China’s private infrastructure firms face unexpected competition
Private Chinese companies taking part in a scheme to reduce the state’s dominance in building infrastructure are finding competition is coming from an unusual place – the government peers they are supposed to replace. Private-sector businessmen say they are losing out in most projects to state firms, which are favoured by local authorities because they are seen as financially stronger and better able to raise capital. State companies are also more likely to bid for projects that private firms consider financially unfeasible. Finance ministry data shows that 600 public-private partnerships (PPP) have so far found partners, and analysts say that about three quarters of the investment has come from state-owned firms. “The government is willing to work with government firms, but co-operation with private companies is a shambles,” said Yan Jiehe, chairman of China Pacific Construction Group, which grew to become China’s largest private builder by revenue over the last 20 years by building roads and bridges for local governments. Yan has no plans to invest in any of the advertised PPP projects, which range from municipal works to highway schemes. “None of the projects make financial sense,” he said. The central government is investigating why the private sector is winning so few projects. The central government has promised to reduce the oversized role of state enterprises in the economy, so any failure of the PPP scheme would raise doubts about that goal. China’s Ministry of Finance and the state planning agency, the National Development and Reform Commission, did not respond to requests for comment. Government officials are already worried about signs of a rapid slowdown in the private sector. Investment growth slowed to a record low 3.9 percent in January-May from the year-earlier period, which compares with a double-digit pace last year. Private firms provide the lion’s share of overall investment in China and create 90 percent of new urban jobs. SHUT OUT Problems with the PPP scheme may be more fundamental. Local authorities have advertised close to 9,000 PPP projects – worth an estimated 9.8 trillion yuan ($1.47 trillion) – so most have yet to find a partner at all. While Britain’s PPP scheme limits partnerships to a state authority and the private sector, China does not differentiate between government and private firms. At best, government firms are not allowed to bid on projects in their home province but are free to do so elsewhere. Still, infrastructure projects would not get done without the participation of government firms because the state is so dominant in the economy, said Wang Shouqing, a Tsinghua University professor who advises local authorities across China on the financing of PPP projects. “It was unrealistic to stop state and government firms from participating,” Wang said. “But placing no restrictions on them has resulted in this, because they run on a different playing field.” In 2014, Beijing pledged to give PPP funding more policy support and began offering rewards of up to 8 million yuan to all participating firms. That prompted local governments across the country to advertise projects as PPP, hoping Beijing’s policy focus would lead to faster approvals. State media has reported that the government is seeking views on a draft PPP law. UNSUITABLE The finance ministry’s database shows just 565 projects out of 8,644 have funding partners. Shanghai-based privately-owned YHX Bank found 73 percent of the investment came from government firms. “At all the projects we’ve dealt with, we’ve been told that what they want is a government or state contractor,” said a project manager at a private construction firm in southwestern Sichuan province who only wanted to give his surname as Long. Water treatment PPP projects have been the most popular among private investors because many have operating agreements that allow firms to collect fees from end-users, unlike other “build-and-transfer” schemes, like roads, that rely on the local authority for payment, analysts said. Agreements with local authorities leave the firms at risk of sudden changes in policy or budget priorities. Government firms, however, have tended to heavily undercut private companies on bids, said He Yuanping, chief financial officer of water treatment firm Beijing Originwater Technology . The company is involved in close to 80 PPPs and has mostly won projects on the back of its technology, he said. Other executives said project terms are not always viable. Some offer lengthy repayment periods of up to 30 years, or uncompetitive returns as low as 1-2 percent, they said. “In my opinion, out of those 8,000 plus projects, half are unsuitable for PPP,” said Wang. “We find that a lot of government officials have an incorrect understanding of PPP.” Nate Stupar Womens Jersey
‘Nod for Colachel port is a boost for domestic industry’
The Union Cabinet’s in-principle approval to establish a major port in southern Tamil Nadu is a shot in the arm for domestic economy, say industry representatives and officials. The proposal to set up a deep-draught port and related infrastructure at Enayam near Colachel in Tamil Nadu is a “good move in capturing transhipment and deep berthing vessel movement,” said R Dinesh, Head of National Committee on Logistics, Confederation of Indian Industry. Enayam located on the west coast can be a major transhipment hub for domestic industry as it is a “central point for the entire east and west coast of India. And with related road and rail connectivity, it can increase ease of goods movement and bring down costs for the industry,” he said. Now the industry looks to Singapore, which is 5–7 days away, for transhipment. Domestic industry can access Enayam in less than two days, he said. However, speed of execution has to be demonstrated, he said. A senior government official said the proposed port can be a catalytic factor in the development of the southern districts in Tamil Nadu. The State will be unique in getting a fifth major port and this one will have the potential to draw major lines. Once a Special Purpose Vehicle (SPV) is formed by the three major ports in Tamil Nadu — the V.O. Chidambaranar Port Trust, at Tuticorin, Chennai Port Trust, and Kamarajar Port at Ennore — the project is bound to be expedited, he said. Tyler Eifert Jersey
Oman Air to challenge Gulf rivals in India
Oman Air, the sultanate’s state-owned carrier, is carving out its own position in the Indian market as it looks to take on its larger Gulf rivals. The Muscat-based airline said last month it wants an extra 8,000 weekly seats on flights to India within two years, increasing its current share by around 40 per cent to 29,820. That would give it more than Qatar’s 24,800 weekly seats but less than Dubai’s 65,000 seats and Abu Dhabi’s 49,670 seats, according to Indian newswire PTI. Oman Air, who is targeting to at least break even in 2017, is counting on increasing demand for international travel from one of the world’s fastest-growing aviation markets. The move is likely to challenge Emirates, Etihad Airways and Qatar Airways, who are some of the largest foreign carriers flying in and out of India. “Demand is certainly there for Oman Air to expand. There are opportunities to grow transfer traffic as well as origin-destination traffic,” Binit Somaia, Director South Asia at CAPA — Centre for Aviation, told Gulf News by email. Passenger traffic in India increased by over 20 per cent in 2015, according to the International Air Transport Association. By comparison, air travel in China grew by roughly 10 per cent and by less than 5 per cent in the United States. Tom Brady Jersey
Air service in western Orissa still pipedream
Residents are up in arms against the repeated negligence of the state government and the Centre to provide permanent commercial air service to the town. Bowing to the pressure of the western Orissa people, Air Orissa started its service in the town January 19. However, as the carrier failed to meet the terms and conditions of an agreement made by the state government, the service was stopped in April. Since then, the government has not clarified on whether to resume the service in the region. With uncertainty looming large over resumption of air service in the heart of the western Orissa, people are preparing for a major stir against the lackadaisical attitude of the government. In the mean time, the Centre has started a survey in Bargarh to extend air service to the region. But silence of the government over resumption of air service at Sambalpur has drawn flak from several quarters. Former Prime Minister Jawaharlal Nehru had inaugurated the Jamadarpali airstrip in the district during construction of the Hirakud dam with an aim to facilitate education, commerce, health and economy in the backward region. However, no measure has been taken over last 60 years to improve the airstrip or to develop it into a full-fledged airport. Protests by residents of Sambalpur and western Orissa region have gone in vain. Both the Centre and the state government are silent over the matter. The airstrip at Jamadarpali was built on 65.76 acres of land with a 4800-ft-long runway. The residents said if the full-fledged airport requires a 9000-ft-long runway, the authorities can use the 235.03 acres of government land (at Talaba and Goudapali) adjacent to the airstrip. They said the district administration should identify the government land and take steps to develop it into a commercial airport. Jordan Willis Womens Jersey
Not fit to fly
In a clear violation of air safety guidelines, the state government has allowed the high and mighty to fly in the state-owned aircraft without a flying permit from the Directorate General of Civil Aviation (DGCA). For the past six years, the nine-seater Beech Super King Air B-200 and Dauphin AS 365N3 helicopter have flown chief ministers, governors and VVIPs without the mandatory Operator Permit (OP) from the DGCA. The aircraft has been in operation since May 29, 2000, and the chopper since August 20, 2007. During this period the flying machines have flown the likes of chief ministers Keshubhai Patel, Narendra Modi, Anandiben Patel, governors Kamla Beniwal and O P Kohli, besides others. Following the death of the then Andhra Pradesh chief minister YSR Reddy in an air crash, a slew of safety standards were made compulsory by the DGCA. Issue 1 of Civil Aviation Requirement (CAR), Air Transport series ‘C’ section 10 came into existence on June 2, 2010 with guidelines for state/ central government and public sectors to ensure better security of passengers like CM, governor and other important dignitaries. Hank Aaron Authentic Jersey
Black money scheme ads to feature on Air India and Vistara and other airlines’ boarding passes
In a first of its kind nationwide publicity drive, Income Tax Department has tied up with seven airlines including Air India and Vistara to publise one-time black money compliance window by printing the scheme’s details on the back of boarding passes. Armed with a total budget of Rs 100 crore, it will employ the services of the government’s publicity department, DAVP, to advertise the four-month window provided to domestic black money holders to come clean by paying a total tax and penalty of 45 per cent. It will also hold townhall meetings. The Income Tax Department has tied up with seven airlines for Income Declaration Scheme (IDS) 2016. These include Air India, Spicejet, Indigo, Vistara and Air Asia. “Beginning July 15 till September 30, the backside of the boarding passes issued by these airlines will have information relating to the IDS,” an official said. The Income Tax Department has also asked its officers to make “all-out efforts” to attract potential declarants by assuring them of confidential and hassle-free disclosures. Harrison Butker Authentic Jersey
Petronet LNG Calls For A Consortium Of Oil Companies To Acquire & Build Acreages Abroad Including India, Says Its MD & CEO
Managing Director & CEO, Petronet LNG, Mr. Prabhat Singh floated a proposal for creation of a consortium or SPV (special purpose vehicle), consisting of companies such as Petronet LNG, GAIL, ONGC, EIL and OIL to jointly bid for prospective properties for exploration of natural gas and as well setting up of LNG terminals in overseas fields, particularly those of Sri Lanka, Bangladesh and the like. Inaugurating a conference on How to Survive in Low Oil & Gas Price Scenario under aegis of PHD Chamber of Commerce and Industry, Mr. Prabhat Singh also disclosed that his company has offered to convert the fossil fuel fed economy of Andaman & Nicobar with that of natural gas, stating that such a proposal has already been submitted to the Lieutenant Governor of the Island. The Petronet LNG and administration of Andaman & Nicobar Island were progressing satisfactorily on the subject as the latter is suitably inclined to convert its eco-system with cleaner fuel rather than staying on to diesel fed economy, he indicated. Elaborating on the issue of proposed consortium or SPV, Mr. Singh hinted that it has been conceived by the Petronet LNG at a time when the company expects that the prevailing scenario of low oil and gas price would stay on for another five years and that to thrive on such circumstances, the consortium and SPV approach of national oil companies would be ideal situation to acquire oil & gas including terminal acreages and assets overseas including India. According to him, the Ministry of Petroleum and Natural Gas is aware of it and that the Ministry’s intent is also there on it without disclosing a definite roadmap to convert it into reality. The idea has been briefly floated and discussed and its conclusiveness should follow as India would be bidding to acquire gas properties and to build LNG terminals in countries like Sri Lanka and Bangladesh for which if India proceeds with collective approach, it would establish and edge over others, said Mr. Singh adding that such an approach is also called for under prevailing circumstances to building energy storage facilities and other such assets domestically. Speaking on the occasion, Executive Director-Corporate Planning, ONGC, Mr. Yash Malik pointed out that collaborative approach of national oil companies is the right solution to creating oil and gas assets in India to enable it thrive under the low oil and gas price regime, articulating that Indian oil sector needs a fiscal regime better than what prevails currently. Mr. Malik also pointed out that in the low price scenario of oil and gas, his company is successfully going ahead with joint venture approach. Chairman, Hydrocarbons Committee, PHD Chamber, Mr. Rajeev Mathur said that the gas sector has been successfully confronting with the challenges of the emerging time. Joel Heath Jersey
Gujarat Gas gets nod for network
Gujarat Gas has received the Petroleum and Natural Gas Regulatory Board’s approval to build, lay, operate, and expand city or local natural gas distribution networks in Panchmahal and Anand districts of Gujarat. It has 25 years or 300 months of infrastructure exclusivity, valid up to July 2041, and marketing exclusivity of five years, valid up to July 3, 2021, for both the networks. Victor Rask Authentic Jersey
Massive expansion of IOC plant at Cherlapally
The Indian Oil Corporation has taken up a massive expansion of its LPG bottling plant at Cherlapally at a cost of Rs. 30 crore keeping in view the future demand. The capacity of the plant will be more than doubled from 120 thousand metric tonnes (tmt) per annum to 250 tmt per annum when the 72-carousal high-speed machine is commissioned in March 2017, a senior IOC official said. He shot down fears of LPG distributors that the work would lead to disruption in supplies of cylinders as the other bottling plants of IOC at Thimmapur on Mahbubnagar – Ranga Reddy border, Paravada in Visakhapatnam, Kondapally near Vijayawada and Kadapa would chip in. The downtime loss would be absorbed by these units. The Cherlapally unit rolled out about 39,000 cylinders per day with the present 2 X 24 head carousal and the same would go up to 75,000 cylinder per day after March. The carousals are inlet – outlet filling systems to fill empty cylinders with cooking gas, rotating 360 degrees, when they were despatched by a conveyor belt. With the latest machinery, IOC would overtake the capacity of HPCL bottling unit which is also located at Cherlaplly. The HPCL had installed 66-head carousal which was the first in the country in 2010. On the other hand, IOC was working with the present 2 X 24 head carousal since 1998. The IOC is the biggest supplier of cooking gas in the State in the brand name of Indane with 36 lakh customers, including 16 lakh connections in Hyderabad and Ranga Reddy. About 23,000 tonnes of LPG was supplied in Telangana, including 12,000 tonnes in Hyderabad, per month. Joonas Donskoi Jersey
Higher ethanol mix fuels alarm among gas dealers in Kolkata
The Centre’s plans to blend 22.5% ethanol with petrol has caused alarm among petroleum dealers in the city, who fear numerous problems in the mix caused because of Kolkata’s high humidity. Already, the E10 Gasohol mix that is used (10% ethanol mixed with petrol or gasoline) causes multiple problems because of Kolkata’s humidity, thanks to ethanol’s hygroscopic (water absorbing) property, and experts and dealers fear the problems will worsen because of the higher percentage of ethanol mix that is being planned, unless remedial measures are adopted by oil marketing companies. 10 per cent ethanol is mixed with Petrol or Galsoline to produce to E10 Gasohol. This causes multiple problems in a humid city like Kolkata thanks to Ethanol’s hygroscopic property (absorbing water). Now, the union government is aiming at blending 22.5 per cent ethanol with petrol. This blending, experts said, would cause greater problems in humid areas like Kolkata, if remedial measures are not adopted by oil marketing companies (OMCs). Already, as reported by TOI on June 21, petroleum dealers found ‘phase separation’ in their tanks, almost in three distinct layers. “I checked only two days back, immediately after the fuel came to my gas station, and found specific gravity or density varying by 14 points. While the declared density of the fuel is 751.1cc, I found fuel density of 662.4cc at the middle layer of the tank, 766.2cc at the lower layer and 757cc at the upper layer. When I questioned the oil marketing company (OMC) about the aberration, the company’s representative asked me to make an average. The average comes to 765cc. So, there is a difference of 14cc,” complained a south Kolkata petroleum dealer. The petroleum dealer said the OMC cannot challenge him as the fuel is kept in a sealed fuel box given to him by the OMC. “If they accuse me of adulteration, I will ask them to compare the fuel of my tank with that of the ‘company box’. They would not find any difference. So, clearly, something is wrong at their end,” the dealer said. We recommend this Video for you BABA NETWORK LTD. Recommended By Colombia “This happens because of absorption of water by the ethanol,” said auto emission consultant Somendra Mohan Ghosh. “Phase separation describes what happens to Gasohol (ethanol-blended petrol or gasoline) when water is present. When gasoline containing even small amounts of ethanol comes in contact with water, either liquid or in the form of humidity, the ethanol will pick up and absorb some or all of that water. When it reaches a saturation point, the ethanol and water will ‘phase separate’, actually coming out of solution and forming two or three distinct layers in the tank, giving three distinct density levels,” he explained. Automobile expert and former NIT director Prabir Kumar Bose said: “OMCs need to mix certain additives with the gasoline so as to minimize the hygroscopic property of ethanol. Besides, the OMCs must maintain a dehydrated ambience so as not to allow ethanol to get exposed to water or humidity.” The variation of density is correlated with fuel consumption. While ethanol reduces carbon monoxide emission by 30%, phase separation causes more pollution and engine trouble. The problem will increase manifold if the blend goes up above 20%, said experts. Moreover, most car engines are not programmed to burn ethanol-blended fuel. Abroad, cars have branding on the basis of its engine’s choice of fuel. Vehicles with flexi-fuel choice can burn ethanol-blended gasoline efficiently. However, in cities like Kolkata, the E10 Gasohol is being dispensed from unleaded petrol dispensers, Ghosh said. However, proper bio ethanol plant is coming up in Assam. The plant will start making ethanol from bamboo in North-East. 40,000 litres of second generation ethanol could be produced there. He said boost to ethanol production could cut India’s huge crude oil imports bill, which is pegged at Rs 7 lakh crore per annum. This Ethanol blended fuel of course will have additives to neutralize its hygroscopic property. Pat Lafontaine Jersey