Government mulls to remove anomaly restricting FDI in civil aviation
The government is considering to remove an anomaly restricting foreign direct investment (FDI) in the civil aviation sector to attract more overseas funds. The sector is faced with an odd situation wherein a foreign investor, excluding overseas airlines, can acquire up to 100 % stake in a local carrier but not seek a scheduled operator’s permit. The permit can only be given to a company which has substantial ownership and effective control in the hands of Indian nationals. “As this condition restricts and prevents foreign investors to take 100% stake in a domestic airline, there is a need to amend this rule in order to facilitate FDI in the sector,” sources said. They added that due to this anomaly, the moment foreign investors buy 51 % or controlling stake in a domestic airline, the schedule air operator permit gets withdrawn. Roger Maris Jersey
50 yrs on, power-full Punjab, powerless in Haryana
Haryana’s distribution companies that are power surplus need a financial turnaround to cut electricity cost and line losses besides checking corruption and improving revenue recovery. Punjab’s challenge is to manage its surplus power and consumption after private players gave a boost to generation in 2014. It also needs to be pragmatic than populist as free power to farmers has already cost the state Rs 42,000 crore in 14 years! Power-packed Haryana reels under outages What do Bansi Lal, Om Prakash Chautala, Bhupinder Singh Hooda and Manohar Lal Khattar have in common? Besides being chief ministers over the past 20 years, these leaders or their parties promised the people of Haryana 24-hour power. Though the first three were unable to keep their word, Khattar hasn’t been consistent on 24-hour power. Initially, the Khattar-led BJP government said it can’t assure round-the-clock power, but later it talked of gradually giving uninterrupted supply to select villages. Despite power distribution companies Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN) claiming to be power surplus, consumers don’t get assured supply. In urban areas, they put up with outages, fluctuations, and deficiencies in customer care. The situation is far worse in rural Haryana. Consumers, particularly domestic, bear the brunt of erratic supply despite promises by successive governments. A bizarre scenario in a state that was not only the first in the country to achieve 100% rural electrification, but where power has always been a politically sensitive sector, especially due to high demand for heavily subsidised agriculture supply. Haryana achieved rural electrification way back in 1971. The state has come a long way from the days when connecting every house was the target. Today, it has 54 lakh consumers, including 41 lakh domestic ones. The quality of power supply remains a concern despite the state’s 10th position with 3.5% of the country’s installed capacity. Empower discoms The two distribution companies, created after unbundling of the erstwhile Haryana State Electricity Board, have adequate power from their generation units, the state’s share from central projects and other sources through long-term agreements. However, supply is hampered by constraints in the distribution system. Poor planning, high line losses, low revenue realisation and corruption have made things worse. “Theft and systemic constraints in distribution are the two biggest challenges. The high rate of theft needs to be controlled and brought down. Deficiencies in distribution network means even paying customers face cuts at times. We also plan to use information technology to improve the quality of supply and services,” says Shatrujeet Kapur, chairman-cum-managing director, UHBVN and chairman, DHBVN. “As not enough attention was paid to distribution, the losses kept mounting for discoms, creating cash-flow bottlenecks at the transmission and generation end also. Commercial losses, including theft, went unchecked, but not much investment was made to improve the operational efficiency and quality of service of discoms. Massive generation capacities were added without commensurate augmentation of the transmission and distribution system and promoting load growth,” says a power expert. Haryana’s own generation capacity has been idle for months and surplus power is sold to other states at a loss. With mounting losses, UHBVN and DHBVN look to the state government for bailouts. The two distribution companies have got a breather with the government taking over 75% or Rs 25,950 crore of their total debt under the Ujwal Discom Assurance Yojana (UDAY), but this won’t help them forever. The discoms will need a financial turnaround. And that’s possible only if they reduce power cost, cut line losses, accurately bill energy supply, reduce corruption and improve revenue recovery. Problem of plenty, populism in Punjab Surplus, deficit and surplus again: That’s the story of Punjab’s power sector in the last 50 years. The Punjab State Electricity Board (PSEB), which was carved out of the public works department (PWD) on May 1, 1967, soon after the state’s re-organisation, was split into two companies – the Punjab State Power Corporation Limited and Punjab State Transmission Company Limited in 2010. The PSEB’s debt-ridden legacy began with the inheritance of a few lakh when it separated from the PWD. In 2010 when it was unbundled, a debt of Rs 16,700 crore was passed on to the PSPCL and PSTCL. In the absence of any major industry in Punjab, the main role of the PSEB, and later the PSPCL, was to feed agriculture, the primary vocation of 70% of the state’s population. The PSPCL provides services to 70 lakh consumers, while the PSEB saw a humble beginning with 6.35 lakh consumers, including 4,600 with agriculture pump-sets. Its revenue collection was Rs 23 crore and it grew to Rs 26,000 crore. Five decades ago, the tariff was 5 annas or 30 paise per unit. Today, a unit costs Rs 4.52. Surge in demand Over the years, Punjab’s power sector has seen a manifold increase in debt, consumer aspirations and political populism. The PSEB saw a sudden expansion in 1968. “Power canvassers were deployed to woo villagers to install tubewells. This led to 2 lakh consumers by 1971,” says YP Mehra, who retired as a PSEB member in 1997. The number of consumers is 14 lakh today, raising the demand from 450 megawatts (MW) in 1967 to 12,000 MW at present. Before the re-organisation, Punjab generated 48 MW from the Joginder Nagar hydel project and 950-MW Bhakra dam. It achieved total rural electrification in 1976. The 440-MW thermal power plant came up in Bathinda in 1969, the 1,260-MW Ropar plant in 1983 and the 540-MW Lehra Mohabbat plant in 1997. The state was reeling under acute power shortage till 2007 and before the assembly elections, deputy chief minister Sukhbir Singh Badal decided to bring in private players to boost generation. The government appointed consultants and created special purpose vehicles to set up five power plants at Talwandi Sabo, Rajpura, Goindwal Sahib, Gidderbaha and Mansa. The Talwandi Sabo, Rajpura and Goindwal Sahib plants added 3,960 MW of generation capacity. It took seven years and constant follow-ups with companies, PSPCL and other
Bihar:State eyes 4,000MW of power from December
Senior officials in state energy department, while addressing a function to mark the fourth foundation day of Bihar State Power Holding Company Limited (BSPHCL) and its four subsidiaries on Tuesday, said the state would be able to meet its daily power demand of 4,000MW by December this year. “The state requires around 4,000MW of power daily. As of now, the overall power supply in the state stands at 3,769MW. We have set a target to increase the power supply to 4,000MW from all sources taken together based on augmentation of existing power transmission and distribution capacity,” said H R Pandey, deputy general manager (public relations), Bihar State Power Holding Corporation (BSPHC). As things stand now, maximum power allocation from the central sector stands at 3,003MW. The state is also getting 100MW of power from its Kanti thermal power unit. Besides, 1,010MW is purchased from open market for which short-term and long-term agreements have been signed with different power producers. Besides, the state energy department is also working on a proposal to provide electricity connections to all houses in Bihar over the next 24 months. BSPHC is slated to commence work on providing electricity connection to around 48 lakh above poverty line (APL) families in the rural areas in the state from November 15 under the seven resolves programme of chief minister Nitish Kumar. The survey for the electrification work has almost completed, except for around six districts, where it is in the final stages. CM Nitish Kumar has set the target of 2017-end for completion of electrification work under the mission. “The district survey for the electrification work is almost complete and the bidding process is also underway. All APL families, which do not have access to power, would be provided electric connection under the mission,” said Pratyaya Amrit, chairman-cum-managing director of Bihar State Power Holding Company. “We have been able to create an identity of our own through team work and high work ethics and standards,” Pratyaya added. Energy department officials claimed that per capita power consumption in Bihar has increased from 144 units in 2012 to 258 units in 2015-16. Besides, power availability in the state is likely to increase by over 200MW once the two units of 110MW each at Barauni Thermal Power Station, where renovation and modernisation work has been done, become functional. Work is also going on at the same thermal power station for commissioning of two more units of 250MW each. Nathan Peterman Jersey
‘India should scale up, speed up nuke electricity programme’
India should scale up and pace up construction of nuclear plants to meet its insatiable power demand, renewable programme and climate change targets, the head of an international atomic body has said. “Currently, India has five reactors under construction with 3,300 MW capacity. But this is too little for a country with so many people,” said Agneta Rising, director general of the World Nuclear Association. Comparatively, China has 20 reactors under construction with 22,596 MW capacity, having had the first nuclear electricity in 1994. Oil-rich Saudi Arabia has planned 16 reactors with 17,000 MW, with first nuclear electricity expected in 2022, according to the association’s Asia Special Update report, which listed the kingdom among the newcomers to nuclear energy. India’s first nuclear electricity plant became operational in 1969. India has the technology, expertise and skill to build its own nuclear plants, Rising said, adding there were no restriction on India importing uranium. But despite the knowledge, India takes about seven years or 84 months to complete a reactor, Rising pointed out. The world average of building a reactor was 73 months in 2015. India needs to speed up construction period for each reactor to 73 months, she stressed. “India has a lot of experience of nuclear science and it has all the technologies. But it must be able to scale up or ramp the nuclear electricity programme,” she told . India’s goal is to have 14.5 GWe of nuclear generating capacity online by 2024, up from 6,219 MW at present, the report said. The government has given in principle approval for new nuclear plants at 10 sites in nine states. “It is important to have (nuclear) infrastructure where you can build prosperity and (take care of) health of the people,” said Rising, stressing the importance of electricity supply reliability and the need to reduce pollution across the country for the people. “India needs to get on to do it (nuclear plants) on a scale and increase the construction pace of the plants,” she said. Anthony Mantha Jersey
Power regulator expected to decide on Tata Power’s compensatory tariff case this month
Power regulator Central Electricity Regulatory Commission (CERC) is expected to deliver its verdict this month on permitting Tata Power tariff compensation to recover losses suffered by the Mundra Ultra Mega Power Project (UMPP) due to high prices of imported coal. The plant has been under the spotlight after the ouster of Cyrus Mistry from Tata Sons. Mistry had raised the issue of the project’s losses in a note to board members. Following a directive of the Supreme Court, the CERC has completed hearing on the compensatory tariff case of two imported coal-based power plants, including a 1980mw project of Adani in Mundra, Gujarat. “The Supreme Court has given time till mid-November for the verdict. The hearing for the case has been completed and we have reserved the judgment and should come out in the next 10 days,” a senior CERC official said. Experts said the Mundra project became loss making after Indonesia issued new regulations that raised the price of coal, while rupee depreciation added to the woes of the project. Mistry had alleged in his note that the Mundra project was a drain on Tata Power’s finances and carries the risk of considerable future impairment. Tata Power has not stopped operations at the plant but has sought a rise in tariff for electricity it generates. The Mundra plant, being operated by Tata Power subsidiary Coastal Gujarat Power Ltd, is presently operating at 70-80% capacity. Association of Power Producers Director General Ashok Khurana said, “Cost under recovery in case of Mundra is result of flawed design of bidding documents as no amount of human ingenuity can take correct call on movement of coal prices for 25 years and non-recognition of change in law in coal source country as force majeure. The same has been accepted by Aptel in its recent judgement.” The Appellate Tribunal for Electricity (Aptel) in April allowed Tata Power and Adani Power’s imported coal-based power plants at Mundra in Gujarat to recover higher fuel costs from consumers under force majeure clause. It directed the CERC to look afresh in the compensatory tariff. Consumers of the project moved Supreme Court against the Aptel order. The Supreme Court has asked CERC to present its verdict by November mid-week. The apex court is set to hear the matter by the end of next month. CERC had in April 2013 allowed CGPL, Tata Power’s unit operating 4,000mw Mundra UMPP, and Adani Power’s 1980mw plant to raise power tariffs from the projects to compensate for an unexpected increase inrecoal cost due to change in Indonesian law. In February 2014, the commission decided 52 paise per unit compensatory tariff for Tata Power’s plant and 41paise per unit for Adani Power’s project. Five procuring states of the two projects moved Supreme Court that stayed the compensation and referred the matter back to Aptel. The tribunal upheld the tariff, which was challenged again by the distribution companies. This time Aptel ruled that CERC cannot alter tariff of projects bid competitively and that the case fell under the ambit of force majeure. Jenissi Management Consultants partner Dipesh Dipu said Tata Power miscalculated the sovereign risk of coal sourcing from another country. “Tata Power bought stake in Indonesian coal mines but that was offset by changes in Indonesia coal regulations and steep rupee depreciation,” he said. Matt Benning Womens Jersey
Promise of 24-hour power on Diwali goes unfulfilled in UP
Lucknow Electricity Supply Administration failed to ensure 24-hour power supply as promised in all localities of Lucknow on Diwali. Local faults and technical problems led to power outages in several places despite maintenance work on various sub-stations ahead of the festival. The control room set up by Lucknow Electricity Supply Administration received 18 complaints of interruptions in power supply on Sunday and Monday. More than 10,000 residents of Gomtinagar Extension went without power supply for nearly five hours on Diwali day and on Monday. It was the fault in the cables supplying power to the area which led to disruption on the festival day. The day after, however, Lesa clamped a shutdown to resolve the problem. Disruption in supply due to excess load was a big reason various localities faced power cut. Aashiana and LDA Colony on Kanpur Road faced short power cuts at least twice on the day of Diwali. Nishatganj faced a half an hour power cut on Diwali day. “Next day, power was cut for an hour,” said resident Ashok Verma. A transformer fault in Rajajipuram led to sudden power cut on the festival day but supply was restored shortly. “We heard the transformer blast but the supply resumed on its own,” said resident Om Prakash Sharma. Vernon Hargreaves III Authentic Jersey
Next LNG importing giant Pakistan readies for buying spree
Pakistan LNG Ltd has launched a mid- and a long-term tender to purchase a combined 240 shipments of liquefied natural gas (LNG), the company said on its website, as the country emerges to become a major gas importer. Pakistan, which can only meet around two-thirds of its gas demand, is expected to issue further tenders seeking twice as much supply to fill out remaining capacity at its new import terminal at Port Qasim, in the commercial capital Karachi, according to one Pakistani energy expert. The mid-term tender covers a period of five years and calls for 60 shipments, while the long-term tender is for 15 years and 180 cargoes, according to information presented in the tender documents released on the company’s website on Tuesday. Suppliers must submit bids by Dec. 20. Pakistan has ploughed billions of dollars into LNG infrastructure, including the construction of a second LNG import terminal and pipelines linking Karachi with Lahore in the Punjab region, the nation’s industrial heartland. The current crop of tenders are a small part of Pakistan’s projected demand as the country works to bring two more import terminals online within the next couple of years, making it a potent force in global gas markets. The country first began buying LNG last year and has already contracted supplies from trading firm Gunvor and Qatargas, the world’s biggest LNG producer. Cheap gas is tempting out new importers from the Middle East to Africa and Asia, helping stave off a deeper price rout hurting producers’ bottom lines. Cheaper than fuel oil and cleaner-burning than coal, LNG suits emerging economies racing to bridge electricity shortfalls and support growth on tight budgets. The Port Qasim LNG terminal, which is due to go online in mid-2017, has a capacity of 600,000 million cubic feet per day. “This tender is for 200 million cubic feet. That means another 400 million will need to be tendered out soon,” said the industry source. A Pakistan LNG official in September said the country was working on commercial as well as government-to-government LNG deals. Tom Rathman Womens Jersey
IOCL, FCIL & HFCL roped in to revive three ailing fertilisers units
Indian Oil Corporation (IOCL), Fertiliser Corporation of India (FCIL) and Hindustan Fertiliser Corporation of India (HFCL) were roped into the joint venture to revive Sindhri and Gorakpur urea units of Fertiliser Corporation of India. This joint venture will also revive the Barauni unit of HFCL, it has been recently decided. Initially, NTPC and Coal India formed a 50:50 joint-venture to revive the Sindhri and Gorakpur fertiliser units. Subsequently, on the direction of the government, three new shareholders were inducted into the special purpose vehicle formed which will also revive the Barauni unit along with the Sindhri and Gorakpur units. According to a notice issued by Coal India, the joint venture will have a revised shareholding pattern in which Coal India, NTPC and Indian Oil Corporation will hold 29.67% each while FCIL and HFCL will hold the remaining 10.99% in the special purpose vehicle which has been christened According to sources, three cash rich PSUs, IOCL, CIL and NTPC will cough up around Rs 50 billion in the form of equity in the special purpose vehicle to deliver on promises made by Prime Minister Narendra Modi in Uttar Pradesh, Bihar and Jharkhand. Revival of the three plants will require a total investment of Rs 180 billion. According to the deal the existing defunct units at these locations will be scrapped and new ones would be set up. “Equity infusion in the proposed special purpose vehicle would be around Rs 1600 each by IOC, CIL and NTPC while FCI may cough up Rs 5 billion in the projects which is expected to be ready in three-four years. Each units is expected to cost Rs 60 billion. They would be gas based will be supplied by GAIL India,” a senior official from one of the PSUs said on condition of anonymity. Edinson Volquez Authentic Jersey
Shell beats profit forecasts, targets lower 2017 spending
Royal Dutch Shell reported an 18 percent rise in third-quarter profit on Tuesday, lowering next year’s capital spending to the bottom of the expected range as it grapples with persistently low oil prices and weak refining margins. The Anglo-Dutch oil major, whose acquisition of BG Group transformed it into the world’s top liquefied natural gas producer, has been under pressure from shareholders to cut annual spending to ensure it can maintain its dividend given the slow recovery in the oil prices. “Lower oil prices continue to be a significant challenge across the business, and the outlook remains uncertain,” Chief Executive Officer Ben van Beurden said in a statement. Shell’s “A” shares were up 3.4 percent shortly after the opening of trade in London. Shell said its 2017 capital spending was expected to be at around $25 billion, at the bottom of the range previously given. This year’s capex will be around $29 billion, down from a combined $36 billion for Shell and BG Group in 2015. Net income in the quarter, based on a current cost of supplies (CCS) and excluding exceptional items, rose to $2.8 billion, beating analysts’ expectations of $1.71 billion. Shell disappointed the market with its second-quarter results, the first full quarter following the completion of the BG acquisition in February, by missing expectations by around 50 percent. Shell’s Integrated Gas division generated $931 million in profits, slightly above last year’s level, while oil and gas production division, known as upstream, was virtually flat. The refining and trading division, or downstream, once again offered support with a profit of $2.01 billion, although this was down from $2.6 billion a year ago. RBC Capital Markets analyst Biraj Borkhataria said there was “room for Shell to outperform its peers in the near term” following the solid results. BP on Tuesday also beat earnings expectations, trimming its 2016 capital spending by another $1 billion. Other rivals, including Exxon Mobil and Chevron, reported sharply lower in quarterly results last week due to lower oil prices and weaker refining margins. Peyton Manning Jersey
India bets on LNG fuelling stations
As part of its strategy to reduce emissions, India is betting on liquefied natural gas (LNG) to fuel its road transportation sector. The clean fuel promotion attempt involves exploring setting up of LNG filling stations. This comes in the backdrop of India’s petroleum and natural gas ministry planning a pilot programme on LNG-run vehicles in Kerala. Going forward, the strategy is to fuel long-haul commercial vehicles and trains with LNG. “We are confident that the pilot project will have desirable results after which we shall begin work on its filing stations across India,” said a petroleum ministry official requesting anonymity. Another government official, requesting anonymity, confirmed the strategy. LNG is transported in ships with a regasification terminal required to convert the fuel to gas. India has a regasification capacity of 25 million tonnes per annum. In order to meet India’s gas demand, the government plans to increase the country’s LNG import capacity to at least 50 million tonne in the next few years. Queries emailed to a petroleum ministry spokesperson on 28 October remained unanswered. India in June launched a programme to run two-wheelers on compressed natural gas. The National Democratic Alliance (NDA) government plans to move towards a gas-based economy, in sync with its commitment made by ratifying the Paris climate change deal to reduce carbon footprint. “This is being done to promote the usage of clean fuel in the country. India has been looking to shift to relatively cleaner sources of fuel and this falls in lie with the same,” said Sanjay Grover, partner at EY, a consultancy. According to a June report by the World Health Organization, half of the world’s most polluted cities are in India, including the capital city of New Delhi. The NDA government has been working towards expanding the country’s gas grid with a target of providing piped domestic cooking gas connections to every household in eastern India by 2020. It is also planning to set up multiple bio-compressed natural gas plants in the country. However, natural gas currently contributes 6.5% to India’s energy mix, though the government plans to raise the contribution to 15%. India’s natural gas demand is expected to grow from 473 million standard cu. metre per day (mscmd) now to 494 mscmd in 2017-18 and 523 mscmd in 2018-19. Brock Osweiler Womens Jersey