CII demands panel to revive private sector investment in infra
Pegging the stuck liquidity with government bodies at Rs 1.25 lakh crore, industry body CII has sought setting up a ‘Renegotiation Commission’ to revive private sector investment in infrastructure. It has also pressed for introduction of Public Utilities Dispute Resolution Bill in Parliament besides implementation of Kelkar Committee report. “Right now there is a downplay of sentiment on PPP and public expenditure on infra … There is huge stuck liquidity with government… Good guesstimate today is it ranges from a figure of Rs 75,000 crore to Rs 1.25 lakh crore,” Chairman, CII National Committee on Infrastructure & PPP, Vinayak Chatterjee said. He was briefing media after the first meeting of the committee. “The key issue that we discussed was how to take private sector sentiment up again for enthusiasm-led investment in the infrastructure sector,” he added. Seeking urgent intervention from the government, Chatterjee said most of the liquidity was stuck in roads and power sector with the government, and include disputed amounts as well as the bills not paid by the government. The key expectation of the private sector is implementation of key recommendations of Kelkar Committee report that has provided solutions for a large number of problems including need for dispute mechanism resolution. “All that needs to be set right away because you cannot wish away private sector. The first budget of the current Finance Minister on July 14, 2014 saw that Rs 500 crore was allocated for 3P India. “It was a clear indication by the NDA government as soon as it came to power but government is midway in its tenure and urgent steps are needed now,” he said. Dispute resolution mechanism can solve many of the problems that the private sector is battling with, he said. Chatterjee said stuck liquidity is astronomically large and when cleared, will pump in a huge quantum of money. He said ‘Renegotiation Commission’ should have a quasi judicial structure with representation from stakeholders as well as civil society besides retired judges that will look into the “existing basket of stressed projects and give dispensation”. This will be a massive signal to domestic and foreign investors for reviving investment. With inadequate infrastructure choking economic growth, the Kelkar Committee has suggested easier funding of projects and a dispute resolution tribunal in its report. The eight-member Vijay Kelkar Committee has also suggested setting up of an Infrastructure PPP Project Review Committee (IPRC) to deal with the problems being faced by such projects. Felix Potvin Authentic Jersey
MPs need to be consulted on PM’s rural roads scheme: Minister
There is a mandatory provision in the rule book that elected lawmakers in the Lok Sabha ought to be consulted for taking up projects under Prime Minister Gramin Sadak Yojana (PMGSY), Union Rural Development Minister Narendra Singh Tomar said here on Thursday. “I am also an elected member. So I understand the grievances and pain of the elected members. If there are states where the elected MPs are not being consulted, the central government will ensure that such consultation does take place,” Tomar told the Lok Sabha during question hour. Answering supplementary questions from members, he said under the rules framed for PMGSY, the superintendent engineer of the concerned projects should contact MPs and ensure that there is a joint inspection of the spot. The issue was flagged during question hour by Congress MP Badaruddoza Khan from Murshidabad who complained that while a sum of Rs 2,623 crore was allotted to West Bengal under the project, “it is a matter of great regret that not a single rupee was allotted” to his constituency for the implementation of the PMGSY and nobody consulted him in this regard. Khan said he has already written two letters to the Union minister. “I have requested the district magistrate. I have raised this question in the general meeting of the Zila Parishad also, but nothing has been done for the last two years,” he said. The MP was supported by party colleague and West Bengal Pradesh Congress chief Adhir Ranjan Choudhury. As several members wanted to raise this issue, Lok Sabha Speaker Sumitra Mahajan said if members want, the house can take up a 30-minute discussion on the subject. Minister Tomar said: “We came to power just some months back, you (Congress) were in power.” Heena Gavit, BJP member from Maharashtra, complained that during spot inspection it was often found that “roads were not only of poor quality but also the length of the road constructed was way less than what was sanctioned”. She demanded the minister should also initiate actions on such complaints. Minister of State for Roads Ram Kripal Yadav asserted that the government will never make any compromise on the standards of the roads. Speaker Mahajan also told the minister that members want that they are taken into confidence when road construction works in their respective constituencies are taken up. Terry Sawchuk Jersey
India aggressive on roads to China
China’s easy road access up to the Line of Actual Control (LAC) has India worried. The government has now decided to put the pace of construction of certain strategic roads along the international border between the two countries on a war-footing. On Tuesday, defence minister Manohar Parrikar said in Parliament that the deadlines of 39 strategic Indo-China border roads have been revised and will be completed in the next three years. Of these 39, five roads will be completed in 2016 itself, eight roads in 2017, 12 roads in 2018, eight roads in 2019 and six in 2020. The LAC is the effective border between India and China. Altogether 73 roads are identified as “strategic” as far as the Indo-China border is concerned. Out of this, 61 roads with a length of 3,417 km entrusted to the Border Roads Organisation (BRO) were planned to be completed by 2012, but out of which only 22 roads of length 708 km have been completed. Lack of road connectivity towards the LAC has been part of a conscious government policy of not developing the borders with China so as to create a buffer area, but it proved to be a handicap as in the case of the 6.9-magnitude Sikkim earthquake of September 2011, when it took days before relief could reach the quake-affected regions in northern Sikkim. To override legal roadblocks like land acquisition, forest and wildlife clearance and so on, the Indian states bordering China — Jammu and Kashmir, Himachal Pradesh, Sikkim, and Arunachal Pradesh — have constituted the empowered committees to resolve issues related to land acquisition, forest and wildlife clearance, etc. The environment minister has also okayed the diversion of forest land required for construction and widening of roads entrusted to BRO in areas falling within 100 km aerial distance from the LAC. Two years back, the then Arunachal Pradesh governor, Lt Gen (Rtd) Nirbhay Sharma had, in a report to the PMO, said that for most of the rugged and difficult terrain along the Indo-China border in Arunachal, China has built roads that almost touch the LAC, while most of the Indian road-heads peter off at least about 50-70 km from the LAC. He had even submitted photographs comparing both sides of the LAC. Mr Sharma had also sought PMO’s direct involvement in road construction. “There is perhaps a case for an integrated road development agency for the state to ensure better coordination and efficiency. The agency may be monitored by PMO directly.” In May, China vastly reorganised its military by raising the level of the Tibet Military Command bringing it directly under the command of the People’s Liberation Army ground forces. This move is looked upon by experts as a measure to buttress its borders with India and to keep troops skilled in high-altitude warfare in the state ready for quick deployment and combat. Before this, China’s western border with India was under Xinjiang’s command while the eastern stretch was under the military region responsible for the eastern sector of the border. A recent Pentagon report had said: “India’s nuclear force is an additional driver behind China’s nuclear force modernisation”. Deadrin Senat Jersey
Even as road building pace quickens, NHAI strands Rs 45,000 cr of projects
Even as the pace of execution and awards in the roads sector picks up pace, a host of half-finished projects entailing investments of close to Rs 45,000 crore are languishing. While National Highways Authority of India (NHAI) has agreed to fund these stalled projects, builders are reluctant to use the money since it would mean giving the authority the first right to cash flows, NHAI has told developers it would be willing to fund half-done build, operate and transfer (BOT) projects provided it accesses the toll receivables first. The additional funding — at 2% over the bank rate — would have benefited some 50 projects across developers. However, bankers are unwilling to give up their rights to the cash flows. A senior executive with a public sector bank said lenders had conveyed their reservations on the proposal to NHAI. “If NHAI debt is given preference we might not be able to recover our dues from the project,” he said. A senior executive at an infrastructure firm told FE that while NHAI’s intentions may have been sincere, the condition had not been prudent.“Instead of asking for a senior debt status, NHAI should have treated the bridge loan on a pari-passu basis,” the executive observed. However, some lenders are attempting to find a solution to the problem. Kamlesh Chechani, vice-president (finance), Supreme Infrastructure, told FE that although it was not directly involved in the negotiations, it was aware State Bank of India had agreed to a priority fee being paid to NHAI in lieu of extra funding by the authority. This development is related to the firm’s Panvel-Indapur project. “We have not received anything in writing as yet but an in-principle agreement has been reached between SBI and NHAI,” Chechani said. The Rs 940-crore road project has been stuck due to delay in land acquisition. Among the road projects that remain incomplete include those of Madhucon Projects, Era Infrastructure, Abhijit Group, Ramky Infrastructure and Supreme Infrastructure. India Ratings estimates 30% of these projects have been constructed in the BOT mode and are annuity-based projects while the majority are toll projects. Meanwhile, roads continue to be built at a good pace with the completion run rate in May at 22 km per day, according to analysts at Jefferies. If the target of 15,000 km in FY17 — as put out by the roads ministry — is to be achieved, it would call for funding of close to Rs 1,50,000 crore. Of this a provision for Rs 55,000 crore has been made in the Budget for FY17, with another Rs 15,000 crore to be mopped up via bonds. The ministry is planning to raise some amount from Life Insurance Corporation of India and the Employees’ Provident Fund Organisation. There is also a proposal to monetise assets. Kansas City Chiefs Authentic Jersey
OIPL’s Rs 29k-cr power project gets stage-I green nod
A state green panel has given first-stage clearance to Orissa Integrated Power Ltd (OIPL) for diverting 17.02 hectares of revenue forest land to set up a 4,000-Mw Ultra Mega Power Projects (UMPP) in Sundargarh district in Odisha at a cost of Rs 29,000 crore. According to the proposal, the UMPP requires a total of 1,302.36 hectares, which includes 17.02 hectares of revenue forest land, 1,285 hectares of non-forest land and 1,105.86 hectares of private land. At a recent meeting of the Bhubaneshwar Regional Empowered Committee (REC), the proposal of the OIPL, a wholly-owned subsidiary of state-run Power Finance Corporation of India, was discussed. According to sources, REC has recommended “stage-I” approval to the proposal with some conditions. OIPL has been asked to furnish the details of non-forest land as well as private land identified for compensatory afforestation along with Record of Rights (RoR) and non-encroachment certificate from the tehsildar before the issue of stage-II approval, they said. The company has been asked to raise compensatory afforestation to 27.89 hectares in one compact block considering fragmented nature of the leftout forest of 10.87 hectares. It has also been asked to furnish revised Forest Rights Act (FRA) certificate for 17.02 hectares before issuance of stage-II approval and submit the status of non-forest land duly authenticated by the competent revenue authority. The project cost is pegged at Rs 29,000 crore and is estimated to generate over 4,500 jobs in the state. As per the rule, the state government gives stage-I and II forest clearances to the projects based on REC recommendations. Curtis McElhinney Jersey
NHPC signs pact with BHEL for hydro power projects overseas
State-owned NHPC today said it has entered into a pact with Bharat Heavy Electricals Ltd (BHEL) for undertaking hydro power projects in overseas markets. “NHPC has signed a Memorandum of Understanding (MOU) on July 21, 2016 with Bharat Heavy Electricals Limited (BHEL),” NHPC said in a filing to BSE. As per the MOU, NHPC and BHEL will look after the civil and electro mechanical packages respectively. NHPC is a Mini Ratna category-I enterprise with an authorised share capital of Rs 1,50,000 million. It is a premier organisation in the country for development of hydropower. During 2015-16 fiscal, NHPC power stations generated 23,404 million units. In the last fiscal, NHPC had a sales of Rs 7,347 crore with a net profit of Rs 2,440 crore, according to its website. Presently, NHPC is engaged in the construction of five projects aggregating to a total installed capacity of 4,290 MW. Gabe Jackson Womens Jersey
OVL raises $1 billion through dollar bonds for Vankor stake buy
ONGC Videsh Ltd has raised $1 billion through a US dollar bonds issue to finance its acquisition of 15 per cent stake in Russia’s second biggest oil field Vankor. OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), raised $600 million through a 10-year bond at a coupon rate of 3.75 per cent and another $400 million through a 5.5-year maturity bond at an interest rate of 2.875 per cent, company’s Director (Finance) S P Gargsaid. The proceeds of the issue would go to refinance a $1.2 billion bridge loan the company had taken from a group of foreign banks to make payments for the $1.268 billion acquisition. “We will draw down the bonds sometime next week,” he said. The bridge loan was taken in May this year at a highly competitive rate of about 1.3 per cent. The interest rate is lower than 4.625 per cent OVL had paid on a $2.23 billion 10-year bond issue in July 2014 to finance its Mozambique gas field acquisition. OVL had in September last year struck a deal to buy 15 per cent in the Russia’s second biggest oil field of Vankor from Rosneft for $1.268 billion. OVL had signed the agreement to buy 15 per cent stake in Vankorneft, the developer of the Vankor oil and gas condensate field in Turukhansky district of Krasnoyak Territory in Russia. In March this year, it signed an initial agreement to buy an additional 11 per cent. That deal is yet to close, he said. Vankor, the largest field to have been discovered and brought into production in Russia in the last 25 years, is located in the northern part of Eastern Siberia. As of January 1, 2015, the initial recoverable reserves in the Vankor field are estimated at 476 million tons of oil and condensate, and 173 billion cubic meters of gas. The area of the Vankor field is 447 square kilometers. Oil and gas condensate production in 2015 was 22 million tons. The 15 per cent stake will give OVL 3.3 million tons per annum of oil production. Prior to the deal, Rosneft, Russia’s national oil company, held 100 per cent stake in Vankorneft. This is the fourth biggest acquisition by OVL. It had in 2013 paid $4.125 billion for a 16 per cent stake in Mozambique’s offshore Rovuma Area 1, which holds as much as 75 trillion cubic feet of gas reserves. In 2009, it had bought Russia-focused Imperial Energy for $2.1 billion. Prior to that in 2001, it had paid $1.7 billion for a 20 per cent interest in the Sakhalin-1 oil and gas field off Russia’s far eastern coast. With daily output of 442,000 barrels per day, Vankor accounts for 4 per cent of Russian production. Nomar Mazara Jersey
L&T Hydrocarbon led consortium bags $1.6 billion order from Aramco
Engineering major Larsen & Toubro (L&T) on Thursday said L&T Hydrocarbon-led consortium has bagged order worth $1.6 billion (Rs 107.572 billion) from oil major Saudi Aramco. “L&T Hydrocarbon Engineering (LTHE), a fully-owned subsidiary of Larsen & Toubro, in consortium with EMAS CHIYODHA Subsea (ECS), a 50:50 joint venture company owned by Ezra Holdings Ltd and Chiyoda Corporation has announced the conclusion of a large EPCI contract from Saudi Arabian oil giant Saudi Aramco,” L&T said in a BSE filing. It further said: “The contract valued at over $1.6 billion is for development of second phase of Hasbah Offshore Gas Field situated off the coast of Saudi Arabia. LTHE’s share in the contract is 60 per cent.” Dalton Prout Authentic Jersey