Gadkari promise to shower road funds
Union minister for road transport, highways and shipping Nitin Gadkari inaugurated the three-lane New Brahmaputra Bridge at Saraighat today and dedicated it to the nation. Built at a cost of Rs 475 crore, the 1,493.58metres-long bridge is expected to ease the problem of traffic congestion at Jalukbari and Amingaon points. The foundation stone for the bridge was laid on October 22, 2006, with the target to complete it in three-and-a-half years. However, it could not be achieved because of a variety of reasons. Sources in the real estate sector said the better connectivity (through the new bridge) will certainly boost the industry on the north bank of the Brahmaputra as land use/development is directly proportionate to transportation. “Land is prime raw material for real estate. Now with the bridge to Kuruwa being proposed by the government, and if the ropeway project, which is hanging fire, materialise, the construction sector will certainly have much scope for improvement on the north bank, where land is not an issue compared to the core areas on the south bank. We can take the instance of the stretch between Jalukbari and Mirza (south Kamrup) where real estate is developing,” P.K. Sharma, the president of the Assam Real Estate Industrial Development Association, told The Telegraph. The construction was carried out by M/s Gammon India under the supervision of M/s Mott McDonald Private Ltd. The signal-free intersection at Jalukbari, flyover at Hajo junction and illumination of the bridge were added for smooth flow of traffic. The bridge was supposed to be inaugurated on January 1 but was postponed citing that the month of Puh was “inauspicious” for such an auspicious occasion. The government decided to inaugurate the bridge in February after chief minister Sarbananda Sonowal got stuck in traffic for 20 minutes while crossing the old bridge. Considering Sonowal’s request for a comprehensive development of surface, waterways and inland transport system in the state, Gadkari announced the Centre will invest more than Rs 1 lakh crore in construction of roads and Rs 2,000 crore for augmenting inland water transport. Stating that there will be no dearth of funds for the development of roads in Assam, the minister said: “You will be tired asking for funds but I will not get tired giving you funds,” Gadkari told Sonowal. He asked the state government to expedite the process of land acquisition and forest clearances for completing projects in a short time. “Altogether 1,253km of roads will be developed as national highways in Assam where the Centre will invest Rs 15,000 crore,” Gadkari said. He said the Centre had increased the Central Roads Fund from the earlier sanctioned limit of Rs 450 crore to Rs 800 crore. Gadkari said in the next two years, the National Highways and Infrastructure Development Corporation will invest Rs 8,000 crore to construct 143km roads, including important bridges and national highways. The minister said a detailed project report was being prepared for construction of 1,722km roads in the state with an investment of Rs 20,000 crore. He said his ministry will carry out dredging of the Brahmaputra from Sadia to Dhubri and effectively use the silt extracted for the development of the Brahmaputra Express Highway, which will be built as an access control highway. Gadkari also laid the foundation stone for development of the Barak river as National Waterways 16 for shipping and navigation. The work includes fairway development of Bhanga–Silchar stretch (70km) in phase I and Silchar–Lakhimpur stretch in phase II. The roll on-roll off (Ro-Ro) vessel, MV Gopinath Bordoloi, was also flagged off from Haldia port (Bengal) via the India-Bangladesh Protocol Route to serve on the Brahmaputra. Sonowal reiterated his government’s commitment to speedy and timely implementation of projects. Stephen Curry Womens Jersey
Govt has kept the promise on roads and highways but sector needs more funds
A priority target of the Union Budget of 2016-17 was to accelerate the growth of the highways segment, considering that the road sector has been ailing for the last lustrum and beyond. To achieve this target, the infrastructure sector was allotted INR 2,21,246 crores of which a sum of Rs. 97,000 crores were allocated for investment in the year 2016-17 towards development of roads. The allocation included Rs. 27,000 crores towards Pradhan Mantri Gram Sadak Yojana (“PMGSY”), Rs. 55,000 crores to Minstry of Road Transport and Highways (MoRT&H) and an additional INR 15,000 crores to be raised by the NHAI through bonds. The FM also announced that amendments will be made to the Motor Vehicles Act. The Budget also announced the issuance of guidelines for renegotiation of PPP concession agreements and development of a new credit rating system for infrastructure projects. Further, the sunset clause for phasing out tax holiday granted to undertaking engaged in developing and maintaining infrastructure facilities which includes roads and highways was extended from April 1, 2016 to April 1, 2017 with the view incentivise the roads construction sector. Accordingly, suitable amendments to Section 80-IA of the Income Tax Act, 1961 (“IT Act”) was proposed in the Budget. Additionally, deduction of 100 per cent expenditure of capital nature incurred for developing or maintaining or operating roads and highways was provided by amending Section 35AD of the IT Act. On the indirect tax, however, surprisingly, a regressive step was taken by withdrawing exemption of countervailing duty being provided on import of specified machinery required for construction of roads thereby. The CVD was prescribed at 12.5 per cent. Post Budget 2016-17 – Implementation True to its promise, the Government awarded a total length of 5688 km of highways up till November 2016, out of which a total length of 4021 km has been constructed. The Motor Vehicles (Amendment) Bill, 2016, was introduced and required the Center to develop a National Transportation Policy in pursuance thereof. The Bill aimed at safeguarding the interest of the public and ensuring equity, while seeking to enhance private participation in the highway sector. A National Road Safety Council was constituted as the apex body to take policy decisions in the matter of road safety under the National Road Safety Policy. Further, an amount of Rs 600 crores which were earmarked for road safety purpose for the FY 2016-17 has been spent on rectification of black on the national highways. The Department of Economic Affairs (DEA) has developed a report on the framework for renegotiation of PPP contracts, with a particular focus on the National Highway and Major Ports Concessions. Based on this report, the DEA is currently working on identifying the requisite modifications/amendments to the existing MCAs; as well as the regulatory and policy regimes necessary to implement such recommendations. CRISIL, primarily in consultation with the Ministry of Finance, has developed a new credit rating framework for infrastructure projects that would facilitate greater participation by long-term investors and lenders. The new credit rating system was released on January 12, 2017, and is based on the ‘expected loss’ (EL) methodology. Budget 2017-18 Expectations A very good progress has been made as regards the various promises made out in the Budget. Having said this, the road and highway sector requires assured funding to properly plan, prepare and award projects, involving a gestation period of 3 to 5 years. The ministry of road MoRT&H has requested the Finance Ministry to allocate Rs 90,904 crore to help in timely completion of the ongoing highway projects and to compensate for the toll revenue losses following demonetisation. However, according to media reports, said indicated/estimated outlay in the budget for 2017-18 is only Rs 58,362 crore. The proposed reduction in allocation of national highway sector would cause a major setback in the progress of ongoing projects and in the achievement of targets. Thus Budget 2017-18 should address the issue of funding road projects and would be required to allocate requisite funds for completion of ongoing projects. The Government could explore looping in the State Governments and private sector for funding the projects. Budget should also propose setting up of logistics parks along national highway corridors linking ports and manufacturing hubs, setting up of bus ports with better facilities requires be given priority. The sector is also looking at setting up of ‘Automobile clusters’ across the country including Chennai. On the fiscal front, tax holiday under Section 80IA should be extended beyond April 1, 2107. The exemption from MAT is another issue which the infrastructure sector has been raising year on year should be considered since MAT results in outflow of cash which would hit the sector badly which is already facing cash crunch on account of demonetisation. Other amendments to Section 80IA and Section 35AD of the IT Act would be required to clarify that modernisation and expansion of existing roads and highways would also qualify as new infrastructure facility. Currently, there is an ambiguity as to whether modernization or expansion of existing roads and highways would qualify as new infrastructure facility qualifying for tax holding under Section 80IA and capital deduction under Section 35AD of the IT Act. It is also suggested that the exemption to CVD on machinery required for construction of road should be restored in order to incentivise the road projects. Carlos Henderson Jersey
Rs 42 lakh cr infra investments seen over next 5 years: CRISIL
With about Rs 42 lakh crore infrastructure spends lined up till fiscal 2021 amid sharpening government focus on roads, railways, irrigation, and urban infrastructure. The four segments of roads, railways, irrigation, and urban infrastructure are expected to account for over 68 percent of infrastructure investments over the next five years. Roads: CRISIL Research expects investments in road projects to double to Rs 9.8 trillion over the next five years, driven by recovery in national highways and faster completion of the rural roads programme. A number of government initiatives over the past two years have aided the pick-up in the awarding of contracts by the National Highways Authority of India, that is expected to grow at 18 percent this fiscal over the robust 43 percent growth of fiscal 2016. Railways: Railways has been another area of government focus, evident from a 21 percent higher allocation in Union Budget 2016-17. We expect investment in railways to double over the next five years until fiscal 2021 to Rs 7.2 trillion. A large portion is towards completion of projects such as the Domestic Freight Corridor. Irrigation: Investment in irrigation is expected to rise almost two times over the next five years to Rs 5.9 trillion. Six major states account for over 60 percent of the investments, with Gujarat, Karnataka and Maharashtra being the top three spenders. The government’s bottom-up approach, well-defined systems and processes for approvals, monitoring of actual progress and fast-tracking of close to 75 projects will drive spends. Urban infrastructure: The government’s thrust on urban infrastructure development is clear with the launch of various schemes such as Smart City, AMRUT, and Swachch Bharat and emphasis on quicker execution of metro rail. Investments of Rs 5.9 trillion over fiscals 2017 to 2021 will be more than twice than in the previous five years. Power: Conventional power segment investments (as in thermal power) are set to decline while investment in renewables and transmission and distribution will rise given the government’s focus on renewable energy. Given stressed financials of private sector generation companies and lack of fresh power purchase agreements expected from distribution companies, conventional power-based capacity additions will slow down to ~47 GW over fiscals 2017 to 2021, led by central and state PSUs. On the other hand, capacity addition in the renewable space (wind and solar) are driven by strong government support, falling capital costs, and improvement in the execution ecosystem. Airport and ports: Investment in airport infrastructure and ports will remain muted over the next few years. While airport infrastructure would incur spends worth Rs 250-275 billion, port investments will be pegged at Rs 325-375 billion. The contribution of greenfield airports will increase to 75-80 percent by fiscal 2021 compared with 40-45 percent in fiscal 2016. Slower pick-up in Tier II and Tier III city airports will lead to the slow momentum. In ports, a 2-4 percent expected rise in port traffic until fiscal 2021 would be led by improvement in the petroleum, oil and lubricants (POL), iron ore, and container segments. With these planned investments, the overall capacity would grow at 3-5 percent compound annual growth rate to reach 2,008 million tonnes by fiscal 2021. Joe Colborne Jersey
AAI to construct 170 parking bays as airlines look to import more aircraft
The Airports Authority of India is to build 170 aircraft parking bays and six hangars at the airports that it runs in the country. The exact number of parking bays and the airports they will come up in will be decided soon, a senior AAI official told BusinessLine. It is likely that the construction of the aircraft parking bays will not include the airports at the four metros — Delhi, Mumbai, Hyderabad and Bengaluru. Technically speaking, these airports are no longer with AAI but are run as joint ventures with the private sector. The construction of the parking bays will allow airlines to park their aircraft late at night at these airports and possibly start early morning flights from these airports thus helping airlines to utilise their aircraft better. The move to construct more parking stands is being taken up to accommodate close to 400 aircraft that airlines in India plan to import over the next few years. Joining the list of airlines which will require space for parking their aircraft is SpiceJet, which earlier this month signed an agreement with Boeing to import 200 aircraft. Delivery of aircraft The delivery of the SpiceJet aircraft is expected to begin in the fourth quarter of 2018. A few days before SpiceJet, GoAir had announced that it had signed up for 72 Airbus 320 New Engine Option aircraft taking the total number of such aircraft that the airline will be inducting to 144.
Apply same rule for all players: Spicejet on OTP system review
With the aviation regulator DGCA reviewing airlines’ on-time performance (OTP) mechanism at four airports, budget carrier SpiceJet today called for applying same rules for all players and making the system more efficient. “If data is challenged, do it in a better way … as long as rules are same for everybody, then there is no problem,” SpiceJet Chairman and Managing Director Ajay Singh said today. His comments came against the backdrop of Directorate General of Civil Aviation (DGCA) setting up a committee late last year to look into the OTP monitoring system of domestic carriers at four airports of Delhi, Mumbai, Hyderabad and Bengaluru after another budget carrier IndiGo complained that the current system was flawed. OTP is one of the several measures to determine an airline’s operational efficiency. It indicates whether an airline is operating its flights on time or not. “If the system can be made more efficient, please do (review it),” Singh said. Jason Spriggs Jersey
India’s Air Passenger Volumes To Reach 310 Million By FY18
Domestic air passenger volumes (pax) have been consistently increasing and are likely to reach 310 million by financial year 2017-18, says India Ratings and Research (Ind-Ra). This will be driven by the aspirations of the middle class to travel in flights and a reduction in price differential between air travel and rail journey, including the recently increased cancellation fees for train tickets. The slowdown in economic growth during the first half of the current decade had minimal impact on pax growth. However, the 2008 global economic crisis and fuel and currency crises in fiscal 2012-13 had a pronounced impact on air traffic growth. The gradual increase in private final consumption expenditure has been buttressing India’s pax growth since early fiscal 2013-14. Ind-Ra’s sensitivity on economic growth also underlines the strong underlying fundamentals and continued growth in pax volumes. Matt Schaub Authentic Jersey
Reduce taxes to support aviation industry
Budget 2017 is expected to be one of the most difficult and watershed budgets in the history of India. There are too many variables, like demonetisation, the mid-year introduction of GST (Goods & Services Tax) and its uncertainty in tax revenues; and most importantly, the expectations of the poll going public and the rest of the country who are expecting the next benefits after enduring the pains of demonetisation. Of course, there’s the advancement of the budget date and the merger with the rail budget. Aviation and travel are enablers of the economy and no longer a rich man’s indulgences. Governments across the world have realised this and are spurring demand in travel. Governments in India have been continuously raising taxes on these sectors and are dampening demand due to rising travel expenditure. The recent six fold increase in service tax on hotels and doubling of service tax on packages is an example of this and we need to move in the opposite direction, especially as travel was affected slightly post demonetization. Alex Delvecchio Authentic Jersey
Kavali airport project hits a road block
In the final stages of commencement of work on the airport being developed at Dagadarthi near Kavali in Nellore district, the project has hit a roadblock. This is because of the government’s preference to go in for a centrally located and commercially viable project, rather than one fraught with viability risks. The priority has now changed to developing an airport nearer the special economic zones (SEZs) and industrial hubs located in the Krishnapatnam and Gudur areas. These places are also easily accessible to industries in Nayudupeta and Tada. Accordingly, Chief Minister N. Chandrababu Naidu has already instructed the departments concerned and also the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) to take a fresh look at the airport project. Seth Joyner Authentic Jersey
HPCL, GAIL Sign Pact With Andhra Pradesh For Rs 400 billion Petrochemicals Project
Hindustan Petroleum Corp Ltd. (HPCL) and gas utility GAIL India Ltd. signed a pact with Andhra Government for setting up a Rs 400 billion petrochemical plant in the state. The 50:50 joint venture will set up a 1.5 million tons Ethylene Derivatives plant, which will produce a wide range of petrochemical raw materials for the manufacture of detergents, paints and coatings, cosmetics, textiles and adhesives. “What we have signed is an MoU expressing intent for setting up the petrochemical plant,” GAIL Chairman and Managing Director B C Tripathi told PTI. Andhra Pradesh government will support the project by providing infrastructure, power, roads and other clearances. The plant will be set up at the Petroleum, Chemical and Petrochemicals Investment Region (PCPIR) sites identified by the state government at Kakinada. The MoU was signed by Tripathi, HPCL Chairman and Managing Director Mukesh K Surana and Kartikeya Misra, Director, Industries in Government of Andhra Pradesh. GAIL-HPCL combine may divest half of the project stake in favour of a strategic partner at a later date. Some global petrochem companies have shown interest in the project but talks are at preliminary stages currently, Tripathi said without disclosing details. The project is a truncated version of the earlier proposed refinery-cum-petrochemicals complex in Andhra Pradesh. HPCL has for the time being shelved plans to build a new refinery and is only pursuing petrochemical project. HPCL and GAIL decided to do the petrochem plan together after their plans to team up with France’s Total, Lakshmi N Mittal Group and Oil India Ltd. (OIL) for a 15 million tonnes a year refinery-cum-petrochemical plant at Visakhapatnam in Andhra Pradesh fell through. Tripathi said currently detailed feasibility report (DFR) is being prepared and details will work out following that. HPCL had in 2007-08 planned an only—for—exports refinery to target demand in South East Asia and the Middle East. The five-way alliance of HPCL, explorer OIL, gas utility GAIL India, Mittal Investment Sarl and Total had in October 2007 signed a memorandum of understanding to look at the feasibility of setting up the Vizag project. In 2009, the Rs 500 billion project was put on hold as petrochemical demand then was seen as too weak to justify the investment. Total did pre-feasibility for the refinery project and demand studies, while GAIL was in charge of the study of the petrochemical unit. But the project was in 2010 put on back burner before equity structure could be decided Oil slides as strong U.S. drilling activity weakens deal to cut output Oil prices fell on Monday as news of another increase in U.S. drilling activity spread concern over rising oil output just as many of the world’s oil producers are trying to comply with a deal to pump less in an attempt to prop up prices. The number of active U.S. oil rigs rose to the highest since November 2015 last week, according to Baker Hughes data, showing that drillers are taking advantage of oil prices above $50 a barrel. Global benchmark Brent crude oil prices were down 25 cents at $55.26 a barrel at 1010 GMT, while U.S. crude futures slipped 8 cents to $53.09. “Oil prices are down because of the rise in the U.S. rig count,” said Tamas Varga, analyst at PVM Oil Associates in London. He also added that Petro-Logistics’ report that OPEC members had cut production by 900,000 barrels per day (bpd) in January was “not very encouraging” because it implied that only 75 percent of the OPEC production cut target was being met. The Organization of the Petroleum Exporting Countries and other producers including Russia agreed to cut output by almost 1.8 million barrels per day (bpd) in the first half of 2017 to relieve a two-year supply overhang. Oil prices have remained above $50 a barrel since producers agreed the deal in December, incentivising drillers in low-cost U.S. shale producing regions to ramp up activity. “In our view the strong rise in U.S. shale oil rigs is a good thing because it will be needed over the next three years as non-OPEC, non-U.S. crude production continues to be hurt by the deep capex cuts both past and present in that segment,” said Bjarne Schieldrop, chief commodities analyst at SEB Markets in Oslo. He estimates the U.S. rig count will continue rising at a rate of seven rigs per week over the first half of the year. Golden Tate III Authentic Jersey
Bottlers refuse to import LPG
Gas bottlers have been refusing to import liquefied petroleum gas (LPG) even though the government has agreed to their longstanding demand to be allowed to operate their own tankers because now they have another complaint. They say that a clause in the recently amended LP Gas Transport Bylaw 2017 is impractical because it requires them to sell their products in areas fixed by Nepal Oil Corporation (NOC). Diwan Chand, general secretary of the Nepal LP Gas Industry Association, said they would not take purchase delivery orders (PDOs) from NOC until it revised the offending provision in the bylaw. “Most importers have their own bottling plants, so how can they sell the imported gas to others instead of distributing it from their own plants?” he said. The government has allowed 46 gas plants to import 775 bullet tankers. The use of own tankers is expected to save the country Rs2 billion annually in freight charges being paid to Indian transporters. NOC issues PDOs to gas importers who buy LPG from depots of Indian Oil Corporation (IOC) in India. Currently, Nepal’s imports of LPG are being shipped in Indian gas bullets. A month ago, Everest Gas Industry of Kathmandu acquired two gas bullet tankers, but it has not yet taken PDOs from NOC. According to the association, gas importers have placed orders for 300 gas bullets. “NOC’s provision has put their investment at risk of loss,” Chand said. Meanwhile, NOC claimed that the bylaw was not meant to discourage importers from bringing LPG in Nepali-owned bullet tankers. NOC Spokesperson Bhanubhakta Khanal said that the corporation would not enforce the provision when there is normal supply. “NOC has been authorised to intervene and invoke the provision only when there is a short supply of cooking gas in the market,” said Khanal, adding that the provision had been inserted in the bylaw to ensure regular supply of the essential cooking fuel. Khanal blamed the delay in importing cooking gas on bullet tanker owners who had not completed the official procedure necessary to transport the fuel. “The newly imported bullet tankers have not been certified by NOC technicians, and their owners have not obtained an explosives licence and road permit from Indian authorities.” Khanal said NOC was always open to holding talks with gas bottlers about the provisions in the bylaw. Charles Woodson Authentic Jersey