Showing posts with label Cutback Bitumen. Show all posts
Showing posts with label Cutback Bitumen. Show all posts

September 13, 2017

Tender wars in Africa

SUMMARY The expressway will be one of the most important infrastructure project in the East African Community The Project has been structured to achieve early completion, under a fast-track delivery model, with concurrent design and construction Kenya’s Sh300 billion ‘thank you gift’ road project handed to an American firm on a silver platter has sparked a fresh tender war among implementing agencies.


As attention of country was focused on the August 8, General Election, a small team of government officials were holed in meetings to dot the i’s and cross the t’s on what is set to be the single largest road project in Kenya. The team, largely drawn from the Kenya National Highways Authority (KeNHA) and the Ministry of Transport, had already sent the project draft to the Attorney General’s office for comments and clearance.

Three days before Kenyans lined up to vote, the final signature was put on paper, handing over the lucrative contract to build the 473-kilometer high-speed expressway between Nairobi and Mombasa to a US firm, Bechtel International Inc. Unlike previous announcements of government projects of such scale, there was no press conference from the Ministry of Transport to break the news.

There was also no announcement from State House. Instead, government officials chose to make the announcement at lunch time on Saturday when everyone was training eyes on the political rallies, as the pessimists rushed to the shopping malls to stock pile food and other home supplies in case of  political stalemate. It also not clear why the announcement had to be done in such a hurry and on a day when most government offices were closed. Chinese company The press release sent to media houses at 1.30pm did not have the most important details of the project; the cost.

But as details of the deal start to become available, it is emerging that the mega project has stark similarities to the controversial Standard Gauge Railway (SGR) contract which was handed to a Chinese company in another sweet heart deal in the run up to the 2013 general election.

The Financial Standard has come across some working papers from insiders at the Treasury and the Ministry of Transport that raise sharp questions on why the project had to be announced in a rush and why it was not competitively done. The brief raises a question as to why the American firm was not allowed to compete with others for the tender if at all it was the cheapest in the market. Government insiders are referring to the project a ‘thank you gift’ to America, given in the spirit of reciprocity, for some unspecified support the US government has extended to Kenya.

Both the contracts of the SGR and the Expressway project were signed shortly before the general elections. The firms constructing them are the ones tasked with determining project costs. Worse, both have been single sourced and were entered in the cover of government to government contracts, in deals that reduce the level of public disclosure and scrutiny that open tenders go through. The biggest concern for sources familiar with government financing is that in both cases, these projects are now going to be financed largely from borrowing, coming at a time when the government is exhausting its headroom to stock up any additional debt. Treasury is understood to be concerned that despite having so much debt that it is struggling to repay for the big projects already underway, it will be required to take a commercial loan to finance land acquisition.
The other concern is whether the road is the most important project at this time given that it is coming to compete with the railway even before the dividends of the rail start being felt. Infrastructure projects The deal has also brought back the American government on the front row seat of firms that have bagged big infrastructure projects after being elbowed out by Chinese companies.

A brief by the State Department of infrastructure as it sought concurrence to proceed with the project says Kenya will borrow funds from American lenders (US Exim Bank and through Overseas Private Investment Corporation (OPIC)) and then sign an Engineering, Procurement, and Construction (EPC) contract to build the road on a single source basis - where the engineering and construction contractor will carry out the detailed engineering design of the project, procure all the equipment and materials necessary, and then construct to deliver a functioning facility or asset to their clients.

The brief queries why a previous model financed by the World Bank was abandoned and how it was determined that the single sourcing approach would offer taxpayers better value for money and would be faster than a Public Private Partnership (PPP). “Although the proposal is being referred to as ‘alternative project concept’ or ‘highway development concept,’ it is simply a non-competitive, single source procurement of an EPC contractor who is able to bring financing with it,” the brief notes. Engineer George Kiiru, the head of PPP at KeNHA told Financial Standard that the government changed its focus from a PPP to EPC because it will be delivered faster as compared to PPP. “Achieving commercial and financial close for PPP contracts can take two to three years thereby delaying the start of construction and completion of the project,” Kiiru explained. “A comparative analysis between a PPP model for a 20-30 year concession shows that cumulative repayments under the PPP approach would be higher compared to the alternative approach with ECA (US Exim/OPIC) support,” Kiiru said. The brief from the State Department of Infrastructure however suggests that there is no reason to suggest that the construction will take longer under the PPP arrangement. “Indeed, there are strong arguments that overall construction period may be shorter under the PPP project as it splits construction between three different EPC contractors. In any event, the constraining factor is always likely to be land acquisition, so it would be a mistake to assume that the Bechtel proposal can deliver construction completion more quickly,” the brief notes.

 KeNHA says the government is yet to determine the exact cost of the project and is waiting for a complete detailed design, which is yet to be undertaken, before it can determine the actual cost. KeNHA also refused to give a cost range of the project on grounds that it did not want to speculate. This is despite the fact that costs are the first considerations in deciding whether or not a project is viable. “This project is a government to government initiative. The US Government nominated Bechtel International to work with the implementing agencies in Kenya to develop the project,” Kiiru reckoned. KeNHA explained that in 2015, the governments of Kenya and the US signed a memorandum of understanding for development of priority infrastructure projects supporting Kenya’s Vision 2030. Kenya later held discussions with the US government, for development of the highway. The American government through the US Exim Bank has provided a letter of support to Bechtel for the Expressway under a proposed government-to-government agreement. “The US Exim Bank has shown interest to finance the project together with other US Export Credit Agencies such as the Overseas Private Investment Corporation (OPIC),” KeNHA said in its response. He said that the Nairobi–Mombasa Expressway will be constructed as a Toll Road, and upon completion, the Government will procure and assign private firms to operate and maintain the highway. Part of the tolled fee shall be applied towards repayment of ECA Loans. KeNHA says a feasibility study has been completed and it shows that the project is viable.

“The expressway will be designed for consistent speeds of 120kph, hence reduce travel time from Nairobi to Mombasa from the current 10 hours, to about four hours.” A source at Treasury who spoke on condition of anonymity said that the plan was to get a private party to finance, build and operate the road for a 30-year period as per a feasibility study financed through a World Bank loan. He revealed that the feasibility study had concluded that the PPP route offered better value for money than the traditional EPC procurement approach. “There is little chance that a contract not competitively procured will be cheaper than an international competitive tender,” noted the source at Treasury who understands government funding procedures. The source seemed to agree with part of the State Department of Infrastructure brief that suggests that Kenyans may not get value for money from a non-competitive process. The brief says Bechtel’s construction costs per kilometer are higher than estimates presented to the Ministry by PricewaterhouseCoopers. Bechtel’s costing proposal is estimated at Sh600 million per kilometer compared to Sh500 million per kilometer estimate given by PWC ($6 million Vs $5 million). “The per kilometer costs under the PPP proposal includes all taxes and duties while Bechtel’s proposal assumes complete tax exemption for the project (corporate tax, income tax and import duties) - which could reasonably be assumed to cost the Government of Kenya an additional $1 million (Sh100 million) per kilometer,” the brief notes. It argues that as part of the American firm’s proposal, an advance payment of $300 million (Sh30 billion) and also a payment of $100 million (Sh10 billion) as ‘establishment fee’ will be required. “So Bechtel will be given $400 million  (Sh40 billion) in funds and highly cash positive before the start of the project whereby the Government of Kenya will be paying interest on this sum from day one as this will be drawn immediately by Bechtel at contract signing,” the brief notes. There is also a further $60 million (Sh6 billion) of design management fees. The proposal from the American firm excluded all relevant taxes. The Government is pushing for the deal on grounds that the US firm is one of the biggest construction companies in America and that this should give Kenyans comfort. Since the firm will also be seeking financing on its own, it also takes away the initial headache of having to source for financing. But what the government is not saying is that Kenyans will eventually pay a premium price for it in one way or another. Bechtel is also not free from controversies in overseas countries where it has operated. For example, it is fighting some bribery allegations in a Saudi Arabia family feud, which is now in court.

There were other allegations on using middlemen named in British courts to win a contract in Abu Dhabi to build a petrochemicals plant. A former vice president of the firm was also sentenced to 42 months in prison for accepting Sh520 million in kickbacks to manipulate the competitive bidding process for the State run power contracts in Egypt. The other point of conflict is the sharing of risk. It is understood that the American contractor allocates itself the time and materials risk but passes on the price, quantity and overrun risks to the Kenyan taxpayer. The project was expected to start by June 2010 but sources say the National Treasury delayed the project because it needed to allow contractors time to carry out due diligence of the project in order to transfer price and quantity risks to the contractors. Unit rates Bechtel contract is based on Unit Rates for elements of work based on historical cost and production data. This exposes the taxpayer to contingent liabilities because unit rates become firm when the design is completed. Though no one is willing to share the estimated costs of the project, the State Department of Infrastructure brief suggests that the contract price will be at least $2.5 billion (over Sh250 billion). The brief says 80 per cent of the contract costs – quantities and prices - are not fixed and this may see the additional costs spill over to the taxpayer Given the other costs associated to the project like getting land, the price of the project could further go up after the design is completed.

A source at Treasury says the project will cost just as much as the SGR, whose contract price was Sh327 billion but other costs such as land compensation and finance costs have pushed it up to near Sh500 billion. “If indeed, Bechtel is cheaper, then they can still tender under the proposed PPP project model and seek for financing themselves from OPIC or Exim Bank at their preferred cheaper rates,” the brief reads. The brief had advised that the proposed method of developing the road under the Bechtel Proposal is not the best to the government, and asked KeNHA not to proceed, instead use the procurement process under the PPP arrangement, where Bechtel would be advised to participate alongside others. This advice was howver overruled.

Read more at: https://www.standardmedia.co.ke/business/article/2001254309/kenya-s-sh300b-thank-you-gift-road-project-to-us-sparks-tender-wars

September 8, 2017

Project Delays

Chennai: The much-awaited Maduravoyal-Port elevated corridor taken up by National Highways Authority in 2007 is likely to be delayed further as it is finding it difficult in identifying consultants, said a state official.

The state and the Centre are responsible for the delay in the project till 2015. The project cost is expected to escalate by at least 15 per cent, the official said.

Five years after suspending ongoing work on the elevated road connecting Chennai Port with Maduravoyal, the state government softened its stand and gave its willingness to allow the project to proceed with certain changes in the alignment along Cooum river, but now the project is pending with NHAI.

According to the National Highways Authority of India sources, the original project cost was about Rs 1,815 crore and the delay means an additional expense of at least Rs 100 crore extra from the original plan.

The state government in 2016 suggested a design change for the elevated corridor on the Cooum river bed from two pillar to single pillar to ensure smooth flow of water beneath. Subsequently union minister for road transport and highways Pon Radhakrishnan conducted field inspections and reviewed the project.

From the date to now there is not much progress in the project, said the state official adding that departments like state highways and Chennai Port are waiting for the early completion of the project as it would decongest a good whole part of Central Chennai and western suburbs, the official noted.

“The Maduravoyal project should have been completed at least four years ago. Both the State and Centre has been ducking over the project thus exposing their incapability to complete a road work.

Chennaiites are suffering traffic snarls and the highways and the corporation has failed big time to address the traffic woes,” said former Chennai mayor M. Subramanian.

Efforts to contact NHAI senior officials for the delay in the project proved futile, but NHAI sources maintained that a re-tender has been floated to identify a new consultant to work on the design change and also exit ramps that would come up along the 19 kilometre project.

Source -Deccan chronicle

September 6, 2017

Road Projects

Contractors finalised for a number of road projects in FS 
MARK STEENBOK 
15:22 (GMT+2) Tue, 05 Sep 2017
Contractors finalised for a number of road projects in FS  | News Article
The Free State Department of Police, Roads, and Transport says there are a number of roads in the province that still need to be fixed.

MEC Sam Mashinini today said that these roads, including the one between Odendaalsrus and Wesselsbron, are not covered in the current financial year and needs attention. He added that since the end of July the department has finalised tenders for successful contractors for a number of road projects in the province. The handover site meetings for, among others, the Kroonstad-Steynsrus, Vredefort-Hoopstad, Vredefort-Viljoenskroon and Bothaville-Viljoenskroon roads commenced yesterday. He says the department needs to maintain these roads once it is completed.
“One of the problems that I am currently giving attention to, is how best do we make sure that the roads in the province are maintained over the long term. I have deliberately asked the different stakeholders to say how,  once the road between Bothaville and Viljoenskroon is completed, we can maintain it. That road is economically viable in terms of the farms there. That road is mostly used and that’s why we are targeting it,” says Mashinini.
He adds that the department’s objective is to build capacity by investing in human resources through skills development. He says the department wants to create a sustainable economic climate in the province and to deliver public infrastructure by using labour intensive technology.
He says from 2008 until last year they have had an intake of 173 contractors of which 83 graduated. In total 78 is still active and engaged in projects in the province.

July 11, 2017

ONLY 10 percent of the surfaced (tarred) national road network is in good condition, with 30 percent in poor condition while 57 percent is in fair condition, a senior Government official has said.

About 3 percent of the road network has been unclassified, 1 percent of gravel and earth roads were certified to be in good condition, 22 percent was in fair condition, 72 percent was said to be in poor condition while five percent was unclassified at this stage.

In response to this situation, Government has initiated a number of road rehabilitation projects, including building new ones. Some of the road rehabilitation projects initiated through the Ministry of Transport and Infrastructure Development include. . .

Tenders will be awarded on a Build Operate Transfer (BOT) basis for the Beitbridge-Bulawayo-Victoria Falls, Harare-Nyamapanda and Rutenga-Boli-Sango roads before the end of this year.

Currently, feasibility studies and detailed engineering designs are underway for the Beitbridge-Bulawayo road and should be completed by August this year, after which tenders will be floated.

Transport and Infrastructure Development Minister Dr Jorum Gumbo said Government had made significant investment into the road network and more funds would be channelled towards infrastructure. The minister said about $300 million had so far been channelled into infrastructure development, including road rehabilitation.

"Some $13,28 million was spent on rehabilitation and maintenance of road infrastructure in 2015 and $11,44 million in 2016. At the same time, rehabilitation of the Plumtree-Mutare road was done from 2012 to 2016 at a cost of $206 million," said Dr Gumbo.

"In the aviation sector, the major investment has been upgrading of Victoria Falls Airport in the last three years to December 2016, at a cost of about $150 million. There was also some money spent on rehabilitation of the runway at Harare International Airport," he said.


All the road works were funded by the Zimbabwe National Road Authority and the Ministry of Finance and Economic Development.

"There has been no private financing of transport infrastructure development since the New Limpopo Bridge in 1994 and Beitbridge-Bulawayo Railway (BBR) in 1998.

"The Plumtree-Mutare project was financed through a loan obtained by ZINARA from DBSA (of South Africa). Victoria Falls Airport was financed by a loan to Civil Aviation Authority of Zimbabwe from China," said Dr Gumbo.

Minister Gumbo said the National Railways of Zimbabwe also carried out some rehabilitation work on the national railway network.

The condition of the country's road network had deteriorated since the last condition survey in 2010. At that time, 20 percent of the national road network was assessed to be in good condition, 30 percent in fair condition and 50 percent in poor condition. Ongoing road projects include the dualisation of Beitbridge-Harare-Chirundu highway, including the Harare Ring Road.

"The construction team has started arriving from China, and construction is expected to start in September this year," he said.

"We are also going to construct Phase 2 of the Harare International Airport Road. The late commencement has been due to delays in carrying out the required feasibility study. Again this will be done and project implementation will commence before the end of the year." the Minister added.

More funds, especially foreign direct investment, could have been channelled towards road projects, among other infrastructure development projects, but lack of appropriate and adequate legislation governing Public Private Partnerships was a hindrance.

"However, we now have the Joint Venture Act, and we trust that from now on we will be able to attract significant levels of FDI in transport infrastructure development," the Minister added.

Source - Bulawayo

June 29, 2017

£165m roads project facing legal challenge


A long-awaited £165m roads project for Belfast is now facing a legal challenge, it has emerged.

Around eight years after it was first announced, cash was finally earmarked for the York Street Interchange development as part of the DUP's £1bn deal with the Tories.

But now, a legal challenge, which has been confirmed by the Department for Infrastructure, over the awarding of the main construction contract, could delay the scheme further.

DUP Tory deal new £1bn allocation breakdown - where will the money go in Northern Ireland?

The Department has said that “the tender process to appoint a contractor to bring the scheme to a construction ready stage has now been completed... however, tender award cannot occur at present due to a legal challenge. The legal process is ongoing.”

The interchange is intended to solve the Belfast's increasing traffic problems.

It aimed to transform traffic flow where the Westlink, M2 and M3 converge.

The bulk of the cash needed to build it, around 40%, was originally due to come from the EU.

The upgrade of the York Street Interchange aims to tackle the traffic gridlock which occurs daily.

As Northern Ireland's busiest junction, it carries 100,000 vehicles daily, mostly commuters to and from Belfast from around Co Antrim.

It was revealed this week that part of a £1bn fiscal package for Northern Ireland as part of the DUP deal with the Conservatives, will include £400m for infrastructure. And as part of that, money will be freed up for the York Street Interchange.

At the end of last year, former Infrastructure Minister Chris Hazzard accepted a recommendation from a public inquiry that the York Street Interchange scheme should progress in principle but reiterated warnings that Brexit had placed a question mark over funding.

Speaking about the project, Wesley Johnston, an expert on Northern Ireland's roads, has said that commuters can still expect delays at the York Street interchange even after work has been completed.

Belfast Telegraph Digital

February 17, 2017

Bitumen in Road Construction

Bitumen is used in road construction due to various properties and advantages it has over other pavement construction materials. Advantages of bitumen for road construction is discussed.

Why is Bitumen Used in Road Construction?

Bitumen gain certain unique properties that are inbuilt in it during its manufacture. The bitumen as a raw material in flexible road construction and bitumen as a mix (composing other materials i.e. aggregates/ pozzolans) serves certain advantages, that prompt to use bitumen widely in road construction.


Use of Bitumen in Flexible Road Construction

The reason behind the significant application of bitumen in flexible pavements are explained below:

1. Production of Bitumen is economical

Bitumen is a by-product of crude oil distillation process. Crude oil itself is a composition of hydrocarbons. The primary products that are available are the petrol, diesel, high octane fuels and gasoline.
When these fuels are refined from the crude oil, the bitumen is left behind. Further treatment of by-product, to make it free from impurities give pure bitumen.
As the primary product demand is of utmost importance to the society, the bitumen as a by product has survival for long. This by product is utilized as a new construction material, without going for any other new resource.

2. Physical and Rheological Properties of Bitumen bring Versatility

The physical and the chemical properties of Bitumen are found to be a function of load level, temperature and the duration of loading. It is a thermoplastic and viscoelastic material.
These dependencies make us to truly access the traffic on the road so that a bitumen mix properties can be varied based on the stress levels calculated. This versatility of bitumen results in a large variety of bitumen mix, based on the road application.

3. The Melting Point of Bitumen is low

It is highly appreciable about the fact that bitumen has a favorable melting point, that helps in both surface dressing and wearing resistance with ease.
The melting point of the bitumen should not be too high, that it can be melted easily during laying the pavement. At the same time, bitumen has a melting point, which would not let the already casted road pave to melt and deform under high temperatures.
In areas of high temperatures, along with this quality of bitumen, the aggregate composition helps to cover up the effect of large temperature.

4. Bitumen can undergo Recycling

As the melting point of bitumen is favorable, it can be melted back to its original state. This is called as asphalt recycling process.
The torn-up asphalt pieces are taken up to the recycling plant, instead of sending them to landfills. This recycled mix can be reused. If necessary, the old bitumen is mixed with new bitumen and new aggregates to make the mix live again.

5. Bitumen gain Adhesive Nature

As explained in the production of bitumen, it is free from hydrocarbon and hence not toxic. The by product is refined to maximum to get rid of organic materials and impurities.
The bitumen has a highly adhesive nature, which keeps the materials in the road mix bind together under strong bonds. These become stronger when the mix is set i.e. ready for vehicle movement.

6. Bitumen has Color Variety

The traditional bitumen is black in color. This is because the dense organic material within bitumen is black in color. Now, when certain pigments are added to bitumen, the color of our choice can be obtained. These are colored bitumen.
It is costly than the normal colored bitumen. The disadvantage of colored bitumen is that it requires more chemical additives and materials.

Requirements of Bitumen Mixes for Road Construction

An overall bitumen mix is used in the construction of flexible pavement to serve the following needs.
  • Structural Strength
  • Surface Drainage
  • Surface Friction

Structural Strength of Bituminous Pavements

The figure below shows a typical cross section of flexible pavement, that was developed in the USA. The structural bitumen layer composes of:
  • Bituminous surface or wearing course
  • Bituminous binder course
  • Bituminous base course
The primary purpose of these bitumen mixes is structural strength provision. This involves even load dispersion throughout the layers of the pavement. The loads involved are dynamic or static loads, which is transferred to the base subgrade through the aggregate course.
A granular base with a bituminous surface course is only provided for roads of low traffic. It is just sufficient and economical.
The rebounding effect of bitumen upper layers helps in having resistance against high dynamic effect due to the heavy traffic. Rebounding property is reflected by the stiffness and the flexibility characteristics of the bitumen top layers. When looking from bottom to top, the flexibility characteristics should increase.
Studies have shown that the above mentioned characteristics of aggregates are attained using densely graded bitumen mixes. This mix should make use of nominal maximum size aggregate (NMAS), that must decrease from the base course- binder course – surface course.
The nominal maximum size aggregate (NMAS) = One sieve larger than first sieve-to retain more than 10% of combined aggregate.
There is a higher amount of bitumen content in the wearing course, that make the layer more flexible. This would help in increasing the durability.

Surface Drainage of Bituminous Pavements

Subsurface drainage can be facilitated using granular sub base in the construction of flexible pavement. Permeable asphalt treated base (PATB) can be used to provided positive surface drainage in major highways. This would behave as a separate course for facilitating subsurface drainage.

Surface Friction of Bituminous Roads

It is essential for the pavement layer to provide enough skid resistance and friction, during vehicle passage, especially in wet condition. This would ensure the safety of the passengers. The macro and the micro surface texture of the asphalt mix contributes towards the surface friction.

The mix gradation i.e. open graded or dense graded will contribute to macro surface texture. The open graded mix have higher macro surface than dense graded. The water is squeezed out from the bottom of vehicle tire when the high macro surface texture is implemented.
The micro surface texture is contributed by the aggregate surface, that is exposed when the above bitumen layer is torn.

Advantages of Bituminous Road Construction Over Concrete Pavements

1. A smooth Ride Surface

It does not make use of any joints; Hence provide a smooth surface to ride. It also gives less sound emission when compared with concrete pavements. The wear and tear are less in the bituminous pavement, thus maintaining the smoothness.

2. Gradual Failure

The deformation and the failure in the bituminous pavement is a gradual process. The concrete pavement shows brittle failures.

3. Quick Repair

They have an option to be repaired to be quick. They don’t consume time in reverting the path for traffic; as they set fast.

4. Staged Construction

This helps in carrying out staged construction in a situation when problems of fund constraint or traffic estimation problems are faced.

5. Life Cost is Less

The initial cost and overall maintenance cost of bituminous pavement are less compared to concrete pavement.

6. Temperature Resistant

They act resistant against high temperature from melting and are not affected by de-icing materials.

Disadvantages of Bituminous Pavement

  1. Bituminous pavements are less durable
  2. Low tensile strength compared to concrete pavement
  3. Extreme weather and improper weather conditions tend to make bituminous pavement slick and soft.
  4. Bitumen with impurities can cause pollution to soil, hence ground water by their melting. These may have hydrocarbons in small amounts.
  5. Clogging of pores and drainage path during construction and service life
  6. More salting- to prevent snow during winter season
  7. Cost of construction high during extreme conditions of temperature

Source - enggfeed

October 10, 2016

TOT or Advance Selling of Human Traffic Loads ?

The National Highways Authority of India (NHAI) is preparing to start the process of monetizing toll-based operational road assets under the toll, operate and transfer (TOT) model, aimed to bring new investments to the highways sector.

“We have not as yet floated tenders to monetize road assets, but are preparing to do so. We expect to begin doing this in 2-3 months’ time under the TOT model,” NHAI chairman Raghav Chandra said in an email response to queries from Mint.

This will be India’s first exercise in auctioning NHAI’s operational projects after a cabinet clearance in August. The proceeds will fund new highway projects under various models.

NHAI is currently working on the guidelines for TOT, under which the investor will collect tolls and be responsible for operation and maintenance of the project. The TOT model will be essential to attract long-term foreign investment, financial investors and investment bankers told Mint.

NHAI can lease up to 75 national highway projects which are fetching tolls for at least two years to various entities on the TOT model. The overall annual toll collected from these projects is about Rs2,700 crore, against which NHAI can expect to raise Rs25,000-30,000 crore by granting 30-year concessions, said Ashish Agarwal, director (infrastructure) at investment bank Equirus Capital.

The TOT model is long overdue, said Gautam Bhandari, partner at I Squared Capital, a US-based investor in road projects. “We are hopeful that NHAI finally does launch its TOT programme so that it can serve as a model for other sectors as well. As a global investor, we believe that NHAI’s TOT model, if executed properly, could be a win-win for everyone. Proceeds from TOT auctions will free up valuable taxpayer capital that can then be recycled for much-needed new infrastructure projects,” he said.

I Squared is looking to invest as much as $1 billion in Indian infrastructure. It has invested more than Rs1,000 crore through its investment platform Cube Highways and Infrastructure Pte. Ltd in three road projects so far.

IDFC Alternatives, which has bought controlling stakes in operational road projects, is waiting to see the fine print. “The good part is that in the TOT model, there are far less variables and concerns to be addressed as compared to projects with embedded construction risks. The differences in the bids here would be more a function of how differently each investor views the traffic growth rates, maintenance costs, synergies with other projects in one’s portfolio, if any,” said Aditya Aggarwal, partner (infrastructure), IDFC Alternatives.

There is significant interest from international infrastructure funds in the Indian road sector, said Rahul Mody, managing director, Ambit Corporate Finance Pvt. Ltd. “The TOT model is an excellent idea. The model takes away two key risks in the road sector—delays or cost overruns and initial traffic discovery—as the assets that will be offered under this (model) will be operational with some tolling history; hence it should attract considerable interest from Indian companies as well as foreign investors,” Mody said.

“The model can be an avenue for NHAI to raise upfront capital to fund the EPC and HAM projects; opportunity to feed the increasing number of pension funds and infrastructure investors having access to low cost capital and further deepen the infrastructure market; and allowing players to choose better the nature of risk-reward play they want to play in the road sector,” Agarwal said.

Source- LiveMint

September 29, 2016

Global Bitumen Market

The global bitumen market is forecast to grow at a Compound Annual Growth Rate (CAGR) of four percent between 2015 to 2020, and the world’s largest energy traders such as the Vitol Group and the Trafigura Group Pte. are in a race to increase their market share.

The bitumen market was valued at around $75 billion in 2014 and is expected to reach $94 billion in 2020, according to a report by Zion Research, titled, “Bitumen (Paving Bitumen, Oxidized Bitumen, Cutback Bitumen, Bitumen Emulsion, Polymer Modified Bitumen and Others) Market for Roadways, Waterproofing, Adhesives, Insulation and Other Applications - Global Industry Perspective, Comprehensive Analysis and Forecast, 2014 – 2020”.

Bitumen is a semi-solid form of petroleum, which is used to make asphalt for roads, waterproofing for roofs, insulation, and adhesives. It is either obtained by distillation of petroleum or is available naturally, such as in Canada’s oil sands.

Bitumen is used mainly in road manufacturing. A surge in road construction activity in Asia will propel growth for the product going forward. 75 percent of the global consumption of bitumen was used for road construction in 2014.

Waterproofing of roofing and building construction was the second major consumer of bitumen in 2014. Increased construction of homes to cater for the growing population is likely to add to the bitumen demand in the future.

Along with roofing, polymer modified bitumen (PMB), which is used as a chemical additive and adhesive, will witness rapid growth compared to other forms of bitumen.

Trucks, trains, and barges have been used traditionally to transport bitumen from refineries to local consumers; however, a drop in supply from the aging refineries in the U.S. and Europe has necessitated the use of oceangoing tankers, to supply the material from its source of production to the end consumer.

Vitol, the largest independent oil-trading house teamed up with U.S.-based Sargeant Marine Inc., which distributes asphalt to customers worldwide to form Valt, which operates the world’s largest dedicated asphalt fleet, handling parcel sizes from 20 metric tons up to 37,000 metric tons through its fleet of fourteen specialist vessels, according to its website.

“It used to be mostly a small distribution business,” Chris Bake, a senior executive at Rotterdam-based Vitol, said in an interview. “Now it is more of a whole arbitrage business requiring a global reach and shipping capacity,” reports Bloomberg.

Trafigura group is also not far behind. Its Singapore-based unit, Puma Energy has added four new bitumen vessels, taking the total number of vessels to 11, which cater to the Asian markets.

“We see a definite upward trend in the number of nautical miles for bitumen,” said Valt Chief Commercial Officer Nick Fay, who estimates an annual increase of about 7 percent. “All the new refineries that are getting built don’t make bitumen,” reports Bloomberg.

The Guvnor Group is planning to invest in the Perth Amboy asphalt refinery and storage facility in New Jersey, which has been shut since 2008, reports Bloomberg.

There is hardly any public information about the bitumen market, which makes it ideal for the large energy traders, who use their energy expertise and global connection to supply to far-off markets.

“There is a perception that the world is going to be more disconnected -- supply and demand-wise -- and we are there to help connect the dots,” Klintholm said.

Nonetheless, increased use of asphalt for roads and environmental concerns with bitumen manufacturing could pose a risk for the growth of the bitumen industry in the future.

By Rakesh Upadhyay for Oilprice.com

July 20, 2016

The South African National Roads Agency (Sanral) his issued tenders to six pre-qualified bidders for each of the mega-bridges, over the Mtentu and Msikaba River gorges, that are to be part of the greenfield section of the N2 Wild Coast Road project.

This is in spite of the fact that the project, which has been dogged by controversy since its inception 15 years ago, still faces some unresolved legal issues. There was huge opposition from KwaZulu-Natal road users who expected to fund the project through increased tolling in their province. However, this opposition has fallen away as the KwaZulu-Natal section has been excluded from the project. The revised N2 Wild Coast Road Project runs from East London to the Mtamvuna River Bridge, a distance of approximately 410km.

Bizana residents fear being displaced and the Amadiba Crisis Committee has objected to the project, claiming it is linked to the Xolobeni dune mining proposal, against which they are fighting. Conservation organisations are bitterly opposed to the fact that the greenfields section of the proposed route will pass through the environmentally sensitive Pondoland Centre of Endemism, part of a global floral hot spot.

Sanral spokesman Mbulelo Peterson said that an open pre-qualification process had been followed before the issuing of the tenders. He said that, due to the size and complexity of the two bridges, which are expected to cost around R3,5-billion to construct, the tender periods were 18 weeks and 20 weeks respectively for the Mtentu and Msikaba Bridges. Tenders would close at the end of October for the Mtentu Bridge and early in November for the Msikaba Bridge. Construction of the bridges was likely to start early next year.

THE N2 Wild Coast road project was already well under way as Sanral had started working on it as soon as it had received the go-ahead from the Minister of Environmental Affairs in 2010. Mr Peterson said that, to date, Sanral had done extensive work on upgrading existing roads on the N2 between East London and Mthatha and on the future new N2 alignment along the current R61 route between Mthatha and Port St Johns.

All work already done on the N2 Wild Coast Road had been funded from non-toll funding and only the greenfields section of the route would be funded through a mix of government grant and tollings.

“Sanral, the Department of Transport and National Treasury are in discussion to finalise the funding model for the greenfields section. By law only roads funded through toll funding can be tolled and no cross-subsidisation of tolling is allowed,” he said.

This meant Sanral could not erect new toll booths or adjust tariffs at existing toll plazas within KwaZulu-Natal to fund roads in the Eastern Cape.

“New toll roads must be gazetted and go through an extensive public participation process after gazetting.”

In January this year, government gave the green light for the construction of the greenfields section of the project, between Ndwalane outside Port St Johns and the Mtamvuna River.

Mr Peterson said this part of the project would start with the construction of the massive bridges over the Mtentu and Msikaba Rivers, which border the Mkambati Nature Reserve. Once these were under way, construction of the remaining approximately 110km of road, the seven additional river bridges and four interchanges would start.

Source - Southcoast Herald

June 22, 2016

Chile Road Projects Tender

Chile is pushing ahead with infrastructure development. The Ministry of Public Works intends to award five to seven projects during 2016. 

The Ministry of Public Works has also set a target of having 12-13 major infrastructure projects being awarded and worth a total of US$6 billion by the time the current administration comes to the end of its term.

One road project due to be awarded shortly is for the phase two of the Vespucio Oriente link. The tender is expected to open in July 2016. 
The projects for the Ruta de la Fruta, El Loa link and the road from Los Vilos to La Serena will also be put to tender in 2016. Meanwhile the tender process for the $1 billion Costanera Central project will be put out to tender in 2017.

First publishedon www.WorldHighways.com

June 16, 2016

Nepal Spends on Road

The prime Minister, other ministers and influential leaders of the opposition parties have managed to get huge funds allocated to their respective constituencies for the development of minor local roads in order to woo local voters.

As many as 98 minor and local roads that were allocated only Rs 1 million or little more in the budget have now been upgraded into multi-year projects, analysis of information provided to Republica by the National Planning Commission (NPC)  shows.

The Ministry of Finance has decided to allocate Rs 40 billion for initiating multi-year tender processes for these projects. However, the roads in question have not been listed as strategic roads, nor has the economic returns been weighed. Line agencies of the Department of Roads have already started the tender process for several of the projects. 
These huge amounts are on top of the budget allocation of Rs 42.02 billion in the current fiscal year. Minor projects that had been allocated between Rs 1 million to Rs 5 million are now receiving Rs 10 million and above. A few of them are receiving over a billion.

Four minor road projects in Jhapa, the home district of Prime Minister KP Sharma Oli, have now been converted into multi-year projects and guaranteed funding of about Rs 1 billion. The projects are Lakhanpur-Mangalbare-Mujarphutta-Jyotinagar road, Satamari-Bhalubari road, Charali Kechana ring road and Damak ring road.

Likewise, Biratnagar-Debanganj road in the constituency of Deputy Prime Minister and Minister for Physical Infrastructure and Transport (MoPIT) Bijaya Gachchhadar has been upgraded into a multi-year project.

Likewise, Finance Minister Bishnu Prasad Paudel has allocated about Rs 3 billion  for similar projects in his  constituency. Belbas-Nuwakot-Dobhan road and Belbash-Bethari road have been turned into multi-year projects. The fiscal year budget had allocated Rs 5 million for the Belbash Bethari road and this sum has now been increased to Rs 1.94 billion.
Swarnim Wagle, senior economist and former member of the NPC, said bringing a road to every voter is not the solution to the lack of efficient road infrastructure in the country. He suggested focusing on good roads over the shortest distances and efficient transportation.

Priority projects in top leaders' constituencies

Three influential leaders from Pyuthan district have used their sway to get minor projects prioritized. Govind Raj Pokharel, former NPC vice chairman, has converted at least two projects into multiyear ones. He was also involved in project selections for the current fiscal year. Track opening and upgrading of Jhimruk ring road and the Hatiyagaun Jabune-Airabati road in Pyuthan have now been prioritized. Likewise, Bamdev Gautam, former home minister and senior leader of the CPN UML, has secured funds for the black-topping of Bhigri-Swargadwari road and the construction of a ring road in Madi Model Municipality.

Rekha Sharma, lawmaker of the CPN (Maoist Center) and minister for general administration, has gotten four roads, also in Pyuthan, converted into multi-year contracts. Cherneta-Salghari-Sari-Dandagau road, Badadanda-Kaskot-Hansapur-Airawati road, and Okharkot-Machchhi-Tanda Pokhari road are among the four.
Balkrishna Khand, influential leader of the Nepali Congress from Rupandehi district, has secured a few multi-year road projects also. Bauddha Paripath-Ramgram-Panditpur-Jyamire road, Harkatawa road and Murgiya- Suryapura-Lumbini road in Rupandehi, and two other minor roads in the Lumbini area were recommended by Khand for such conversion. Similarly, senior UML leaders Janardan Dhakal, Surendra Pandey, Parbat Gurung, Rajendra Pandey, Lal Bahadur Rawal, Yagyaraj Sunuwar, Deepak Karki, and Janardan Sharma of CPN (Maoist Center) have also secured projects in their home districts.

Sumitra Amatya, a member of the NPC, told Republica that "projects are being converted as a new experiment for completing projects listed in the budget within three years and averting the continuous financial burden of such small projects over as much as a decade." She further said that conversion into multiyear does not mean the resources are allocated right away as the funds will only be disbursed after the detailed project report (DPR) and environment impact assessment (EIA) are completed.
- See more at: http://www.myrepublica.com/feature-article/story/44377/billions-for-local-roads-in-home-districts-of-bigwigs.html#sthash.Bc81YyAD.dpuf

June 7, 2016

Concrete to Replace Bitumen..

Concrete Roads 20% Cheaper Than Bitumen, More Durable – Dangote

The president of Dangote Group, Alhaji Aliko Dangote yesterday said using concrete in road construction is 20 percent less costly than using other materials.

The business man disclosed this at Itori, Ewekoro local government area of Ogun State during the inauguration of a 26 km concrete road constructed by his company as part of its corporate social responsibility, CSR, to the people of the area.

According to Dangote, apart from saving cost,  roads constructed with concrete last longer than bitumen roads and do not require much maintenance.

“Our decision to introduce cement concrete roads in Nigeria, is in line with what obtains in other parts of the world. For instance, the famous Autobahn in Germany, was constructed with concrete. The equally popular Marine Drive in Mumbai, India, which was built in 1939, is another example of a concrete road.”

The business mogul further stated that players in the cement industry in Nigeria have been clamouring for a rethink on how roads are constructed in the country saying to save billions that go into maintaining bitumen roads, concrete roads are the answers.

“The Nigerian cement industry as our contribution to finding a cost-effective and lasting solution to this problem, has been advocating the construction of concrete roads as a more viable alternative to asphalt roads. That is why we at DIL, are venturing into the construction of concrete roads. Today’s ceremony is just the beginning for us, as we will soon embark on the building of more concrete roads in other States of the Federation, including Lagos, Bauchi, Kogi and Kaduna.

Dangote explained that his company embarked on construction of Itori -Ibese road to contribute their quota to easing suffering of the people of the area occasioned by poor state of the road also help their business.

“This project was conceived in 2014, as part of our efforts to ease movement of our heavy duty trucks from our Ibese Cement Plant to other parts of the country. We realised that the existing narrow road built in the ’70s, had virtually collapsed and needed to be reconstructed to accommodate our trucks and other road users.

“First, concrete roads are not only about 20 percent cheaper than the conventional asphalt roads, but they also last longer and do not have potholes. Also, concrete roads do not require frequent maintenance and they save fuel for motorists and protect tyres from wear and tear.

He noted that apart from being cost effective and durable, materials for making concrete roads are locally sourced.

“Another advantage of concrete roads is that cement, the basic raw material is for construction, is available locally, and is cheaper to use in the long run than bitumen, a petroleum-based product that is presently imported. As a matter of fact, in Nigeria, economic losses due to poor condition of our roads is estimated at about $1billion annually. I believe that the introduction of concrete roads will enable the government to find lasting solution to the poor road network in the country, and also reduce the burden of constantly sourcing for funds to repair roads.

Source- leadership

February 22, 2016

Coastal Road Phase 1

The Maharashtra Coastal Zone Management Authority (MCZMA) is yet to give its final nod for the Rs 12,000-crore coastal road project, but the BMC is gearing up to begin work on it and will be rolling out the work tenders for the first phase in three months. The decision to roll out the work tenders was taken after the peer review report on the first phase.

“The peer review report for phase 1 of the coastal road project is complete and the tenders for the first phase stretching from Priyadarshini Park to Bandra will be out in three months,” said Additional Municipal Commissioner Sanjay Mukherjee. Apart from Coastal Regulation Zone (CRZ) clearances, the civic body is also awaiting clearances from the Navy as well as the Coast Guard, before actual construction of the coastal road begins.

The current BMC budget has made an allocation of Rs 1,000 crore for the project.
The Maharashtra Coastal Zone Management Authority (MCZMA) is yet to give its final nod for the Rs 12,000-crore coastal road project, but the BMC is gearing up to begin work on it and will be rolling out the work tenders for the first phase in three months. Apart from Coastal Regulation Zone (CRZ) clearances, the civic body is also awaiting clearances from the Navy as well as the Coast Guard, before actual construction of the coastal road begins.

The current BMC budget has made an allocation of Rs 1,000 crore for the project. The decision to roll out the work tenders was taken after the peer review report on the first phase. It is a detailed study of the project and covers the shortcomings of the consultant’s report. It was submitted on February 17.

“The peer review report for phase 1 of the coastal road project is complete and the tenders for the first phase stretching from Priyadarshini Park to Bandra will be out in three months,” said Additional Municipal Commissioner Sanjay Mukherjee.

Apart from making recommendations on the number of lanes, the report also includes a data analysis for different times of the day.

Source: http://indianexpress.com/article/cities/mumbai/maharashtra-work-tenders-for-phase-i-of-coastal-road-in-3-months/

February 18, 2016

Global Bitumen Market @ 72 B and is Growing

ALBANY, New YorkFebruary 8, 2016 /PRNewswire/ --
The global bitumen market will expand at a CAGR of 3.90% from 2014 to 2020. The market was valued atUS$71.44 billion in 2013. It is expected to reach US$93.38 billion by the end of 2020, according to a research report released by Transparency Market Research. The report titled "Global Bitumen Market - Industry Analysis, Size, Share, Growth, Trends and Forecast, 2014 - 2020".
According to the research report, the global bitumen market is primarily driven by the growing rate of use in construction of roadways around the world. The report states that there is a rapid increase in the rate of creation of roadways and other related activities, creating a high demand for the global bitumen market. Polymer modified bitumen, a type of bitumen, is highly preferred due to the advantages it provides, such as high porosity, high skid resistance, and low noise. All three properties are the most sought-after ones in the global roadways industry, giving PMB an advantage over other materials.
The global bitumen market's growth rate is, however, restrained to a high degree by the environmental hazards created by the use of bitumen. The report segments the global bitumen market in terms of products and applications, and also provides a geographical dissection. By products, the global bitumen market was dominated by PMB in 2013. The segment held more than 65% of the market for that year and is expected to be the fastest-growing segment for the report's forecast period. PMB is also used for waterproofing purposes.
The report states that more than 80% of the global bitumen market, from the perspective of applications, was dominated by road construction in 2013. Other applications of bitumen arise in automotive, adhesives, paints and enamels, and the roofing industries. From a geographical point of view, the global bitumen market was led by North America in 2013. North America took up over 30% of the global bitumen market in 2013, a market share attributed to expansion of state infrastructure. However, the report states that the fastest growth rate in the global bitumen market for its given forecast period will be held by the Asia Pacific region owing to rapid rate of industrialization.
The key players of the global bitumen market are Villas Austria GmbH, Valero Energy Corporation, Shell Bitumen, Petroleos Mexicanos, Nynas AB, NuStar Energy, JX Nippon Oil & Energy Corporation, Marathon Oil Company, Indian Oil Corporation, ExxonMobil, China Petroleum and Chemical Corporation ChevronTexaco Corporation, British Petroleum, and Bouygues S.A., The report states that the global bitumen market is highly competitive and fragmented due to the presence of a large number of regional players.
Get Sample Report, Segments or table of Contents as per your Requirements: http://www.transparencymarketresearch.com/sample/sample.php?flag=CR&rep_id=295
Key segments of the Global Bitumen Market 
Bitumen Market - Product Segment Analysis 

Bitumen Market - Application Analysis 
Roadways 

Waterproofing (Roofing) 

Adhesive 
Insulation 
Others (including decorative and industrial applications) 
Bitumen Market - Regional Analysis 
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Water Over and Under Bitumen

Repairs continue on Northern Territory's Buntine Highway after massive flood washes away sections of road

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Updated 18 minutes ago
The clean-up is continuing after recent severe flooding across the Top End's Victoria River District caused sections of the Buntine Highway to be washed away.
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  00:00             00:00       
AUDIO: Gordon Atkinson from the NT Department of Infrastructure says five-metre sections of Buntine Highway bitumen were lifted and carried away by rushing water(ABC Rural)
The NT Department of Infrastructure has confirmed that whole five-metre sections of bitumen had lifted and been carried away by rushing water.
The department's Gordon Atkinson said the rain events had been bigger than anything seen over the past 10 years.
He said it was normal for road surfaces to be ripped up by such intense events.
"The bitumen has water running over the top of it and the water gets underneath and helps to lift it as well, a bit like an aeroplane wing," he said.
Mr Atkinson said the priority was to repair damage and make the highway operational, and that a longer road improvement would continue in the background.
"All our major repairs are finished, so the Buntine Highway is open to major traffic and there are no weight restrictions," Mr Atkinson said.
He said the last bits of resealing required would happen soon and drivers were safely doing 100 kilometres per hour over those sections.
Mr Atkinson said the "mountains of organic debris" left on bridges had been largely cleaned up, with a large quantity of snakes and spiders keeping workers on their toes.
"Nobody got bitten," Mr Atkinson said. "They are used to it now. They've got gloves on, they are using pitchforks, poles and chainsaws on long chain bars.
"They are ready to start running when the snakes appear."