National highway authority of India invites request for proposal
The National Highway Authority of India (NHAI) has invited request for proposal (RFP) to widen the Thalassery-Mahe bypass under engineering, procurement and contract (EPC) basis.The new road is expected to provide better connectivity in the Kannur-Kozhikode stretch. The NHAI has invited RFP for widening the 17.6km stretch to 45 metres. The work has to be completed in 2.5 years. The project has a 4-year maintenance contract. Under EPC mode, the contractor will be paid Rs 813.66 crore as lump sum grant. The NHAI will collect this money through toll booths once the work is completed. Prospective bidders have been given time till January 15 to submit proposals. The Thalassery-Mahe bypass connecting Azhiyoor and Muzhappilangadu has been a long pending demand of the local residents. The land acquisition for the project began almost 35 years ago. The new stretch could bring better connectivity and is expected to solve traffic issues in Mahe and Thalassery . The land acquisition was completed in Kodiyeri. Distribution of compensation for the acquired land is progressing at Chokli and Azhiyoor. However, land acquisition in a small stretch in Mahe is stuck after differences with regard to compensation. NHAI can proceed with work once 60% of land is acquired. Rod Gilbert Jersey
Demonetisation: ICRA pegs revenue loss from toll collections suspension in first 10 day at Rs 460 cr; road project debt servicing under lens
The debt servicing ability of road projects would be under strict watch over the next few months, as the impact of demonetisation on the cash flows becomes clear, say credit rating agencies. Although the National Highways Authority of India (NHAI) has authorised its regional officers to make payment covering 90% of the interest amount provided in the financial/refinancing package to the concessionaires on submission of the required documents, this would remain inadequate, say analysts. Shubham Jain, vice president, ICRA said, “Unlike annuity road projects, wherein the principal repayment falls due on semi-annual basis, majority of the toll road projects have monthly debt-repayment frequencies. With only interest cost and operations and maintenance expenses getting compensated, the compensation will be inadequate from the debt servicing point of view, unless the project has DSRA or other cash reserves to fall back on”. However, Jain said that the projects with DSRA constitute a very small percentage of the operational projects and hence the credit impact on the sector can be substantial. Jain told FE that there might be instances where concessionaires missed their November payments. “We are monitoring these developments and there could be some rating actions over the next one week,” he said. In a statement last Friday, ICRA observed that the proposed compensation mechanism based on O&M and interest costs, could lead to disputes with developers given the huge revenue loss for them. Last month, the rating agency had pegged the loss in toll revenues resulting due to demonetisation at Rs 460 crore for the first 10 days of stoppage of toll collection. This was for around 115 toll projects having an average daily collection ranging around Rs 40 lakh. “The loss owing to 23 days of no toll collection would have crossed Rs 1,000 crore,” Jain added. Meanwhile, there is still lack of clarity over how long will it take for the compensation to reach the developers. Ajay Srinivasan, director, CRISIL Research said there is still no clarity over when will NHAI compensate the road developers. “The loss of toll revenues for the month when the toll collections were stopped will pose a constraint for road projects. Therefore, actual timing of release of payments from the authorities for the loss of cash flows of projects is what we are watching out for at the moment”. The developers will apply for compensation under the change in law provision provided in the concession agreements and may also ask for extending the concession period by the number of days such change was applicable. However, in times of uncertainty sponsors’ ability to bail out the project from cash flow shortfall to meet its debt repayment obligations will be tested. Given that a significant number of projects continued to languish despite the uptick in traffic seen in the last two years, not many sponsors will be in a position to support the projects if required. A recent report by CARE Ratings suggested that quantum of sponsor support required in FY17 is expected to increase to some extent in 43% of the 67 operational projects with outstanding debt of around R15,150 crore and length of 12,000 lane kilometres. Further, 28% projects with length of 3,700 lane kilometres and debt of R6,900 crore are owned by sponsors with moderate to weak credit quality and will require sponsor support. However, apart from the short term pain, the impact of slowdown in economic activity post-demonetisation is likely to constrain the cash flows of these roads for a bit longer, say analysts. Srinivasan said that whether the developers can claim the impact of demonetisation on the lower commercial vehicle traffic under change of law provision is also being looked into by the developers. There are already indications that the toll collection growth will be much lower compared to the last two financial years. CARE Ratings observed that the toll collection growth is likely to be moderated to 6-7% in the financial year ended March 31, 2017 due to subdued economic activity post demonetisation. This is in stark contrast to the growth of 11% and 11.25% witnessed in average daily toll collections during FY15 and FY16 respectively despite subdued hike in toll rates. Darren Woodson Jersey
India saved Rs 4,866 crore through energy efficiency measures last fiscal
The Indian industry saved more than Rs 4,866 crore through adoption of energy efficiency measures last financial year, the power ministry informed today. The top entities who took part in the efficiency drive will be felicitated in a function by power minister Piyush Goyal on Wednesday. The ministry said Goyal will inaugurate the National Energy Conservation Day here and felicitate winners of the National Energy Conservation Awards and National Energy Conservation Painting Competition 2016. “The participating entities for the 2016 energy awards have collectively invested Rs 5,111 crore in energy conservation measures and achieved monetary savings of Rs 4,866 crore in a short period of 13 months. These entities have also saved 7,378 million units of electricity which is equivalent to the energy generated from a 1,352 Megawatt thermal power plant,” the power ministry said in a statement. The awards are organised by the Bureau of Energy Efficiency (BEE) and recognise industrial establishments which have taken effective measures to conserve energy and students from across the country who paint ideas for energy conservation. The entities which have sent their entries for the awards this year include industrial units, offices, hotels, hospitals, zonal railways, railway stations including metro stations, manufacturers of BEE star labelled appliances, thermal power stations, universities, electricity distribution companies and financial institutions. The ministry said more than 11.4 million students from across the country participated in the school painting competition this year – 8 per cent more than last year. Goyal will also give away National Energy Conservation Awards 2016 including three Top Rank Awards, 43 First Prizes, and 48 Second Prizes to establishments for best energy conservation technologies and practices. Austin Hooper Womens Jersey
Kalpakkam nuclear power station to be shut for three days due to Vardah
The atomic power station at Kalpakkam, located 75km from Chennai, has shut down both its units due to cyclone Vardah. They will be back into service in about three days, said Madras Atomic Power Station (MAPS) station director R Satyanarayana on Tuesday. On Monday, both the units were functioning normally till power lines tripped one by one, said a press release, adding: “Yesterday, both the units were operating normally and generating power of 180MW each. On receipt of cyclone warning, all preparatory actions have been taken and the Station Cyclone Protection Committee has been activated to continuously monitor and oversee the arrangements.” As the wind speed was very high that is 100km per hour, the 230KV power lines tripped one by one, it said, adding, “as the power evacuation from station was not possible, both the units were brought to safe shut down state. After normalization of all 230KV power lines, the units will be brought back into service in about three days.” Eddie Vanderdoes Authentic Jersey
CNG buses cheaper, efficient & last longer, insists Gail Gas
Rebuts BMTC’s argument that eco-friendly vehicles cost more Gail Gas Ltd has issued a point-by-point rebuttal of the objections raised by the BMTC before the state government on inducting CNG buses in its fleet. Two public sector undertakings — Bangalore Metropolitan Transport Corporation (BMTC) and Gail Gas Ltd — are locked in a dispute over running Compressed Natural Gas (CNG) buses in the city. Gail Gas Ltd has issued a point-by-point rebuttal of the objections raised by the BMTC before the state government on inducting CNG buses in its fleet. The effective running cost of CNG buses is about 20% lower than that of diesel buses, Gail Gas, which is a subsidiary of Gas Authority of India (Gail), stated in its recent power-point presentation to the Infrastructure Development Department. In a detailed proposal, the BMTC maintained that the operating and maintenance costs of CNG buses are higher than those of diesel buses, and listed several challenges in running them. The BMTC’s arguments shocked Gail Gas which has already set up CNG filling stations in Bengaluru. It is banking on the BMTC to make profit. It has won the contract to supply CNG and Piped Natural Gas (PNG) to Bengaluru Urban and Rural districts. According to Gail Gas, the BMTC calculated the operating cost by considering the CNG price at Rs 50 per kg, but the actual price is Rs 42.50. It questioned the data obtained by the BMTC from Brihanmumbai Electric Supply and Transport (BEST) and the Association of State Road Transport Undertakings. The BMTC quoted BEST as saying that the operating cost of CNG vehicles is higher in the longer run. BEST, which has a fleet of 2,970 CNG buses, also informed the BMTC that the mileage of its CNG buses is 2.64 kmpkg on average. Gail Gas has disputed this claim, saying BEST’s fleet includes many retrofitted buses (CNG engines fitted to normal buses) and that’s why their mileage is poor. It has asked Karnataka to consider the data of Pune Mahanagar Privahan Mahamandal Ltd (PMPML) where the average mileage is 3.75 kmpkg. The PMPML has been operating 574 new CNG buses, Gail Gas said. Though the capital and maintenance costs of CNG buses are higher than those of diesel buses, the additional cost can be recovered within one-and-a-half-years (250 km per day and 330 days per year), Gail Gas stated. Gail Gas general manager (projects) Partha Jana said the company had clarified all issues raised by the BMTC. CNG buses are not only cost-effective but also environment-friendly. Various reports have proved that the emission levels of Bharat Stage IV CNG buses are close to Euro IV levels. The company hopes the government will agree to run CNG buses, he added. Wesley Woodyard Womens Jersey
BP to partner Reliance to open petrol pumps
Oil major BP plans to open petrol pumps in the country in a joint venture with Reliance Industries and bring in innovative strategies to capture the market dominated by state-owned companies. “We are partners and are looking at all possible options. We have been discussing the retail foray,” sources said. BP is RIL’s partner in its exploration, production and gas-sourcing businesses. In February 2011, London-based BP had bought a 30 per cent stake in 21 oil and gas production-sharing contracts operated by RIL for $7.2 billion. RIL and BP are also partners in India Gas Solutions, an equal joint venture for sourcing and marketing gas in the country. Besides, BP sells automotive and industrial lubricant brand Castrol in India. In January this year, BP got in-principle approval to sell aviation turbine fuel in India. The global giant has also got in-principle approval and licence to set up 3,500 fuel outlets. RIL holds licences to set up 5,000 fuel outlets. So far, it has set up about 1,500 filling stations, of which over 1,000 are operational. Industry sources said several marketing options were being considered to capture the fuel retail market. Apart from dynamic pricing, the company is looking at the option of setting up motels, convenience stores and café with WiFis. Also, to cater to commercial goods transporters and truckers, highway pumps will have resting and eating places and vehicle servicing outlets. Within the city, there are plans to introduce dynamic pricing, which means the cost of a product could be flexible. Analysts said the entry of new players in fuel retailing will soon cause a price war at petrol pumps, benefiting consumers of petrol and diesel in line with the prevailing international practice. Arbitration drill The government is considering joining the arbitration initiated by RIL and its partners against a $1.55-billion demand raised on Reliance for “unfairly enriching” itself by producing natural gas belonging to ONGC. “We have received the notice and are studying it. We will take an opinion of the law ministry on joining the arbitration,” a senior oil ministry official said. Bobby Hart Authentic Jersey
Swan Energy gets nod for Rs 56 billion floating LNG terminal
Nikhil Merchant-led Swan Energy today said it has received approval from the Gujarat Maritime Board (GMB) for construction of a Rs 56 billion floating LNG terminal off the Gujarat coast. “Swan Energy Ltd, through its 100 per cent subsidiary company Swan LNG Pvt Ltd (SLPL), has received approval from Gujarat Maritime Board (GMB) for commencement of construction of LNG terminal with ancillary structures for its floating storage and re-gasification unit (FSRU) project at Jafrabad, Gujarat,” the company said in a regulatory filing. Oil and Natural Gas Corp (ONGC), IOC and Bharat Petroleum Corp Ltd (BPCL) have agreed to take one million tonnes per annum capacity each on the 5 million tonnes a year floating LNG terminal. Swan Energy, which is building the project in joint venture with Exmar of Belgium, is targeting 2019 for commissioning of the one jetty-moored FSRU at Jafrabad. It plans to expand the capacity to 10 million tonnes through the deployment of a second FSRU. Merchant’s Swan Energy Ltd holds 51 per cent stake in Swan LNG Pvt Ltd – the company building the Jafrabad terminal. Exmar Marine holds 38 per cent and the remaining 11 per cent is with Gujarat State Petroleum Corporation (GSPC). Exmar is known as a pioneer in floating regasification solutions for having introduced world’s first FSRU in 2005. “SLPL has executed an EPC contract for marine and dredging work worth Rs 21.15 billion with National Marine & Infrastructure India Pvt Ltd for carrying out the construction of LNG terminal at Jafrabad, Gujarat, to be completed within 3 years. NMIPL has already started the construction works,” it said. The company had last year secured all necessary permits for the project and the state-owned firms agreed to hire 60 per cent capacity of the terminal on tolling basis for importing their own gas will help Swan take the final investment decision and tie-up project financing. ONGC and IOC own 12.5 per cent stake each in Petronet LNG Ltd, which owns and operates a 10 million tonnes a year liquefied natural gas (LNG) import terminal at Dahej in Gujarat. This terminal is being expanded to 15 million tonnes by next month. While Petronet expanded the Dahej terminal on premise of leasing out the capacity third parties, the company also has a 5 million tonnes a year LNG import facility at Kochi. GSPC is building its own LNG terminal in joint venture with Adani Group at Mundra in Gujarat by 2017. Also on the west coast is an under-utilised 5 million tonnes Dabhol LNG import terminal, operated by state gas utility GAIL India Ltd. Antoine Roussel Jersey
Top Indian Gas Utility Pushes Gazprom for LNG Price Cut
India’s biggest gas utility is seeking a price cut and other changes to a 20-year liquefied natural gas supply contract from Gazprom PJSC, the latest in a series of concessions sought by buyers amid a global gas glut. GAIL India Ltd. is pushing to overhaul the 2.5 million ton a year contract with the Russian gas giant that starts in 2018, B.C. Tripathi, chairman of the Indian state-run company, said in an interview in New Delhi. The company also plans to charter four to five LNG vessels on short-term contract as it prepares to receive U.S. LNG supplies. “It’s not only duration, it’s the price, source of supply, the terms and conditions,” Tripathi said of the supply contract Dec. 6. “There are a host of contractual issues — all these are being re-looked into.” While there are talks on “adapting the contract terms,” the deal signed in 2012 is in place and legally binding, the press service for Gazprom’s export arm said in response to a request seeking comment. No other details were provided. Its deputy head Alexander Medvedev said in July that Gazprom was in talks on the contract with GAIL and was positive over the result without elaborating. India is seeking to take advantage of the glut that has pushed prices down almost 60 percent the past three years, by renegotiating long-term contracts. Last year the country’s biggest gas importer, Petronet LNG Ltd., reworked a 25-year contract with Qatar’s RasGas Co. that resulted in prices dropping by almost half. GAIL is currently buying about 2 million tons a year of LNG on a spot basis, comprising about a fifth of its overall purchases, Tripathi said. The supply contract with Gazprom was signed in 2012. “We are seeing a change in LNG contracting mechanism, with short-term contracts growing and replacing long-term contracts,” India’s Oil Minister Dharmendra Pradhan said Dec. 6. GAIL, which was the first Asian importer of U.S. shale gas, has bought four cargoes in the spot market from Cheniere Energy Inc.’s Sabine Pass plant. The company has an agreement to buy 3.5 million tons a year for two decades from the Louisiana terminal, with the supplies expected to start in March 2018. It has also booked 2.3 million tons a year from the Cove Point LNG liquefaction terminal in Maryland, which is set to commence deliveries in December 2017. Spot LNG in Singapore increased about 16 percent from a week earlier to $8.55 per million British thermal units on Monday. LNG Freedom While U.S. LNG exports are still relatively small, they are having an impact because the contracts are tied to U.S. natural gas prices instead of crude oil that much of the LNG coming to Asia is linked to. They also allow for switching of cargo destinations — a key concern for importers seeking greater flexibility. GAIL plans to issue a tender for a short-term charter to ferry U.S. shale gas after it scrapped an earlier tender to lease nine carriers, including three to be built in India, on a long-term basis. India wants to turn the global glut of LNG to its favor as it seeks to boost the amount of natural gas in its energy mix to 15 percent by 2020 from about 6.5 percent now. “Buyers will continue to have options,” Pradhan said. Emmanuel Ogbah Authentic Jersey