Budget 2017: Nitin Gadkari-led Road ministry seeks funds to decongest metros
Earmarked funds to decongest crowded metros creaking under overloaded infrastructure, incentives to phase out old vehicles, and promotion of e-tolling may find a place among proposals for roads and highways in the Union Budget 2017-18. Sources said Budget-related discussions have seen Union road transport and highways minister Nitin Gadkari take up the proposals with Union finance minister Arun Jaitley, and also pitch for setting up of logistics parks along national highway corridors linking ports and manufacturing hubs. The initiative to decongest cities was spurred by complaints that day-to-day transport as well as doing business had become increasingly difficult in cities like Bengaluru, Delhi, Mumbai and Kolkata. Last year, Wipro chief Azim Premji and Biocon CMD Kiran Mazumdar Shaw had raised Bengaluru’s problems with Gadkari. “They had asked how we can rescue them from this growing problem. It takes nearly two hours for people to reach office. No city can sustain and progress if congestion on roads is not property addressed,” Gadkari had said then. The ministry is also pressing for larger budgets for highway construction, and is looking for measures to improve road safety through signage, rumbler strips, and traffic management systems. The ministry had noted that new road connectivity and improving the existing network in Bengaluru alone would need at least Rs 15,000 crore. Similarly, road projects in and around Delhi require an investment of Rs 50,000 crore. The ministry is looking for some budgetary support that can be supplemented by the states, and may involve a role for private industry too. With old vehicles, particularly trucks and buses, seen as big contributors to air pollution, the ministry is pushing for incentives to phase them out. The road transport ministry has already prepared a proposal for voluntary scrapping of old heavy vehicles, which includes provisions for owners to get some value from scrap and the original manufacturer getting some incentives too. The ministry has said that paying toll electronically could help reduce congestion at toll plazas and save several man-hours and fuel. He has suggested providing some incentive to such commuters. Sources said the minister pushed for developing logistics parks along national highways network, and to set up bus ports with better facilities.
Road ministry receives 55 cases since rollout of the amended arbitration scheme
The introduction of amended arbitration scheme to revive construction sector has received a good response as 55 claims worth Rs493.53 crore were submitted to the road ministry within a month of its implementation. According to the Action Taken Report (ATR) submitted by the ministry, till 4 January it had received 55 claims and in 32 of them communications have been sent to the contractor/concessionaire for opening of escrow accounts and submission of the bank guarantee. These 32 cases amount to Rs378.05 crore. A road ministry official requesting anonymity said, “The response has been good so far and we expect this to revive the infra sector and especially construction of national highways.” He added that Rs 249.37 crore have already been released to IRB Infra Developers Limited under two claims submitted by them. Out of the 55 claims received by the road ministry 53 are related to national highways construction. The Hindustan Construction Company tops the list with 20 claims, followed by Oriental Structure Engineers with 16 claims, including two joint venture projects—AFCONS -5 and Gayatri 3. The other companies, which have filed claims are IL&FS, Unitech and Sunway Construction. As per the ATR, the road ministry is pursuing arbitration proceedings in 42 cases to switch over to the provisions of amended Arbitration Act. The scheme, which was approved by CCEA last year in August and introduced by the road ministry in December 2016, entailed that the government agencies would pay 75% of the arbitral award amount to an escrow account against margin free bank guarantee, in those cases where the award is challenged. Andy Lee Womens Jersey
Ministry pushes for India-made steel only for govt infra projects
Concerned over the anemic growth in steel consumption, steel minister Birender Singh urged all concerned ministries to use India-made steel only for infrastructure and construction projects of the government. He also wants a modification in the general financial rules to include life cycle cost analysis in design and planning stage of public projects. At a consultative committee meeting on Monday, he also said the ministry is exploring new avenues for usage of steel like steel bridges, containers, water tanks and crash barriers. “We have spoken to different central and state governments to enhance usage of steel,” the minister said. Singh said the ministry has constituted four committees with representatives from INSDAG, steel producers, consultants, architects, users and government authorities to promote steel usage with the mandate of formulating codes and standards, life cycle cost analysis and sustainability, development of designs of various utility structures and skill development in the steel sector. “Similarly, four task forces have been constituted for increasing steel usage in railways, urban development, road transport and highways and shipbuilding sectors,” he said. Hoping demands to come from the government’s rural housing project plan, the steel ministry has approached concerned authorities to elaborate on the advantages of steel houses like less erection time, more durability, better flexibility and eco-friendliness. Presentations with prototype designs have been made to key officials of the rural development ministry. Singh said the road ministry’s plan to reconstruction of 1,500 road bridges, 208 over bridges and the chardham highway project provide huge opportunity for enhancing steel usage. Ministry and PSUs are working on these opportunities as also in sectors like railways, defence and other manufacturing industries, he said. Tahir Whitehead Jersey
Renewable energy: Address these issues urgently; 2017 could be a tipping point
There is much to celebrate when reviewing the developments witnessed in the renewable energy sector in India in 2016. In 2016 the renewable energy capacity commissioned was higher than thermal capacity addition for the first time. Solar power expectedly dominated the Indian renewable energy space in 2016 – the highest ever annual solar capacity was added (4GW), recording unprecedented low tariffs, and commissioning the world’s largest solar PV power plant with a capacity to produce 648 MW in Kamuthi, Tamil Nadu. The phenomenal growth recorded in the sector in 2016 was despite the disappointment among stakeholders in the renewable energy sector regarding the 2016 budget. Only a little over half of the Ministry of New and Renewable Energy’s (MNRE) budgetary ask for the renewables sector was actually allocated to the sector. Further, the reduction of the accelerated depreciation incentive to 40 percent from the previous 80 percent effective April 2017 created uncertainty in the sector. Expectations from the 2017 Union Budget Some of the key concerns plaguing the rapidly growing renewable energy sector include curtailment of renewable power (particularly wind power), constrained inter-regional transmission capacities, delay in payment to generators, regulatory uncertainties, and delays in signing or non-signing of Power Purchase Agreements (PPAs). While some of these could be resolved in the short-term through allocations under the 2017 budget, other hurdles such as constrained inter-regional transmission capacities will require long-term interventions. There is an urgent need to develop and institutionalise innovative financial instruments to underwrite the risks plaguing the renewables sector in India at preferential rates. Instruments tailored specifically to suit the requirements of solar and wind developers, could mobilise the flow of both domestic and international debt and equity, keeping up the pace of deployment even as more fundamental sectoral interventions are put in motion. While several such instruments are currently available in the private market, their cost makes them prohibitive for developers and investors. To address this challenge, the government should consider scaling up the previous budget allocation of Rs 9,200 crore in public enterprises (IREDA and SECI), which aid the growth of the renewables sector. The additional public investment could be leveraged by way of providing low-cost finance, increased issuance of government-backed securities, and the deployment of financial instruments that underwrite risk through these enterprises. The Council on Energy, Environment and Water (CEEW) is currently engaging with several national and international stakeholders to determine instruments that enable public funds to create the maximum leverage, given market conditions. Secondly, the government should prioritise the setting up of the first green bank in India in the 2017 budget to facilitate more foreign investment into the sector at concessionary rates. Allocation of the necessary funds for green bank activities in the 2017 budget, setting a precedent for future budgetary allocations, could be a game-changer for the sector. Thirdly, tariffs in 2017 will depend on the implementation of the Goods and Services Tax (GST) regime. At present, India’s celebrated solar bids of Rs 4.34 are more than twice the lowest global solar tariffs bids, namely Chile (Rs 1.94/kWh). CEEW’s analysis estimates that solar tariffs could increase up to 10 percent if the existing tax exemptions are disregarded while determining the applicable GST slab for solar components. However, if current exemptions were considered while deciding the applicable GST rates, the increase in solar tariffs would be insignificant. An instrument or mechanism to offset such predicted increase in tariffs could be announced under the 2017 budget. Alternatively, the government could also consider rebooting the accelerated depreciation benefit back to 80 percent. Fourthly, the budget should show ambition in putting India on track to becoming a solar module manufacturing hub, similar to what India has already achieved for the wind sector. The government could push through the Pradhan Mantri Yojana for Augmenting Solar Manufacturing (PRAYAS) initiative, which had been promulgated under the Make in India campaign late last year, and provide much-required financial incentives to promote manufacturing. Fifthly, the government should also emphasise and incentivise the development and deployment of productive use of renewable energy solutions, such as solar pumps and solar sprayers in rural areas by focussing on both the availability and affordability of funds for promoting rural applications of renewable energy, including decentralised renewable energy systems. Sixthly, energy storage is steadily becoming an indispensable component of solar energy systems, primarily for rooftop and decentralised systems, owing to the intermittent nature of renewable power generation. MNRE had allocated a meagre amount of Rs 18 crore towards research and development and implementation of schemes pertaining to energy storage in the renewable energy sector in 2016. This allocation needs to be enhanced significantly under the 2017 budget to foster innovation in energy storage research. A seventh requirement would be to enable both solar manufacturing and deployment growth at scale. India would need to ensure the availability of skilled manpower through targeted skill development programmes, under the 2017 budget. CEEW-NRDC’s analysis estimates as many as four direct full time equivalent jobs per MW of operational manufacturing capacity could be created in the solar module manufacturing sector. Finally, land-related issues have always troubled the sector. Following up on the Digital India Land Records Modernization Programme announced earlier, the government in the upcoming budget could provide for setting up of nodal agencies, which could act as “land banks” for easy access for developers to obtain required land for renewable projects. The year 2017 could be the tipping point for India’s renewable energy sector. The upcoming budget could provide an adrenaline boost as India races towards meeting its aggressive renewable energy goals by 2022. Sam Reinhart Authentic Jersey
Air India to bid for 23 new routes under RCS
Poised with the Regional Connectivity Scheme (RCS) of the National Civil Aviation Policy, Air India is set to bid for connecting 23 routes with the Union Ministry of Civil Aviation (MoCA). Some of its existing routes would also be brought under the ambit of the RCS, said CMD Ashwani Lohani. Additionally, to keep pace with the growing competition in the international airspace, by March 2020, the national carrier will be inducting 100 more aircraft, including few Boeing 787 in 2017, some Boeing 777 (in Q1, 2018),13 new wide-body planes in next two years and 12 A320 neo aircraft are expected in 2017, taking the total aircraft count from 132 to 232. As a member of Star Alliance, to be more competitive in the international airspace, the airline has a slew of measures planned. The carrier has come up with a tentative wish list of six new destinations to offer connections in 2017. These destinations are Washington (USA), Toronto (Canada), Tel Aviv (Israel), Stockholm (Sweden) or Copenhagen (Denmark), African region and Frankfurt (Germany). Separately, to offer enhanced connectivity, flight frequencies will be increased to Madrid, Sydney and Melbourne. Going ahead in the year, the long neglected subsidiary Alliance Air will be given a push to post profits from the current financial year, and the reach of Air India Express will be expanded. 2018 will again see the addition of another six new destinations to the carrier’s network, affirmed Lohani. For the RCS to gain ground, Air India would require 20 more ATRs and to service this influx of additional aircraft and new routes, the carrier would need 200 new pilots, Lohani said. Therefore, the recruitment process of pilots has been set in motion already, he revealed. In this regard, the fleet size will be expanded by 23 ATRs, taking the total count to 72 by December 2017. Ha Ha Clinton-Dix Womens Jersey
7 NE airports have potential for operations under UDAN: Report
About 44 airports across the country including seven in Northeastern States have “high potential” for operations under the ambitious Regional Connectivity Scheme (RCS) for civil aviation, UDAN, according to a report brought out by apex industry body FICCI. “Based on the geographical, operational and commercial parameters, 44 out of the 414 underserved and unserved airports have high potential under RCS. “We have also identified around 370 potential destinations for the shortlisted airports, including metros, State capitals and important commercial, industrial and tourism centres,” said the FICCI report, brought out in concert with global professional service company KPMG. Assam has three high potential RCS destinations and two each in Arunachal Pradesh and Meghalaya. Uttar Pradesh has four high potential RCS destinations, three each in Maharashtra, Rajasthan, West Bengal, Bihar, Karnataka, Himachal Pradesh, Gujarat, Chhattisgarh and one each in Andhra Pradesh, Telangana, Tamil Nadu, Odisha, J&K, Puducherry, Lakshadweep, Daman and Diu, Haryana, Madhya Pradesh, Jharkhand and Uttarakhand. “So far 22 States have joined the RCS and we have identified 30 airports where operations could be started immediately,” Union Civil Aviation Secretary Rajiv Nayan Choubey said. RCS, or UDAN (Ude Desh Ka Aam Naagrik), was introduced as part of the National Civil Aviation Policy 2016 and was formally launched in October last. It provides an opportunity to take flying to the masses by way of fiscal incentives, infrastructure support and monetary subsidies (viability gap funding). Noting that RCS was a good scheme, Regional Director of International Civil Aviation Organisation Arun Mishra, however, said India did not have the wherewithal right now for RCS to become successful. “They are trying to build the wherewithal but it will take some time,” he said. “We have to be careful about creating the enabling conditions for this scheme to become successful. One of the most important things is the right size of aircraft that you need.” He said a plan was required to induct smaller aircraft for RCS operations. Seattle Seahawks Jersey
Indian Airlines Soar But Experts Warn of Turbulence Ahead
A major acquisition by Indian budget airline SpiceJet this week underscored the vast potential of the world’s fastest-growing aviation market, but experts say woefully inadequate infrastructure and high operating costs could threaten the industry’s rapid expansion. India’s burgeoning middle classes are taking to the skies in ever greater numbers, with passenger growth of 20 percent in 2015 according to industry body IATA — nearly double China’s 11-percent increase over the same period. Low-cost airlines are rushing to expand their fleets to take advantage of that growth, encouraged by a fall in fuel prices that last year pushed several private operators into profit for the first time. SpiceJet, India’s fourth biggest airline with a 13-percent market share, said Friday it was buying up to 205 Boeing planes worth $22 billion to fuel a major expansion of its domestic operations. Experts say the country’s aviation sector holds vast untapped potential, with just 100 million of India’s 1.2 billion people taking to the skies last year. But they warn that India’s rickety infrastructure could hold back future growth, with just 90 of the country’s more than 460 airports currently operational. “Consistent 20-percent-plus growth per se is not a cause for celebration if the institutional framework is weak,” said Kapil Kaul, South Asia head of industry advisory and research firm CAPA. “This only increases safety and security risks. And skill shortages are also emerging. An urgent fix is required.” CAPA has warned that India could face a capacity crisis unless it builds 50 new airports over the next decade. Andreas Athanasiou Authentic Jersey
Will the Government spend $10 Billion on Airport Infrastructure?
According to Civil Aviation Secretary RN Choubey, if about $10 Billion is spent on airport infrastructure in the five years then India will become the world’s third largest in the aviation market in next seven years. There are around 400 unused lands across the country, which have become useful for the cattles for grazing. These lands could be used by the aviation industry to make airports. The growth rate is expected to escalate in the coming years after the airport infrastructure is determined. The growth of about 23% is what India is aiming at in comparison to China. China—India’s rival in terms of aviation—shows a growth of about 41%. The Indian aviation growth is enhanced by proactive industry-friendly policies but also by the fall in the fuel prices. The progressive policies and the Regional Air Connectivity Scheme at the national level have helped in boosting the airport infrastructure and developing more flights for the masses. The fares in the civil aviation have been made almost as same as that of an air-conditioned train fares. As per the Regional Air Connectivity Scheme, about 50–60% viability gap funds were refunded as subsidy. Jerry Hughes Authentic Jersey
India committed to goals on renewable energy: Piyush Goyal
India is committed to meet its renewable energy goals and is not bothered about US president-elect Donald Trump’s skepticism on policies related to climate change, Piyush Goyal, India’s minister of state with independent charge for power, coal, new and renewable energy and mines, told delegates at the 2017 Abu Dhabi Sustainability Week. Goyal was asked whether Trump’s negative stand on global warming will influence India to change its plans of becoming a global hub for renewable energy. “India doesn’t interfere in any other country’s elections and we respect the fact that America has chosen its leader,” Goyal said. “However, clean energy is not something that we are working on because somebody else wants us to do it. It’s a matter of faith and the faith of the leadership in India. Nothing on Earth is going to stop us from doing that.” Although India remains dependent on coal to fuel its energy needs, it aims to scale up its solar power capacity to 100GW by 2022. It is targeting 60GW from wind energy and plans to bring in hydro power, from which it generates 40GW, into the category of renewable energy. By 2022, the country plans to generate around 225GW from clean and renewable sources. When other global industry experts said renewable energy needs private funding to be successful, Goyal said he does not see any challenge in getting finance for renewable energy in India. “Gone are the days when government had to bring in subsidies. We don’t need to convince the industry anymore. We just need to make sure that there are no roadblocks.” The minister said the cost of renewable energy has been gradually decreasing and currently it is at par or marginally higher than what is generated from fossil fuels. Paul Worrilow Authentic Jersey
NTPC expects to cut Chhabra losses by a-fifth
Country’s largest power producer NTPC expects to cut losses from Chhabra power station that it acquired last week to one-fifth by saving on interest outgo and raising operational efficiency. The company is on lookout for more state-run stressed assets for buyouts, sources said. The tariff of the project is expected to come down by Rs 0.05 a unit to Rs 3.84/unit. NTPC Last Thursday announced acquisition of 1000-mw power plant owned by state generating company of Rajasthan. It signed an agreement with Rajasthan Vidyut Nigam to acquire 1000-mw operational stage I of the power plant and 1320-mw stage II of the project that is under construction. In October last year, Rajasthan Electricity Regulatory Commission approved cost of stage-I of the project at Rs 5053 crore. After depreciation, Stage I of the project has been valued at Rs 3,900 crore, of which the debt portion is at Rs 3200 crore and equity at Rs 700 crore. Stage I of the power station comprises of four sub-critical technology based units of 250-mw each operating at highly inefficient parameters. At an interest outgo as high as at 10.75%, the plant was losing Rs 295 crore annually. With NTPC takeover the heat rate– heat generated per calorie of coal burnt — expected to come down to 2400 kcal/Kwh. Coupled with low-cost funding advantage at 8%, NTPC is confident of narrowing losses to Rs 66 crore a year once it starts generating electricity from the project. NTPC is expected to complete the acquisition of stage-I next month. NTPC will provide project management services to Rajasthan generation co mpany for expeditious completion of stage II of the project. The cost of the second stage of the project of two units of 660-mw each is estimated to have risen due to delay to Rs 9750 crore comprising 80% debt and 20% equity. The first unit of 660-mw of the second stage is expected to be commissioned by next month and second unit by June next year. Joseph Blandisi Authentic Jersey