Government appoints new NHAI Chairman
The government has appointed Yudhvir Singh Malik as the Chairman of National Highways Authority of India (NHAI). Malik, an 83 batch Haryana cadre IAS officer, was earlier posted as special secretary in Niti Aayog. The outgoing chairman Raghav Chandra, an 82 batch Madhya Pradesh cadre IAS officer, has been moved to the National Commission for Scheduled Tribes as secretary. Malik will have a huge task at his hands meeting government’s ambitious road construction target of 10,000 km for the current year. Malik will also have to get the work started on the Delhi-Meerut expressway. Prime Minister Narendra Modi has been personally monitoring this project and has already told the roads ministry to finish the work within the timeline of two years. The NHAI has a budgetary funding of Rs 22,000 crore and has been given permission to raise bonds worth Rs 50,000 crore. In the current year, the authority plans to undertake highway construction works of around Rs 70,000 crore. Rick Leonard Womens Jersey
Demonetisation drives 70percent trucks off India’s roads says transport union
Kultaran Singh Atwal, a transporter, owns seven trucks. Now, he says, he is forced to keep five of his fleet idle due to demonetisation, as he has been deprived of the minimum Rs 20,000 cash per truck per trip that he requires as running expenses. Atwal is not an exception. There are many like him. With the government’s curbs on withdrawal of money and exchange of old Rs 500 and Rs 1,000 notes, the motor transport business is suffering, since 80 per cent of the business is cash-based. The All India Motor Transport Congress (AIMTC) — a representative body for 9.3 million truckers, and more than five million bus operators, tourist taxis and maxi cabs — says 70% of the vehicles of their members are already off the roads. The association warns that if the situation is allowed to persist not only the supplies of essential commodities like milk, fruits, vegetables and medicines will get increasingly affected but it will also cripple the lives of 20 crore people directly or indirectly dependent on this industry. “Under the Finance Act, I’m allowed Rs 35,000 per truck per trip in cash for expenses on diesel, octroi, etc.,” Atwal, who is the Chairman of AIMTC, told IANS. “How can I survive when there is an overall withdrawal limit of just Rs 50,000?” he queries. “The government must hike the withdrawal limit or allow cheque-based transactions in our sector.” Echoing similar sentiments, Bal Malkit Singh, advisor and former President of AIMTC, says: “Our operations are getting badly affected as the withdrawal limit of Rs 50,000 that we have been given is very little.” What is happening in the process is the supply chain has been hit. “Movement of products is slowing down. Supplies of essential commodities like food, pulses or any export consignment is either getting slow or even coming to a halt in some places.” What the truckers association has sought to drive home is that this industry contributed 4.8% to the country’s gross domestic product in 2015-16, which amounted to Rs 544,800 crore. This is a little over Rs 1,492 crore daily. With 80% of the transactions in cash, Rs 1,194 crore is what the industry needs daily to sustain operations — the bulk of which is just not available today. The fortunes of truckers is also linked to that of the trading business in India, which is facing its own set of woes. With bulk purchases in mandis almost drying up, delivery of products also becomes redundant. “The lack of cash flow in the markets is equally affecting us traders and the transport sector as well, since both these businesses totally function on cash,” said Praveen Khandelwal, Secretary General of the Confederation of All India Traders. “Our businesses have seen an overall drop of 75% due to the demonetisation. There is a lack of money flow in the markets,” Khandelwal told IANS. “After demonetisation, around 60 per cent of freight is not in movement,” added Naveen Gupta, the association’s Secretary General. Gupta said there is also a sharp drop in long-haul movement because, apart from diesel and tolls, all the other expenses, like the daily expenses of drivers, local taxes are also paid in cash. “The ones plying are the short-haul vehicles, which are either running on diesel bought with leftover old currency and because there is an exemption on tolls,” Singh added. Danny Woodhead Womens Jersey
With Nitin Gadkari big targets in sight, NHAI seeks Rs 60,000 cr borrowing limit in FY18
The ministry of road transport and highways has sought a borrowing limit of close to R60,000 crore for the National Highways Authority of India (NHAI) for 2017-18, roughly the same as the ceiling for the current year. The borrowing limit is sought to be maintained despite NHAI having raised just R12,500 crore in the current fiscal — R2,500 crore through tax-free capital bonds and R10,000 crore through taxable bond from Employees Provident Fund Organisation (EPFO). Last fiscal, it raised R19,000 crore taxable bond and R5,000 crore through tax-free bonds. Incidentally, NHAI’s project awards have also been slower during the April-October period of the current fiscal. Compared with the 2,615-km project awards in the April-October period of the last fiscal, it has awarded 2,330 km in the first seven months of the current year. NHAI had awarded 4,344-km highway projects in 2015-16 and 3,067-km in 2014-15. Asserting that there was no paucity of funds for awarding projects, an official said delays in land acquisition have been coming in the way. NHAI awards projects only after acquiring 90% of the required land. NHAI acquired 9,000 hectares of land in 2015-16 against 6,750 hectares in the previous year. For the current fiscal, it is targeting to acquire 10,000 hectares. The cost of land acquisition stands at an average of R2.13 crore per hectare compared to R1.35 crore per hectare in the last fiscal. Land acquisition now accounts for 40-45% of the total project cost. “Funds could be raised as and when required,” the official said, adding that the authority has sufficient funds to carry out project awards. In 2014-15 and 2015-16, NHAI had constructed 1,501 km and 1,987 km, respectively. The road transport and highways ministry has asked NHAI to award 15,000 km and construct 8,000 km highways in the current fiscal. Borrowings apart, NHAI’s major source of funds is the highway cess, the proceeds from which would go up from R9,566 crore in 2014-15 to R25,356 crore in 2017-18. It also hopes to plough back tolls collected from projects to the tune of R8,596 crore in 2017-18 for building new highways. Firmly poised to achieve its ambitious targets on road construction, the ministry of road transport and highways will ask for budgetary allocation of R91,000 crore for 2017-18, up 57% from the current year’s outlay, which the ministry is set to overshoot by about R4,500 crore. Road transport and highways minister Nitin Gadkari has set ambitious targets of awarding highway projects of 25,000 km and building 15,000-km long roads during 2016-17. Josh Gordon Authentic Jersey
‘Power storage services, next in renewable energy sector’
Chairman of the Telangana State Electricity Regulatory Commission (TSERC) Ismail Khan said provisions related to ancillary/capacity services and the regulatory framework for the same need to be incorporated into the new Electricity (Amendment) Bill. Delivering the keynote address at the ‘Conference on Clean Power and Energy 2016’ jointly hosted by Confederation of Indian Industry and British Deputy High Commission, Hyderabad, here on Wednesday, Mr. Khan emphasised the need to update the regulatory framework to keep pace with technological upgradation in the energy sector. The Indian government’s ambitious target of achieving 175 gigawatts of renewable energy capacity by 2022 comes with a challenge to the grid security, as the renewable energy is not dependable owing to unpredictable changes in climatic conditions, Mr. Khan said. Storage of energy is one option to maintain grid security and stability. Development and innovation of storage services will require upgrading of regulatory framework. While energy storage is not a new concept, and being used for a long time in the form of hydel and gas-based power generation, the time lag in both cases to pump to grid is longer when compared with the battery storage. As of now, the renewable energy capacity of the country is very low, but as it grows, changes need to be brought in at policy levels. While Andhra Pradesh has taken some initiatives in this direction, Telangana is yet to adopt the technology, Mr. Khan said, and suggested a pilot project for storage of solar power which could serve as model project for future developers. British Deputy High Commissioner Andrew McAllister, in his special address, spoke of the strides made by UK in the renewable energy sector, and said 13 per cent of the country’s capacity is in this sector. It is aimed to be increased to 30 per cent by 2030. “As part of the ecosystem that supports the uptake of renewable energy, energy storage solutions are very important as they offer flexibility and reliability to the gird system,” Mr. McAllister said. Senior policy analyst of the Renewable Energy Association (REA) Frank Gordon, in his address, delineated the technologies of energy storage. O. J. Howard Womens Jersey
CERC for change in power transmission bid rules
To expedite development of the power transmission network and avoid delay, the Central Electricity Regulatory Commission (CERC) has emphasised to the Power ministry the need to give out large projects, instead of breaking these into parcels. This comes in the wake of increasing numbers of petitions, arguing over the dates of commissioning, incentives and the delays. In a letter dated October 14, to the ministry, the commisison has highlighted these issues. As there is no benchmark for implementation of a project, the network operator also misses on the chance to earn incentives for early commissioning, the letter is being reviewed by Business Standard. Suggesting a way forward, CERC said large projects, not components of large projects, should be awarded. “In the case of a new transmission network, splitting into components and award through tariff (rate)-based competitive bidding (TBCB) complicates the execution. Therefore it is advisable to identify the entire network for developmemnt through TBCB, instead of comparatively smaller elements, commissioning of which depends upon commissioning of all upstream/downstream elements,” said the letter. The commission has also asked the government to include an implementation agreement in the bidding guidelines, to improve coordination between developer and bid process manager. The government had issued an order in July 2015 that transmission projects won under TBCB and those awarded to Power Grid Corporation of India for system strengthening would be eligible for transmission charge from the date of commercial operations, even if ahead of schedule. The first to so come early was, the transmission project of Rajasthan Atomic Power Project (RAPP), owned and managed by Sterlite Grid, commissioned in January 2016. CERC has asked for incorporating the incentive in the bidding documents and implementation agreement. And, that all the disputes should be settled through the implementation agreement. Power ministry officials said the advice was being examined and some of the suggestions had already been incorporated in the new bidding documents. Butch Goring Authentic Jersey
Need direct benefit transfer scheme for power sector: Amitabh Kant
India needs to introduce a direct benefit transfer (DBT) scheme for the power distribution sector on the lines of the one that is on for cooking gas cylinders, NITI Aayog CEO Amitabh Kant has said. “Everyone must pay for electricity,” Kant said on Wednesday at a conference organised by India Energy Forum. He said unless metering is done at the lowest levels, the power sector will not survive. Kant said radical restructuring is important for the power sector to create wealth so that people invest in it. He said in long run, the power distribution sector should be privatised. “Either they perform or perish. Ruthless action is required,” Kant said. He said a new ecosystem of independent electricity regulators is the need of the hour. Landon Collins Jersey
Low power generation capacity utilisation to continue in 2017
Low power generation capacity utilisation will continue in 2017 on higher generation capacity and only gradual recovery of state-owned distribution utilities, expects Fitch. Fitch Ratings believes sustained improvement in distribution companies’ financial profiles will hinge on the gradual reduction of network losses. Generation and transmission utilities will in turn benefit from timely clearance of dues and higher utilisation rates. It predicts that state distribution companies struggling with years of cash losses will have breathing space in 2017, with 16 states and a union territory signed up for voluntary financial and operational restructuring of their distribution utilities. Tri-partite agreements that allowed central government-owned utilities – NTPC, NHPC and Power Grid Corporation of India Ltd – surety to ensure collection of dues from the distribution companies lapsed in October 2016. There is no clarity yet when or which, if any, of the agreements will be extended. Any consequent increase in receivables for the utilities would be credit negative. Fitch expects state utilities to have large capex requirements in 2017. This will lead to only marginal improvement in their credit metrics. However, Fitch expect the ratings to remain stable. The linkages with the sovereign also provide a rating buffer for these entities. NTPC, NHPC and PGCIL will benefit from regulatory certainty under the current five-year tariff period through end-March 2019. Most of the investments in the next few years will be under the traditional cost-plus model, providing companies with greater security on returns. However, new projects – both thermal generation and grid – in India will be offered through a competitive bidding mechanism. Fitch also expects greater private-sector participation in grid assets as more projects are tendered, although PGCIL will account for more than two-thirds of new capacity investments. It expects rated companies – PGCIL, Adani Transmission Limited and NTPC – to bid prudently for new projects under competitive bidding. Interest and investments in renewable energy will continue, supported by government policy initiatives. However, bidding discipline – especially in solar – remains an issue. “We expect electricity prices to continue to hover at their low levels in 2017. This will be driven by high generation sent out from power stations, continued grid congestion and poor financial health of the distribution companies limiting off-take,” the Fitch report said. Fitch expects issuers, including smaller renewable players, to continue to tap offshore markets to diversify their funding sources and take advantage of potentially lower interest rates. This will free up bank facilities as well. Nevertheless, a failure to rehabilitate the distribution companies would be negative for the whole electricity sector. Any increase in receivable days for power generators and transmitters would be negative for the financial profiles of these entities. Shea Weber Womens Jersey
NITI Aayog CEO says discoms need to be privatised to increase efficiency
NITI Aayog Chief Executive Officer Amitabh Kant today said government owned power distribution companies were largely inefficient. Talking at the India Power Forum, Kant said in order to increase the efficiency, power discoms needed to be privatised. Kant also criticized the various policies launched by different governments to bail out the discoms for the acute cash crunch. “Many policies have come, Ujjwal, UDAY…But in order to increase efficiency, discoms need to be privatised,” Kant said. He further added efficiency of discoms will increase only when when there will be a reduction in aggregate technical and commercial (AT&C) losses. He said use of net metering could provide a solution to the problem of high AT&C losses. He, however, highlighted the issue of discoms not being able to charge users properly for the electricity they are consuming. He suggested introduction of direct benefit transfer (DBT) in the power sector for targeted electricity subsidy. Adding to that, Kant said with the growing installation of renewable energy across the country and a global pressure to cut use of coal, India should also give up using diesel. He said along with a push for renewables, cutting diesel usage would help the environment. Adam Lowry Authentic Jersey
Airlines slash fares post Centre’s demonetisation move, offer heavy discounts
The Narendra Modi government’s decision to ban old currency notes of Rs 500 and Rs 1000 has affected the aviation sector with the sale of air tickets declining by 10 percent. In order to cope up with the decline in the airline bookings after the government’s demonetisation move, several domestic passenger carriers have slashed the airfares and offered special discounts for a limited period. Several domestic airlines made surprise announcements in this regard on Tuesday and Wednesday, which assumes significance as they have been made during the peak travel season. Buffalo Bills Authentic Jersey
Kullu airport inducted under UDAN scheme
The Kullu-Manali Airport at Bhuntar has been included under UDAN (Ude Desh Ka Aam Naagrik) scheme by the Airports Authority of India (AAI). UDAN was launched by the government last month and it seeks to connect small cities by air as well as make flying more affordable for the masses. Kullu Airport Director AN Sharma said the AAI had called for open bidding from all interested stakeholders, including airlines, on the government’s regional connectivity scheme UDAN. The Kullu Airport and many other airports throughout the country having less than seven flights a week were included under the scheme. Airfare of Rs 2,500 or lower is to be offered for flights of less than one-hour duration. The scheme is a market-based mechanism in which airlines bid for seat subsidies through auctioning. Operators will assess demand on routes and submit proposals for operating and providing connectivity on such routes and seek Viability Gap Funding (VGF), if any, while committing to certain minimum operating conditions, Sharma stated. So far only national carrier Air India was plying daily flights from Delhi to Kullu. With the inclusion of Kullu Airport under UDAN scheme, other airlines would be encouraged to conduct operations on this sector. Air India would also offer lower airfares after other operators start scheduled operations and offer UDAN seats, AN Sharma added. Trent Taylor Authentic Jersey