and MLAs from the TDP and TRS will ever support a RSS backed Candidate, who acted against Dalit Christian and Muslin reservations. Therefore, invariably cross voting will take place, which might give the underdog, Ms.Kumar, a win. Support Dr.Meira Kumar, give a conscience vote and make her the 2nd Female President of India.

All the best to Dr.Meira Kumar.....👍✌



Sunday, June 29, 2014

NHAI concession may help Reliance Infra, others disentangle Rs.4,500-cr debt
[Editor: The article misses an important name in the road-project space, IVRCL Ltd (Rs.25.30); whose finances worsened because of too much focus on the BOT projects. IVRCL Ltd will also be a major beneficiary of such largesse from the government of India, though the according to the sources, it has now decided to incline more toward the EPC projects]
New Delhi | June 27, 2014: The National Highways Authority of India (NHAI) last month’s move to reschedule the premium that developers of road projects have to pay to the government for securing the right to build and operate them will facilitate faster completion of the beleaguered projects and help companies service the debt associated with them.

Companies like IRB Infrastructure, Sadbhav Engineering and Reliance Infrastructure (R-Infra) that will benefit from this move have a total debt obligation of Rs 4,500 crore associated with the road projects they are developing and which are eligible for rescheduled premium payment.

Premium is the amount developers have to pay NHAI for bagging road projects on a build-operate-transfer basis. Developers have to bid the premium amount that they pay NHAI upfront, based on future traffic estimates. The term for payment of the premium is typically 20-25 years, with a 5% increase annually.

In March, a committee headed by then chairman of the Prime Minister’s Economic Advisory Council C Rangarajan had suggested a mechanism whereby the rescheduling of payment of such premium will be allowed for only those projects where the toll collected is insufficient to meet project expenses such as servicing of debt, operations and maintenance, along with the premium payment.

For instance, say a road developer has to pay a premium of Rs 100 to NHAI for a road project, but is able to pay only Rs 60 now, after deducting project expenses from toll collection. In such a situation, the government will allow the developer to capitalise the remaining premium amount over the concession period. The developer will have to, at a later date, pay this shortfall in premium with a 10.75% interest.

The government had approved this scheme before the model code of conduct came into force ahead of the Lok Sabha election. The NHAI allowed nine road projects to reschedule premiums in the last week of May, leading to a total premium deferment of Rs 5,960 crore. For FY15, the amount of deferred premium stands at Rs 652 crore.

The developers whose projects have got the benefit are calling it as a much needed breather in a stressed environment.

“The moment a project becomes operational, I, as a developer, do not have the kind of cash flows needed to service my repayments in the initial years,” said Lalit Jalan, chief executive of Reliance Infrastructure. “This mechanism is to ensure that the banks don’t get stressed.” R-Infra’s Rs 925-crore Hosur-Krishnagiri road project has been approved on premium restructuring.

IRB’s Rs 2,226-crore Ahmedabad-Vadodara project and Rs 839-crore Tumkur-Chitradurga projects are among the beneficiaries of the scheme. According to the final approval given by NHAI for IRB’s projects, Rs 236 crore will be the revised premium that the developer will have to pay NHAI in FY15 for the Ahmedabad-Vadodara project and Rs 81 crore for the Tumkur-Chitradurga project, said Virendra Mhaiskar, the chairman of IRB. “It certainly comes as a relief for us and will be helpful in smooth operations of the projects,” he said.

Jonas Bhutta, Bank of America Merill Lynch (BoAML) research analyst, in a report in May said, “Premium rescheduling would lead to cash profits versus losses earlier on these IRB projects, and 100bp (basis points) arbitrage between interest cost on short-term debt (12%) and discount rate at which premium will be rescheduled (11%)”. The foreign brokerage has raised IRB’s FY15-16 earnings by 1%-6% on lower interest expenses.

Sadbhav Engineering had received an approval to defer premium for its Rs 1,213-crore Rohtak-Panipat and the Rs 480-crore Hyderabad-Yadgiri road projects. The company expects 100% deferment of premium in FY15 for both projects, which will mean it will not have to pay any premium in FY15, said a senior senior executive from Sadbhav Engineering. According to the original agreement, the company had to pay a total premium of Rs 60.1 crore for the two projects in FY15.

According to a Kotak Institutional Equities report in May, premium rescheduling will improve Sadbhav Engineering’s near-term cash flows and the potential valuation of the projects it is executing.

“The company seems well-placed to meet the increment equity requirement of Rs 380-400 crore for its underconstruction and development projects,” said Aditya Mongia, infrastructure sector analyst at Kotak Institutional Equities.


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