ONGC Videsh Ltd gets 1-year extension for exploring Vietnamese oil block
ONGC Videsh Ltd, the overseas arm of Oil and Natural Gas Corp (ONGC), has received one-year extension to explore a Vietnamese oil block in the contested waters of the South China Sea. This is the fourth extension for OVL to explore Block-128, the license for which is now valid till June 15, 2017, sources privy to the development said. OVL had in May applied to the Vietnamese authorities for a fourth extension of the exploration licence for the deepsea block to maintain India’s strategic interest in the South China Sea. Vietnam’s national oil company PetroVietnam has granted the extension, sources said. OVL had signed Production Sharing Contract (PSC) for the 7,058 square km Block 128 in offshore PhuKhanh Basin, Vietnam on May 24, 2006. Ministry of Planning & Investment (MPI), Vietnam issued investment licence for the block on June 16, 2006, being effective date of the PSC. The company has not found any hydrocarbon in the block but is continuing to stay invested. OVL first took a two-year extension of the exploration period till June 2014 and then another one year. A third extension was granted on May 28, 2015 and now a fourth extension has been granted. The company has so far invested USD 50.88 million in the block. The block lies in the part of South China Sea over which China claims sovereignty. In 2011, Beijing had warned OVL that its exploration activities off the Vietnam coast were illegal and violated China’s sovereignty, but the company continued exploring for oil and gas. OVL forayed into Vietnam as early as 1988, when it bagged the exploration licence for Block 6.1. The company got two exploration blocks – Block 127 and Block 128 – in 2006. However, Block 127 was relinquished due to poor prospectives, the other Block was retained. The first extension followed China putting the area under Block 128 for global bidding. China claims sovereignty over most of the South China Sea where the two Blocks are located and had warned the Indian arm from drilling in the region. OVL continues to own 45 per cent stake in Vietnam’s offshore Block 6.1 and its share of production was 2.023 billion cubic metres of gas and 0.036 million tonnes of condensate. The company in October 2014 signed an agreement to pick up to 50 per cent stake in the two exploration blocks in the South China Sea. OVL took 40 per cent stake in Block 102/10 and 50 per cent in 106/10 that lie outside the sea territory claimed by China. In return, PetroVietnam took half of OVL’s 100 per cent stake in Block 128. Brooks Reed Authentic Jersey
Major ports, entities to take Rs 50,000 crore loan in USD: Nitin Gadkari
India’s major ports and state-run shipping entities may take Rs 50,000 crore loan in US dollars at a low interest rate to augment infrastructure, Union Minister Nitin Gadkari said today. A pact for External commercial borrowings (ECB) by Jawaharlal Nehru Port (JNPT) with SBI and Singapore’s DBS, for USD 400 million (around Rs 2,600 crore) loan, has paved way for other major ports besides Shipping Corporation, Dredging Corporation and Cochin Shipyard to take the same route, Shipping and Road Transport and Highways Minister said. “ECB in ports will increase capital in infrastructure sector. JNPT has paved way for our ports and shipping entities to take loans in dollar term at a very low interest rate which in turn would enhance the viability of projects,” the Minister said at a function here for exchange of documents by bankers and JNPT officials for ECB of USD 400 million. “We can take loans of Rs 50,000 crore in US dollars,” Gadkari said. Jawaharlal Nehru Port (JNPT) has entered into an agreement with State Bank of India (SBI) and Development Bank of Singapore (DBS) for a loan of USD 400 Million. Gadkari said the rate of ECB loan is only 2.025 per cent and with Libor it comes to about 3.15 per cent which is cheaper than any other Indian currency loan. The funding by JNPT is the first-of-its-kind for major port and it opens up one more avenue for major and government ports to raise funds by accessing international markets for their requirements, he said. He said the loan would be used for augmenting JNPT infrastructure that include a 45 km 6/8 lane road which will be tolled and added JNPT may repay it in 5-6 years as it has 45 lakh containers which are going to be increased to 1 crore. “Loans in dollar term in 3 per cent interest would reduce our project costs as there will be a saving of interest of 8 per cent. Cost of our construction will reduce and economic viability of projects will increase. We are planning to use the financial strength of our ports to develop inland waterways,” Gadkari said. Gadkari said ECB of USD 400 million by JNPT will be used to improve the infrastructure required for doubling its existing capacity to 9.85 million TEUs annually. The ECB comprising USD 300 million from SBI and USD 100 million from DBS will be primarily utilised by JNPT, which has US dollar denominated foreign currency earnings that can be leveraged for a low cost foreign currency borrowing, for expansion of existing roads network. “Borrowing by JNPT is for Door-to-Door tenor of 7.5 years. However, lending by JNPT to MJPRCL (Mumbai JNPT Port Road Company Limited) for 45 Km 6-8 lane road is for 16 years (two years construction and 14 years repayment),” JNPT Chairman Anil Diggikar said The project will be developed by MJPRCL, a joint venture company of NHAI, JNPT and CIDCO at a cost of Rs 2,895 crore. JNPT is going to double its capacity in the next seven years and the road project would boost EXIM trade. Demarcus Walker Jersey
India’s progress incomplete without infra expansion: PM Narendra Modi
India’s progress is incompete without rapid expansion and upgradation of basic infrastructure, Prime Minister Narendra Modi said today while underlining that his government’s efforts are characterised by speed and scale to usher in “an era of historic growth”. Modi, who chaired a meeting here yesterday to review the progress in core infrastructure sectors, said it was noted that there has been “phenomenal progress” in vital sectors such as renewable energy and railways. “On 22nd August 2016, I chaired a marathon meeting to review the progress in core infrastructure sectors. I have been holding such meetings very often because India’s progress is incomplete without the rapid expansion and upgradation of our basic infrastructure,” he said in a statement. “The development journey of India is special. Our sustained efforts are characterised by speed and scale, which can usher an era of historic growth,” he added. The Prime Minister underlined that the India story is also about resilience. “When the world economy is weakening and slowing down, India is a ray of hope,” he said. Contending that doing business is easier today than it was, Modi said, “Big level corruption and bottle necks are becoming history.” He noted that the country went through two drought years but agriculture production has not decreased. “Our endeavours to give our farmers an expansive market and more money for their produce continue,” he said. “I am certain that we will continue building on this progress and achieve our aim of transforming India,” he said. Jim McMahon Authentic Jersey
India to get 50 new airports in 3 years, says Ashok Gajapati Raju
India, the fastest growing aviation market, is set to get 50 new airports in the next three years as part of a plan to boost regional connectivity, and of these, at least 10 will become operational over the next one year, said civil aviation minister Ashok Gajapati Raju, in an interaction with reporters in Mumbai in Tuesday. “We are trying to convert the wish list into a work list,” he said. Maharashtra is going to be the first state to sign an agreement, said Raju. He is expected to sign the agreement later on Tuesday. Other states are also on board, the minister added. As part of the plan, existing air strips in certain regions of Maharashtra including Solapur, Jalgaon, Akola, Nanded and Shirdi will be developed into low-frill airports at an average cost of Rs.100 crore, said the minister. The regional connectivity model will be based on the viability gap funding (VGF) for a period of three years, under which 80% of the cost will be borne by the state government and the rest by the government of India. The new civil aviation policy cleared by the Indian cabinet on 15 June aims to take flying to the masses. The civil aviation ministry had announced a complex regional connectivity policy that seeks to connect unconnected towns with the help of VGF. This will be done by capping fares at about Rs.2,500 for those routes and helping airlines with funding to ply them. The funds will be generated by charging a cess on other domestic flights. In order to ensure that the airlines operating on regional routes are economically viable, “the government has worked out a scheme which will have lot of hair cut all around,” the minister said. On whether any airline has come forward for the plan, he said most of them are in talks with the government. “A magazine referred to me as a flightless bird. Don’t want to be flightless bird forever,” he said. Mike Condon Womens Jersey
Govt willing to handhold airlines in trouble: Minister
The government is willing to “handhold” the Bengaluru-based Air Pegasus to restart operations, but will not interfere in the financial troubles that the airline is facing. This is the message that Ashok Gajapathi Raju, Union Civil Aviation Minister, conveyed to Shyson Thomas, Managing Director, Pegasus, whom he met at the Ministry of Civil Aviation here on Wednesday. “We need to have airlines flying, not on the ground. We want airlines to survive, (but) we cannot take the liabilities and generate other problems. We have asked him to interact with the Secretary (Civil Aviation). Then we will see how we can be of help,” the Minister told BusinessLine soon after his meeting with Thomas. The Bengaluru-based airline suspended operations two weeks back after the leasing companies decided to take backthe aircraft given to Air Pegasus for non-payment of lease charges. SpiceJet situation Comparing the situation that Air Pegasus is facing with the woes of SpiceJet, the Minister pointed out that both the airlines suffered from the problem that their books were in a bad shape. “When your books are bad the Government can help you up to a particular level. Beyond that we can’t. “He will have to get his act going. He does not have very big financial liabilities,” the Minister added talking about Air Pegasus.. Talk to lessors Drawing parallels with the SpiceJet situation, Raju added that even when SpiceJet had this problem it had to talk to the lessors with the Ministry stepping in only after SpiceJet had cleared its current dues and allowed it to clear its past dues in instalments. “Their finances they have to look after. “But in whatever way we can handhold we will try and hand hold,” the Minister added. Speaking with newspersons Thomas accepted that the airline had fallen behind in clearing its dues but claimed that things would soon settle down. “We have suggested a solution where we pay some part of the amount which is outstanding immediately and the remaining amount is paid in instalments. “The lessors have not accepted it yet. “We still expect to see the airline back in the sky in about a week,” he added. Malcom Brown Womens Jersey
Nitin Gadkari seeks fuel cess to raise funds for inland waterway projects
Union Minister Nitin Gadkari said his ministry is mobilizing money to finance the inland waterways projects through state-run ports to benefit from the latter’s ability to borrow cheap loans overseas. Gadkari said that he is also seeking 5 per cent of the fund collected from cess on petrol and diesel for financing the inland waterways projects. Indian government has made ambitious plans to develop inland waterways on rivers like Ganga, Brahmaputra and Mahanadi, which could potentially form a network 20,000 km long and reduce cost of transport substantially. “The budget for the shipping ministry is Rs 1,800 crore but for 20,000 km of inland waterways we need at least Rs 70,000-80,000 crore. The projects are economically viable with good internal rate of return but it has not been successfully practised in our country,” the union surface transport, roads and shipping minister Gadkari said. The state-run ports will form subsidiaries that will own and operate these inland waterways projects. “Inland waterways don’t have any financial credentials right now. But our ports can raise foreign loan at low cost that will be helpful for the economic viability of these projects. The ports will raise dollar loans and pay it back in dollars to reduce the cost of borrowing,” he said, on the side-lines of a Indo American Chamber of Commerce conference. The centre has announced plans to inject Rs 25 lakh crore to strengthen inland waterways, ports and rail-road links, which will create four crore jobs in the country. Gadkari said that the government is confident of scaling up road constriction to 41 km per day from the present 22 km per day, for which his ministry is removing constraints relating to land acquisition, forest and environment clearances and has fast-tracked many processes. Commenting on the appointment of Urjit Patel as governor of the Reserve Bank of India, he said that given his background in infrastructure, he should consider reducing interest rate to the infrastructure sector by at least 2 per cent so that the projects become viable. “Interest rate at 11-12 per cent for infrastructure projects is not viable. We expect that it can be reduced by 2 per cent for these projects to become viable,” the minister said. He said that of the 403 stranded road projects that his ministry inherited, only 7-8 projects are still stuck while the issues with rest of them have been resolved. Kevin Faulk Authentic Jersey
Government to allow bundling of national highway projects
The government will allow bundling of public funded national highway projects that can be monestised by leasing out to private players for toll collection for a period of 30 years. The portfolio of government funded operational highways projects would be prepared on the basis of geographical proximity that would be leased out to institutional investors under toll operate transfer (TOT) model. Under the policy, infrastructure developers, private equity firms and institutional investors like pension and wealth funds along with the local operation and management partners can take up completed highway stretches. Under the TOT model, roads already built by the National Highways Authority of India (NHAI) are awarded to the private sector in lieu of an upfront fee. The private party operates the national highway stretch and collects tolls on it for a long-term period. “Investors have told us that they are more interested in taking up more than one project as it would make their investment viable, help achieve economies of scale and synergy in operations,” a senior roads ministry official said. The government has lined up around 104 highway projects to be leased out. These national highways have been constructed by the National Highways Authority of India (NHAI). Road transport and highways ministry expects a minimum investment of around Rs 75,000 crore in these projects. “We are already in talks with Goldman Sachs, ADIA and several other global institutional investors. These firms have evinced interest in preliminary talks,” the official said. Adam Henrique Jersey
100 planes by 2023, finally, GoAir spreads its wings to take on rivals
Airlines typically spirit people from one city to another and after forging links between them, fly to another and another. Adding routes, with much ado, is what they do. Low-cost carrier GoAir is the antithesis of this defining characteristic of airlines. It has long been the fuddy-duddy of Indian skies, cautious to a fault in embracing expansion. Be it fleet size, number of flights or number of routes, the 10-year-old has been awfully timid compared with competitors (see Slow, Very Slow). Both IndiGo and SpiceJet, which started around the time GoAir first took off, have far more planes — 111 and 42, fly to more routes — 40 and 39 — than GoAir. The airline’s market share was 8.4% in July compared with 39.8% and 11.7% of IndiGo and SpiceJet. New airlines in India like Vistara and AirAsia India have lobbied hard to launch international flights, bound by the infamous 5/20 rule that which prevented them from flying international routes until they are five years old and have at least 20 planes (the new aviation policy has relaxed this rule a little). GoAir, in contrast, was in no hurry to exploit the opportunity even when it met one of the conditions (age) five years ago. By its own admission, or rather that of Jeh Wadia, managing director, GoAir, the airline is a tortoise. In successive interviews to ET last June and July, Wadia and its new CEO Wolfgang Prock-Schauer stressed that the airline would continue to focus on domestic operations. Wadia also termed ambitions of overseas flights as “more glamour than anything else”. Even when the airline placed its first major order of 72 Airbus Neo 320s in June 2011, there was little to indicate that a change in strategy was at hand. Aircraft deliveries face delays and are stacked over years. Indeed, GoAir took first delivery of the first aircraft from the jumbo order only this June. But barely two months later, the airline took the industry by surprise by ordering 72 more Neos, doubling its total order to 144 planes. The new aircraft order was also aimed to build up the international presence, according to Prock-Schauer. “The character of an aircraft is to spread its wings and fly. It should not be bound to one market.” Prock-Schauer now counts international expansion at the top of his to-do list, he revealed in a recent interview. “We are in a (domestic) market which is growing at a rate of 20%… even 10% will be good enough. We are really confident about absorbing this aircraft number.” Surprise Aggression GoAir now accounts for a third of Airbus’ total order book to India; the remaining belongs to IndiGo. It now has 20 planes and is scheduled to reach the 100 mark by 2023 by inducting one plane every month for 10 years. Like IndiGo, Prock-Schauer acknowledges that placing big orders is smart since it leads to incentives and of course benefits on sale and leaseback transactions. GoAir’s sudden aggression has surprised many aviation analysts, given its deeprooted cautious manner of doing business. Some industry experts say it may be a sign of insecurity with the advent of aggressive new competitors and the government’s relaxation of rules which will help them. In 2012, the government relaxed foreign investment norms in aviation allowing foreign carriers to buy 49% stake in Indian peers. Earlier this year, it allowed Indian carriers to fly overseas if they have 20 planes. Immediately after the 5/20 rule was relaxed, Vistara CEO Phee Teik Yeoh spoke of ambitious plans to mount flights not only to neighbouring regions but also to the US and the UK. Prock-Schauer denies GoAir has been influenced by these factors, although he did say the decision to place the second order was taken in just two months. The pressures of the domestic market could have forced the change of strategy. No doubt, India still leads other nations with a 23% growth rate in domestic traffic, but airlines have been feeling the pinch of overcapacity, especially in the metro cities such as Delhi and Mumbai, according to Prock-Schauer. “These metro routes (which account for over 70% of overall traffic) are getting a bit difficult for all of us.If you add up Mumbai-Delhi you will probably have 62 frequencies among all of us. So it is very difficult in the lean season.” The government has been talking of regional connectivity and developing 150 new airports, but Prock-Schauer says that as far as Go Air is concerned there would be very little demand beyond 40 key airports. “After the top 40, demand goes down like this,” he says, with a sharp downward slant of his hand. There could not be a better airline executive than Prock-Schauer to lead GoAir’s sudden desire for aggression and overseas push. He is an aviation veteran of 35 years. The Austrian is also a scale-up expert. In his first job with Austrian Airlines, he oversaw its expansion from 20 planes to 100. During his six year-plus stint at Jet Airways, he presided over its fleet expansion from 40 planes to more than a hundred, its first international flights to Colombo and later to London, its public listing and acquisition of Air Sahara. “That (international expansion) is something I have done several times,” he says. On the list of GoAir’s foreign destinations are unusual choices such as Iran, Azerbaijan, Uzbekistan, Kazakhstan, China, Vietnam, Saudi Arabia and Doha and even Europe. Last week, the airline received the aviation ministry’s approval to fly to some of these destinations. “We purposely chose countries which have huge demand, like China or countries like Kazakhstan and Vietnam that are underserved. Vietnam can be the new Thailand,” he says. The short distances also augur well. “Some of these countries are so close to India. Almaty (Kazakhstan) is less than a three hour flight away from India. Even Baku (Azerbaijan) isn’t that far,” says Prock-Schauer. The USP of GoAir’s network will be the east-west connectivity, according to him. The airline will develop
Maharashtra to develop 10 airports as part of Central scheme
The Maharashtra cabinet today decided to develop 10 airports as part of the Centre’s regional connectivity scheme, and a Memorandum of Understanding will be signed between the state, Civil Aviation Ministry and the Airports Authority of India tomorrow. The cabinet decided to develop airports at Shirdi, Amravati, Gondia, Nashik, Jalgaon, Nanded, Solapur, Kolhapur, Ratnagiri and Sindhudurg in the first phase, an official from the General Administration Department said. Under the national policy on civil aviation, the Centre will provide funds and also assist the state governments in developing essential infrastructure for the airports. The Centre will bear 80 per cent of Viability Gap Funding (VGF). According to the official, the state government will reduce the Local Body Tax (LBT) on air fuel from the existing 10 per cent to 1 per cent for a period of 10 years. The MoU draft states that the state government will provide essential land free of cost. These airports will be provided with roads, rail, Metro and waterway connectivity. The state government will also provide electricity, water and necessary facilities at concessional rates, the MoU says. Davon House Jersey
Don’t want to fly over Pakistan, airlines write to Modi government for help
Indian carriers are increasingly seeking the government’s nod to fly to the Gulf from western India (mainly Ahmedabad) over the Arabian Sea to avoid the circuitous route over Pakistan. Security fears due to deteriorating India-Pakistan ties as well as economic factors are driving the requests. Air India, Jet Airways, IndiGo and SpiceJet operate flights to Gulf over Pakistan. “In the past few days, India has asked some non-scheduled aircraft flying from Pakistan to return and Pakistan may also retaliate. This is one fear that is behind the demand and the other is pure and simple cost factors,” said an airline official. SpiceJet has sought direct access for its flights from Ahmedabad to the Gulf under the “flexi-use of airspace”, which allows commercial aircraft to use the airspace reserved for air force and the navy. TOI has accessed a presentation made by SpiceJet to both defence and civil aviation ministries in this regard. “With this not only airlines save fuel and route navigation flight charges (RNFC), our country can generate more RNFC. This will also enable reduction in carbon emissions which is part of global environmental saving,” SpiceJet said in the presentation. The budget airline would save rupees one lakh if it is allowed direct oceanic route instead of flying over Pakistan for its Ahmedabad-Dubai flight. Preston Brown Womens Jersey