Watsa’s Bangalore International Airport investment plan gets government nod
The government has given the long-awaited security clearance to billionaire Prem Watsa’s proposed investment in the GVK-led Bangalore International Airport (BIAL). A GVK spokesman confirmed the development and said this will pave the way for the deal “to be concluded very soon”. Sources said the security clearance had been recommended by the Ministry of Home Affairs several months earlier. The Ministry of Civil Aviation however had kept some approvals pending and sought several clarifications from both parties as well as from the Karnataka state government. Indian-born 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 2,149 crore, valuing the eight-year-old airport at about Rs 6,500 crore. A month later, Fairfax signed another deal to buy 5% stake held by Flughafen Zurich AG in BIAL. GVK had said the sale was one of its fund-raising steps to reduce debt. The conglomerate has total debt of over Rs 22,000 crore on its books. The Bangalore airport is Fairfax Group’s largest investment in the country since it opened an India-dedicated investment company in 2014. It is also the company biggest bet on India’s infrastructure sector. Post the deal, Fairfax will hold 38% of BIAL, followed by Siemens Project Ventures with 26% while the governments of India and Karnataka will each own 13%. GVK will hold the remaining 10%. When contacted, BIAL managing director Sanjay Reddy told ET that GVK will “continue to be responsible for the management of the company and also operate the airport. The MD and CEO will be from GVK,” Separately, a person close to the development said that Fairfax may nominate Watsa himself, Harsha Raghavan, CEO of its affiliateFairbridge Capital and Deepak Parekh, chairman of HDFC and an independent director at Fairfax as board representatives in BIAL. The rest of the board composition is yet to be decided. According to its latest annual report, BIAL’s board as of end FY16 had former Air India chief and chief-secretary Karnataka governmentArvind Jadhav as chairman, GVK Reddy as co-chairman, Sanjay Reddy as managing director, GVK CFO Issac George, GVK board member Krishna Ram Bhupal, Airports Authority of India’s Sudhir Raheja, Venkatramana Hedge from the aviation ministry, IAS officers Vandita Sharma and Arvind Shrivastava, DR Kaarthikeyan, as well as Basil Justin Wetters, Johannes Schmidt, Pramod Bhambani and Daniel Schmucki from Siemens. S Balasubramanian and A Meher Prasad were independent directors. A few months earlier, Subhash Chandra Khuntia, the new chief secretary of the Karnataka government took over as chairman, BIAL. Bangalore airport handled more than 20 million passengers last year. It now has a built capacity to cater to 20 million passengers annually but upon completion of its expansion plans the number can go up to 50 million. Michael Irvin Authentic Jersey
Budget 2017: Ministry seeks cut in excise duty on jet fuel
The civil aviation ministry, as part of its Budget recommendations, has sought a reduction in excise duty on aviation turbine fuel (ATF), or jet fuel, to 8% from 14%, by rolling back an increase made last year. The government had raised the duty to compensate for its tax loss, as global crude oil prices fell to below $30 a barrel. Crude oil prices have doubled now. “Excise duty was raised when crude prices were low. Now they are inching up and the government can easily cut excise duty, which will also help shield airlines from a hike in jet fuel prices,” said a government official, who did not want to be named. “The government’s revenue would also not be impacted, as any revenue impact shall be compensated by a positive realisation due to the high output multiplier,” said an industry source, pointing to the impact a healthy industry can have on the economy. Rising fuel cost is a concern for the airline industry, which has started reporting profits after a long spell of losses. A more than 20% increase in air passengers and low fuel prices were the key drivers of the improved performance. To be sure, the duty hike helped temper volatility in fuel prices — though local prices didn’t fall in line with global rates earlier, they may not rise too much either now, if the government rolls back the tax increase it made. “Any rise in price of fuel, which constitutes a large part of our cost, is a concern but we may not be impacted that much because the government was raising taxes when crude was falling. So, the full benefit of crude decline was never transferred to airlines, which can act as a shield for us,” SpiceJet Chairman Ajay Singh said at a press conference last week. The ministry is, for the first time, sending the Budget wishlist after getting it vetted by professional consultants. This decision was in line with an idea mooted by the minister of state for civil aviation Jayant Sinha, who had called a meeting of all industry representatives to discuss Budget demands last week. Other requests include keeping ATF in the GST ambit. Fuel products aren’t included under GST and are set to attract higher taxes than those proposed under the new indirect tax system. “ATF is kept outside the GST ambit. However, globally ATF is delinked from other petroleum products and is included under the scope of GST and not considered a ‘sin’ product. Vonn Bell Authentic Jersey
No demonetisation impact; airlines flew 23.91% more passengers in December
In a clear indication of not being impacted by the government’s demonetisation move, which has seen sectors witnessing drop in demand, air passengers flown by airlines during December grew by 23.91% over same month last year, shows data released today by Directorate General of Civil Aviation (DGCA). The aviation sector, in terms of passenger growth, had registered a growth of 22.45% during November – PM Modi had announced a move to demonetise Rs 500 and Rs 1,000 notes on November 8, 2016. During December, which is also traditionally a peak travel month, all national scheduled carriers flew their planes with over 80% of their seats full. The list was led by SpiceJet, which recorded load factors of 93.7% and flying its panes with over 90% seats full for 21 months in a row. IndiGo came close second by flying its plane with 91.45 full followed by GoAir with 90.7% PLF. SpiceJet also topped the chart of airlines that flew the highest number of its flights on time. The data shows that SpiceJet flew 70% of its flights on time at four airports –Delhi, Mumbai, Hyderabad and Bengaluru- in the country. Jet Airways and Jet Lite came second by flying 64.3% of its flights full followed by Vistara, which flew 64.2% of its flights full. Air India was last in the list by flying 59% of its flights in time. Roquan Smith Jersey
Tata Power becomes India’s largest renewable company with 3,060 MW operating capacity
Integrated power company Tata Power Co Ltd today said the company has become the largest renewable energy company in India with its non-fossil operating capacity reaching 3,060 Megawatt. Tata Power said its non-fossil fuel portfolio comprises 693 MW hydro, 918 MW solar, 1,074 MW wind and 75 MW of waste gas-based generation. The company added that it the company has revised its share of non-fossil fuel based capacity up to 35-40 per cent by 2025. In FY16, Tata Power Renewable Energy Ltd (TPREL), a wholly owned subsidiary of Tata Power, completed the acquisition of Welspun Renewables Energy Private Limited (WREPL) to become the largest Renewable Energy Company in India. Welspun Renewables has one of the largest operating solar portfolios in India spread across ten states. It has about 1,008 MW of Renewable Power Projects comprising of about 862 MW Solar Power Projects and about 146 MW of wind power projects. In FY16, Tata Power Renewable Energy Ltd (TPREL), a wholly owned subsidiary of Tata Power, completed the acquisition of Welspun Renewables Energy Private Limited (WREPL) to become the largest Renewable Energy Company in India. WREPL has one of the largest operating solar portfolios in India spread across ten states. It has about 1,008 MW of Renewable Power Projects comprising of about 862 MW Solar Power Projects and about 146 MW of Wind Power Projects. “This is one of the many key milestones in our endeavor to generate 35-40 per cent of Tata Power’s total generation capacity from clean energy sources. This mammoth leap is well in line with our aim to enhance and increase our non-fossil fuel capacity, and maintaining our value of sustainable growth,” Anil Sardana, Chief Executive Officer and Managing Director, Tata Power, said. Tata Power together with its subsidiaries and jointly controlled entities has an installed gross generation capacity of 10496 MW and a presence in all the segments of the power sector such as fuel security and logistics, generation, transmission, distribution and trading. Cameron Meredith Womens Jersey
Cairn India gets nod for drilling 64 exploratory, appraisal wells in KG-Basin
A committee under the Ministry of Environment, Forests and Climate Change has given a green signal to Cairn India for undertaking drilling works of 64 exploratory and appraisal wells in KG-OSN-2009/3 block in KG basin at Prakasam and Guntur districts of Andhra Pradesh. The Expert Appraisal Committee (EAC) while according to environmental clearance set a few conditions along with other specific and general environmental conditions relevant to the project proposal. “After examining the facts and detailed deliberations the committee decided to recommend the proposal for grant of environmental clearance subject to compliance of following conditions along with other specific and general environmental conditions relevant to the project proposal,” the EAC said in the minutes of the meeting held recently. Cairn India Limited has proposed for drilling of 55 exploratory and 11 appraisal wells in KG-OSN-2009/3 block in Offshore KG Basin. The offshore block in the Bay of Bengal along the coast of Andhra Pradesh is spread over an area of about 1988 km. The block covers partly the offshore areas of Prakasam and Guntur districts. Cairn India had earlier said it declared force majeure of two of its oil and gas blocks including KG-OSN-2009/3 due to the objections raised by the Ministry of Defence for taking up exploratory works. However, the company, in 2014, got necessary clearance from the Ministries concerned. The block was awarded to Cairn India on 30 June 2010 as part of the NELP-VIII round for exploration of hydrocarbons and production. The company has 100 per cent stake in the Block, according to the last year’s annual report. Exploratory/Appraisal drilling is carried out in the identified sub-surface structures to find out if there is presence of hydrocarbons in commercially exploitable quantities, an expert in oil and gas filed said. Cam Talbot Jersey
Eyeing 5,000-5,200 km of projects by the end of fiscal: NHAI
National Highways Authority of India (NHAI) plans to award 10-15 percent more projects this year compared to FY16, said Yudhvir Singh Malik, Chairman of NHAI. Speaking to CNBC-TV18 Malik said they look to award closer to 5,000-5,200 kilometres of projects by the end of the fiscal year. In April 2016, Ministry of Road Transport and Highways had announced an ambitious target of awarding 25,000 kilometres of road projects in FY17. Of this, 15,000 would fall under NHAI and 10,000 under the Ministry and National Highways and Infrastructure Development Corporation (NHIDCL). Malik agreed land acquisition posed the biggest challenge in achieving the target. To counter this roadblock in future, he said, NHAI plans to avoid any project awards unless 80 percent of the land is in possession and statutory clearances received. He said availability of funds is not an issue in achieving the target. Malik also said the compensation process to land owners is being streamlined subsequent to which they are looking forward to achieve about 7-8 kilometres on a daily basis. JJ Redick Womens Jersey
Giant power outage hits Amsterdam rail, roads
Amsterdam was hit by a giant power outage Tuesday, causing road and rail chaos that left scores of rush hour commuters stranded, authorities said. The power cut meant no trains to or from Amsterdam’s busy main rail station, resulting in a rush of drivers onto the road and heavy traffic. “Other parts of the country are hit by the knock-on effect,” Dutch National Rail said on its website. “The power cut has since been fixed but rail traffic is still seriously affected,” it said shortly before 10:00 am (0900 GMT). The power cut was repaired by 0800 GMT, electricity provider Liander said, but it warned “problems may still occur due to the start-up process.” It did not give a reason for the cut, but The Netherlands has been experiencing sub-zero temperatures overnight. Early Tuesday, large parts of Amsterdam and its northern neighbours Zaandam and Landsmeer were hit by the massive power cut, affecting some 360,000 households and public transport including the capital’s tram service, Liander said. Dutch road safety association ANWB warned that heavy traffic jams had formed on the A2 highway between Amsterdam and Utrecht. Dutch public newscaster NOS meanwhile showed television images of commuters resignedly waiting for the problem to be fixed at Utrecht’s central station, while long queues formed at bus stops at Amsterdam Central station. A.J. Greer Authentic Jersey
A bumpy ride for road construction firms
The December quarter is set to be a rough one for road construction firms because of problems related to demonetisation. The fortnight of toll-free days in November forced analysts to cut revenue growth estimates. The government has assured compensation for loss of toll revenue, but that would come with a lag. Worse, it will take care of only costs and the interest to be paid out for that period on the project, but not the profits. Effectively, therefore, firms such as NCC Ltd and IRB Infrastructure Developers Ltd may see revenue contraction because of lower toll collections. Some firms such as PNC Infratech Ltd are stuck with slow-moving orders because of land acquisition delays. Those with a larger mix of engineering, procurement and construction orders may be better off during the quarter than those with exposure to toll revenue. Another big disappointment is the slow pace of tendering by the government. Yes, it was known that the target for 25,000km of roads to be awarded during FY17 was too ambitious. After all, the target was two-and-a-half times that of the year before. With barely three months to go for the fiscal to end, the progress both on tender awards and execution is nothing to write home about. ICRA Ltd’s data shows the ministry of road transport and highways awarded only 5,688km of roads. A little less than half of this was from the National Highways Authority of India (NHAI), which was actually expected to award about 15,000km during the year. But the estimates were revised down to less than half by NHAI. In fact, the awards may not even be close to that achieved in FY12. This implies lower-than-anticipated order inflows. And there’s more to prove the naysayers right. The pace of project execution until date for FY17 signals the failure in achieving estimates. NHAI’s 5.8km/day execution is 17% higher than a year ago, but is just a quarter of the target pencilled in for the year. Subdued progress was noticed even prior to demonetisation. This is partly because the newly-introduced hybrid annuity model was being worked out. Also, not many bidders came forth due to highly leveraged balance sheets. Financial closure of the first few projects took longer than expected. As reality struck the Street, the stocks of these firms fell from their highs. Most of the leading firms have underperformed the benchmark indices and fallen between 5-15% since a year ago. Add to this the credit rating agencies have decided to tighten rating metrics. Crisil Ltd, for instance, is adding “expected loss” through the life of the project. This will help investors take better decisions, given that the ramp-up periods and cash flows are unpredictable in infrastructure projects. Of course, the Union budget is expected to offer more sops and support to road construction. Investors may do better to wait until the euphoria settles down and reality sinks in, as it did in 2016. Dion Jordan Authentic Jersey
Bangladesh secures more tariff cut rate in power import from India, saves Tk 128.70 million
Bangladesh has secured a negotiated cut-down rate of tariff to import around 250 megawatts (MWs) of electricity from India, officials said. The reduction is estimated to save around Tk 128.70 million for the country in power purchase from the Power Trading Corporation (PTC) of India over the next six months. The Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) secured the electricity-tariff cut to Tk 6.14 per unit (1.0 kilowatt-hour) from the previously quoted Tk 6.26 per unit, a senior power official told the FE Sunday. “We have been able to have the electricity tariff reduced for extension of the deal as the PTC would not require any additional installment cost to supply the electricity,” he said. The proposal would be sent to the cabinet committee on government purchases this week for final nod, said the Power Division official. Meanwhile, the existing deal on electricity import through the PTC would expire on January 31, 2017. The Indian PTC had sought to sell electricity at Tk 6.26 per unit to the state-run Bangladesh Power Development Board (BPDB). Bangladesh currently imports around 650MW electricity from the neighbouring country under different mechanisms, devised amid electricity crunch in the recent past. Of the imported electricity, 250 MW comes from Indian government-allocated quota at an average tariff rate of Tk 2.78 per unit. Another 250MW power comes through PTC. Bangladesh imports 100 MW of electricity from Tripura at a tariff rate of Tk 6.13 per unit. Another quantum of around 40 MW come from open market at a rate of Tk 4.46 per unit. Bangladesh had initiated import of around 250 MW of electricity through PTC since July 2013 at a tariff rate of Tk 6.30 per unit under a three-year agreement. The deal was extended for a six-month period until January 2017, with the tariff rate reduced to Tk 6.26 per unit that helped save the power-purchase costs by Tk 81.70 million for six months. Christian McCaffrey Jersey
Central sector power, a burden on Gridco
Even after repeated requests to deallocate its share of power from NTPC’s Barh Super Thermal Power Station (STPS) in Bihar, the cash-starved Grid Corporation of Odisha Limited (Gridco) is forced to buy costly power from Central sector. While the average cost of power from Central thermal power stations (Odisha’s share) is estimated at `4.38 per unit, power from Barh STPS-II will cost `6.36 per unit. Tariff of Central thermal generating power stations is fixed by the Central Electricity Regulatory Commission (CERC). With the State’s share of 14.79 per cent from the two units of Barh-II with an installed capacity of 1320 MW (2X660MW), Gridco will draw 1105.83 million unit (with Central sector loss of 1.98 per cent) during 2017-18. The total cost of power has been estimated at `704.30 crore. The State Government has been requesting the Ministry of Power (MoP) from 2012 for de-allocation of power from NTPC stations outside Odisha including the Barh-II STPS. On August 31, 2015, the MoP notified for surrendering allocated power by different States including Odisha and sought willingness from other States to avail such surrendered power. “The proposed de-allocation in favour of Odisha is yet to take effect as no alternative buyer has offered willingness to purchase power from Barh-II. Power from NTPC plan is being thrust upon Gridco in spite of any requisition to draw power from the two units,” Gridco sources said. The State trading utility Gridco has projected the energy availability from Barh STPS-II of NTPC as per the share allocation in favour of Odisha in its annual revenue requirement (ARR) application for 2017-18 financial year. This is bound to increase the power tariff in the State as Gridco will pass on the high tariff to consumers, the sources said. Earlier, the MoP had de-allocated 155 MW from New Nabinagar STPP in Bihar last year following request from the State Government. The State’s share has been allocated to Uttar Pradesh. Gridco has projected power procurement of 7371.37 million unit at estimated cost of `3227.39 crore from Central sector thermal generating station for the ensuing financial year. Chris Doleman Authentic Jersey