PPP spells bright prospects for Lucknow airport
Flyers may be in for better services with Union government making budgetary provision for operation and maintenance of airports in tier-II cities on a PPP (public private participation) model. Aviation experts said the provision actually replaces the privatisation scheme proposed earlier that could not take off on account of low profitability of relatively smaller airports. In UP, for example, Lucknow and Varanasi airports were proposed to be thrown open for privatisation in 2013. The government, however, stepped back and cancelled the mandatory request for quotation (RFQ) after not many private players reached out. The PPP model, however, may evince interest amongst private parties that may get involved in only a section of airport operation/maintenance while not having to bear the burden of the whole setup. A senior AAI official said how the model is executed will have to be worked out in terms of profitability. Ryan O’Reilly Authentic Jersey
Expansion by Indian carriers to help aviation sector overcome cash ban impact
Continuous addition of capacity by India’s airline companies will help the country’s aviation market overcome the impact of demonetisation, says airline body International Air Transport Association (IATA). IATA’s observation came, as it announced that ‘the domestic India market topped the growth chart for the second year in a row; passenger volumes surged by 23.3% in 2016 – twice as fast as the next fastest growing market, China.’ “It has not all been positive news over recent months; indeed, the seasonally-adjusted (SA) traffic trend slowed in H2 from its stellar upward trajectory, and business confidence has fallen following the withdrawal of large-denomination banknotes in November. However, airlines are scheduling strong flight frequency growth in 2017, which will translate into time savings for passengers and will have the same stimulatory impact on demand as a cut in fares,” IATA said in its Air Passenger Market analysis for 2016. The analysis showed that domestic air travel globally rose by 5.7% in 2016. “All major markets except Brazil showed growth, but India and China, with RPK expansion of 23.3% and 11.7% respectively, were the stand-out performers,” it said. IATA said that demand in the domestic sector globally (revenue passenger kilometres or RPKs) rose 6.3% compared to 2015 (or 6.0% if adjusted for the leap year). “This strong performance was well ahead of the ten-year average annual growth rate of 5.5%. Capacity rose 6.2% (unadjusted) compared to 2015, pushing the load factor up 0.1 percentage points to a record full-year average high of 80.5%,” it added. Russell Martin Womens Jersey
India sees highest domestic air passenger growth in 2016: IATA
Emerging as a stand-out performer, India witnessed the highest growth of 23.3 per cent in domestic air travel demand worldwide in 2016 twice that of neighbouring China, according to IATA. The global airlines’ grouping today said domestic India market topped the growth chart for the second year in a row with passenger volumes surging twice as that of China. “Domestic air travel rose 5.7 per cent in 2016. Capacity rose 5.1 per cent and load factor was 82.2 per cent, up 0.5 percentage points over 2015. “All major markets except Brazil showed growth, but India and China, with RPK expansion of 23.3 per cent and 11.7 per cent, respectively, were the stand-out performers,” the International Air Transport Association (IATA) said. Revenue Per Kilometre (RPK) is a measure of passenger volumes. Both India and China have been underpinned by additional routes and increasing flight frequencies, the grouping said, while adding that the latter is likely to continue this year. Reflecting strong growth, Indian carriers flew nearly 100 million passengers on the domestic routes last year, as per latest data from aviation regulator DGCA. To boost the domestic aviation sector, the government is working on various initiatives, including upgradation of airports as well as enhance regional air connectivity. With respect to India, IATA said it has not all been positive news over recent months. “… seasonally-adjusted traffic trend slowed in the second half from its stellar upward trajectory and business confidence has fallen following the withdrawal of large- denomination bank notes in November,” it said. In November 2016, the government scrapped old Rs 500 and Rs 1,000 currency notes as part of continuing efforts to crack down on illicit fund flows. The move has impacted the economy, including travel segment. On India, IATA also said airlines are scheduling strong flight frequency growth in 2017, which will translate into time savings for passengers and will have the same stimulatory impact on demand as a cut in fares. Globally, passenger traffic demand grew 6.3 per cent last year — much higher than the ten-year average annual growth rate of 5.5 per cent. International passenger traffic alone rose 6.7 per cent in 2016. “Air travel was a good news story in 2016. Connectivity increased with the establishment of more than 700 new routes. And a $ 44 fall in average return fares helped to make air travel even more accessible. “As a result, a record 3.7 billion passengers flew safely to their destination. Demand for air travel is still expanding,” IATA’s Director General and CEO Alexandre de Juniac said.
Air India to use government dole to trim aircraft loans
National carrier Air India is set to reduce its aircraft loans after finance minister Arun Jaitley allocated Rs 1,800 crore toward retiring debt that has been raised to fund fleet expansion of the debt-laden airline. New Delhi-based Air India, which is battling both full-service and low-cost private carriers for market share at home and the country’s immediate neighbourhood, has debt of about Rs 45,000 crore on its balance sheet: of the loans, Rs 14,000 crore are aircraft loans, while the rest are working capital funds that include non-convertible debentures of Rs 7,500 crore. Founded in 1932 and a near-monopoly until the 1990s, Air India has lost market share to more nimblefooted private carriers in one of the world’s fastest-expanding aviation markets. A reduction in fuel prices and efforts to pare down costs helped Air India turn in a better financial performance, although the carrier still accounts for the biggest quantum of industry losses. In FY16, the airline posted a net loss of Rs 3,837 crore as compared to .Rs 5,859 crore in the previous year. While the allocation for the 2018 fiscal is about Rs 1,000 crore lower than Air India’s demand of .Rs 2,800 crore, the national carrier expects the government will release more funds later. “Of the Rs 2,800 crore we had sought, Rs 1,800 crore is for repaying aircraft loans and the rest was for compensation on account of the rupee’s movement against the dollar, something that has increased the cost of servicing our aircraft loans,” a senior Air India executive, who did not want to be identified, told ET. He said the infusion will be used to repay aircraft loans. Against the US dollar, the rupee has fallen significantly over the past five years as periods of sputtering economic growth and global quest for safe stores of value have strengthened the US currency in which most global loans are denominated. In the current financial year, the government had initially allocated Rs 1,713 crore, while the carrier sought.Rs 3,300 crore. In the supplementary grants, the government allotted a further .Rs 752 crore, more making a total allocation of Rs 2,465 crore. The Rs 46,000-crore debt continues to be a drag on the carrier, and Air India chairman Ashwani Lohani had recently told ET that the government’s financial support was needed to prevent a further pile-up of loans. C. J. Prosise Jersey
South Sudan: Juba Now Extends Oil Extraction Contracts
South Sudan has extended the crude oil exploration and production licences given to Asian multinationals by five years to increase output. The Petroleum Ministry has extended the licences of Malaysia’s Petroliam Nasional Berhad (Petronas), China National Petroleum Corporation (CNPC) and India’s Oil and Natural Gas Corporation (ONGC) to 2022 to increase crude oil production to over 300,000 barrels per day. Juba has also extended the agreement with Sudan for transporting oil in two pipelines to Port Sudan. “We will move quickly to repair all the damaged facilities and put them back in production. With this package now signed, we will now be moving forward with oil production, especially in places that were shut down,” said Petroleum and Mining Minister Ezekiel Lol Gatkuoth. Juba has agreed to compensate subsidiaries of CNPC and ONGC for shutting down production in 2012 following a dispute over transit fees with Khartoum. The firms will also be compensated for disruption of output due to the civil war. However, the exact amounts have not been disclosed. Juba depends on oil revenues to finance 98 per cent of its budget, but output has declined to about 130,000 barrel per day from about 350,000 barrels per day in 2012 as a result of the civil war. “We will do our best to increase production and also support resumption of oil from the Unity fields. We will work with Ministry of Petroleum to do our best in terms of economic development,” said CNPC’s president Jia Yong. He said the co-operation between South Sudan and Sudan has to be strengthened to enable the two countries to benefit from crude oil production in the Unity State oil fields. South Sudan has been relying on oil production in Paloch oil field in Upper Nile State after fields in Unity State were shut down in 2014 due to the war. Chris Bigras Womens Jersey
Work Begins On TAPI Gas Pipeline This Month
TAPI gas pipeline is expected to begin in Pakistan this month. The Tapi Company, a special purpose company created to run the pipeline project, has awarded the project management consultant (PMC) contract to the multinational engineering and consulting firm, the ILF Group. The ILF consultant team is ready to conduct route survey, detailed engineering and feasibility study in the ongoing month. The team will be collecting local data or conduct survey for keeping track of various project development status. A senior government official told media: “A team from Turkmenistan will reach Islamabad on February 14 to begin work on the route survey, engineering and feasibility study to implement the Tapi pipeline project.” The team will first start operations this month in Pakistan and then it will move to India and Afghanistan. Mobin Saulat, Managing Director at Inter State Gas Systems, said while speaking to media persons in Islamabad: “Pipeline construction and gas-field development has started in Turkmenistan and we appreciate efforts of Turkmenistan authorities to expedite the project.” He further noted, “Pakistan had reiterated its firm commitment and continued to provide full support for the Tapi pipeline. Efforts to achieve financial close were going on and the project would be commissioned as per schedule.” About TAPI Gas Pipeline TAPI is a natural gas pipeline being constructed by the Asian Development Bank (ADB). The TAPI Pipeline Project of ADB aims to export up to 33 billion cubic meters of natural gas per year through a roughly 1,800-kilometer long proposed pipeline from Turkmenistan to Afghanistan, Pakistan, and India. TAPI presents an opportunity for regional cooperation on an unprecedented scale, linking the economies of the four countries. Afghanistan, Pakistan, and India will gain a steady supply of affordable gas to power their growing economies. Pakistan and India will receive 1.325 bcfd (billion cubic feet/day) of gas each, however, Afghanistan will get 500 mmcfd (million cubic feet/day). A gas price agreement had already been reached in 2013 to set the pricing mechanism under which the gas price at Turkmenistan borderline would be around 20% lower than the standard price of a light crude oil that serves as a standard for purchases of oil worldwide. According to the accord, Turkmenistan will invest around $25 billion to supply 3.2 bcfd of gas to energy-deficient Pakistan, Afghanistan, and India. Paul Martin Authentic Jersey
Now, a tree that can generate power
Money does not grow on trees but electricity might someday. Scientists have developed a new biomimetic tree that generates power when wind blows through its artificial leaves. The technology, developed by researchers at Iowa State University, may help people charge appliances without the need for wind turbines. The device mimics the branches and leaves of a cottonwood tree. Small strips of plastic inside the leaf stalks release an electrical charge when bent by air. Such processes are known as piezoelectric effects. Cottonwood leaves were modelled because their flattened leaf stalks compel blades to oscillate in a regular pattern that optimises energy generation by flexible piezoelectric strips. Michael McCloskey said the technology could spawn a niche market for small and visually unobtrusive machines that turn wind into electricity. “The advantages here are aesthetics and its smaller scale, which may allow off-grid energy harvesting.” McCloskey said cell phone towers in some urban locations, such as Las Vegas, have been camouflaged as trees, complete with leaves that serve only to improve the tower’s aesthetic appeal. Tapping energy from those leaves would increase their functionality, he said. Christian Fischer Womens Jersey
Tamil Nadu to get 500 Megawatt solar power plants at Rs 2,170 crore
NLC India Limited has proposed to set up solar power plants at the cost of 2,170 crore with a total capacity of 500 Megawatt in various parts of Tamil Nadu. The company has floated tenders and received quotations from different firms for setting up of the plants with capacity not less than 50MW each. Power generated from the proposed solar plants will be fed to Tamil Nadu power generation and distribution corporation (Tangedco). The company has already signed a power purchase agreement with Tangedco. It has proposed to generate 83 crore units of power per annum through the proposed solar plants. Power generation will commence within 13 months from the date of work order given to the selected firms. NLC chairman and managing director S K Acharya said the company will adopt the new system of solar development operator mode to execute all projects. As per the new system, the selected firms have to identify and acquire necessary land, obtain permission from competent authorities, design, install and commission the plants and feed power to Tangedco. The firms have to operate and maintain the units for 15 years on contract under the new system, he said. The company has proposed to establish 130MW (two 65MW units) solar power plant at a total cost of 700 crore at Neyveli following the successful commissioning of a pilot project of solar power plant with a capacity of 10MW at a cost of 75 crore. Bharat heavy electrical limited (Bhel) and Jackson Engineers Limited have been assigned the work to establish a unit each. More than 650 acres of land in the north and west side of Neyveli township has been allotted for the two projects so far, said Acharya. The company has commenced work to set up a 20MW solar power plant at Attam Bahar at South Andaman and a 30MW solar power plant at Kishori Nagar, North Andaman following a direction from the Union ministry of new and renewable energy. “The foundation stone was laid at Attam Bahar. Tendering work is underway. The plant will be installed with sufficient capacity of battery energy storage system to cater to the power needs of the island throughout the daytime and even in peak demand period. Also the preliminary work for solar power plant at Kishori Nagar has already been initiated,” said Acharya. In total, the company proposes to establish 4,000MW solar power plants at various parts of the country to generate solar power to the tune of one lakh megawatt by 2022. Roger Craig Jersey
Foreign oil companies exempt from paying tax on sale of storage leftover
Encouraging foreign firms to take capacity in India’s strategic oil reserves, Budget 2017-18 has exempted them from paying income tax on sale of oil left after the contract for storage in underground caverns has ended. Finance Minister Arun Jaitley in the Budget presented yesterday exempted income of foreign company, which books capacity in the strategic storages, from sale of leftover stock. Till now, exemption from payment of income tax was available only during the duration of the contract a company entered into for hiring the storage caverns. “Tax exemption on the sale of leftover crude oil stock will encourage foreign companies to invest in setting up Strategic Reserves in India,” Oil Minister Dharmendra Pradhan said in a tweet. In a bid to insulate the country from volatility in global oil market, the government will build two more underground crude oil storages in Odisha and Rajasthan. Jaitley said the new facilities at Chandikhol in Odisha and Bikaner in Rajasthan will have a capacity to stock 12 million tons of oil. India has already built underground storages in rock caverns at Visakhapatnam (1.33 million tonnes), Mangalore (1.5 MT) and Padur (2.5 MT). “For strengthening our energy sector, Government has decided to set up Strategic Crude Oil Reserves. In the first phase, three such Reserves facilities have been set up. Now in the second phase, it is proposed to set up caverns at two more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan. This will take our strategic reserve capacity to 15.33 million tons,” Jaitley said in his Budget speech. Strategic storages provide a country with two-fold advantage. Firstly it ensures utilisation of reserves in times of high oil and gas prices and secondly they can be used in the event of supply disruptions following unforeseen events like a natural disasters or a war like situation. The storage at Chandikhol will be an underground rock cavern while the one at Bikaner will be an underground salt caverns. “With this, India will move to the high energy table of the world,” Pradhan told PTI here. “We have a lot of learning from the first phase construction. We plan to do the second phase in 3-4 years.” Last week, UAE’s national oil company ADNOC signed an agreement to hire half of the capacity of India’s maiden strategic oil storage at Mangalore. India is 81 per cent dependent on imports to meet its crude oil needs. Abu Dhabi National Oil Company (ADNOC) will hire half of the 1.5 million tonnes Mangalore facility, officials said. An agreement to this effect was signed between Indian Strategic Petroleum Reserves Ltd (ISPRL) – the special purpose vehicle building the oil storages, and ADNOC after talks between Prime Minister Narendra Modi and Abu Dhabi’s Crown Prince Sheikh Mohamed bin Zayed al-Nahyan. Under the agreement, India will have first right to use the stored oil in case of an emergency, while ADNOC would use the facility to store oil for trading purposes. ADNOC will stock 0.75 MT or 6 million barrels of oil in one compartment of Mangalore facility. Of this, 0.5 MT will belong to India and it can use it in emergencies. ADNOC will use the facility as a warehouse for trading its oil. The 1.33 MT Visakhapatnam storage and 2.5 MT Padur stockpile together with 1.5 MT Mangalore storage will be enough to meet nation’s oil requirement of about 10 days. Pradhan said Congress-ruled Karnataka government has agreed on waiving VAT on the crude oil imported for the strategic storage, which UAE wants to use to stock oil when prices are low and supply to its customers when rates are good. Leonard Floyd Womens Jersey
M&A is buzzword of oil industry now, says Dharmendra Pradhan
he grand plan to merge state oil companies will be executed in a time-bound manner but the outcome may not be one giant company that absorbs all firms. Each new entity will straddle the entire value chain — from exploration & production to refining and marketing, oil minister Dharmendra Pradhan said. In an interview with ET, he said the government would leave it to the companies to pick their match instead of micro-managing the commercial aspects of the deal. Edited excerpts: What is the idea behind proposing a merger of state oil companies? Their bargaining and risk-taking capacity will increase. The industry is changing very fast. Merger and acquisition is the buzzword. Look at all oil majors, they are diversifying, synergising and integrating themselves. So you expect Indian companies to get into the league of BP and Shell? Yes, exactly. Will the merger result in one giant company? It will not be one company. It will not be wise to put all eggs in one basket. There will be multiple companies. But all these will be integrated (with E&P, refinery and marketing in each company). The government will not micro manage (the merger). Its role is to create policy, to facilitate that (merger). Who will merge with whom, who will acquire whom is up to the company. Their boards will take decision. Besides obtaining size and financial firepower, what is the kind of ambition we have for the oil firms? There are two things. One is to fortify the position of Indian players in the domestic market. Foreign players are welcome but Indian companies should not lose out. They should compete, upgrade themselves. Second, Indian companies should also be able to enhance their presence in the global market. Our consortium of state oil companies has done a good deal in Russia (acquisition of stakes in Vankor fields). Had Oil India or BPRL or Indian Oil tried that alone, they may not have been able to do such a deal. When will the merger start? It has already started. The FM’s statement in the Budget is not a knee-jerk statement. It’s well thought out. It will happen in a time-bound manner. All oil companies have different culture and multiple stakeholders. Mergers are not always easy… These are no big issues. No company is making a loss. There is heartburn when a loss-making company is purchased. There will be no heartburn if a profit-making company acquires another profit-making company. The merger will only enhance their competitiveness. Many CEOs and CFOs will lose jobs. Will the managements let the merger happen? These are government companies. How will they deviate from the government policy. And then, instead of 6 directors, there can be 12 directors in a company (to accommodate more people). Is it an issue? A bigger company will offer bigger opportunity. Customs duty on LNG has been halved to 2.5%. This can help boost gas consumption… Yes. The strategy is to create more consumption. This is a big incentive. The government will build two more strategic petroleum reserves. How much will it invest? It would take Rs 10,000 crore. It can get completed in three to four years. Has any policy framework been finalised for private players? We will keep a provision for the private sector and if someone shows interest we will allow him to work on this. There are two things: some people will be interested in long-term investments, others will be interested in using the reserves to store crude. Right now, we are seeking private players to use the three ready facilities. Abu Dhabi National Oil Company (ADNOC) and some Indian companies have shown interest. What are the terms for ADNOC which has agreed to partly fill one of the reserves that’s ready? There is a broader agreement and terms are still being finalized. Does the government plan to cut excise duty on petrol and diesel since prices have risen sharply in the past few months? There is no need right now. We expect prices to stay in the $55-60/barrel range, and as long as prices stay there, a cut in duty won’t be necessary. Ronnie Stanley Authentic Jersey