Bengaluru violence: AirAsia allows passengers to reschedule travel free of cost
Low-cost carrier AirAsia today said passengers of their flights departing from Kempegowda International Airport here on September 13 can reschedule their travel at no charge due to logistical difficulties that they may face in getting to the airport following the outbreak of violence over the Cauvery issue. “AirAsia understands the seriousness of the current situation in Bengaluru. All AirAsia guests booked onto flights departing from Bengaluru on Tuesday, 13th September 2016 can reschedule their travel at no charge,” the aircraft carrier said in a statement here. “The airline understands the logistical difficulty that some guests might face in getting to the airport for their flight,” AirAsia added. The carrier has made arrangements for rescheduling the passengers travel to any time up to 72 hours at no charge, AirAsia said. “Any guest travelling from Bengaluru on Tuesday, 13th September, 2016, can contact our airline staff or call centres to reschedule their travel to anytime up to 72 hours from now at no charge,” it said. “AirAsia as a group believes in providing the best of safety, security and comfort to our guests and crew at all times,” AirAsia said. Jermon Bushrod Jersey
In a first, Welspun ties funds for road project under ‘Hybrid Annuity Model’
Welspun Enterprises on Monday has closed financing for the country’s first expressway project under the ‘Hybrid Annuity Model’ on Delhi-Meerut Expressway with the total cost of ?841.50 crore. Of the total project cost, 40 per cent will be funded by the National Highways Authority of India (NHAI) under the new Hybrid Annuity Model, the company said. The remaining 60 per cent will be arranged by the concessionaire by way of mix of debt/equity of 48:12, 12 per cent being the promoter’s contribution and rest will be funded by Punjab National Bank-led consortium, it said. Hybrid Annuity Model (HAM) is a mix investments done by government and private players and payment is also made in a fixed amount for a considerable period and then in a variable amount in the remaining period. “With infrastructure spending going up, Hybrid Annuity Model is an opportunity to fast track highway projects and revive public- private-partnership mode. It will not only improve the traffic flow between the two states, but also contribute to enhancement of economic activity in the region,” Raghav Chandra, Chairman, NHAI, said. The project will be developed in 2.5 years, and thereafter the maintenance on the stretch for 15 years will be done by Welspun Delhi– Meerut Expressway Pvt. Ltd. It stretches across 8.716 km and is entirely within the city of Delhi. It consists of a six-lane express way in the centre, flanked by two four-lane highways on either side — making it 14-lanes in all. Will Hernandez Jersey
Languishing road projects
There are 46 projects which have been identified by NHAI as languishing with a total length of these projects is 4,860 km. covering a total project cost of Rs 51,338 crore. Out of 46, issues have been resolved in 27 cases whereas issues on 19 projects are yet to be sorted out. Reasons responsible for project delays: Lack of equity with the concessionaire: In several sections (e.g. Motihari-Raxaul section, Rohtak-Jind section, Gurgaon-Kotputli-Jaipur section, Haridwar-Dehradun section), the lack of equity with the concessionaires has delayed the projects much beyond the scheduled completion date. In some projects, this has also resulted in the bankers not disbursing even the loan sanctioned at financial close. Diversion of funds: In few cases the physical progress of work is not commensurate with the financial progress. These are likely cases where the funds may not have been utilised towards the projects and concessionaires are finding it difficult to bring back the funds so diverted. Delays due to reasons not attributable to the concessionaire: The Authority has also defaulted in fulfilling its conditions precedent in a number of cases due to land acquisition, environment /forest clearance /utility shifting /RoB issues. In cases like Rimoli-Roxy-Rajamunda, delay in forest clearance has turned the project unviable and therefore has to be terminated and re-bid. Refusal of banks to accept first charge of NHAI: For any languishing highway project in BOT (toll/annuity) mode that has achieved at least 50 per cent physical completion, NHAI will provide financial assistance to complete the project subject to first charge on the toll/annuity receivables of these projects. However, the banks have refused to accept the first charge of NHAI and therefore no progress in implementation of this policy to complete languishing projects is being achieved. High cost of interest during construction (IDC): The cost of construction in case of delay, whether due to concessionaire or the Authority, results in increase in the cost of debt which turns the project unviable. In case of termination due to delay by concessionaire during the construction period, there, too, is no termination payment. Difficulty in obtaining additional debt in stalled projects: In projects where the concessionaire is already faced with delays, there is no possibility of obtaining additional debt to complete the project as the account in many cases may have already turned NPA. Overleveraged balance sheet of the developers anticipating high level of growth. The economic downturn seen in the last few years has caused revenue realisation at a much lower rate than was anticipated. Many developers have taken future obligation which created difficulties in debt servicing. Stress on the existing road infrastructure loan portfolios of FIs: Reduced revenue realisation due to economic slowdown affected debt servicing by the concessionaire as the contracted debt servicing obligations could not be met with the existing revenue. As the sector got affected, the lenders debt portfolio for roads came to have a disproportionally high level of debts. NPAs saddled banks with additional capital adequacy requirements, provisioning demands and income recognition restrictions. Long period of revenue collection: The current practice of financing large infrastructure projects based on revenue streams spread over 20 to 30 years, but with project debt having tenure of 10 to 15 years, is also unsustainable. Debt sanctioned by banks higher than total project cost estimated by NHAI: Because the project debt is based on the developer’s cost estimates, which is, on an average, 35 per cent more than the NHAI project cost, the lenders are exposed to a higher risk particularly in the event of termination of the concession agreement, wherein NHAI guarantees compensation based on its own appraised project cost and not the developer’s estimate. Corporate debt restructuring has been affected in many SPV debt: Concessionaires unable to service debt have to propose to the lenders to restructure the debt: While the first restructuring exercise is permitted by lenders without any adverse asset classifications, any exercise going forward automatically affects the asset classifications in the books of lenders. A second restructuring necessarily requires that the debt be classified as non performing. Sector exposure norms of FIs getting exhausted: With the debt obligations mounting on account of debt repayment deferment, sector exposure increased, reaching exposure norms for this sector. Higher cost of financing: The lenders who provide major part of financing in the form of debt are concerned with the downside risks which influences the project progress and debt serving capability and consequently to mitigate the risk of financing have enhanced the cost of lending to the sector. Bond market for infrastructure financing: The Bond market can provide a viable option for long term financing. Under the Infrastructure Debt Fund, Banks have to accept the first charge of Infrastructure Debt Funds on termination payment . As projects have been financed at a much higher cost than the NHAI total project cost, the debt due may not cover the complete senior debt leading to resistance of banks to first charge of Infrastructure Debt Funds. Brandon Brooks Jersey
Infra pool to have separate funds for roads, clean energy
The government has tweaked the structure of the National Infrastructure Investment Fund (NIIF), which will now have two dedicated funds — one for roads and another for clean energy — as it looks to get long-term funds into two crucial sectors of the economy. Originally, the government had planned to have NIIF as the mother fund which was to raise money from sovereign wealth funds (SWFs), pension funds and other long-term investors. But based on discussions with investors, the finance ministry has now changed the strategy. “Interaction with various SWFs, pension and long-term funds showed that investor interest was not so high in multipurpose or multisectoral infrastructure fund. They wanted more focused investment in sectors or sub-sectors,” economic affairs secretary Shaktikanta Das said, when contacted. He confirmed that the two sectoral funds are planned, which sources said could have initial corpus of around Rs 5,000 crore each. The government had planned to start NIIF with an initial corpus of Rs 40,000 crore and had budgeted to release Rs 4,000 crore this financial year with funding from other investors such as Abu Dhabi Investment Authority, Russia’s RUSNANO, Qatar Investment Authority and Singapore’s GIC, among others. The idea is to provide long-term funding and reduce pressure on banks, which are the primary source of finance for long-term infrastructure projects. Bank lending comes with asset-liability mismatches since majority of bank deposits are for one-two year tenure while loans to infra projects are for 15-20 years. With Sujay Bose taking charge as NIIF chief executive, the government is set to release the budgetary allocation for the current financial year and is in talks to raise funds from multilateral agencies in the mother fund. A part of the allocation will also be transferred to the two sectoral funds with further fund-raising from long-term and private equity investors. Das said that the government has a long shelf of projects and money would start flowing to the two sectors quickly. Investor interest in the highways and renewables sector has grown in recent years after the NDA government unveiled a series of measures to promote investment in these two segments. Several overseas funds have shown interest in investing in the country’s highways sector after the government moved to uncog the sector and accelerated the award of projects. The government is banking on rapid infrastructure development through this fund and has identified several projects in which investments could flow into. The NIIF, announced in the budget, is expected to ease pressure on banks, which are facing severe stress from bad loans. Duke Johnson Womens Jersey
NHAI gives Rs 350 crore boost to Gurgaon-Jaipur stretch of NH-8
The NHAI board has approved the infusion of Rs 350 crore to complete the already delayed Gurgaon-Jaipur stretch of NH-8. The widening and maintenance work has come to a standstill as the highway developer has no funds to carry out expansion and even bankers have stopped releasing funds. The widening work had started in April 2009 and has missed several deadlines. Sources said banks had stopped releasing loans fearing they would not recover their debt that they had already extended to the project. TOI has learnt that the NHAI board, which has representation from highways and finance ministries, has approved the fund infusion considering that termination of the contract at this stage would create bigger problem. Sources said the project was 90% complete. “Re-tendering the work will take time and commuters will suffer, who have already faced the worst. The road also needs proper maintenance,” said an NHAI official. He added the fund will be used to complete the remaining three flyovers, building service roads, foot over bridges and installation of crash barriers along the entire 225 km stretch. According to the approved scheme, NHAI will first recover its interest on the amount it will infuse for the remaining work. “Since serving interest of loans already extended by the banks to this project is also important, we will allow payment of banks’ interest as well from the toll being collected. The remaining amount of the collected toll will be used first to pay back NHAI’s investment,” said a source. Last October, the government had approved one-time fund infusion by NHAI to revive and complete languishing national highway projects. NHAI chairman Raghav Chandra said this was the best possible solution to finish this languishing project. He added there are also issues regarding non-payment of toll by multi-axle vehicles at a toll plaza and Rajasthan government would have to compensate for the revenue loss. Sources said huge number of multi-axle vehicles have skipped paying toll at Shahpura by claiming that the vehicles are owned by locals. Ed Dickson Jersey
Centre committed to develop road network in Arunachal: Union Minister Mansukh Mandavi
The Centre is committed to develop road infrastructure in Arunachal Pradesh and attaching priority to it, Union Minister Mansukh L Mandaviya said in Itanagar on September 13. “Prime Minister Narendra Modi is clear that East and West should develop equally without discrimination and accordingly being a minister, who hails from extreme western part of the country (Gujarat), I am here in the extreme eastern part to assess the progress of road development,” he told reporters. The Minister of State for Chemical & Fertilizers, Road Transport & Highways and Shipping has arrived in Itanagar on September 12 to launch the ambitious ‘Pradhan Mantri Jan Aushadhi Yojana’. He launched another ‘Jan Aushadhi Store’ at Ziro in Lower Subansiri district and inspected the Pappu-Yupia-Hoj-Potin stretch of NH 713A which had severely been damaged by landslides. The stretch of the highway has been widened to two lane by the Road Transport & Highways and Shipping Ministry at a cost of Rs 450 crore. The work was substantially completed in March last but due to heavy rain since April this year that triggered landslides,the road was damaged at about 30 to 35 spots. Expressing serious concern over the condition of the road,he suggested that long term measures, hill side protection measures need to be undertaken with the input and guidance of expert agencies so that road damages could be minimised. “I have directed the state PWD officials to prepare estimate and submit to the ministry in a week’s time for necessary repair and maintenance of the 50-km stretch of NH13 between Potin and Ziro,” he said. Earlier at Ziro, Mandaviya announced an amount of Rs 10 crore for maintenance of Potin to Bopi stretch of road in Itanagar. “This stretch of the road (Potin to Bopi) needs immediate maintenance. So while the land acquisition for TAH is under process, the road needs to be maintained and kept motorable,”he said announcing Rs 10 crore for the maintenance work. Mandaviya also directed the Western Highway Zone regional manager to submit the DPR for the maintenance to his ministry at the earliest for release of the announced amount. He said the NDA government at the Centre is committed to construct five lakh km of national highways in the country in five years. “At present 16 km of NH are being constructed per day in the country and we are planning to increase it to 20 km per day,” he said, adding out of total 2,570 km length of national highway in Arunachal, 653 km have been completed while 1917 km of NH are under progress. “With improved highway infrastructure in the state, development process will be accelerated,” he said, adding the Centre is contemplating to convert one lakh state highways into national highways in five years. Terming Arunachal as a “beautiful” state, the Union Minister said the state with innumerable potential in horticulture, agriculture and tourism sector could be a developed state in future. “Arunachal could be transformed to a major tourism destination of the country and for this, improvement of road infrastructure has been taken up by my ministry,” he said, adding the ministry would soon formulate a policy by which roads in hill states could be protected by using international standard technology. When asked about the proposed 2000-km long road from Tawang to Vijaynagar along the international border, Mandaviya said though the road was sanctioned but there remained major hindrance in land acquisition which is a state subject. On the proposed East-West Industrial corridor from Brahmakund to Ruksin, he said the road was under “active consideration” of the Centre. When his attention was drawn on the vast resources of medicinal plants in the state which are yet to be explored, Mandaviya assured to apprise the AYUSH Ministry to do extensive research on the available plants besides setting up Ayurvedic institutes in the state. The union minister also asked Chief Secretary Shakuntala Gamlin, who was also present on the occasion, to prepare a list of potential sectors in the state and send to the Centre so that necessary schemes could be formulated. Charley Taylor Womens Jersey
Kerala: State needs to augment power generation to tackle crisis
With the Union Power Ministry gearing up to scrap the firm allocation of power from the central generating stations (CGS) in non-competitive bidding mode, Kerala will have to immediately apprise the Centre of the consequences that are likely to arise on adopting a revised sharing methodology and also initiate steps to augment the generating capacity by 2,500 MW. As per the revised guidelines proposed by the Centre, States hosting power projects reserve the first right for 85 per cent of the generated power, after apportioning 15 per cent with the Central unallocated pool for meeting exigencies. Power sector sources told The Hindu here that the Central allocation during the past one decade had increased by 800 MW, but the State could add only 250 MW to its own power pool. None of the generating stations in South India would share power with Kerala from its unallocated 15 per cent. The State government would have to wake up to this reality and chart a strong course of action to tackle local resistance to inception of new projects. It would also have to apprise the Centre that the Ministry of Environment and Forests had been denying clearance for major hydel projects identified in the late eighties, citing the need for conserving the rich flora and fauna and a host of other environmental issues. The State does not have fossil fuel reserves such as coal or lignite and hence would have to drain its resources for purchasing power through competitive bidding from private generators. This would inevitable lead to a tariff hike and the consumers would have to bear the burden. Proposed methodology The proposed methodology is heavily balanced in favour of resource rich States and the State government would have to convince the Centre that it amounts to discrimination. Considering the easiness in carting power, almost all generators prefer to establish plants in resource-rich States, especially where coal is available in plenty. This would further push Kerala to the brink of a crisis soon and also runs against the Constitutional obligation for balanced development across the country through equal sharing of available resources. Whether the Centre would approve the arguments of the State government is a matter of concern, but it would take up the issues soon, sources said. Ron Greschner Womens Jersey
Discoms looking for new revenue streams
As Delhi Electricity Regulatory Commission (DERC) goes through a complicated phase with delayed orders of tariff revision and the appointment of chairman in jeopardy, discoms are looking at other avenues to increase their revenue. The capital’s power regulatory body has proposed changes in its regulations to allow the discoms and Delhi Transco Ltd (DTL), which claim to be under financial stress, to retain a larger share of their non-tariff income. As per the draft regulations floated by DERC, the power utilities may be allowed to retain up to 60% of the revenue earned from other businesses such as consultancy. Discom BSES has repeatedly asked the DERC to liquidate their regulatory assets which they claim have touched Rs 16,000 crore, pending dues that can be recovered by way of increased tariffs. This move by DERC is seen as an attempt to encourage non-tariff income. The proposed amendment in the DERC (Treatment of Income from Other Business of Transmission Licensee and Distribution Licensee) Regulations, 2005, also states that the utilities will be able to retain 40% of the revenue in case capital assets. David Harris Womens Jersey
Sri Lanka scraps NTPC’s plan to build coal plant
A plan by NTPC to build a power plant in Trincomalee in Sri Lanka’s Eastern Province, has been scrapped following the country’s decision to switch from coal to renewable energy sources. Sri Lanka’s Ministry of Power and Energy on Tuesday told the Supreme Court that it would drop its plan to build a coal power plant in Sampur, Trincomalee, after environmentalists raised serious concerns. Officials at the Indian High Commission said they had not heard from the Government of Sri Lanka on the matter yet. The decision is a virtual blow to the National Thermal Power Corporation’s (NTPC) first international joint venture, in which it holds a 50:50 stake with the Ceylon Electricity Board (CEB). Following concerns over the environmental impact of a coal plant, Sri Lanka has decided to look at options such as Liquefied Natural Gas (LNG), solar and wind power, according to Sulakshana Jayawardena, director-development in the Power Ministry. The Sampur Coal Power Plant was proposed as a joint venture following a 2006 agreement among the Government of Sri Lanka, CEB and the NTPC. In 2011, the partners formed the Trincomalee Power Company Limited, with the aim of setting up two coal-based power plants with a total capacity of 500MW in the strategically crucial coastal town on the island’s east coast. Though the coal-powered plant has now been shelved, the Ministry is engaging with the NTPC to explore partnerships using other sources of energy. “If the NTPC is willing, we are open to considering that option,” Mr. Jayawardena told The Hindu on Tuesday. A Reuters report in May 2016 quoted Sri Lanka’s Petroleum Minister Chandima Weerakkody as saying: “We do not want to hurt India. So President Sirisena in his visit has offered an LNG plant instead of the coal plant,” referring to President Sirisena’s visit to India at that time. Speaking to The Hindu on Tuesday, a senior official of the TPCL said a joint working group formed by the two countries a few months ago was exploring alternatives. “Sri Lanka has expressed its view. We will abide by what the joint working group decides,” he said. Sri Lanka’s total installed power generation capacity is currently about 4,050 MW. This includes 900 MW of coal power, 1,335 MW of oil burning thermal power, 1,375 MW of hydro power and nearly 450 MW of non-conventional renewable energy sources. The country aims to increase its capacity to 6,400 MW in another decade to meet its growing demands. Tony Dorsett Jersey
Andhra now second state to achieve 100% electrification
Andhra Pradesh has become the second state in the country after Gujarat to achieve 100 per cent electrification of households, a latest report has said. JM Financials published the report based on a national -level survey on electrification in various states. Discussing this through a tele-conference with top officials of the Energy Department today, Chief Minister N Chandrababu Naidu said, “We achieved 100 per cent electrification by June-end. Now, you have to set a target of ensuring uninterrupted world-class quality power supply.” He said access to electricity was a key socio-economic development indicator, but this was an area where there was still a significant gap in India. About 35 per cent rural households in states like Uttar Pradesh, Madhya Pradesh, Bihar, Odisha and Assam still lacked access to power supply, he claimed. The Chief Minister asked the Department officials to chalk out an action plan to be implemented from the grassroots level so as to make the power sector self-sufficient in the long run. “Whatever we have achieved in the power sector in the last two years is no doubt very significant, but is not sufficient. “We have to render world-class services to the consumers by providing uninterrupted power supply on par with global standards, at affordable prices,” he said. Yu Darvish Jersey