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Last Updated : Aug 27, 2012 03:33 PM IST | Source: Moneycontrol.com

GVK Power to sell stake in Australian rail, port arms

UR Associates has come out with his report on Infrastructure sector. The research firm says during the Japanese Prime Minister‘s visit to India in December, 2011, Japan offered to match Government of India‘s contribution to DMIC Project by announcing a contribution of $ 4.5 bn for projects with Japanese participation.

 
 
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UR Associates has come out with his report on Infrastructure sector. The research firm says during the Japanese Prime Minister’s visit to India in December, 2011, Japan offered to match Government of India’s contribution to DMIC Project by announcing a contribution of $ 4.5 bn for projects with Japanese participation. 


The revision of the equity structure of the Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) has been approved by the Union Cabinet. The Delhi Mumbai Industrial Corridor (DMIC) is being developed as a global manufacturing and investment destination utilising the high capacity 1,483 km long western Dedicated Railway Freight Corridor (DFC). A request was received from the Government of Japan for 26% participation in the equity of DMICDC. During the Japanese Prime Minister’s visit to India in December, 2011, Japan offered to match Government of India’s contribution to DMIC Project by announcing a contribution of $ 4.5 bn for projects with Japanese participation. 


As approved by the Cabinet on 16 August 2007, DMICDC was incorporated on 7 January, 2008 with authorized equity base of Rs 100 mn (49% equity participation by GoI, 41% by IL&FS and 10% by IDFC) for developing projects, coordinating the implementation of the numerous projects and also raising finances, wherever needed.


Subsequently, in the meeting held on 15 September, 2011, the Union Cabinet approved the restructuring of DMICDC with GoI equity capped at 49% of the total equity and the Govt. owned Financial Institutions as majority shareholders. In pursuance of the above approval, IIFCL and LIC took over the equity held by IL&FS and IDFC respectively, at par, thereby substituting private Financial Institutions in DMICDC with Govt. owned Financial Institutions.


Capacity expansion of ports:


The Government has set a target of awarding 29 PPP and 13 Non-PPP projects involving capacity addition of about 245 MTPA for expansion and capacity creation in the major ports during the current financial year. Most of the Non-PPP Projects are expected to get commissioned during the current financial year; the PPP Projects are expected to get completed in a period of 2-3 years after the award. 


GVK Power and Infrastructure to sell stake in Australian rail and port subsidiaries: 


GVK will sell minority stakes in its Australian rail and port subsidiaries to raise funds for developing a coal mine in Queensland. The Sanjay Reddy-led company, which had acquired a controlling stake in Australia's Hancock Prospecting coal mines last year, needs to invest $10 bn to mine and build rail and port facilities that can transport coal from the mines to India and other countries. GVK appointed Australia and New Zealand Banking Group as its financial advisor and has started talks with rail and port companies to offer stakes in its project. Last year, GVK Power had acquired 79% in the Alpha Coal and Alpha West projects and 100% stake in the Kevin's Corner project in Queensland from billionaire mining heiress Gina Reinhart for $1.26 billion. It had also acquired 100% stake in a 500 km rail line and a 60-million-tonne-per-annum port to boost GVK's plan to export coal to power plants in India and China.


L&T roping in investor for infra arm, says Naik: 


Larsen & Toubro (L&T) said it would bring in an investor into L&T Infrastructure Development Projects Limited, its infrastructure development arm, in a month or two. At the company’s annual general meeting, L&T Chairman A M Naik said new capital would be brought in by unlocking the value of L&T IDPL. He, however, did not give any detail on the extent of the equity to be diluted and the funds that would be raised through the sale. L&T also plans to sell equity in its port project Dhamra in Odisha. L&T said it expected five or six tenders for power equipment in the next few months. Import of power equipment from China has dampened prospects of domestic power equipment manufacturers. Naik expects this trend to change, as more players opt for indigenous manufacturing, instead of cheaper Chinese imports. L&T also plans to increase the turnover from infrastructure projects in West Asia from $1.5 bn (Rs 82.95 bn) to $2 bn (Rs 110.60 bn) this year. International projects would provide a cushion effect in tiding over the slowdown in construction contracts being awarded in the country.


No bids for expressway:


There is no sign of the Eastern Peripheral Expressway (EPE) project around Delhi becoming a reality by even 2015 with the tender for its construction not finding any takers. The NHAI is now planning to extend the bid last date. NHAI sources said though more than a dozen firms had pre-qualified for the project, none of them submitted financial bids. Though prevailing market conditions and low interest of contractors are cited as the main reasons for no private player bidding for NH projects, questions are being asked whether the highways ministry lost a golden opportunity last year to bid out the project.


IVRCL's Chennai plant in dispute with Chennai Water Supply Board: 


Chennai Water Desalination Ltd (CWDL), which produces water through a desalination plant, is in a spot of trouble with the Chennai Metropolitan Water Supply and Sewerage Board, over what constitutes "forced shut down’'. Chennai Water Desalination Ltd is a subsidiary of the Hyderabad-based infrastructure company IVRCL. Last year, CWDL’s plant had to be shut down for a month due to a four-fold increase in the total suspended solids concentration which is harmful to drinking water. This increase was caused by a breakwater construction in an adjoining Greenfield port. While the company continues to recognise revenue, the corresponding payments have been withheld by the board. According to sources, negotiations are going on between the company and the board.


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To read the full report click on the attachment



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First Published on Aug 27, 2012 01:26 pm
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