Rural Housing targets in 2016-17 absolutely doable-MoRD
Department of Rural Development was given a target to complete 33 lakh houses in 2016-17. These included houses that were taken up under the Indira AwaasYojana (IAY) and were incomplete on 1st April 2016. Many of them were incomplete for many years. Of these, 21.57 lakh houses have been completed so far. This is nearly double of what was being completed each year in the 2012-13 to 2014-15 period. The Table below shows the year wise completion – Year Number of IAY Houses completed 2012-13 10.80 lakhs 2013-14 10.83 lakhs 2014-15 11.82 lakhs 2015-16 18.03 lakhs 2016-17 (up to 28 January 2017)21.57 lakhs Sincere efforts are being made to complete 33 lakh houses in the current financial year, in partnership with States. In the current financial year, on 20th November, 2016, Hon’ble Prime Minister formally launched Pradhan MantriAwaasYojana (Gramin) – PMAY(G), with an original approval for33 lakhs new PMAY Gramin houses, which has now been increased to 44 lakhs. The targets have been communicated to the States and after following an intensive process of beneficiary selection using SECC ( Socio-Economic Caste Census-2011) and Gram Sabha, housing design typology finalization, finalization of training programme of rural masons and geo tagging of all currently occupied houses to establish that only poor households have been selected, States have started the registration process for construction and over 14.23 lakh beneficiaries have already been registered so far. 16.53 lakh images of current dwellings are uploaded on the AwaasSoftwebsite. The work on all these houses are expected to be started over the next one month, and completion period for these houses has been brought down to only 12 months with efforts to complete more than 50 per cent of houses in six months. Most of these 44 lakh houses are expected to be completed before December, 2017. Altogether one crore and 33 lakh houses will be completed in three years from 2016-17 to 2018-19. Chris Thorburn Authentic Jersey
Rise in fuel costs, slide in rupee to hit Indian airlines: report
Aviation in India will be impacted by the rise in fuel costs in the first quarter of 2017. The slide in the value of the rupee will also impact the earnings of all airlines, Martin Consulting said in its ‘Review of Indian aviation in 2017’ report. Passenger traffic The report warns that the increase in global aviation fuel prices could result in “casualties” among Indian airlines. The report points out that the projected rise in global aviation fuel prices is expected to cast a shadow on passenger growth numbers in the near term adding that much of the over 20 per cent growth in domestic passenger carriage is on account of airlines managing to absorb costs to churn out sustainable air fares. “This will be tested in the course of the coming year,” the report says. The report which was released on Sunday adds that demonetisation will add to the negative sentiments affecting GDP growth, access to travel is likely to be impacted and airlines may find it a challenge to sustain growth and yields should airfares increase. Martin Consulting works with airlines in India, South-East Asia, Africa, East Europe and Africa. CAPA warning Interestingly the Centre for Asia Pacific Aviation (CAPA) had also warned as early as end-December that the on-going demonetisation drive and the roll out of the Good and Services Tax (GST) sometime in 2017 could impact the growth prospects of the domestic aviation industry in the next fiscal. “The Government’s demonetisation move could impact the growth of the domestic civil aviation market by as much as 3-5 per cent in 2017 though the next fiscal is expected to be the third consecutive year of domestic growth above 20 per cent,” CAPA Aviation Outlook for Fiscal 2018 had estimated. Matt Murray Womens Jersey
Govt’s focus on infra to cut down logistics cost: Nitin Gadkari
Government is working on boosting infrastructure, particularly ports, roads and waterways, to significantly reduce logistics cost that is “very high” in the country, Union Minister Nitin Gadkari said today. He made a pitch for port-led development which is “crucial” for higher economic growth. “Our logistics cost is very high. It is 18 per cent. It is easy to take any material from Mumbai to Dubai or from Mumbai to London, but it is very difficult to take material from Mumbai to Delhi as it is costly and complicated… We want to give highest priority to that on how we can reduce this cost,” he said. Speaking at the Andhra Pradesh Investors Summit, the road, transport, highways and shipping minister hoped that the target 40 km of road construction per day will be achieved by next year. “It was 2 km per day, last year, it was 18 km per day and by the end of this March, it will be 30 km per day. But our target was 40 km per day, and I am confident that next year, we will complete that target,” he said, adding that the government will complete 2 lakh km National Highway on time. By December-end, he said the ministry has finalised contracts worth USD 80 billion. About ports and shipping, Gadkari said contracts worth Rs 1 lakh crore have been finalised to give a push to the sector. “Most important for our development is port led development… we have Sagarmala as a big investment project. We have already started work on Rs 1 lakh crore,” he disclosed. Last year, the three flagships — Cochin Shipyard, Shipping Corporation of India and Dredging Corporation — recorded profit of Rs 6,000 crore and “for this year, we are expecting profit of about Rs 7,000 crore and we are going to invest this profit”. Essar Ports CEO and MD Rajiv Agarwal agreed, saying infrastructure development is key to growth and the sector needs “cheap finances to develop that”. “What we need is cheap finances… We should need infrastructure as something like defence because it is so important to give quality living to our people and take India to a stage of developed nation,” he said, adding that there should be no roadblocks on land or environment for infrastructure development. Agarwal put the estimate for India to develop infrastructure at trillions of dollars and “we need to remove all the roadblocks to get that money”. Speaking about infrastructure projects in Andhra Pradesh, the road transport minister said Rs 1,665 crore worth of projects have been completed for the Visakhapatnam port and projects worth Rs 2,702 crore are going on. “Within 3 months, we are going to award the projects of Rs 1,200 crore. On this port, we are making investment of Rs 6,000 crore,” Gadkari added. He felt that port-driven development will reduce the cost and this is one of the reasons why the government is giving priority to waterways. On Buckingham Canal near Vijayawada, the minister said: “We will try to take loan in dollars and use that for this canal project, which costs Rs 2,000 crore.” For the Amaravati-Anantpur road project, land acquisition has started and soon, it will start, according to the minister. “Before the end of our five years, we will start the work for Andhra Pradesh worth Rs 1 lakh crore,” he announced. Meanwhile, NHAI and the Department of Roads and Buildings (R&B) inked MoU for construction of 3,000 km of roads, worth Rs 75,000 crore. The second MoU was signed between NHAI and CRDA for 426 km, worth of Rs 23,430 crore. The minister also announced Rs 1,000 crore for Central Road Fund (CRF) in Andhra Pradesh and 30 rail overbridges (ROBs) at a cost of Rs 3,500 crore. Wayne Gretzky Jersey
Budget 2017: Highways sector likely to see only marginal rise in fund allocation
Highway sector’s budgetary allocation for 2017-18 fiscal is likely to be increased only marginally even as the Narendra Modi government has set an ambitious target of building almost 40km of roads per day. Government’s road-construction target was 20 km per day during UPA-II. Sources said the highways ministry is likely to get Rs 58,000 crore, up from Rs 57, 976 crore it got in 2016-17. It had sought Rs 90,000 crore (approximately). The marginal increase means the ministry will have to run a tight ship in the new fiscal, officials said. This comes at a time when the ministry has unveiled an expansion programme of constructing 20,000 kilometres of national highways over the next three years. This includes the Bharat Mala project that envisages developing 6000 km roads along coastal and border areas, Char Dham project connecting four pilgrimage spots including Badrinath and Kedarnath and Sethu Bharatam involving building 350 bridges and rail over bridges in two years. Highways ministry, however, maintains the not-so-generous allocation will not prove a stumbling block for the proposed projects as of now. “The finance ministry has allowed us to raise approximately Rs 59,000 crore from the market. This along with the budgetary allocation will see us through in the new fiscal,” said a ministry official. But ministry officials caution if the present allocation trend continues in the next couple of years, it can hit the highway-expansion programmes. “If the government wants the highways infrastructure to be a catalyst for economic progress, it will have to continue the current level of investment in the next 2-3 years,” said Rohit Kumar Singh, member (finance), National Highways Authority of India. The Modi government, like the previous NDA government under Atal Behari Vajpayee, has given top priority to the sector that had hit a rough patch since 2007. The government realises that road construction is vital for creating jobs and raising incomes, infrastructure experts said. According to credit rating and research firm Crisil, the construction sector was the most labour-dependent among all non-agricultural sectors, requiring more than 12 people to produce R10 lakh of real output. Infrastructure experts admit the sector has probably got one of the biggest boosts since 1998 when the then NDA government launched the National Highways Development Project, the largest government initiative to date to expand and upgrade the capacity of the India’s shambolic highway network. Between 2014-15 and 2016-17, the overall allocation to the highways sector has increased by 73 % — from Rs 1.3 lakh crore to Rs 2.25 lakh crore. “The one sector that will outperform is highways. The progress in the last two-and-a-half years is laudable. But the ministry has to be careful otherwise it might get affected by the ‘high expectation’ syndrome. Apart from a quantum jump in terms of project allocation, the quality too needs to improve,” said Vinayak Chatterjee, chairman of infrastructure consulting firm Feedback Ventures. Chatterjee says the ground conditions are right for a higher allocation. But he concedes there are tough challenges that the government will have to address if the current pace of development has to continue. “These range from land acquisition issues, stressed balance sheet of highway developers and banks, laden with NPAs, that are reluctant to lend,” he said. In the last two years, the government has taken a slew of policy initiatives to raise revenue and lure back the private sector to invest in highways sector. With the appetite for PPP (public private partnership) projects going down, the highways ministry decided to first move to the EPC (engineering procurement contract) model where the government funds the entire project. It also introduced a new model called “hybrid annuity” where the government gives 40 % of the construction cost while the developer invests the remaining 60 %. The new model will not result in reduced equity investments by developers, but will also reduce initial capital outflow for NHAI. Besides, the government also finalised the blueprint to auction completed public funded road projects to domestic and international players for operation and maintenance for a 15-20 year period. Mark Streit Jersey
Financial woes of power distribution cos run deep; it’s too early to evaluate Uday
India’s power sector has long been riddled with the poor financial health of the power distribution companies (Discoms) despite repeated bailouts from the Central government, the first of which was attempted in 2001. The Ujwal Discom Assurance Yojana (Uday) approved by the Union Cabinet in November 2015 aimed to permanently resolve the financial issues of these companies. While Uday does appear to be a robust attempt by the government to revive their fortunes by making state governments more responsible, it is still early days to evaluate the one-year-old scheme, which has shown mixed results till date. Woes of Discoms Discoms have long been starved of essential outlays which has not been the case for generation and transmission utilities. The focus of the power sector has been on adding to the generation capacity and meeting rising electricity demand. However, the distribution infrastructure at the consumer end has often been neglected. This has left Discoms ill-equipped to cater to the composite mix of consumers they are obligated to serve. Discoms have to deal with multiple challenges: Supplying electricity to a large number of connections with low individual loads, multiple tariff classes with cross-subsidies, power theft and planning for fluctuating. Revenue loss can be attributed to accumulation of regulatory assets, arrears in operational costs, arrears in payments to generation and transmission utilities, interest burdens, etc. State governments in India also often subsidise electricity tariffs for agricultural and domestic consumers. Delay in disbursement of state subsidies, promised to domestic and agricultural consumers, has added to the financial strain on Discoms. As a result, their debt has burgeoned despite attempted bailouts. As per the government’s 2015 estimates, the accumulated debt of all Discoms reached Rs 4.3 lakh crore. While operational and financial inefficiencies are recognised as the root cause, exact nature of the problem varies across different states and across different Discoms. Attempted reforms Uday aims at improving operational and financial efficiency of state Discoms. It does not promise any grants but voluntarily asks the states to take-over 75 percent of the debt of the respective Discoms. The scheme appears to build on previous financial restructuring schemes (financial restructuring scheme, 2012 and Distribution Management Responsibility Bill, 2013) and on aligning its targets with other ongoing programs in the power sector. Under Uday, states issue non-statutory liquid ratio (SLR) bonds and state development loan bonds, in the market or directly to the respective banks or financial institutions holding the Discom debt to the appropriate extent. The scheme requires a tripartite agreement between Discoms, the state government and the ministry of power (MoP). So far 21 states have signed MoUs. Jharkhand is the first state to sign under Uday and it cleared historic dues of the state Discom amounting to Rs 5,553 crore. Since then, Jharkhand’s state Discom has accumulated fresh dues of Rs 1,330 crore. On the other hand, the Haryana state Discom, Dakshin Haryana Bijli Vitran Nigam (DHBVN), for the first time ever since its inception recorded a profit of Rs.78 crores, in the first half of financial year 2016-17. Both the Discoms signed for Uday within three months’ gap, Jharkhand in January 2016 and Haryana in March 2016. It would be short-sighted to attribute either of the state’s results to the efficacy of Uday scheme. The Uday scheme has to be seen from a long-term perspective. The power ministry, in its memorandum of Uday scheme, announced a plan for states to absorb future losses in a graded manner: 5 percent of the previous year’s losses in 2017-18, 10 percent in 2018-19, 25 percent in 2019-20, and 50 percent in 2020-21. This indicates that the scheme has allocated financial restructuring of Discoms, anticipating the timelines for improvement in Discoms performance. Further, to improve the operational efficiency of Discoms, Uday has identified parameters, based on which ranking of states is undertaken. These parameters call for better metering, consumer indexing, augmentation of networks, quarterly tariff revisions, etc. Participating states may get priority funding through concurrent schemes on power sector development. Are Discoms entirely to blame? Despite a history of inefficient operations, the distribution segment has struggled due to a lack of investments, high costs of power procurement, delay in payments from government and under-performing power plants. About 80 percent of the costs of supply of Discoms, in aggregate, is for bulk power purchases. Revenue realisation from sale of power barely touches 80 percent of the overall cost of supply. Discoms rely on their Annual Revenue Requirement (ARR) – filings, submitted to the state regulators, for any cash surpluses, to invest in additional infrastructure. Given high costs of supply, regulators come under tremendous pressure to minimise increases in ARR, by denying mandated returns to Discoms. The generation and transmission utilities, on the other hand, get high regulated returns. The central public sector generation utilities enjoy heavy post-tax profits, while, in the same sector Discoms are bailed out by various schemes from the government.
Air traffic grows 23%, railways AC travel under 5%
Domestic air traffic is booming but the travel surge seems to have given the railways a miss, especially in the more profitable air-conditioned classes. While air traffic grew 23% to almost 77 million during April-December, the number of passengers travelling in air-conditioned railway coaches, which touched 108 million, grew at less than 5%. As a proportion of number of passengers travelling in air-conditioned coaches, air traffic was over 71%, which is a record in recent years. Just a year ago, it was a shade over 60%. As a proportion of AC passenger traffic, domestic air traffic used to hover around the 50% mark until 2014-15. For Indian Railways, passenger traffic is subsidised by freight or cargo with fares, on an average, covering 57% of the cost. Air-conditioned coaches are comparatively less loss-making, although AC three-tier was making profit. A NITI Aayog analysis showed that a couple of years ago, the railways was spending Rs 1.67 for every rupee earned from its passenger business due to its so called social obligation. But a drop in air fares on the back of a fall in global oil prices, together with the railways’ experiment with dynamic pricing -which made AC travel more expensive for those booking late -meant that it was more attractive to fly. Faced with financial stress, the transporter ignored the decline in AC traffic and chose an easier option of introducing flexi-pricing for AC classes to reduce losses, over-looking the suggestions that it should actually hold fares, where it was vulnerable to competition. Railways, as of now, controls large market share in suburban travel and long distance non-AC travel, but the state-run transporter succumbed to populist pressures and failed to rationalise fares in air-conditioned segments even as it lost short distance passengers to luxury buses and private vehicles and long-haul to airlines. The transporter was forced to bear the subsidy of around 64% on suburban travel. While this accounts for 54% of passengers, it yielded just 5.7% of passenger revenues in 2015-16. The only long-distance segment in which Indian Railways has a large market share is non-AC classes -sleeper and general, but the fare is highly subsidised. The NITI Aayog analysis showed that compared to bus fares, almost 99% of the fare in general coaches is subsidised, while in the sleeper classes the under-recovery is as much as 60%. So, railways is actually losing a share of the profitable segment. Austin Jackson Authentic Jersey
AI can help save $25 bn for airlines, airports: Study
Airlines and airports can save an estimated USD 25 billion annually from flight disruptions by harnessing artificial intelligence, cognitive computing, predictive analytics and other progressive technical capabilities, says an industry report. According to a report by Sita, a technology services provider to air transport industry, predictive tools using artificial intelligence and cognitive computing are likely to be adopted by half of airlines and airports over the next decade, which can help them save up to USD 25 billion. Predictive technologies can provide passengers with more relevant information about their journey to help them create more seamless and personal experiences, Nigel Pickford, director market insight at Sita said. “Airlines and airports are focusing on technologies that will make them more responsive to issues in their operations. This will enable them to improve their performance and customer services,” Pickford said. Artificial intelligence is developing quickly and airlines and airports are turning to the academic community to help them with predictive tools to tackle disruptions, he said. Richard Rodgers Jersey
Government proposes steep hike in licence fee for private jet operators
Private jet operators may soon have to shell out more for flying licence with the government proposing five-fold increase in the existing fee. The Civil Aviation Ministry has suggested a steep hike in fee to Rs 5 lakh for granting licence for non-scheduled operators. Besides, the fee for submitting application as well as for renewal of licence is proposed to be increased. In this regard, the Ministry has proposed amendments to the Aircraft Rules, 1937. The fee for non-scheduled operator’s permit is proposed to be Rs 5 lakh from existing quantum of Rs 1 lakh. While the application fee is to be raised to Rs 50,000 from current Rs 25,000, the renewal fee is proposed to be hiked to Rs 2,50,000 from just Rs 50,000 now, as per the draft norms. Along with the higher fee, the Ministry would increase the validity of such permits to five years. At present, the licence is valid for two years and the same can be renewed for two more years at a time. Stakeholders would have time till mid February to submit their comments and suggestions on the proposed amendments to the Ministry. Non scheduled operator permit is given to entities such as those operating or owning private jets for personal or commercial use. There are more than 120 non-scheduled operators in the country. Andre Roberson Authentic Jersey
AAI plans a centralised system to ease air traffic
Air traffic congestion and travel times, especially for flights operating from busy airports like Mumbai and Delhi, are expected to drop significantly from April as the Airports Authority of India (AAI) is betting big on a centralised platform to help flight operators and airports plan their operations better. According to officials, the Rs 107 crore Centrally-controlled Air Traffic Flow Management (C-ATFM) system integrates data from airlines, airports, air-traffic agencies and the military, to give individual flights a projected wait period at the destination airport, even before it takes off. Once fully implemented, it would reduce the holding time of planes over airports, an AAI spokesperson said. “The new system will be most beneficial for busy sectors like MumbaiDelhi where aircrafts are often unable to land due to congestion and are often forced to hover above airports resulting in delays.” AAI’s own calculation project that adopting the new system will help airlines save as much as Rs 1,680 crore per annum, on account of savings on fuel, while also enhancing passenger safety and reducing the carbon footprint. “It will also display weather details along with static information about airports, air spaces and air routes,” said officials. The system is currently being tested on the congested Mumbai-Delhi airspace and at the Delhi airport. It will be implemented at Mumbai, Delhi, Chennai, Hyderabad, Bengaluru and Kolkata airports, in its first phase which will begin in April. Marcus Cooper Jersey
Government bailed out Air India, not Kingfisher, says Vijay Mallya
The government had bailed out Air India but not Kingfisher Airlines (KFA), beleaguered industrialist Vijay Mallya said on Saturday. “Government bailed out Air India, but did not bail out KFA. So much for favours,” recalled Mallya in a series of tweets, three days after the market watchdog Sebi barred him from trading in securities with six others. The then UPA government had in April 2014 announced a Rs 30,000-crore bailout package to the loss-making state-run Air India till 2020 by way of capital infusion, hiving off its engineering services and ground handling business. Incidentally, Kingfisher grounded its services across the country in October 2012 after the civil aviation regulator Directorate General of Civil Aviation (DGCA) suspended its flying licence. The flamboyant 61-year-old Mallya, however, is reported to be in Britain in exile since he left India on March 2, 2016 after the consortium moved the Debt Recovery Tribunal in February 2016 to expedite the hearing on its recovery petition. The Tribunal on January 19 this year ordered attachment and recovery of Mallya’s properties for defaulting on bank loans by Kingfisher. Allowing a joint petition filed in June 2013 by a consortium of 17 banks led by the State Bank of India (SBI), the Tribunal’s Bengaluru bench said properties of Mallya and Kingfisher worth Rs 6,203 crore ($909 million) be recovered from them with 11.5 per cent interest per annum since July 26, 2013 over unpaid loans. Roberto Luongo Jersey