Work on TAPI pipeline to begin in Pakistan tomorrow: Official
The work on the long-awaited 1,680 km Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline, which will help ease energy deficiency in South Asia, will start in Pakistan tomorrow, a senior Pakistani official said today. Leaders of Turkmenistan, Afghanistan, Pakistan and India performed the ground-breaking of the project in December 2015. “Officials from Turkmenistan have reached along with a high-level delegation and an inaugural ceremony will be held on Friday to start work on route survey and detailed engineering in Pakistan,” Inter State Gas Systems Managing Director Mobin Saulat was quoted as saying by The Express Tribune. The daily reported that the route survey, detailed engineering and feasibility study, which will be conducted by a consultant are required to be undertaken before building the gas pipeline. The project management consultant will first undertake the survey and study in Pakistan and then extend its scope to Afghanistan. TAPI Company, established with the task of running the transnational gas pipeline, has awarded project management contract to German firm ILF. “Building of the pipeline and development of gas field has begun in Turkmenistan and we appreciate its efforts to step up activities in an attempt to complete the project according to the schedule,” Saulat said. He said that efforts aimed at achieving financial close of the project were also continuing and the pipeline would be commissioned as per schedule. Turkmenistan, Afghanistan, Pakistan and India have already signed a USD 10-billion investment agreement for the TAPI pipeline in a bid to kick off activities, update feasibility study and finalise pipeline route in war-torn Afghanistan. With the title of peace pipeline, the project is expected to bring peace and stability in the region because of cooperation among regional countries and reliance on each other for meeting energy needs. According to the agreement, Turkmenistan will invest around USD 25 billion to deliver 3.2 billion cubic feet of gas per day (bcfd) to energy-hungry Afghanistan, Pakistan and India. Of the total, USD 15 billion will be invested in developing the gas field whereas USD 10 billion will be poured into laying the pipeline over 1,680 km connecting Afghanistan, Pakistan and India with Turkmenistan. The pipeline will connect South and Central Asia. Turkmenistan will invest 85 per cent of the project’s cost. An official said a consortium of Japanese companies had fast-tracked development of the gas field in Turkmenistan. A gas sale and purchase agreement has already been signed in 2013 to establish the pricing mechanism under which gas price at Turkmenistan’s border will be around 20 per cent cheaper than the price of Brent crude oil. Pakistan and India will each receive 1.325 billion cubic feet of gas per day (bcfd) while Afghanistan will receive 500 mmcfd. Yohann Auvitu Jersey
Eni looks to strong project pipeline to boost growth
Italy’s Eni reported its first quarterly profit in 18 months and said it expects oil and gas production to rise 3 percent per year over the next four years after a string of high profile discoveries. Eni, the biggest foreign oil major in Africa which accounts for more than 50 percent of its output, has made major gas finds in Mozambique and Egypt, and said on Wednesday it was looking to add up to 3 billion barrels of new resources out to 2020 even as it cut investments by 13 percent. Earlier Eni beat expectations with fourth quarter adjusted net profit of 459 million euros ($484 million) helped by lower spending and higher oil prices. “We’ve never had such a strong set of projects in our history,” Chief Executive Claudio Descalzi said during a conference call with analysts on the group’s 2017-2020 plan. State-owned Eni said its organic reserve replacement ratio — a measure of its ability to find hydrocarbons — stood at 193 percent in 2016 compared to a 35 percent peer average. Exxon Mobil Corp, the world’s largest publicly traded oil producer, failed to replace 100 percent of its oil and gas reserves with new projects last year while ConocoPhillips Corp revised down proved reserves. Eni, which will reap the benefit of a ramp-up at Kazakhstan’s giant Kashagan field, expects output this year to jump by 5 percent as key projects in Angola, Ghana, Indonesia and Egypt come on stream ahead of schedule. To deal with the gas finds, the company said it aimed to develop its liquefied natural gas (LNG) business. “We can create a strong portfolio… the aim is to reach 10 million tonnes of LNG per year by 2025,” Descalzi said. Since taking over as CEO in 2014, Descalzi has refocused the group on the upstream (E&P) business of finding oil and gas. The veteran oilman, previously head of Eni’s E&P unit, has won plaudits from investors for steering Eni through the oil market slump by discovering prize acreage, cutting costs and selling assets. But his mandate comes up for renewal in the coming weeks and there is some concern his position could be undermined by a corruption probe over a Nigerian oilfield. “Upstream growth at Eni is well supported by significant organic resource access and while transformation is still in progress there’s lots of value still to unlock,” said Santander analyst Jason Kenney. Eni said it would pay a dividend of 0.8 euros per share in 2017, the same as the previous year. Under its so-called “dual exploration” strategy, Eni aims to sell down stakes in oil and gas fields it operates to raise cash to fund future development and support dividends. The company, which will generate cash flow of 47 billion euros from operations over the next 4 years, said it was targeting asset sales of 5-7 billion euros to 2020. “Around 60 percent of that will be in 2017-2018 and some 3-4 billion euros will come from diluting our stakes in fields we operate,” CFO Massimo Mondazzi said. Eni last year sold an overall stake of 40 percent in its giant Zohr field in Egypt to Rosneft and BP for around $2.1 billion. Sources have said Exxon Mobil has clinched a deal to buy a stake in the group’s Area 4 concession in Mozambique but that an announcement would not be made for some time. Descalzi said a deal to sell a stake in the Mozambique field was “not far” away, adding Eni would remain operator of a part of the field. Jake Bean Jersey
Niti Aayog wants chief in NHAI to monitor projects
In a throwback to the Planning Commission era when its secretary used to be an integral part of the National Highway Authority of India’s (NHAI) board, the Niti Aayog has proposed to the PMO that its CEO Amitabh Kant be inducted in the authority’s board. The step will help fast track clearances to highway projects at a time when the Centre is struggling to meet the current construction rate target of highways of 40 km per day. Significantly, it is for the first time since the Planning Commission made way for Niti Aayog that a proposal bearing testament to the olden era has been mooted in the NDA regime. The move which has been jointly mooted by the government think tank in tandem with the ministry of road transport and highways (MoRTH), is aimed at empowering the NHAI board to clear all highway projects on its own, instead of taking the prevailing long winding route of seeking clearances from MoRTH and the finance ministry, prior to sending them for Cabinet approval. With Niti Aayog being the PMO’s policy arm, presence of its CEO in NHAI board will strengthen it further to clear projects. Highly placed sources confirmed to this newspaper that during the Planning Commission era, the plan panel’s secretary used to be a part of the NHAI board and as the plan body’s status was equivalent to the Union Cabinet, the presence of its secretary on the authority’s board helped in expediting clearances to highway projects. Sources further informed that Mr Kant’s presence in NHAI’s board will, just like earlier times, not only help in cutting short the process of appraising highway projects, but will also empower the board to clear projects of smaller as well as higher values on its own and send them for Cabinet approval, thus saving valuable time. At present, the NHAI board proposes a highway project, and if its less than worth Rs 1,000 crore, then MoRTH itself clears and sends it for Cabinet approval. However, if the project is more than Rs 1,000 crore in value, then MoRTH forwards it to the finance ministry where the expenditure department scrutinises it and after multiple layers of scrutiny and whetting, it is sent for Cabinet approval, thus taking a lot of time in the process. While MoRTH has set for itself an ambitious target of constructing 40 km of highway stretches on a daily basis, it is being felt that owing to the long process of clearing projects, the target is a bit too steep and in actuality only around 20 km of roads per day are being constructed. The NHAI board consists of seven full time members including the chairman, while there are four part-time members, thus making it an 11-member board. Mr Kant will be the 12th member of the board. MacKenzie Weegar Jersey
Infrastructure in India: Completion of projects is behind targets, says Jefferies
Awarding pace remains sluggish with 8% y-o-y drop in NHAI awards in 9MFY17. Lack of land possession has been sighted as the reason behind bid postponement and consequent delays in awards. Hybrid annuity model is facing challenges in financial closure for new players and leading to cancellation of awarded projects. However, completion rate remains robust with NHAI reporting 26% y-o-y growth in 9MFY17. Awarding activity from both National Highway Authority of India (NHAI) and ministry of road transport and highways (MoRTH) has been lower in FY17 vs FY16. Hence the full year targets, which always seemed over-optimistic, will be missed by a large margin. Based on our channel checks, we believe that NHAI and MoRTH has awarded 3,200kms and 3,100kms respectively till mid-February. Execution has maintained pace, continuing the improvement in activity seen in the post-monsoon period. NHAI completion rate has improved by 26% y-o-y from 1,355kms in 9MFY16 to 1,704kms in 9MFY17. Monthly data on MoRTH is not available but channel checks suggest that there has been negligible impact of demonetisation on execution. In 7MFY17, overall (NHAI+MoRTH) completion had improved to 3,591kms (up 24% YoY) vs 2,892kms last year, implying a run-rate of 17km per day. But this still remains well shy of the 41km per day target. Aaron Rodgers Authentic Jersey
Infrastructure: Narendra Modi’s pet mega highway projects make little progress; land acquisition, protests, cash crunch blamed
Most of the mega highway projects for which foundation stones have been laid by Prime Minister Narendra Modi since August 2014 have made little or no progress due to a variety of reasons including problems of land acquisition, utility shifting, “protests by villagers” and cash crunch faced by contractors. PM Modi has laid foundation stones for 11 highway projects, most of them in the engineering, procurement and construction (EPC) category, where the government would fund the projects entirely. Although EPC projects face no fund constraint, unlike public-private partnership (PPP) projects, the huge slippages even in these projects reflect poorly on the efficiency of implementation. As reported by FE earlier, about 18 km of highways are built in the country every day now, against the target of 41 km a day set by the government. According to a presentation made by the road ministry to the Prime Minister’s Office recently at the latter’s instance, only two of the 11 projects launched by Modi are on track. Not a single kilometre has been developed in the four-laning project of the 125-km Patna-Buxar stretch in Bihar — the ground-breaking ceremony for which was on August 18, 2015 — as the appointment of concessionaires, selected via competitive bidding, got delayed. The project was divided into three stretches by the National Highways Authority of India to improve viability but local protests against land acquisition too played spoilsport. In two other projects as well — the Patna-Gaya-Dhobi section of NH-83 (100 km) and Port-connectivity Highway Project (18 km) — for which foundation stones were laid in August 2014 and August 2015, respectively, by Modi — there has been little progress. While only 1% physical progress against the target of 41% (for January 2017) has been achieved in the first project, in the second one, no physical progress could be achieved while the target was to complete 21% by now. The ministry attributed the delay in both these projects to slow mobilisation of resources by the civil contractor. Of the four other projects running slow, two are in PM Modi’s own Lok Sabha constituency, Varanasi. The physical progress of the four-laning of the 17-km Babatpur-Varanasi section of NH-56 and of the Varanasi bypass is lagging behind the target due to protest from local villagers even as land acquisition has been completed. The progress has also been slow in the case of the 100-km Solapur-Maharashtra/ Karnataka border project, awarded in the build operator transfer (toll) mode. Construction has been tardy on the stretch, which is among the major high-density traffic corridors in the country, connecting northern and western India with the southern India, ministry sources said, adding that just 11 km could be constructed in the last six months. Construction of the four-lane Pardi Naka flyover in Nagpur has been just 3%. With banks reluctant to shed their wariness in funding PPP projects in the sector, the government launched the hybrid annuity model, touted as a solution to the lack of equity funds in the sector, but even this has not been a runaway success. Banks are worried that equity contribution of developers in these projects — where the government’s bears 40% of the project cost — is too low, at less than 10%. However, two projects are on track — six-laning of the Eastern Peripheral Expressway and Delhi-Meerut Expressway. Sources said Modi has asked the highway ministry to speed up the projects as otherwise he would refrain from laying foundation stones for any new project.
Lessors should furnish info on aircraft for probes, says AAIB
Aviation regulator DGCA should put in place norms to ensure lessors provide information about their aircraft leased to domestic airlines whenever there is a probe, as per a recommendation by AAIB. It has been made by the Aircraft Accident Investigation Bureau (AAIB) while submitting its report on an emergency landing incident of a SpiceJetBSE -4.77 % aircraft last year. The report, which was submitted to the Directorate General of Civil Aviation (DGCA) in November 2016, was made public this week. SpiceJet’s Mumbai-Delhi flight, with 158 people on board, had made an emergency landing at the Mumbai airport on March 19, 2016. The A-319 aircraft involved in the incident was wet-leased from Bulgarian operator BH Air. No one was injured in the incident. Under DGCA regulations, a domestic airline operator is required to maintain a detailed maintenance and operational information about leased aircraft. In its report, AAIB said BH Air “did not respond to the request of SpiceJet (the lessee) for incident information that was made after the validity of the wet lease period”. When a plane is taken on wet lease, the lessor also provides crew, maintenance and insurance. Against this backdrop, the report has recommended that provisions should be there to ensure lessors share information about aircraft whenever required for the investigation purpose. “Provision should be made in DGCA regulations to ensure the lessor must provide aircraft incident/accident information to the lessee whenever required for incident investigation,” it said. AAIB investigates serious incidents and accidents involving Indian aircraft that are referred to it by the civil aviation ministry. During the investigation, AAIB found that the leased aircraft had suffered failure of hydraulic system. Donte Moncrief Womens Jersey
Flying in and out of Delhi set to get cheaper
Flying in and out of Delhi may get much cheaper by coming summer break. The Supreme Court has directed the long-standing legal tussle over Delhi International Airport Pvt Ltd (DIAL) levying 96% higher charges on airlines — which are passed on to flyers as overpriced fares — than prescribed by a government agency be resolved by April-end. The Airports Economic Regulatory Authority (AERA) had in December 2015 slashed Delhi Airport charges by a steep 96% for the period April 1, 2014, to March 31, 2019 (second control period). While this should have meant a sharp drop in airline charges, and thereby significantly lower fares, DIAL continues charging the higher tariff that AERA had approved for April 1, 2009, to March 31, 2014 (first control period). The Delhi Airport operator took legal recourse for not implementing the lower tariff order. AERA moved the AERA Appellate Tribunal (AERAAT) on this issue but the matter has been pending for a long time. Air India on January 24, 2017, filed a special leave petition (SLP) in SC on DIAL’s alleged over-charging in the current period. AI took this move due to “delay” in AERAAT deciding on the case because of the tribunal’s “frequent disbandment and reconstitution”. “DIAL has been unjustly enriched by Rs 7,257.15 crore approximately on account of revenue generated from tariff charges for the period starting from April 1, 2014, till June 30, 2016… DIAL is currently recovering Rs 300 crore (approximately) per month, and if it is permitted to continue doing so… then by the end of the second control period (March 2019), there would be a total collection of Rs 17,157.15 crore (approximately) as against target revenue of Rs 7,709.61 crore, straightaway leading to the excess collection of Rs 9,447.54 crore over and above target revenue,” Air India’s SLP says. Echoing AERA fears, AI also says in its petition that “there are no means as to how excess revenue earned (by DIAL) could be refunded to the ultimate payer.” AERA estimates that due to DIAL charging the older, higher charges, passengers flying in and out of Delhi will pay about Rs 9,450 crore as extra charges in just over three years. On February 23, 2017, a two-Judge bench of Supreme Court heard AI’s petition. The court then gave this order: “Having regard to the facts and circumstances of this case, we request the AERA Tribunal to take up the matter at an early date so as to dispose of the same within a period of two months from today. As prayed, list the matter in the last week of April 2017.” DIAL did not comment on this development until the time of going to press. Its top officials had recently told TOI that the excess collection made in the second collection period can be recovered through “truing up mechanism”. Tom Rathman Jersey
Employees demand answers from indebted flight carrier Air Costa
Andhra Pradesh-based regional airline Air Costa suspended its flight operations, citing ‘financial difficulties’ on Tuesday barely four years into operations. Allegedly mired in debt, the company, which had four Embraer-190 aircraft when it started off in 2013, has been left with none with the planes seized by its lender GE Capital Aviation Services (GECAS). Sources in the airline confirmed that the company has been struggling financially since 2015. Sixteen flights to eight destinations were affected on Tuesday, but Air Costa said they will resume on Thursday or Friday. Employees said the management did not keep them in the loop regarding the grounding of operations. The beleaguered airline has reportedly defaulted on payments to its lender. Sources in the company said some employees have not been paid since December 2016. Bruce Boudreau Jersey
PMO steps in to give Dabhol Power Project new lease of life
The Prime Minister’s Office (PMO) has stepped in to keep afloat Ratnagiri Gas and Power, the second avatar of the jinxed Dabhol power project. It has called a meeting of key stakeholders to resolve issues plaguing the company, convince the Railways to enter into a power purchase agreement, and expedite the demerger of the LNG division. Almost a decade after lenders and public sector companies revived the troubled project, RGGPL, with about Rs.8,000-crore debt, is dealing with a string of issues and PMO’s move can be a shot in the arm. On top of the agenda for the meeting that is scheduled to take place on March 4 is to resolve the issue relating to the power purchase agreement between the railways and the RGGPL which has seen a stalemate due to disagreement over pricing. The PMO may ask the Maharahstra state government to waive off state-wise transmission charges and transmission losses, and also waive off the tax on gas to the project to make the power more viable. The plan for the demerger of the LNG regasification unit from the power unit has been approved by lenders but certain issues raised by Power Finance Corporation and LIC have to be sorted out. The agenda for the meeting seeks PFC, which has loaned Rs.1,200 crore to RGGPL, to approve the demerger scheme and “separately deal with reconciliation issue of past dues”. It will also take up the modification on guarantee for bonds sought by LIC which has an exposure of around Rs.1,400 crore through these bonds. (LIC had funded some of the foreign creditors when the Dabhol account was reorganised by banks) “This is a stressed asset and we feel that now that the PMO has taken it up, the problems may ultimately get resolved and the power plant and LNG terminal would start operating successfully,” a top executive involved in the discussions said. The power pact between RGPPL and Indian Railways hit a roadblock as the latter wanted to pay not more than Rs.5 a unit (including the state-wise transmission charges) which the generator argued was unviable. “The Railways is currently drawing 500 mw from RGGPL and has agreed to continue with the quantity but the two parties are yet to reach a consensus on the tariff,” an executive involved in the negotiations said. The PMO is working on getting both the parties to agree to 500 mw of electricity at Rs.5.50 a unit for the power purchase agreement. Also, it is seeking Maharashtra government’s cooperation to waive off state-wise transmission charges and transmission losses, and value added tax or GST. Steve Nash Womens Jersey
Karipur airport runway to operate round-the-clock from March 1
The runway of the Karipur airport, which had been partially closed during the last 18 months to facilitate runway strengthening works, would become operational round-the-clock from Wednesday. The runway had been closed for eight hours daily from September 1, 2015 as part of the Rs 60-crore re-carpeting works. The 24-hour opening of runway is expected to provide relief to thousands of expatriates from Malabar. Though the works have been completed, the DGCA and Union civil aviation ministry are yet to give any positive signals about revoking the ban on operation of wide-bodied aircraft, imposed on May 1, 2015. Meanwhile, an upgraded instrument landing system (ILS) and single touch down zone lighting system, which would enhance the safety of aircraft operations, have also been installed at the airport. “Though the runway will be operational round-the-clock from Wednesday, the operators will take some more time to change their schedules. The upcoming summer schedule would see the airlines making use of the fully operational runway,” said airport director K Janardhanan. The new ILS installed at a cost of Rs 3 crore enables landing even in poor visibility conditions and provides precision lateral and vertical guidance to an approaching aircraft, using a combination of radio signals. AAI officials said that the single touch down lighting system would help prevent the possibility of overshooting of the runway by aircraft. Janardhanan said the airport was expecting a tremendous growth in the domestic sector in the coming months. “We are looking to achieve a 100% growth. We have just four flights now but we have received proposals for five additional flights. Among them are a new Indigo flight to Chennai which will start operations from March 1. Also on the cards is an Air Carnival service to Chennai,” he added. Bobby Baun Womens Jersey