Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Sunday, 20 March 2016

Making of a NPA ?

A news report tells about NHA ( National Highway Authority ) planning a 13 Km long pod-based Personal Rapid Transit ( PRT ) network in Gurgaon , at a cost of Rs 850 Crores , which will be Built / Owned / Operated ( BOT ) , by a private contractor for a period of 25 years , during which , it will recover the cost ( and , make some profit ? )


*  Pods will carry 5 passengers who will be picked up at Docking Stations

*  A group can also " hire " an entire pod to take to desired destination ( 16 in all )

*  Pods will be suspended from overhead rails, and run on a guide way at close intervals

*  Pods are " automated " ( just touch destination icon on a screen ? )


*  Dozens of Highways built under BOT system remain un-built or languish for want of sufficient paying traffic , resulting in contractors having suffered huge losses and now , NDA government trying to salvage these . Contractors are desperately trying to get out of their legal commitments

*  With no contractor coming forward for new projects , BOT system is nearly ditched and Govt has decided that it will finance future road projects, on its own

*  Contractors are unable to repay to banks , Rs 40,000 Crores worth loans ( I presume , in
case of PRT as well , private contractor will need a bank loan )

*  As to the ticket-price to be charged , a dispute has been going on ( now pending in Court ) , between Govt of Maharashtra and Reliance , in case of Mumbai Metro , for 2 years

*  Trans Harbor Link project ( in Mumbai ) was tendered and scrapped twice on the question of " Projected Traffic " and " Projected Revenue " and " Viability Gap Funding " , delaying the project by 10 years and consequent cost-escalation of 200 %  !

*  Has PRT compared  its " Ticket Price per Km " with ,

    *  Private and State owned buses plying on Delhi / Gurgaon roads  ?

    *  Delhi Metro ?

    *  Private taxis and auto-rickshaws ?

    *  Uber / Ola  ?

*   PRT can run only on a FIXED GUIDE WAY , and to DEFINED Destinations  only , whereas private taxis can take a passenger ANYWHERE

This means , PRT cannot compete with the destination FLEXIBILITY of taxis !

That means , its pricing / timings would need to be better than Delhi Metro !

*  Is it not highly " probable " that , much before PRT starts ( 2 years , at least ? ), private air-conditioned , Motorbike Taxis will arrive in Delhi , making PRT a " Non Starter " ?

I wonder if those bankers lending loan to PRT builder will search for answers to the above mentioned issues in DPR

Or , as is the current practice , they will write-off Rs 850 cr as NPA , when time comes  !

I hope NDA government / RBI spend more time / effort / energy to lay down " loan approval criteria " which will prevent future NPAs , than on cleaning up the current NPAs !


hemenparekh.in / blogs

21  March  2016


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