Air Costa may sell 26% stake to Qatar Airways
Air Costa, the Vijayawada based airline, is in talks with Qatar Airways for an equity tie up. Sources in the regional airline told BusinessLine that even as Air Costa suspended its operations for a day early this month, its top management was in Doha in Qatar to negotiate the deal. The airline resumed operations after it restructured its leasing terms with its lessor, GECAS (GE Capital Aviation Services). It had earlier leased its two 78-seater E170s from Embraer itself. Air Costa is promoted by the LEPL Group, which has interests ranging from real estate to power plants. A spokesperson for the company refused to comment on the developments. Sources said that Air Costa is willing to sell 26 per cent equity to the foreign airline but is expected to shed a higher stake if it is able to get more funds. Last year, it was in talks with a couple of foreign investors to sell 26 per cent stake to raise Rs. 350 crore. It has placed orders for 50 new E190s worth $ 2.94 billion which are expected to start arriving from 2018. Air Costa now has three 110 seater E190 Embraers and flies to nine destinations. It operates 35 flights daily and has already flown over 1 million passengers. By 2018, it plans to have a total fleet size of 12 aircraft and fly to 18 stations. Qatar Airways, a state-owned airline based out of Doha, has been in talks with several foreign airlines for similar tie ups to put together a network of international alliances. It has a fleet size of over 180 aircraft and flies to more than 150 destinations globally. According to its web site, Qatar Airways operates to 13 cities in India with over 100 weekly flights and has been in talks with a few Indian airlines for an alliance. With Air Costa set to receive its pan India licence, Qatar has been keen on coming on board the airline, sources in the Vijayawada-based airline said. At one point of time, Qatar Airways was learnt to be in talks with Kingfisher Airlines but the talks fizzled out after the Indian carrier folded up. As per the civil aviation policy, foreign airlines can pick up 49 per cent stake in an Indian carrier. If they want a higher stake, they can join hands with foreign funds and portfolio investors to cross the 49 per cent barrier. Trent Williams Authentic Jersey
Major reforms underway in freight sector: Prabhu
Major reforms are underway in the freight sector with reduction of cargo charges announced in the rail budget for the first time, and it will benefit the railways in a big way during the coming days, Railway Minister Suresh Prabhu today said. “In our country due to non-running of time-tabled freight trains, most of the cargo does not come to railways… when will the goods train reach no one knows. “But to change this scenario we have already started a programme and two pairs of time-tabled container trains — ‘Cargo Express’ — have commenced and I am happy to share that they reached their destinations ahead of their scheduled time,” Prabhu said after flagging off a time-tabled container (weekly) train between Nagalapalli and Tuglakabad at Secunderabad railway station here. He said though the railways gets two-thirds of its income from goods transportation, “we did not focus on this and because we ignored it, the railways’ share in cargo has been on the decline and in the coming days it will be a matter of concern how the railways will support itself.” “Hence, for the first time in the history of the rail budget, from this year we have initiated bringing down cargo charges. Reforms in the freight sector are mind-boggling, and will benefit railways in the coming days,” Prabhu said. The railways is the biggest user of energy, he said, pointing out that energy utilisation should be done in a proper way, and to bring down costs (on electricity) several measures also need to be undertaken. “Bringing down costs (reduce expenditure of railways on energy) is essential for survival of the railways…It’s a matter of existential need and we have formulated big policies on energy-saving,” the minister said. In the last two years, the Narendra Modi-led government has made the rail budget with the focus on providing passenger amenities and the budget has everything for the common man, he said. “Big investments to improve passenger amenities such as lifts, elevators, e-ticketing, catering on demand, mechanised laundry and the new Deen Dayal coach have been made,” he said. Prabhu also flagged off the 11307 Gulbarga-Hyderabad daily Intercity Express and the 11083 Mumbai LTT-Kazipet weekly Tadoba Express via video remote link during the event. He said the “two long-pending demands (to start passenger trains) have now been fulfilled.” Joe Theismann Jersey
Dispute between Delhi government, highway authority stalls NH-24 widening
A dispute between the Delhi Government and the National Highways Authority of India (NHAI) over encroachment along NH-24 has stalled widening of the highway. While preparatory work has started on the NH-24, the Delhi Government is yet to hand over land to NHAI. The biggest contentious issue is removal of a slum cluster at Patparganj in East Delhi which is necessary for widening of the highway. The slum called Nehru Camp houses nearly 1000 shanties. Widening of NH-24 is important for smooth traffic flow between Delhi and Ghaziabad. This stretch of NH-24 from Sarai Kahle Khan to UP Gate is accessed by nearly three lakh vehicles every day. Union Transport Minister Nitin Gadkari has recently taken up the matter with Delhi Chief Minister Arvind Kejriwal for swift action for removal of encroachment. POLITICS INVOLVED? However, sources said the Delhi Government has not shown much keenness given the Aam Aadmi Party’s vote bank in the slums. The Nehru Camp falls in the constituency of Deputy Chief Minister Manish Sisodia. Sources said the Delhi Government would get the land vacated only after the NHAI assures adequate compensation to the slum dwellers. A senior Transport Ministry official said they are working out the amount of compensation. “Widening of NH-24 will offer a big respite to lakhs of daily commuters between Delhi and Uttar Pradesh. Union Transport Minister Nitin Gadkari has spoken to Delhi CM Arvind Kejriwal and the latter has agreed to provide land. We are working out the amount of compensation. A decision will be taken soon,” said the official. DISPUTE OVER COMPENSATION However, sources said there was also a dispute over paying compensation. Since the land in question belongs to the Public Works Department (PWD), the NHAI wants the Delhi government to compensate the slum dwellers, sources said. According to Delhi Government officials, the slum is situated over PWD land which has to be handed over to the National Highways Authority of India (NHAI) for converting NH-24 into 14-lane road. The notice to vacate the land was issued by the Sub-Divisional Magistrate in August 24. However, the demolition was stopped by the Delhi Government. Angry slum dwellers alleged that the Delhi government has not offered any alternate location for them. A police team was attacked by the slum dwellers when they were asked remove the encroachment from the roads. The AAP government has taken a decision against demolition of slums in Delhi unless a rehabilitation plan is put in place. Immediately after taking oath as Chief Minister, Arvind Kejriwal had issued a notification prohibiting demolition in Delhi. Carlton Fisk Womens Jersey
NHAI,IIT-Kharagpur ink pact for paneled concrete pavements
National Highways Authority of India (NHAI) and IIT-Kharagpur have entered into an agreement for research on laboratory and field investigations on paneled cement concrete pavements for highways. “NHAI in collaboration with IIT Kharagpur shall promote to develop a technology to construct paneled cement concrete (pre-fabricated in a small panel size) which can replace the design of construction of existing cement concrete road,” NHAI said in a statement. The duration of the research project is 3 years and NHAI has paid an amount of Rs 1.25 crore for the it, excluding cost of construction of trial pavement section on NH, the statement added. The highways in the country are generally paved with bituminous (asphaltic concrete) material produced from refineries. However, NHAI said it has been experienced that these highways are prone to damage and need periodic maintenance frequently due to adverse climatic conditions such as rain and hot weather prevailing in the country. “Therefore, to overcome this problem, the Government of India has recently announced a policy for the construction of concrete pavements for all major highways due to their longevity and maintenance free life,” it said. As per the current practices, the construction of these highways requires a monolithic (in-situ) layer of cement concrete normally 300 mm thick laid continuously over the prepared surface. Therefore, an innovation is required to optimise the design of concrete pavement in its traditional form which can facilitate the faster construction at much cheaper cost, thus, consuming less natural resources and promote the philosophy of Green Highways in the country. Any saving in design and construction with the help of new technology will not only entail huge investment but also save consumption of substantial quantity of natural resources used for production of cement and stone aggregates. “The paneled concrete pavement laid on a lean concrete base can fulfill government’s dream of providing a long lasting maintenance free pavement at a cost at par with those of asphalt pavements,” it said. Such pavements laid at a few places in India have given a good service when used as an overlay over a bituminous layer commonly terms as white topping (WT) but an extensive study is required to formulate the design practices for its use in wider perspective, it added. Jadeveon Clowney Authentic Jersey
Khattar asks officers to accelerate speed of work on highways
Haryana Chief Minister Manohar Lal Khattar today directed PWD officials to coordinate with the National Highways Authority of India to accelerate the work on National Highways in the state. The Chief Minister, who was presiding over a meeting to review the progress of works of National Highways here, exhorted the officials of Public Works (Building and Roads) Department to put in sincere efforts to get the work completed on time. The Chief Minister said the present government is keen to strengthen infrastructure and connectivity in the state. It was informed in the meeting that work on widening National Highways passing through the state is in progress. Michael Dickson Jersey
Round-the-clock power supply a distant dream for Ghaziabad
The Paschimanchal Vidyut Vitran Nigam Limited’s (PVVNL) move to augment power infrastructure in the city under Integrated Power Development Scheme (IPDS) has hit the land hurdle. As a result, plans to construct six 33/11 KV sub stations across the city is hanging fire. “For a long time, we were working on a plan to provide round-the-clock power supply for which we needed to enhance the infrastructure. Unfortunately that is not happening anytime soon,” said PVVNL chief engineer SK Gupta. “There are at least six places where we urgently need to build 33/11 KV sub stations but neither GDA or GMC are in a position to provide land for it,” Gupta added. “Every time we request GDA and GMC we are told that no land is available. This has been happening for the last two months and if this continues, I am afraid it will have an adverse effect on the already declining power situation,” Gupta claimed. Of the six places where the power department needs land, four are in the trans Hindon area whereas the rest are within the city. “In trans Hindon area we need 2,200 to 2,400 sqm of land at Pasonda, near Haj House and at Delhi border while in the city, land is required at Chipiyana and Model Town. In fact we can manage with 1,500 to 1,800 sqm of land but we are not getting even that,” Gupta alleged. The primary reason why the civic agencies are reluctant to part with the land is because the rule says the land has to be given for free and the agencies have reservations over it. Uttar Pradesh Chief Minister Akhilesh Yadav has also set a target to provide 16-hours of power supply in rural areas and 22-24 hours supply in urban areas. This was promised in his party’s manifesto in the 2012 Assembly elections. But as things stand now, 24-hours of uninterrupted power supply at least in Ghaziabad is a distant dream and this is bound to have repercussions for the party in the upcoming Assembly elections. Earl Thomas III Jersey
Centre adding to power sector stress instead of alleviating it
Effecting quantum changes in policy while maintaining continuity of incumbents is one of the challenges of governance. In all key infrastructure sectors, our country has grappled with this challenge as we have moved from one generation of policy to another. In one of the recent interviews, former revenue secretary NK Singh talked about how telecom policy was migrated to revenue share in the Atal Bihari Vajpayee government. While this would solve the issue of future telecom licences, the major issue was about migrating existing licences to the revenue-sharing regime. Singh talks how the then Attorney General and telecom minister were “morally” opposed to allow the existing licences to be migrated. PM Vajpayee, realising the magnitude of the problem, immediately ordered for the telecom minister to be changed and a new Cabinet Note to be put up. Needless to say, given the new facts and the implications of stalled telecom story—perhaps also the implication of not cooperating—the Attorney General was only too pleased to change his opinion and recommend revenue sharing. The rest, as they say, is history. All telecom licences were migrated to revenue-sharing model, and today we stand with over 1.2 billion telecom users and some of the cheapest tariffs on the planet. The above story is not just about how policy is to be adapted to incumbents, it is also about how national interest can sometimes be served by helping incumbents come out of stress and make investments in the future. The ministry of power perhaps need to learn an important lesson from such pivotal experiences in governance. There are far too many instances where policy stagnation has resulted in stress in the power sector, and many of the incumbents are not in a position to make any further investments in capacity addition. The implication of this could be grave, and the government needs to wake up to the threat of over 50,000 MW going the NPA way. A conventional thermal power project typically has three legs that needs to work in parallel for the plant to attain viability—coal, a power purchase agreement (PPA) and transmission. Given the breakneck capacity addition in 11th Five-Year Plan (2007-12), most of these linkages have not kept pace with the plant and these assets face the threat of turning NPA. For instance, there is a substantial capacity in the country that has a Coal India Ltd (CIL) coal linkage and a coal mine, but does not have access to a PPA. The capacity with a CIL coal linkage without a PPA is cumulatively about 26,300 MW, and the capacity with a coal mine but without a PPA is about 4,250 MW. Unfortunately, the prerequisite for availing linkage and coal mine coal is a long-term PPA, and states appear in no mood to call for PPAs for coal-based plants. In the past two years, only Andhra Pradesh and Kerala have completed bidding for an aggregate capacity of 3,250 MW. There is no visibility of any more long-term PPA in the near time-frame. If this situation is not corrected, these projects will turn into NPAs soon. It is ironical that Jharkhand, while reneging from PPAs signed with thermal plants citing lack of demand, called for over 2,000 MW of solar bids in the last three months alone. The power ministry has to create an enabling framework for states to procure stranded thermal power, else we are likely to see larger stockpiles of CIL coal and more plants turning NPAs. In the coal-based power sector, the Cabinet Committee on Economic Affairs approved a landmark list of 78,000 MW (scheduled for commissioning by March 2015) for obtaining coal linkage from CIL. But some of these plants have been delayed beyond their scheduled commissioning, and there are others that have been commissioned but were not a part of the original 78,000 MW. Total capacity, amounting to over 16,700 MW, is lying stranded, waiting for linkage coal to achieve operations. In addition to the two above categories, there is about 14,600 MW of power capacity that has a PPA but no long-term coal source. There is another 9,925 MW of power capacity that has been set up with neither a coal source nor a PPA in place. That this power capacity is becoming stranded comes in the backdrop of NTPC and state distribution companies being freely allowed to sell power from linkage coal in the spot market, and also being provided bridge linkages where their coal mine is taking time for commissioning. NTPC also enjoys the unique privilege of signing PPAs on a regulated tariff basis (without tender) with state-owned utilities long after the national tariff policy deadline of 2011 has expired. This unequal level-playing field for NTPC is the final nail in the coffin. The fundamental issue remains that the policy for a PPA requirement for coal linkages, or an approved restrictive list of coal linkages of 78,000 MW, was drafted in the context of a coal scarcity scenario. We are in an era of coal surpluses, and CIL seems to be contemplating exports. It is imperative that such policies change and ensure that coal, whenever and wherever available, be provided to domestic plants to prevent them from turning NPAs. It is imperative that such policies change and ensure that coal, whenever and wherever available, be provided to domestic plants to prevent them from turning NPAs. The plight of gas-based power developers is no different. The policy for gas-based power projects (providing power system development fund support) was announced with great fanfare in 2015—subsidy was announced on imported LNG, provided states agreed to buy the power. An absurd stipulation of requiring the developers to commit to “zero” return on equity was also agreed to by the industry, and bids were called. However, after the bids were completed and the states consumed the power, and after submitting the due documentation by the developer to obtain the subsidy, the government failed to release the subsidy in time. Out of the blue, and after about four months of delay
GAIL may face loss on US contract owing to price mismatch
Shares of GAIL have increased by over 25 per cent in the past five months on hopes that the country’s largest gas transmission company will report better earnings in the future following an increase in pipeline tariffs. While this is true, investors also need to consider the possible loss that the company will bear on its US gas contracts if the current sharp mismatch between the contract price and the spot price of gas persists in the future. GAIL had signed two long-term contracts to procure total 5.8 million metric tonnes per annum (MMTPA) of gas with supply starting 2018. At the current level of Henry Hub price, a benchmark for the US gas price, the landed cost of the gas will be at 75 per cent premium to the spot gas rate. If this difference persists when the gas is delivered two years later, it will be difficult for GAIL to sell costlier gas to domestic clients because they may prefer to source cheaper gas from other suppliers. The final gas pricing will be a function of several factors including the difference between the benchmark price and spot rate as well as trend in crude oil price. However, the risk is high since GAIL has not secured customer tie-ups for US contracts. This is unlike its long-term contract with Qatar-based RasGas Company which is under back-to-back arrangement. The event may also offset the benefit of higher tariffs for the company’s five gas pipelines. In addition, Bloomberg reported that NTPC is seeking to terminate the long-term gas supply contract with GAIL due to higher price. It means there is a potential risk to GAIL’s earnings due to supply of high-priced gas contracts amid a glut in global LNG market. Analysts believe that Asia may become a major market for the oversupplied global LNG as the economics of selling to Europe does not work due to steep competition from Russian gas supplier Gazprom. Credit Suisse estimates that GAIL may have to take a haircut of $1/mmbtu to sell US LNG into Asia, resulting in a $300 million (about Rs 2,000 crore) annual loss. At Tuesday’s closing of Rs 379.5, the stock traded at 13.4 times FY18 earnings, which is higher than the longterm average and therefore, reflecting that the market is under-pricing the risk from the US gas contracts. John Miller Jersey
Odisha to revise power duty for commercial users
The Odisha cabinet on Monday decided to amend the Odisha Electricity (Duty) Act, 1961, through an Ordinance, revising electricity duty for commercial users. Emphasising that the hike in rates will not affect domestic users, chief secretary A P Padhi said the amendment of the Odisha Electricity (Duty) Act will help the government generate Rs 90 crore of additional revenue annually. As per the ordinance, the government has decided to enhance the upper limit of electricity duty to Rs 2 per unit in case of captive power plants and independent power producers and to a maximum of 15 per cent on ad valorem basis (value of the power and not quantity used) in other cases. At present, the state government levies duty at the rate of 2% for irrigation, 4% for domestic use and 5% for small scale industry. However, irrespective of the categories of consumers, the duty is subject to an upper ceiling of 40 paise a unit. Justifying the decision to bring in an ordinance, Padhi said by the time the assembly would have reconvened, the state government would have lost out on revenue and hence it was decided to amend the act. Though four months of the current fiscal have already passed, the Ordinance would still help the state garner Rs 60 crore out of the Rs 90 crore that had been initially projected, Padhi added. Notifying the Ordinance, a government statement said that considering the inflation and regular growth in energy charges by distribution companies and the need for infrastructure development in power sector, the revision was necessary. The cabinet also gave its nod to an ordinance to amend the Odisha Gram Panchayat Act, 1964, and enable the rotation of reservation of offices of the sarpanch after every term of election. As per the existing provision, the reservation is rotated after every two terms of election. Since the process for panchayat election has already started, an ordinance was necessary, the chief secretary said. Deatrich Wise Jr Womens Jersey
Electricity in 18k villages in 1000 days: PM
Prime Minister Narendra Modi said on Tuesday that his government has set a target to provide electricity connection in 18,000 villages across the country in just 1,000 days. He said he was appalled to see that even after 70 years of Independence, people were forced to lead the life of 18th century in the 21st century. He also lauded the Jammu and Kashmir government for launching a solar energy campaign from Ladakh. At an event to mark the 75th anniversary of the Quit India Movement at the birthplace of revolutionary leader Chandrashekhar Azad here, the Prime Minister recalled those who laid down their lives for the country and said that today people don’t have to die for the nation but have to work for its development. He called upon the people to take a pledge for taking the country forward and referred to the passage of the Bill on the Goods and Services Tax (GST) in Parliament in this regard. Madhya Pradesh Chief Minister Shivraj Singh Chouhan also addressed the function. Kenny Moore Authentic Jersey