Highway projects on an overdrive as NHAI raises Rs8,500 crore from LIC
After months of negotiations, the National Highway Authority of India (NHAI) has finally managed to raise Rs8,500 crore from Life Insurance Corporation (LIC) for a period of 30 years at an interest rate of 7.22% per annum. A senior NHAI official confirmed the move. “The sum is a part of the market borrowings permitted by ministry of finance for the current financial year and the deal was closed on Tuesday,” the offical said. He added that to finance various highway projects, NHAI had to raise Rs 55,000 crore in the current financial year. The official said the NHAI bonds being offered to LIC are the highest-rated paper backed by sovereign guarantees with a yield of 70-80 basis points higher than government securities. One basis point is one-hundredth of a percentage point. Out of this, Rs10,000 crore through EPFO and Rs8,500 crore from LIC has been raised. The remaining Rs5,000 crore each through masala bonds and Rs16,500 crore from the market is still under process. As per data available, NHAI has already managed to raise additional Rs11,929 crore through investors availing capital gains exemption (outstanding as on 31 October 2016). The huge sum is required as highways minister Nitin Gadkari has decided to more than double the rate at which national highways are being built—from 16km a day to 41km a day in the financial year 2016-17. This is around 2.5 times the current rate of construction. The road minister had decided to award 25,000km of national highways in FY17 compared with 10,000km in the last finical year, and raised the construction target to 15,000km as against the 6,000km constructed last year. Out of this 25,000km highway award, 15,000km are under the NHAI. Similarly, NHAI’s target for construction has been fixed at 8,000km for the current financial year. Curtis Samuel Jersey
Budget 2017: HPCL expects custom duty exemption on greenfield expansion
Sharing his expectations from the upcoming Budget 2017, M K Surana, Chairman and Managing Director, HPCL said the company would like customs duty exemptions for greenfield and brownfield expansions. Such exemptions would aid funds infusion into infrastructure projects and also allow for potentially reasonable returns, he added. Surana said that he expects the government to continue with zero duty on crude imports. However, he does not expect the government to tinker with cess for upstream companies and expects lesser subsidy provision in the Budget because he expects the overall subsidy burden on the government to be less. Below is the verbatim transcript of MK Surana’s interview to Latha Venkatesh, Sonia Shenoy & Anuj Singhal. Anuj: What would be your key expectations heading into the Budget? The government policies have been in favour of companies like yours for last three years? A: In the way that the control of the prices of motor spirit (MS) and high speed diesel (HSD) has been good for the oil marketing companies as such and the government policies has been in the direction which keeps the oil sector in good humour to that extent. As far key things which we can hope from the Budget, I don’t know whether the government will be doing it, but we have got a lot of expansion plans coming in green field and brown field, new projects as well as expansion, so if the custom duty exemptions can be given for the green field expansion and the brown field expansion then that will be a definite help in infusing more infrastructure projects and ensure that the projects have reasonable returns on that. The second things is that there is Bharat Stage (BS) VI specifications to be implemented effective 2020, so a 100 percent depreciation on those projects. In the past government has considered that as a pollution control project. So that will be another thing which we can look for. The crude import duty is zero right now and we hope it will continue. So these are the two or three main key things which we hope in the Budget. Latha: What about cess. It went from specific duty of Rs 4,500 per tonne to an ad valorem. Will they tinker that and change the ad valorem in any way? A: It depends because as the crude prices goes up, the ad valorem thing will continue to be higher and higher which does have impact on the upstream companies. However, we need to see because the expectation is that crude prices will continue to hover in the range of USD 55-65/bbl for some time. So right now the ad valorem rate is there but it is more or less not much of a difference to that extent. So I do not think there will be much change to that effect on that. Sonia: Are you expecting any kind of hike in the oil subsidies and can you tell us with every dollar increase in oil prices, what does that do to the total under recoveries? A: Right now there is no under recovery on MS and HSD. It is fully balanced. So overall subsidy burden on the government should be lesser than what it used to be. It will be only on liquefied petroleum gas (LPG) and public distribution system (PDS) kerosene. The consumption of PDS kerosene is also slowly coming down as more and more LPG being brought into the system. So overall the subsidy provision should be lesser than what has been in the past, in my opinion. Anuj: Kerosene price hike which has been the norm now. It resulted in a lot of consumption, moving away from this. Do you expect that to continue because that would again be positive from economic point of view? A: The reduction in the kerosene consumption is a result of two-three things. It is not purely because the price is being hiked, because the price is being made closer to the other kerosene, the kerosene which goes into adulteration etc gets reduced and therefore the consumption of kerosene reduces and so the subsidy burden also reduces – that’s one thing. Second, with the push on the Pradhan Mantri Ujjwala Yojana (PMUY) LPG for the below poverty line (BPL) category, so some part of kerosene is getting shifted to LPG and to that extent the ration quota will get reduced for the kerosene and to that extent some of the part of that kerosene which was not going actually for PDS and being used in some other means, will not be done. Latha: Are you privy to any targets on this BPL LPG front and therefore some estimate of how much kerosene consumption may fall – and that would be good for you profit and loss (P&L), wouldn’t it? A: Not for our P&L as such but good for the country as a whole. I do not think it will have much impact on oil companies because there is some subsidy part on that but overall from the country point, it definitely will impact. Latha: Any pressure from the government for higher dividend . It is widely believed that especially because you all have been the beneficiaries of the way the government has handled the subsidy issue. There will be more dividend request. Are you privy to anything? A: I think its better that I do not comment on this right now. Stephon Gilmore Jersey
India shouldn’t replace its dependence on imported oil with reliance on imported solar cells
Minutes after Donald Trump’s inauguration as the 45th US president, the White House website outlined his vision of an ‘America-First Energy Plan’ (www.whitehouse.gov/america-first-energy). Its focus is on policies to lower costs for Americans and eliminating ‘burdensome regulations’ in the US energy industry. The plan is that the shale oil and gas revolution in the US will spur employment and growth. Towards this, the US government will now permit tapping deposits on federal lands. Trump plans to eliminate Barack Obama’s policies like the Climate Action Plan and the ‘Waters of the US’ rule. The plan talks of reviving the US coal industry and a commitment to clean coal technology and targets energy independence. The priority is for using energy for the development of the US, with the emphasis on fossil fuel and reducing local emissions. There is no mention of climate change, a commitment to a sustainable planet, of renewables, or energy efficiency. Stimulating the economy through cheap domestic energy is the main target. So what does this mean for the global agreement for climate signed in Paris? The US, in its Intended Nationally Determined Contribution (INDC), committed to reduce its overall carbon dioxide equivalent emissions by 26-28 per cent of its 2005 levels by 2025. The Climate Action plan, which is being eliminated, was one step in this direction. If the Trump Plan results in spurring growth in US coal, oil and gas production to provide cheap energy (unburdened by harmful regulations), it is unlikely that the US would meet its Paris commitments. The US has 4 per cent of the world’s population and accounts for about 16 per cent of the world’s energy consumption and carbon dioxide emissions. India has about 18 per cent of the world’s population and accounts for 6 per cent of global consumption and emissions. The average American’s carbon footprint is 16.2 tonnes a year in 2014, about 3.6 times the world average and 10.4 times the Indian average of 1.6 tonnes a year. In his seminal 1968 essay, ‘The Tragedy of the Commons’ (Science, goo.gl/XrlngG), ecologist Garett Hardin suggestes that for commons like grazing pastures, it is optimal for each member to over-exploit (eg. raise more cattle), since they reap the short-term benefit but take only a portion of the loss. Overgrazing occurs till finally the pasture is destroyed. The only solutions are regulation or property rights. In the global climate problem, it would be impossible to come up with agreed upon regulations or property rights if a major emitter decides unilaterally to maximise its short term (perceived) benefits and ignores the sustainability of the commons. The US played a key role in holding countries like China, India, Mexico and the European Union accountable to meeting emission commitments. It will be difficult to hold other countries to emission targets if the US reneges on its commitment. India’s INDC commits to having 40 per cent of power generation capacity from non-fossil sources in 2030 (with low-cost international finance) and reduce the emissions intensity of GDP by 33-35 per cent over the 2005 values. Given the current growth in renewable-installed capacity in India, this seems achievable, irrespective of the US policy. The availability of low-cost international finance could be affected depending on the policy regimes for renewables in the US. The US policy incentives for investments in renewables and energy efficiency research and deployment has been a major catalyst for their growth. If there is a change in policy support in the US, it may impact the momentum of growth and innovation in these areas. We may benefit in the short-run from lower fossil fuel costs if the US plan meets its goal of scaling output. Also, if there is really a major investment in making clean coal technologies viable (most R&D funding had been reduced), this may help India make our coal plants more acceptable. As good global citizens with a stake in a sustainable planet, we should not deviate from our commitment to clean energy and our INDC. However, we need to re-examine the metrics of success for our energy policy. Keeping energy affordable and financing the growth of the energy sector are two critical challenges. India must be concerned with long-term energy security. Our solar mission has resulted in a significant deployment of solar power plants. However, our efforts to stimulate solar manufacturing have not been successful. We have built up production capacity of 1,400 MW of solar cells and 5,600 MW of solar modules. All these facilities are struggling to be globally competitive. The capacity utilisation of these facilities is 21 per cent for cells and 47 per cent for modules. The hallmark of our energy policy should be where we are able to utilise our energy growth to stimulate jobs and the economy. We should not replace a dependence on imported oil with a reliance on imported solar photovoltaic (PV) modules. Benson Mayowa Jersey
Experts urges greater subsidy on purchase of solar products
Experts in the field of solar conservation have urged Finance Minister Arun Jaitley to increase subsidies on purchase of solar products in the 2017-18 Union Budget to give a boost to beneficiaries. Members of global NGO Solar Cooker International (SCI) Janak Palta McGilligan and city-based Deepak Gadhia, in a letter to the finance minister, have requested that greater subsidy to be given on the purchase of solar cookers and solar dryers to beneficiaries, who are mostly women and farmers, which will enable them earn more income through its use. Padma Shree recipient McGilligan and Gadhia, a member of International Solar Energy Society (ISES), observed that the government’s scheme of giving new LPG connection to BPL families is not going to solve energy related problems as LPG fuel is going to be available only for a limited period. “Energy is largely fuel wood, animal dung, or crop residues, all of which emit smoke, pollute atmosphere, and are detrimental to health and safety of family members, particularly women,” the letter said. “Solar cooking has been viewed as one way to alleviate a number of India’s problems which could be supported by government efforts,” it said. “The use of solar cookers will solve the issue of inadequate household energy faced by rural population across the country,” Palta and Gadhia were quoted as saying in the letter sent to the FM recently. They also stated that government should give tax rebate to individuals investing in rooftop solar under provisions of Income Tax Act. Rodney Hudson Jersey
In big boost to Modi’s power push, Adani sets up world’s largest solar plant in India
It took 8,500 men working two shifts every day for six months – and three shifts for two months – to finish, ahead of schedule, the Adani Group’s giant solar power plant in southern India. The vast, 10 sq km project in Ramanathapuram, in the southern state of Tamil Nadu, is the world’s largest solar power station in a single location, according to the company. It has the capacity to power 150,000 homes – and it is one sign of how serious India is becoming about meeting its renewable energy targets. Considering the delays that commonly bog down infrastructure projects in India, the speed at which the 648 megawatt project was completed demonstrates the country’s commitment to renewables, said an analyst. “The government is very clear about its solar plan, and large installations are key to this plan,” said Aruna Kumarankandath of the Centre for Science and Environment in Delhi. Prime Minister Narendra Modi “is a real evangelist”, and has prioritised solar to meet the renewables target, she said. As a signatory to the Paris Agreement on climate change, India is committed to ensuring that at least 40 per cent of its electricity will be generated from non-fossil-fuel sources by 2030. While coal still provides the lion’s share of India’s energy, officials forecast the country will meet its Paris Agreement renewable energy commitments three years early – and exceed them by nearly half. A 10-year blueprint released last month predicts that 57 per cent of total electricity capacity will come from non-fossil sources by 2027. Solar energy is a particular focus. It makes up 16 per cent of renewables capacity now, but will contribute 100 gigawatts of the renewable energy capacity target of 175 GW by 2022. Of that 100 GW target, 60 per cent will come from large solar installations. The government is planning 33 solar parks in 21 states, with a capacity of at least 500 megawatts each. GETTING CHEAPER India’s ambitious targets come at a time when renewable energy is at a turning point in the country, as generating electricity from renewables costs nearly the same as from conventional sources. The urgency also aims to fill a gap: India is among the world’s fastest growing economies, yet one-third of its households have no access to grid power. The renewables goal will help ensure “uninterrupted supply of quality power to existing consumers and provide electricity access to all unconnected consumers by 2019”, according to the blueprint. The Adani plant, built at a cost of Rs 45.5 billion ($661 million), reflects the government’s ambitions. It comprises 2.5 million solar panel modules, 576 inverters and 6,000 km of cables, the company said. The government grants some subsidies for solar and has raised the investment target for solar energy in the country to $100 billion, with Japan’s Softbank and Taiwan’s Foxconn among others committing to the sector. But there are hurdles, with land availability for solar parks a chief concern. Conflicts related to land have stalled industrial and development projects in India, putting billions of dollars of investment at risk, according to a recent report. “Land is definitely a concern, and there’s also the issue of transmission,” said Kumarankandath. “It’s all very well to produce all this energy, but do we have transmission lines capable of taking it up? We’re also going to need large quantities of water to clean the panels.” Some states are passing new land laws to make acquisitions easier, while the government is also exploring innovative places to install solar panels, including across the tops of irrigation canals. Meanwhile, the Adani group, India’s biggest solar power producer and also its top coal-fired generator, may be unseated before long by China, which is building what it claims will be the biggest solar farm on earth: an 850 MW plant on 27 sq km of land. Bob Griese Womens Jersey
AAI chairman inaugurates central air traffic flow management in Delhi
Dr. Guruprasad Mohapatra, Chairman, Airports Authority of India (AAI) formally dedicated the Central Command Centre, Air Traffic Flow Management, at New Air Traffic Services Complex here on Thursday. The inauguration took place in the presence AAI board members, senior officers of AAI and representatives of various airlines. Dr.Mohapatra said on the occasion of the 68th Republic Day, “India is on the threshold of becoming seventh country in the world, to implement air traffic flow control measures across the country which will accrue benefits in terms of reduced carbon foot print, embarking on Green environment concept, fuel savings and economic benefits to the air travelers.” He said that the AAI is in the process of implementing the CATFM system covering the entire Indian airspace and major airports, to begin with, subsequently nationwide application. The C-ATFM system is primarily meant to address the balancing of capacity against the demand to achieve optimum utilization of the major resources viz., airport, airspace and aircraft at every Indian airport where there is a capacity constraint. The ATFM Service relies on a number of supporting systems, processes and operational data which are already in place, for efficient management of Air Traffic Flow across the country. The system displays weather information along with static information about airports, airspaces and air routes. It processes the demand / capacity information, provides decision making tools to the ATFM flow managers for collaborative decision making, in consultation with airlines, Military and Airports Operators to facilitate the regulated flow of traffic in each airport in India. With the introduction of ATFM in India, it is envisaged to have: Enhanced safety, cost savings to airlines resulting out of fuel savings approximately to the tune of Rs. 1680 crores per year, reduction in operating cost for airlines and contribution to green environment. Weston Richburg Womens Jersey
Airport curb to cabin in a flash of your eye
Clear, the biometric screening firm long hobbled by a limited network, is landing in several major US airports soon, including New York’s LaGuardia, marking the start of an era that could radically accelerate your trip from curb to cabin. But there are some bumps to smooth out first. Clear, which started at JFK International Airport earlier this month, will open screening lanes at LaGuardia and Atlanta’s Hartsfield-Jackson in the next few days, followed by Los Angeles International and Minneapolis-St. Paul by April. All told, the expansion will put Clear at 22 major airports, covering the majority of domestic American flights, according to the company. Clear doesn’t replace TSA PreCheck so much as complement it. It checks travellers’ identities with a fingerprint or iris scan, eliminating the boarding pass and identity checks. That lets Clear members proceed directly to bag and body screening. The company says about 65% of its users at the busiest airports have also enrolled in PreCheck, allowing them to retain their shoes, belts, and laptops during the screening. Clear is a reincarnation of the verified-identification idea begun by journalist Steven Brill in 2003. That company ran out of money and shut down in 2009. It was purchased in bankruptcy the following year for about $6 million by investors including Clear’s current CEO, former hedge fund manager Caryn Seidman-Becker. Other stakeholders include T. Rowe Price Group Inc., Sterling Equities, investor Bill Miller, and former executives of Priceline Group Inc. (Clear also offers security checks at various professional sports arenas.) The New York-based company, in which Delta Air Lines Inc. holds a 5% stake, has been working hard to expand its network to the point where veteran air travelers would view it as comprehensive. Glaring omissions at some major hubs, such as Chicago O’Hare and Newark Liberty, have made some frequent fliers disinclined to consider paying for the service. “In order to provide the best service and to meet the expectations of our members, we have to be in all the right airports,” said David Cohen, Clear’s chief administrative officer. “That’s really important.” There are other obstacles still facing Clear. Its lanes, for one, aren’t always located in the same terminals that have the bulk of an airport’s traffic. At both Dallas-Fort Worth and Houston-Bush airports, for example, Clear’s lanes are in terminals not used by the dominant carriers at those hubs, American Airlines Group Inc. and United Continental Holdings Inc., respectively. Cohen said each airport has different needs and requirements about where Clear can establish screening. Clear charges $179 annually, with new enrollees receiving a one-month trial for free. The company has also experimented with a variety of pricing promotions, such as $29 for a three-month enrolment last summer. Members of Delta’s SkyMiles frequent flier program get discounted memberships, while Delta covers the cost for its top-level elite members. Clear members can add a spouse or domestic partner for $50, and children 17 and younger are free. Clear says it has more than 700,000 members nationwide and will surpass 1 million in the next few months, with annual enrollment growth of 110%. If Clear reaches critical mass and becomes a viable option for all who wish to enroll, it may face a bigger problem: success. More travelers using Clear may spell longer queues at airports that already face space constraints. Isn’t Clear useful to its customers precisely because its audience is limited? Cohen said the company hasn’t yet faced this problem, even as it processes upwards of 2,000 travelers each day at its busiest locations. And the tech firm has an advantage when it comes to that issue, he said: By using technology like automated kiosks, it can expand without hiring more employees. Andre Tippett Jersey
Listen to Airlines to make the Regional Connectivity Scheme a Success
Modi government’s ambitious regional connectivity scheme is a laudable initiative that can help transform India’s aviation sector like never before. While the move is praiseworthy, airlines and government need to arrive at a consensus on how to make it work and they need to do this quickly. Under the regional connectivity scheme, UDAN, government is offering a subsidy to participating airlines that operate to airports where either no scheduled flight operates as on date or where the frequency of flights is very limited. Fares on RCS routes have been capped at Rs 2,500 per hour of flying. The scheme – and herein lies the problem – would be funded through a regional connectivity fund (RCF) created from levy of Rs 7,500 – Rs 8,500 charged to the airlines on a per-flight basis. The Federation of Indian Airlines (FIA), which represents Jet Airways, SpiceJet, GoAir and IndiGo – has opposed the levy. “Members of the FIA believe that the objective of the civil aviation policy is and, as has been stated in the policy itself, is to reduce costs. Already, 50% of an airline ticket cost goes in various forms of direct and indirect taxes and fees and so on. Here is something that adds to that cost for consumers and that’s what we oppose,” a senior airline official said as he explained on why they had opposed the move. The government, airlines say, should make every effort to bring down the cost of aviation, bring down fares and stimulate the market. The airlines seem to have a valid point here. Airlines feel there are other ways in which the scheme can be paid for – either as a budgetary grant or in terms of Airports Authority of India, which with its large deposits and high profitability, can step in. “It’s their airports which will get populated and a lot of their dead assets will become viable again once the scheme takes off. Perhaps there could be another way of funding this scheme. We feel we should not put another additional charge on passengers. Every additional charge is limiting our ability to reduce fares,” said another airline official. India is the fastest growing aviation market in the world today. Growth happens when you stimulate. This has been India’s experience in the telecom sector as well. “How much can the fares go up? Our ATF prices are already the most expensive in the world,” the official said. What airlines are saying, it seems, makes sense. The high taxes and fuel prices have seen many airlines fold up in the past and a great initiative like the RCS shouldn’t add to the passenger’s and airline’s misery. Ricardo Louis Womens Jersey
British Gas to pay 9.5 million stg for customer billing failings-Ofgem
Centrica-owned British Gas has to pay 9.5 million pounds ($11.9 million) in compensation to customers who faced billing problems after the household energy supplier upgraded its system in 2014, UK energy market regulator Ofgem said on Tuesday. Ofgem said British Gas, Britain’s biggest energy supplier, had shown failings in its registrations, complaints handling and billing processes for business customers and over 6,000 new customers had experienced delays registering with the supplier. The 9.5 million pounds comprises payments to affected customers and payments to a charity to help energy customers in need, Ofgem added. British Gas said it voluntarily reported the issues to Ofgem after it introduced the new IT billing system. “We invested in a new billing system so we could improve the service we provide to our business customers,” British Gas said in a statement. “At the time, this was a major undertaking – merging nearly 100 different systems into one. It didn’t go as smoothly as we would have liked so we reported this to Ofgem as a priority,” it added. British Gas said the issues have now been resolved and it has restored a “very good quality of customer service”. ($1 = 0.8009 pounds) Vita Vea Jersey
State-owned gas utility GAIL planning to raise Rs 750 crore through bonds
State-run gas marketer GAIL (India) Ltd is planning to raise Rs 750 crore in bonds via private placement to finance its ongoing projects. The company has decided to issue non-convertible bonds of up to Rs 750 crore with an option to double the issue size via private placement in one or more tranches, GAIL said in a statement on Friday. “The issue of the rupee bonds would help in funding the growing capex requirements for the future growth of the Company,” Chairman B C Tripathi said. The board also recommended issuance of one bonus share for every three equity shares held by shareholders. Following the issue, the paid-up share capital of the company will expand from Rs. 1,268 crore to Rs. 1,691 crore. “The decision has been taken in order to enhance shareholders’ value and acknowledge their support to the company over the years,” Tripathi said. The last time GAIL had issued a bonus share was in October 2008. GAIL has also decided to pay an interim dividend of Rs 8.5/share, or 85% of the paid-up equity share capital, for 2016-17. The record date for this is February 3. All state enterprises, especially the profitable oil companies, are facing increased demand for big dividends from the government aiming to generate enough resources to expand public spending. Mason Cole Jersey