Centre to utilise waterways to transport logistics: Nitin Gadkari
Looking to bring down the cost of logistics, government would utilise waterways in the country to transport goods including fertiliser, cement and steel, Union Minister Nitin Gadkari said today. Gadkari said this hailing the arrival of car carrier ship MV Dresdan with 500 cars at Coachin Port. This is a successful experiment and effective utilisation of this (waterways) system will help increase water transport in the country, Gadkari, Minister for Road Transport and Highways said here. “We want to diversify road traffic to water transport,” he said adding goods transportation through water costs barely 20 paise per km in comparison to Rs 1.5 a km through road and Re 1 per km through railways. The logistics cost in India is 18 per cent, which is higher than China (8-10 per cent), Japan (10-12 per cent) and European Union (8-12 per cent), he noted. “Now this can be a very successful experiment by which we can take cargo including fertiliser, cement and steel on the water,” he told reporters. Recalling the recent transportation of Maruti cars from Varanasi to Assam through waterways, the Minister said per car, the cost could be reduced by Rs 3,000 to 4,000 as the transportation expense was very less. The car carrier ship, arrived here, is of Cyprus registration, which has obtained licence for coastal run between the ports in India. It has the circuit of Ennore-Cochin-Kandla-Cochin-Ennore, connecting the automobile production hubs in Tamil Nadu in the East coast and Gujarat and Haryana in the West coast of India. The ship has 13 decks with the capacity to carry 4,300 cars. The operator of the Car Carrier is SICAL Logistics based in Chennai, which is a leading player in bulk operations in many ports and operates a Coal Terminal at Ennore. The Car Carriers, which are Roll on-Roll off (Ro-Ro) ships, are highly productive with automobiles being driven in and out of the ship. The operator carried the vehicles of Renault, Ford, Hyundai and Toyota from Tamil Nadu and Honda and Ford from Gujarat. Cochin Port has identified the Q7 berth at Ernakulam Wharf for handling the ship, and a clean yard of 4,000 Sq m area at Q7 is allotted for storage of cars until delivery to the dealers, which is normally expected in a week’s time. Kerala is a major consumption centre of cars with annual sales of about 1,50,000 to 1,80,000 units, which is highly significant in determining logistic patterns. Brock Coyle Jersey
In tolls and foreign players, roads sector eyes new funds
The Centre is planning to push the new toll-operate-transfer (TOT) model in the roads sector, buoyed by indications of interest from sovereign funds such as the Abu Dhabi Investment Authority and the Qatar Investment Authority, as well as Canadian Pension Plan INvestment Board. If the pipeline of the 100-odd projects lined up under the TOT model can be successfully handed out to investors, the move would offer an avenue for monetisation of completed stretches of public-funded national highways that are up to two-years old, thereby helping mobilise additional resources for constructing of new highway sections. Alongside the TOT option, where interest has been shown by the Abu Dhabi Investment Authority, Qatar Investment Authority and Canadian pension funds, the government-owned National Highways Authority of India (NHAI) is also exploring the possibility of raising funds through infrastructure investment trusts, officials indicated. A major feature of private funding of roads is the collection of toll. In India, toll rates are calculated taking into account the base toll rate and the wholesale price index and are indexed to the projected costs of sections in the case of high cost structures. Toll revenue numbers from across the country point to an over two-fold increase in collections over the last five years, with road users increasingly coming to terms with paying tolls on highways (chart). This is even as the private participation in the roads sector witnessed a severe liquidity crunch in the years 2012-13, 2013-14 and 2014-15, which resulted not just limited or no participation in the new projects awarded on the default BOT-toll format, but also delays in completion of ongoing projects. The TOT push comes at a time when the overall outlook for tolling in India has improved, with Crisil Research pegging overall toll collection stretches to increase 1.5 times over next four years. According to the agency, the total stretch of highways under toll collection model for NHAI and key states is expected to increase 1.5 times from around 15,190 km in 2014-15 to around 22,200 km by 2018-19 and the total number of toll collection projects are projected to increase from around 250 (in 2014-15) to 360-365 in 2018-19. Of these, NHAI toll collection stretches are pegged to increase 1.4 times over next four years while toll collection on state highway stretches are expected to increase 1.5 times over next four years, according to Crisil. NHAI had initiated the process of awarding projects on tolling towards the end of 2009-10 and as of 2014-15, according to Crisil estimates, around 6,990 km of national highways constructed under EPC and BOT Annuity are under tolling. This is expected to increase 1.4 times over the next four years and touch 10,300-10,500 km by 2018-19, primarily driven by a number of to-be awarded projects to be implemented on EPC/Cash contract basis. The total number of toll collection projects are expected to increase from around 102-104 currently, to 128-132 by 2018-19 (assuming an average length of 80 km for NHAI toll collection project), according to Crisil. Several hurdles, however, plague toll collection in India, including some factors that are intrinsically linked to the consumer behaviour of road users in the country. Problems associated with toll collections in India: Transition from EPC to BOT: Most BOT project operators are companies that have evolved from EPC contractors into BOT concessionaires by leveraging their experience in constructing mega road projects. However, these companies had either no knowledge or very basic knowledge of tolling when they entered the tolling business, Ministry of Road Transport officials indicated. There is progressive realisation tolling is a very technical and complex activity and many varied factors contribute towards its success. Unwillingness to pay toll: Users treat roads as a public good where the service should be provided free by the government. Support from local authorities: The concept of BOT projects is not understood by the lower levels of administration with whom the concessionaires have to deal with on a daily basis. Pilferage: According to a rough assessment, toll pilferage on ill managed plazas can be as high as 25 per cent. Even a momentary failure of toll IT system can result in considerable toll pilferages. Detours: With wide-spread development of roads, taking a toll detour has become a standard practice by most road users. In a large number of concession agreements, there are no safeguards like check plazas. Therefore, to avoid loss of toll collections, choosing the correct location for the plaza becomes critical. Political interference: This generally commences from protests against land acquisition and finally culminates in obstruction of tolling activities. Explicit clauses for addressing the issue of disruption of tolling activities needs to be included in the agreements. The ‘Force Majeure’ clause in contracts currently, does not provide adequate safeguards due to the lengthy time stipulations. Toll plazas are usually the target of political agitation in the near vicinity culminating in impacting toll operations. Unauthorised exemptions: A large percentage of exemptions consists of road users who have to be necessarily exempted in order to ensure smooth and unhindered tolling operations. These road users have the potential to create problems. Tavon Young Womens Jersey
NHAI Opens Bids For Road Assets Worth Rs 50,000 Crore
The National Highways Authority of India (NHAI) has floated tenders inviting bids to monetise its road assets worth Rs 50,000 crore. The government-run authority said it expects to lease out around 6,000 km of national highways to private players through the auction route starting next month. Around 50 national highways would be leased out in the next month, according to data from NHAI website, mostly for toll collection and maintenance in lieu of the upfront payment to the road authority. “I would like to make it very clear that this is not a distress sale of assets but an initiative to enhance private sector participation in the operations and management of the highway sector,” Raghav Chandra, Chairman, National Highways Authority of India said in an emailed response. Growing Appetite NHAI’s latest move has the potential to kickstart stalled projects in the highways sector, according to experts. “Since most of these highways are already being made, it is just about maintenance, which private players feel comfortable working around with,” said Gaurav Karnik, partner and leader of real estate and infrastructure, at advisory, auditing and business consultancy firm EY. What could sustain the momentum is the ministry of road transport and highways’ ambitious target of adding 50,000 km of national highways over the next five years. The government will set the pace of highway construction at 42 km per day, Union minister for road transport & highways and shipping, Nitin Gadkari said. Floating online tenders will make the auction process more transparent, said EY’s Karnik. “The highways sector is growing and we are bullish on it. There is good growth potential over the next couple of years, especially given the government’s push,” he added. Cruising Ahead A recent study by India Ratings and Research estimates that investors are keen on picking up stake in completed highway projects worth Rs 24,500 crore. With infrastructure investment trusts gaining traction, highways will evolve further as an asset class, the agency says in a report titled ‘Opportunities Manifest Despite Overt Limitations’. Global institutional investors such as UAE Infrastructure Investment Fund, Japan Bank for International Cooperation (JBIC), Nomura and others have indeed shown interest in picking up stake in these long-term projects, Chandra of NHAI confirmed. While institutional investors including sovereign wealth funds are generally averse to taking risks in ongoing projects, they are open to investing in stable yield projects, the state-run authority said. The availability of foreign capital frees up domestic capital, both equity and debt, for the NHAI to invest in more greenfield projects. Welcoming the NHAI’s decision, Isaac George, director and chief financial officer, GVK Power & Infrastructure said. “It is a good thing to bring private players in the sector. Road maintenance will improve and so will the administration of toll collection.” That is precisely the NHAI’s rationale behind these auctions. “This would ensure efficient operations and management of monetised assets on a long-term basis while generating financial resources upfront for investing in new projects,” Chandra said. More private companies should exploit these opportunities, Issac added. When asked whether GVK has bid for any of these or other projects, he said, “As of now, we have not taken any call as we are still dealing with problems on our end.” Though private players are gung-ho, the NHAI cautioned that projects will only be monetised if it gets attractive bids. “The base price for the project will be determined by the authority,” clarified Chandra. Seth Jones Authentic Jersey
Banks delaying roads sector funding: Nitin Gadkari
Union Transport Minister Nitin Gadkari on Tuesday chided the bankers for delaying funding of road projects at a time when most issues in the roads sector have been resolved. Gadkari said bankers did not exercise the same caution earlier when the sector was facing difficulties. “I have some reservations with the bankers. When everything is clear, we are taking 8-10 months for financial closure. But when there was a bad situation, they financed,” Gadkari said. “We have a watch list of banks,” he added. “We have resolved enovironment and land acquisition issues. We are not giving approval to projects if 90 per cent of the land is not acquired,” he said. Giving details of how his ministry had worked on reducing the number of pending projects, Gadkari said he had saved the banks billions of rupees of bad loans by faster clearances. When he took the office in May 2014, there were 403 stuck projects with an underlying investment of Rs 3.86 trillion, which had now come down to just eight projects, Gadkari said. “I would request all of you to invest in the road sector. We’ve a lot of potential, we’ve increased the road length, economic viability is good, internal rate of return is good,” he said. The minister said there are no major issues regarding land acquisition now. “There is no problem, even with utilities there’s no problem in acquiring land,” he said. After the NDA government came to power at the centre, the length of the national highways has been increased to 1.62 lakh km from 96,000 km in two years, he claimed. Nick Bonino Jersey
Dip in power generation looms large
Catchment areas of Idukki reservoir have received less cumulative rainfall in September : Low water level in the Idukki reservoir owing to less cumulative rainfall in September has raised fears that there would be shortage in power generation during the peak summer season of March, April and May. The Periyar, main source of the Idukki reservoir, has virtually turned into a stream. As per official estimates, the cumulative rainfall in Idukki in September last was 1,553. 5 mm, while this year till September 26, it was 1,358.43 mm. Water level in the Idukki reservoir showed a decreasing trend last Saturday. This was owing to an increase in power generation and low inflow to the Periyar and other tributaries. An official at the Dam Monitoring and Research Station at Vazhathoppe told The Hindu on Monday that the average power generation from Friday was above 5 million units, which was the main reason for a decline in the reservoir level. However, it picked up on Monday after the generation level was considerably reduced, he added. This is the first time since the beginning of the southwest monsoon that the water level has shown a declining trend. The official said that during September, the average rainfall in the catchment areas is below 50 mm and only a rainfall above that level could result in an increased inflow, impacting the water level. Lowest level The increase in the water level per day was nominal, resulting in the lowest water level in September compared to the water level during the past three years. Water level in the Idukki dam on Monday was 2,351 ft. The same day last year, it was 2,359.16 ft. In 2014, the water level was 2,378.96 ft and in 2013, it was 2,3076.8 ft. The average power generation was below 2.5 mm since the beginning of the monsoon season. The Idukki dam is mainly reserved for the summer season, when there is a high demand for electricity in the State. Duke Johnson Authentic Jersey
CIAL reports 21% growth in FY16 net
Cochin International Airport Ltd has registered 21 per cent growth in its net profit at ?175.22 crore in FY16. The company’s turnover also posted a 27 per cent growth at ?524.53 crore. The director board, which met here on Tuesday, also ratified a proposal to release 25 per cent dividend to the 18,000 investors, resulting in the total dividend pay out of nearly ?110 crore, an increase of 178 per cent since 2003-04. In the last fiscal, the airport handled 7.77 million passengers. Addressing the 22nd AGM, Kerala Chief Minister Pinarayi Vijayan who is also the chairman of CIAL said that the new international terminal will be operational within two months and the company devised a master plan for land utilisation with the help of Ernst & Young. The construction of the 1931-metre four-lane road including two flyovers will be completed by next month. The installation capacity of the solar power plant will be doubled by February 2017. With the commissioning of the 12 MW solar power plant, CIAL became the first airport in the world fully powered by solar energy. It increased the power generation to 15.4 MW by the installation of more photovoltaic panels. The total installations so far produced 23.5 million units of power, he said. Nick Ritchie Jersey
Cabinet clears IOC-OIL-BPCL’s Russian stake buy for $3.14 bn
The Cabinet today gave its nod to a consortium of IOC, Oil India and BPCL buying stakes in two Russian oilfields for a total of USD 3.14 billion. Indian Oil Corp, Oil India and a unit of Bharat Petroleum Corporation(BPCL) will buy 29.9 per cent stake in Taas-Yuryakh oilfield in East Siberia for USD 1.12 billion and another 23.9 per cent in Vankor oilfield for USD 2.02 billion. The Cabinet Committee on Economic Affairs (CCEA), headed by Prime Minister Narendra Modi, approved the consortium buying 29.9 per cent stake in Taas-Yuryakh Neftegazodobycha LLC, which holds and operates two licences for the Srednebotuobinskoye oil and gas condensate field, one of the largest in the East Siberia. The stake is being acquired from LLC RN-Razvedka I Dobycha (RN Upstream), a wholly-owned subsidiary of Rosneft, Russian state firm, officials said. The licence for the central block is valid till 2041 and the northern block till 2032. The consortium will buy another 23.9 per cent in JSC Vankorneft, a subsidiary of Rosneft, which holds two licences for the Vankor oil fields in East Siberia valid till 2112. Officials said the Vankor asset has been valued at USD 8.45 billion as on May 31, 2015 on zero debt and working capital basis for arriving at the acquisition price. This is the same value at which ONGC Videsh, the overseas arm of the state-owned Oil and Natural Gas Corporation (ONGC), bought 15 per cent stake in Vankor in December 2015. That deal closed on May 31 this year and the company has signed up for buying another 11 per cent in the same field. Taas currently produces about 21,000 barrels per day of oil, and a peak of 1,00,000 bpd is expected by 2021. Vankor, on the other hand, is past its peak, which was 161 million barrels (22 million tonnes) in 2014 and 2015. It currently produces 154 million barrels. Rosneft had last year sold 20 per cent stake in Taas to BP of UK for USD 750 million. The Russian firm will hold 50.1 per cent stake in the project after the deal. Benoit Pouliot Womens Jersey
First flight under Regional Connectivity Scheme likely in January, says Ashok Gajapathi Raju
Government expects the first flight under the regional air connectivity scheme, which is in advanced stages of finalisation, to take off in early January 2017, Civil Aviation Minister Ashok Gajapathi Raju has said. The Regional Connectivity Scheme (RCS), which seeks to provide air services between un-served and under-served areas, is part of larger plans to boost the domestic aviation sector, which is clocking over 20 per cent passenger growth. Raju, under whose stewardship the civil aviation policy was announced in June, said work is at an advanced stage with respect to RCS. “We expect the first flight under RCS to take off by the end of this year or early January 2017,” he told PTI. The civil aviation ministry has already signed memorandums of understanding (MoUs) with various states, including Gujarat, Maharashtra, Chhattisgarh and Jharkhand, for implementation of RCS. The scheme refers to operation of an air transport service between any two airports, of which at least one has been declared by the central government as un-served or under-served. There are 394 un-served and 16 under-served airports. Last week, the Airports Authority of India (AAI) said as many as 20 un-utilised airports are ready to start operations for regional flights. A slew of incentives are being proposed under RCS, including Rs 2,500 cap on airfare for one-hour flights. Airlines under RCS will be extended viability gap funding (VGF) while the states concerned are required to offer certain concessions such as providing police and fire services free of cost. VGF will be created by way of charging a small levy per departure on all domestic flights on certain routes and small aircraft below 80 seats. Central and state governments will be sharing the VGF amount. Last month, the government notified excise duty of 2 per cent for jet fuel purchased from airports that come under RCS, which is part of the new civil aviation policy. The concessional rate will be applicable for airlines as well as cargo operators. A basic excise duty at concessional rate of 2 per cent will be levied on aviation turbine fuel (ATF) drawn by operators or cargo operators from RCS airports for three years,” the Central Board of Excise and Customs (CBEC) had said in a notification. Brian Dawkins Womens Jersey
Air India’s loss stands at Rs 246 crore in first quarter, narrows from Rs 316 crore last year
Air India’s turnaround — announced by Prime Minister Narendra Modi in his Independence Day Speech — seems unlikely, as the national carrier has reported operating loss of Rs 246 crore during the first quarter of the current fiscal. The first quarter loss has narrowed from Rs 316 crore during the same period last year, it is much below the airline’s expectation of making about Rs 90 crore in operating profit during the first quarter. In contrast, all other listed airlines in the country have made net profits during the same period on the back of lower fuel prices and rising demand for travel. The revenues during the period have increased marginally by Rs 121 crore (see chart). Marginal increase in revenues was a concern raised by the Prime Minister’s Office in its first review on July 6. The unaudited results for the quarter was cleared by the airline board in its meeting held on September 14. The airline is awaiting its audited financial results for the full fiscal 2015-16, where it estimated to make operational profits of Rs 100 crore. “Revenues not picking up are surely a concern, as this is impacting the overall performance of the airline,” said a ministry official, who did not want to be identified. Analysts feel that the airline has always been in turnaround mode but cannot turnaround unless the real problems are addressed. “It is believed that Air India’s problem can be addressed by giving it money, which is not the case. The airline has systemic problems and it cannot turn around unless those problems are addressed. The airline surely has shown improvement by reducing its losses but that is not commensurate with the benefits that includes lower fuel price and growing demand,” said Jitendra Bhargava, former executive director of Air India. An email sent to the airline on the issue did not elicit any response till press time on Tuesday. Air India has a huge debt burden and that is one factor impacting any turnaround prospects, its management had told ET earlier. It shells out Rs 4,000 crore annually to service debt. In an interview to ET in July, Air India chairman Ashwani Lohani had said: “Air India today has to annually pay Rs 4,000 crore to banks to service debt. It is a huge amount of money and profitability would be much easier if you remove that. I am committed to making the airline profitable on a year-on-year basis, but some debt restructuring needs to be done.”The national carrier is renegotiating with banks to restructure Rs 10,000 crore of the Rs 45,000 crore debt. As part of the bailout package, the government is also infusing and amount of Rs 30,231 crore till 2021-22. Kevin Hogan Womens Jersey
Carbon-neutral tag for IGI Airport, first in Asia-Pacific
The Indira Gandhi International (IGI) airport on Tuesday became the first airport in Asia-Pacific to achieve the carbon neutral status. The Airports Council International (ACI) announced IGI’s achievement during the airport carbon accreditation certificate presentation ceremony in Montreal, Canada. The same body awarded IGI the world’s number one position (in 25-40 million passengers per annum category) twice in a row under the Airport Service Quality (ASQ) programme. Airport officials said that the airport carbon accreditation has upgraded Delhi airport to ‘Level 3+, Neutrality’, which is the highest level of achievement available to airports across the world. Carbon neutrality occurs when the net carbon emissions over an entire year is zero. This means the airport absorbs or offsets the same amount of emission that is generated, officials added. The chief executive officer of Delhi International Airport Limited (DIAL), I Prabhakara Rao, said, “Achievement of the accreditation for carbon neutrality is indeed recognition of a great team work. Today we have delivered on our commitment of achieving sustainable solutions for aviation climate change mitigations made at LPAA-COP 21 last year through carbon neutrality. With this achievement, we have set up a new benchmark for other airports in this region.” He said that now DIAL is focussing on energy conservation and exploring alternative solution for generating green energy. The Delhi airport further aims to increase its solar power generation capacity to 20MW by 2020, he added. The various emission saving measures implemented in DIAL have resulted in 51% reduction in specific greenhouse gas (GHG) emission (kgCO2/Pax) during the last five years. At IGI, DIAL has taken the proactive approach towards environment management and sustainability development. Terminal 3 of Delhi Airport is a LEED (Leadership in Energy and Environment Design) Gold certified green building. Other energy efficient and environment friendly infrastructures at the airport include sewage treatment plant (STP) and water treatment plant (WTP), energy efficient bridge mounted equipment (BMEs), energy efficient lighting systems, advanced fuel hydrant systems, fixed electric ground power units (FEGP) and preconditioned air (PCA) supply systems. ACI Asia-Pacific regional director Patti Chau said, “We are extremely delighted to welcome the first airport in our region with such achievement.We are proud of Delhi airport’s achievement and its commitment to sustainability which has set a good example for airports in the region.” Ondrej Pavelec Womens Jersey