DGCA asks aircraft leasing companies to pay more tax on imported planes
In what could be a blow to the regional connectivity scheme, the aviation regulator has stalled the entry of aircraft leasing companies into India by asking them to pay higher duties on imported planes. The civil aviation ministry, which has been actively pushing for air connectivity to small cities and towns, now plans to take up the matter with the finance ministry to find a solution. According to government rules, any company importing an aircraft has to inform the regulator whether it is bringing the plane for non-scheduled operations or personal use. The rule does not mandate that the company importing the aircraft has to operate it —so, a leasing company can import aircraft in its name and lease to airlines involved in commercial operations. The duty on aircraft imported for nonscheduled operation is just 2.5 to 3 per cent, but it is steeper at 19-21 per cent for those brought in for personal use. Leasing companies, which plan to import aircraft and lease them out to local operators, have sought approval to pay duties at the lower rate. But the Directorate General of Civil Aviation (DGCA) has blocked it by arguing that these companies may avail of the lower rates but use the aircraft for personal use, as there is a precedent. “In the past, we had come across violations by operators, who import aircraft on the pretext of non-scheduled operations but use it for personal use. This way, they save a lot of money by paying less duty on it,” said a DGCA official, who did not want to be named. One cannot guarantee that these aircraft would not be used for personal flights, added the official. Barring aircraft leasing companies from entering India could hamper prospects of the regional connectivity scheme, whereby the government aims to connect unserved and underserved airports. It has decided to fix fares at Rs 2,500 per hour of flight and compensate the airlines through a subsidy for operating flight which may not be commercially viable. “We had discussions on the issue. We are writing to the revenue department and get the issue addressed,” Aviation Secretary RN Choubey told ET. He said there was a need to address the tax rule for leasing companies to shift base to India. “No leasing company would come if they are asked to pay higher duties,” Choubey said. To make the regional connectivity plan a success, the government is working to make aircraft available for scheduled commercial operators — regional operators who will launch regional flights. The government has also allowed foreign-registered aircraft to be operated in India, on the request of aircraft leasing companies. The government will open the bids to operate regional flights next week and expects the flights to start in February. Till last Thursday, the aviation ministry received bids from 60 companies to operate flights on 600 regional routes. Demetrius Harris Jersey
Bangalore International Airport: State seeks security nod
Karnataka has advised the Ministry of Civil Aviation (MoCA) to issue “security clearance“ to billionaire Prem Watsa’s proposed investment in Bangalore International Airport (BIAL) in an effort to speed up an FDI proposal that has been flying back and forth between Bengaluru and New Delhi. The traffic volumes at BIAL have surpassed the projections, calling for speedy addition of a second terminal.But the delay by the Centre could be holding up key capital investment decisions at the BIAL due to the uncertainty the indecision has created, people aware of the development said. Watsa’s Toronto-based Fairfax Group had, in March last year, announced its decision to buy a 33% stake in BIAL from GVK Group for Rs 2,182 crore ($321 million), valuing the eight-year-old airport at about Rs 6,600 crore. A month later, Fairfax signed another deal to buy 5% stake held by Flughafen Zurich AG in BIAL. The investment proposal, however, has been hanging fire with MoCA seeking one clarification after another from the state, conveying an impression that decisions over FDI proposals consumed their usual time despite the Centre’s claims of speedy clearance. Technically, a state government has no say in matters relating to security clearance to a foreign investor as it depends more on the relationship between two countries. Karnataka had declined to of fer an opinion on the grounds that the subject fell completely in the domain of the Ministry of Home Affairs. The BIAL had, on May 11, 2016, wrote to MoCA requesting that “security clearance“ be given to new investors. The MHA, for its part, communicated its nod to MoCA sometime ago, which chose to vet the FDI proposal further, and insisting on an opinion from Karnataka on security as well as other issues. The state had declined an opinion in the past, but has now chosen to advise the MoCA to communicate the MHA nod to BIAL. The MoCA ‘s delay on Watsa’s investments in airport sector has raised eyebrows because his Toronto-based group is an existing investor in India with stakes in Thomas Cook and Quess Corp. Just a few days ago, the RBI approved another investment proposal from Fairfax to pick up 51% in the Kerala-based Catholic Syrian Bank. “I don’t understand why the MoCA should drag the subject so much because Watsa is person of Indian origin who is running successful businesses in Canada and other countries,“ said R.Ramakrishnan, a practising chartered accountant. The Bengaluru airport recorded the largest growth at 22.4% in passenger and cargo traffic in the January-September period compared to other large airports by handling 11million passengers. Nevertheless, the BIAL is yet to take a call on award of contracts like airport operations, management and services possibly awaiting clarity on the fate of the FDI proposal. Randall Cunningham Womens Jersey
New Rules For On-Time Performance
Aviation regulator DGCA is preparing fresh guidelines for block hours, a yardstick for on-time performance, to remove disparity among various airlines. Block hours refer to the time taken by an aircraft to travel between cities. An airline’s on-time performance as well as facilities and financial compensation to a flyer in case of a delay are determined by block hours. The Directorate General of Civil Aviation (DGCA), which has been studying block hours from February 2016, has noted that the block hours differ from route to route, and from airline to airline. “Some airlines reported good on-time performance by showing additional block hours for a particular flight compared to same flights of competing airlines,” sources said. The ministry of civil aviation has tasked the DGCA with standardising the existing block hours for different routes. “We have been studying various routes for this purpose. The idea is to ensure that all airlines use the same block hours for the same route,” DGCA chief B S Bhullar said. Officials on the job said that traffic data of various airlines of the past five years has been collected, and is being analysed as part of the standardisation exercise. According to the sources, while the flying time between Delhi and Mumbai is approximately 1.28 hours, the block hours for the route stood at a maximum of 2.10 hours. “Some airlines show additional block hours, and because of this, they report before time, or on-time arrival despite departing late. That anomaly is being addressed by DGCA now,” said Air Passengers Association of India (APAI) president Sudhakara Reddy. Brian Dawkins Jersey
Tremendous growth potential for domestic air cargo, says Raju
There is tremendous potential for domestic air cargo growth but “somehow the jigsaw puzzle” was never pieced together, Union Minister Ashok Gajapathi Raju said as he rued that currently cargo is only a minuscule part of Indian aviation sector. Currently, Blue Dart and QuikJet are the only two domestic players operating cargo carriers. Naresh Goyal-owned Jet Airways had announced its plans to set up a cargo airline in 2015 and had even got Government’s in-principle approval for leasing of a freighter from its strategic investment partner Etihad. However, the airline later shelved the plans, citing market conditions. The Civil Aviation Minister said there is a need to motivate entities for air cargo operations. “In India, God has blessed with all types of climates, name the climate, name the produce the potential is tremendous. We are in the infancy (with regard to air cargo),” Raju told PTI in an interview. Even as the domestic passenger growth has been over 20 per cent for many months, cargo segment is lagging behind. The national civil aviation policy has also given thrust to boosting air cargo business, especially against the backdrop of rising e-commerce activities and exports. Alex Smith Womens Jersey
Pvt airlines scuttling regional connectivity scheme
Now it is confirmed that all domestic airlines, barring PSU carrier Air India, have joined hand to fail the Government’s plan to promote regional connectivity by encouraging setting up of smaller carriers. The Federation of Indian Airlines which represents scheduled carriers like Jet Airways, Indigo, Spicejet and Go Air have gone to court challenging the Government notification imposing a levy per flight to create a fund for development of regional airports. It is a paltry Rs 7500 to Rs 8500 per flight of levy that the Civil Aviation Ministry notified recently. The Government wants to take flying to the masses by making if affordable and convenient. This would ultimately lead to growth of the civil aviation sector as a whole. If every Indian in the middle class income bracket, for example, takes just one flight in a year, it would mean sale of 35 crore tickets. It would be a quantum jump from just about 7 crore domestic tickets sold during 2014-15, according to the civil aviation ministry. It is a very valid argument. Apart from the overall growth of the aviation sector ultimately benefiting the air carriers, consider the convenience for the people who are denied air travel to smaller towns and cities for lack of infrastructure like proper airfields and connecting roads. Most of the funds needed for the development of this infrastructure is, anyway, being provided by the civil aviation ministry and the state governments. The airlines are also being asked to chip in, like a small levy per flight. But these airlines have pleaded that they cannot charge extra from passengers to pay for the levy. This is a very specious plea. What if the Government charged the amount in the name of, say, the airport development fee? Indeed such a fee was charged in the past for select airports. Now it is for development of around 200 airports across the country. The issue is just about broad-basing fund sources from stake holders. All domestic carriers have huge stake in the development of the civil aviation sector. The Government’s scheme of making flying cheaper (Rs 2500 for a flight of one hour and less) will benefit all. Wendell Smallwood Authentic Jersey
BIMSTEC needs a ‘power tool’; here’s why it is time for a green energy revolution
The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organisation involving a group of countries in South- and Southeast-Asia. These are: Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal. The main objective of BIMSTEC is technological and economic cooperation among South- and Southeast- Asian countries. Recently, BIMSTEC leaders met during the BRICS summit in Goa on October 16, 2016, where they decided to expedite the signing of the BIMSTEC Memorandum of Understanding (MoU) on grid interconnection, given the high potential of renewable energy sources in the region, for energy cooperation and promoting regional energy trade. Clean energy resources With the recent ratification of the Paris agreement on climate change by India, the country needs to (i) achieve a 30-35% reduction in intensity (emissions per unit of GDP) in 2030 vis-a-vis 2005 and (ii) source 40% of the electricity from non-fossil fuel sources by 2030. Recently, the ministry of power also revised its target upwards, to have 60% of the electricity from non-fossil fuels by 2027. The predominant renewable energy sources are wind and solar. But a problem with renewable energy sources is variability/uncertainty; so, they need back-up generating resources during the non-operating period. These variabilities/uncertainties are best handled with grid interconnection, fast-acting ramp up/down resources like hydro and gas, and large regional power pool. The regional power pool has many potential benefits, including: 1. Reduced or postponed costs: Lower operation costs due to energy exchange and lower investments in power generation due to least cost development of regional energy resources and reduced cost of maintaining power generation reserves. 2. Improved conditions on the supply side: These include reduced coincident peak load of the regional power pool; mutually utilised power generation reserves for interconnected national power grids; increased robustness of power supply to meet unexpected events, such as variability of wind and solar, load growth above forecast and/or delayed commissioning of generation/transmission projects. Amongst BIMSTEC, Nepal uniquely possesses rich natural resources like hydro, wind, solar, etc, which can facilitate the process of having carbon-free BIMSTEC countries. But as far as grid interconnection is concerned, only Bhutan and Bangladesh have been interconnected with India synchronously and asynchronously, respectively, whereas Nepal is operating radially. The regional interchange at present is to the tune of 2,200 MW. The technical, commercial, legal and regulatory issues have been well-settled and trading is working satisfactorily. Similarly, there are many international success stories of electricity power pool amongst countries in Europe, Central America, South America, Africa and East Asia. Powergrid had also prepared a feasibility report for interconnection with Sri Lanka through overhead/undersea cable and also with Myanmar for Tamanti hydroelectric project. Therefore, it would not be difficult to interconnect all the BIMSTEC countries, including Thailand, with proven high-voltage direct current (HVDC) technology wherever the need be. Before introduction of multilateral energy exchange, the first step in regional power pool starts with two neighbouring countries signing for cross-border trading of energy services through a bilateral cooperative framework. This has been successful with four countries, i.e, India, Nepal, Bhutan and Bangladesh for several years. Thus, establishment of multilateral energy exchanges, though complex with regards to settlement approaches and requirements of greater verification, would not be difficult. One of the main reason for not having large interconnection and regional trading is that every country is working isolated and there is no single agency to integrate them and trade the power. In line with international practices, it is suggested that a dedicated ‘power pool’ for energy trading and a special purpose vehicle for grid interconnections be established amongst BIMSTEC countries to take it forward. The critical success factors in creating power pool are; 1. Common legal and regulatory framework: Governments and the transmission system operators (TSO) of their respective national grids should be able to define a common legal and regulatory framework to facilitate achievement of regional objectives. These involve the preparation of “Intergovernmental memorandum of understanding” granting permission for the utilities to make a contract and providing guarantees regarding obligations resulting from an interconnection contract. As also an “Inter-utility memorandum of understanding” among participating national power utilities defining ownership of assets and key principles to be followed on establishing, putting in place and enforcing rules of practice covering technical planning, operations, and commercial aspects of regional power system integration. graph-6 2. Durable framework for system planning and operation: To maintain flexibility in setting up of a viable, multi-country, organisational structure to leverage the individual and collective capabilities of TSOs (a) have to plan for and implement cross-border interconnections, (b) harmonise the operational rules of practices for their interconnected national power grids, (c) put in place a transparent, fair, and viable commercial framework for cross-border trading in energy services. 3. Equitable commercial framework for energy exchanges: Power utilities must exchange a range of energy services such as (a) lowering of generation capacity reserve requirements, (b) ability to achieve scale economics, (c) opportunity to interchange economy energy, (d) increased load and fuel diversity, (e) opportunities of sale of surplus firm energy, (f) emergency support on major breakdowns. It must have a clear, transparent and harmonised set of commercial rules of practice, which are adhered by the interconnected national utilities. It may be observed that this is the right time for India to assume a leadership role for establishment of “BIMSTEC power pool” and a SPV for grid interconnections amongst BIMSTEC countries as a part of MoU, likely to be signed amongst countries during the fourth summit this year in Nepal. Marcus Maye Womens Jersey
India tendered 1.7 GW of solar in December, finds Mercom Capital
India’s impressive 2016 for solar showed no signs of slowing down in the year’s final month, with data from market analysts Mercom Capital Group revealing that more than 1.7 GW of new solar capacity was tendered in December. Accounting for the majority of the new solar capacity offered was the Solar Energy Corporation of India (SECI), the government’s sanctioned solar division that is the driving force behind a push to build 1 GW of rooftop solar PV atop government buildings nationwide. In addition to SECI’s 1 GW worth of tenders, Neyveli Lignite Corporation (NLC) also issued two solar tenders in December for 500 MW and 250 MW, to be set up in Tamil Nadu and Odisha respectively. The remaining capacity offered came from Hindustan Aeronautics Limited (HAL) for 15 MW to be built at the HAL Ojhar Township in Nasik, and 10 MW from Rajasthan Electronics and Instruments on behalf of the Oil and Natural Gas Corporation (ONGC) for a project in Gujarat. Mercom Capital said that the 1,776 MW of tendered solar capacity in December was more than double the 755 MW tendered in November. With 2016 ending strongly, thoughts now turn to what 2017 has in store for India’s solar market. The early signs are good, following the news on January 1 that the Tamil Nadu Electricity Regulatory Commission (TNERC) has permitted the Tamil Nadu Generation and Distribution Corporation (TANGEDCO) to issue a further 500 MW tender for solar through competitive bidding. An earlier TANGEDCO tender issued late in 2016 was met with a lukewarm response by developers due to mounting problems in the state concerning late payments and curtailment. TANGEDCO is hopeful that this latest tender can prove more attractive, with reports in the local media suggesting that the utility has sought a procurement price of INR 4.50/kWh ($0.07/kWh). Calvin Johnson Authentic Jersey
Delhi govt yet to pay Rs50 cr to discoms for waiving off electricity bills
The Delhi government’s Power Amnesty Scheme that resolved problems of overcharging or non-payment of bills is long over, but distribution companies claim they haven’t received payments promised by the government. Government data revealed that the scheme which was open for nine months offered waivers in power bills of consumers worth a whopping Rs128 crore. The discoms, that implemented the scheme, were supposed to get compensated for the energy charges they had waived off and this amounted to nearly Rs50 crore for all the three companies combined. “It is seven months since the scheme got over, but we are yet to receive the money. The BSES Rajdhani Power Limited (BRPL) and BSES Yamuna Power Limited (BYPL) together are to get somewhere around Rs40 crore, whereas the TPDDL needs Rs11 crore,” discom officials said. Sources in the government said that the file is still with power minister Satyendar Jain, who is yet to approve it. A letter accessed by HT dated August 13, 2015 which had asked discoms to implement the scheme from August 30, 2015 read, “The discoms shall provide details of any energy dues waived as a result of the settlement scheme in the case of JJ clusters. The GNCTD will provide subsidy to the discoms on actual basis equivalent to the amount of the energy charges (exclusive LPSC) so waived.” As many as 76,663 people had benefitted from the scheme. Although the discoms earned Rs83.22 crore through resolution of grievances, waivers given to consumers amounted to more than Rs100 crore. Under the scheme, consumers in JJ clusters were charged Rs250 per month for the period for which they had not paid their dues and had the option of paying it in instalments over six months. The late payment surcharge was also fully waived off for them. Besides, all criminal or civil proceedings against those who voluntarily disclosed having tampered with meters were withdrawn. Marcus Kruger Womens Jersey
India’s peak power demand to jump four-fold by 2035-36: draft CEA plan
India’s peak demand for power is expected to rise from the current level of 153 GW to about 690 GW by 2035-36, according to the Perspective Transmission Plan of the Draft National Electricity Plan prepared by the Central Electricity Authority (CEA). The CEA is the policy ideation and demand projection arm of the Ministry of Power. The report notes that this “can at best be an indicative plan giving broad transmission corridors across various regions and possible international exchange corridors.” According to the CEA, the demand projection till 2022-36 includes the 14th Plan (2022-2027), 15th Plan (2027-2032) and first three years of 16th (2032-2036) Plan. The massive increase in power generation and transmission infrastructure would require an expenditure of ?2,60,000 crore during the 13th Plan (2017-2022) alone. This also includes an estimate of ?30,000 crore in the transmission system at below 220kV voltage level. The generation projections under the draft National Electricity Plan note that there will be no need for coal-based power generation capacity addition in the country from 2017 to 2022. Effectively this suggests that all new projects during the 13th Plan need to be restricted to the transmission sector. Integration of renewable energy into the grid will be a focus area, according to report. The transmission corridors between various regions are sufficient to cater to variable dispatches of wind and solar, both during evening peak and noon time (when solar dispatches are high), provided the gas generation is reduced to zero and coal based generation are also brought down as shown under various scenarios, the report said. The analysis assumes that, the all-India peak dispatch from wind would be 50 per cent of the wind installed capacity due to spatial diversity. It is also assumed that the all-India dispatch from solar plants would be 60 per cent of the installed capacity during summer months and 50 per cent during rest of the months. James Paxton Authentic Jersey
Enough transmission capacity till 2022: CEA
India will not need power transmission projects in addition to the already planned capacity till 2021-22, a report by power sector planner Central Electricity Authority (CEA) said, citing low electricity consumption, delay in development of proposed power generation plants and high growth in power transmission capacity. A senior CEA official said while the country has over achieved transmission system capacity addition targets, some power generation projects have got stuck on account of various factors including shortage of finance and lack of demand for electricity from distribution utilities. “From system studies, it was observed that the already planned transmission corridors towards SR (southern region) and NR (northern region) are sufficient to cater to the assessed import requirement of SR/NR for year 2021-22 under base as well as N-1 contingency conditions,” CEA said in the draft national electricity plan for transmission. It is estimated that an expenditure of Rs 260,000 crore would be carried out during 2017-22 for addition to transmission system capacity. CEA said that the already planned transmission corridors between various regions is sufficient to tackle variations in generation from wind and solar power plants. Marc Staal Jersey