Cheaper flights on anvil: Government to declare UDAN bid results by March 15
The government will likely announce the winners of its regional connectivity scheme UDAN by March 15, CNBC TV18 reported citing unidentified sources. It said that 11 companies were learnt to have submitted the bids operating subsidised flights on 200 routes across the country, covering 43 airports. The government had invited bids from carriers to start regional flights at a discount on routes and airports that are underserved, in order to facilitate cheaper connectivity for a larger section of the society. The government will choose the eligible airlines to operate flights under UDAN scheme through a reverse bidding process, where the airlines will claim government subsidies and tax incentives in return for flying at tariffs which will be capped. Reportedly, the 11 airlines that had submitted bids under the scheme include Air India, Spicejet and TruJet, which have small aircraft which are most suitable for operating regional flights. Others who submitted bids included mostly unscheduled and charter operators. SpiceJet has submitted bids for flights originating from Mumbai, Delhi and Kolkata, and has not sought any government subsidy. The scheme seeks to take the number of active airports in the country to 118 from the current 75, by making operational 43 airports which have high potential under the UDAN scheme. Out of these 43, the government says it has identified 30 airports at which the operations could be started immediately. RCS (Regional Connectivity Scheme), or UDAN (Ude Desh ka Aam Nagrik), was introduced as part of the National Civil Aviation Policy 2016 and was formally launched in October last year. It aims to provide opportunity to the masses to fly with fiscal incentives, infrastructure support and monetary subsidies such as viability gap funding. Under the scheme, the routes will be awarded to the carriers for three years. The scheme itself will remain operational for 10 years. Under UDAN scheme, the fare for a one-hour aeroplane journey of about 500 kilometres or a 30-minute helicopter journey will be capped at Rs2,500, with proportionate pricing for other routes with different lengths and duration. T. J. Logan Authentic Jersey
Around 12%work on expressway underpasses completed, DC reviews progress
Around 12% of the work on the three underpasses on Delhi-Gurgaon Expressway has been completed in the last two months. One side of the flyover at Hero Honda chowk will be completed by March 31 and will become operational by the first week of April. The dates were announced in a review meeting chaired by Gurgaon deputy commissioner Hardeep Singh, who inspected the project sites on Saturday along with National Highways Authority (NHAI) officials. The Delhi to Jaipur side of the much-awaited flyover at Hero Honda Chowk on Delhi-Gurgaon expressway is likely to open in the beginning of April, reducing the traffic load on the expressway. The 1.4km-long flyover is being constructed as part of three-layer crossing — flyover, underpass and at grade road. Work on the underpass at the junction is also on the fast track. As far as the work of the underpasses at the three junctions — Iffco Chowk, Signature Tower Chowk and Rajiv Chowk — is concerned, it was informed at the meeting that in the last two months about 12% work has been completed. The total cost of this project is Rs 1,005 crore and the likely date of completion is March 2019. But the NHAI is aiming to complete the project ahead of schedule — by the end of 2018. At Rajiv Chowk, the construction of a two-lane underpass on either side for signal-free traffic movement via Sohna-Gurgaon Road is underway. A two-lane underpass for traffic coming from Medanta Hospital towards Delhi and an underpass rotary for non-motorised vehicles and pedestrians across the NH-8, connecting all four arms of the main junction are also progressing. The NHAI authorities said the parking area near Rajiv Chowk will be handed over to public works department in about 20 days and the PWD will carry out the pavement work. This will help in keeping the dust from flying and bring down the pollution level. Singh assured the highway authorities that all help will be accorded to them to ensure that the project is completed within the stipulated time as these underpasses are crucial for decongesting the city.
26,815 KM OF RURAL ROADS LAID THIS YEAR: GOVT
A total of 6,372 rural roads measuring 26,815 km had been laid in Chhattisgarh so far involving an expenditure of Rs 7,880 crore under the Pradhan Mantri Gramin Sadak Yojana (PMGSY) during the current financial year so far. This was informed by officials at a meeting of the State-level Permanent Committee of the Chhattisgarh Rural Roads Development Authority chaired by Chief Secretary Vivek Dhand at the Mantrlaya on Saturday. A total of 6697 rural roads had been approved by the Central Government measuring 29,562 kms under PMGSY. A total of 105 new roads would be constructed in various districts of Chhattisgarh under batch-II of the project work under PPMGSY, officials informed. It may be recalled that the worst insurgency infested districts of Chhattisgarh would be able to further provide a boost to rural road connectivity work with the Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Narendra Modi approving a Centrally Sponsored Scheme namely “Road Connectivity Project for Left Wing Extremism (LWE) Affected Areas”. The project is aimed at improving the rural road connectivity in the worst LWE affected districts from security angle, officials informed. The project will be implemented as a vertical under PMGSY to provide connectivity with necessary culverts and cross-drainage structures in 44 worst affected LWE districts and adjoining districts in the country, critical from security and communication point of view. The roads will be operable throughout the year irrespective of all weather conditions. Under the project, construction/upgradation of 5,411.81 km road and 126 bridges/Cross Drainage works will be taken up at an estimated cost of Rs 11,724.53 crore in the above district. The fund sharing pattern of LWE road project will be same as that of PMGSY i.e. in the ratio of 60:40 between the Centre and States for all States except for eight North Eastern and three Himalayan States (Jammu & Kashmir, Himachal Pradesh & Uttarakhand) for which it is 90:10. The Union Ministry of Finance will have to allocate to Union Ministry of Rural Development Rs 7,034.72 crore for this project during the period of implementation 2016-17 to 2019-20. The Union Ministry of Rural Development will be the sponsoring Ministry as well as the implementing Ministry of this project. The likely duration of implementation of the project is four years from 2016-17 to 2019-20. The “Road Connectivity Project for LWE Affected Areas” is envisaged in LWE States including the 35 worst affected LWE districts which account for 90% of total LWE violence in the country and 9 adjoining districts critical from security angle as per the inputs and lists of roads / districts provided by the Union Ministry of Home Affairs. The roads taken up under the scheme would include Other District Roads (ODRs), Village Roads (VRs) and upgradation of the existing Major District Roads (MDRs) that are critical from the security point of view. Bridges up to a span of 100 meters, critical from security angle would also be funded on these roads. Notably, a total of 16 construction works of 698 kms of roads in Left Wing Extremism (LWE) affected areas are under construction in Chhattisgarh, officials informed. The input cost of these roads is Rs 928 crore . Roads up to a length of 435 kms had already been laid in the insurgency infested districts, they informed. A total of 5894 kilometers of roads will be laid, 223 buildings will be constructed and 144 bridges and railway overhead bridges will be built in the entire State during the next 18 months, they informed. Roads measuring up to 1322 kilometers had been laid, construction of 49 buildings and 23 bridges had been completed till date. The Government is also targetting to lay 1526 kilometers of State Highways roads worth Rs 10,171 crore till March 2018. Twenty-eight developmental works relating to the roads had already been sanctioned. Roads measuring up to 253 kilometers had already been laid till date. Eighteen developmental works relating to laying of roads worth Rs 1965 crore with the financial aid of the Asian Development Bank (ADB) had already been in the pipeline. There is a proposal to construct 233 State Government buildings with a sanctioned of Rs 1349 crore. Forty-nine buildings had already been constructed. Bridges and railway over-bridges (144) worth Rs 1050 crore had been sanctioned. Twenty-three bridges had been completed by now. Chief Minister Raman Singh had recently asked the Chhattisgarh Road Development Corporation (CGRDC) officials to lay a network of 808 kilometers roads at a cost of Rs 2179 crore in another 18 months time. He directed officials to complete the laying of roads by May 2018, officials informed. The Chief Minister also laid stress on completing the rural road connectivity projects so that the villagers can have smooth all-weather transport in the years to come. Singh was reviewing the road development projects recently at the Mantralaya in Naya Raipur. During the meeting, the Chief Minister ordered the inclusion of Dhamdha- Gandai- Salhetekri in Rajnandgaon district in the ongoing roads’ network project. The 39-kilometer road will be laid at a cost of Rs 120 crore. The officers gave a detailed presentation of the roads project being laid in the State. The Chhattisgarh Government has set 2018 deadline to complete construction of an additional 3,000 kms of road network with an investment of USD 2.34 billion. This is based on the basis of an Annuity/BOT/Loan from the Asian Development Bank (ADB), official sources informed. Notably, ADB had also been helping Chhattisgarh government upgrade about 916 kilometers of roads in the State. The works include development of new road sections, two laning work, constructing and strengthening culverts and bridges, officials stated. Notably, new stretches of rural roads are rapidly coming up in Chhattisgarh with massive funding support from ADB, officials stated. The ADB has provided lending support to Chhattisgarh for projects undertaken under PMGSY. The international funding agency had been helping to either construct or upgrade 31,000 kms of rural roads in the states of Chhattisgarh, Madhya Pradsh, Odisha, West Bengal and Assam
NHAI yet to set fresh deadline as investors sweat over NPR fate
In April 2011, construction for the much hyped Northern Peripheral Road (NPR) road project started and it was supposed to completed in a year, by March, 2012. However, it has missed several deadlines since and in April 2017, the project will have completed seven long years since being commissioned by the Huda (Haryana urban development authority). Now, with the project having changed hands and the NHAI (National Highways Authority of India) being assigned the task of taking it forward, there’s new hopes of it finally coming to fruition. While the Huda failed to get it off the ground, all eyes are now on the NHAI to bring the project to fruition. However, the NHAI is yet to set a fresh deadline for the project. “The NHAI has taken over the project. While the entire expressway will span 27 km, the Gurgaon stretch will cover 18 km. The enitire stretch is proposed to be open to commuters at once. We will soon set a fresh deadline for the project,” AK Sharma, project director, NHAI, said, adding that the all issues regarding land acquisition and rehabilitation of displaced people have to be resolved by the Huda at the earliest. Of the 18 km Gurgaon stretch of the Dwarka Expressway project, the bituminous work over 15 km is complete and the remaining 3 km covering the New Palam Vihar and Kherki Daula stretch is still ongoing. For the investors who have pumped crores into the project, the six-year wait for the project to see the light of day could be prolonged for another two years or more. “The Northern Peripheral Road (NPR) or Dwarka Expressway project could have been completed long back had the Huda and successive Haryana government taken it forward on a priority basis,” a developer associated with the project said, adding that even after the NPR is ready to be thrown open to the commuting public, it could take another few years for the required infrastructure to be put in place. The oustees, who weren’t considered for rehabilitation by the Huda, has set their hopes of relief on the Punjab and Haryana High Court. Responding to an earlier petition, the high court had directed the Huda to consider all oustees, including the general power of attorney and special power of attorney holders, for rehabilitation. However, the oustees who were left out of the plot draw, later moved a fresh plea against the Huda claiming it violated the court’s directive. “The delay has caused irreparable loss to investors. However, we still have hope that the project will be a reality some day. I believe more than 100 residential and commercial projects have been delayed due to litigations regarding the NPR project,” Captain Sameer Singh, an investor, said. None of the displaced 600 families have got alternative plots as yet. “I filed a contempt petition against the Huda for not considering be eligible for the rehabilitation package. They left me out as I am a GPA holder. The court will hear my petition on February 28,” Ram Babu Sharma, a plot owner at New Palam Vihar, said. According to plot owners, the majority of plots mired in litigation was sold by brokers on the general or special power of attorney (GPA-SPA) much before the Huda issued acquisition notices. “Gopal Subramanium, former Solicitor General of India who represented the Haryana government in 2010, had said that all petitioners shall be rehabilitated. However, despite the assurance, the Haryana government has continued to drag its feet on the issue,” Rajkumar, another plot owner, said. While many GPA-SPA holders built their houses, many plots by these holders continue to be vacant. “The government should resolve the issue at the earliest. The investors will be relieved and infrastructure will get a massive boost,”Navin Raheja, a member of the National Realty Development Council (NRDC), said. All eyes are now on a court hearing on a Huda plea on March 16. “While work on 15 km of the Gurgaon stretch is complete, the remaining stretch is caught up in litigation. We’re trying to resolve the rehabilitation issue,” Yashpal Yadav, the Huda administrator, said. DeAndre Hopkins Jersey
SpiceJet shuns UDAN subsidies
No-frills carrier SpiceJet will fly without subsidies to unserved airports from three of India’s biggest urban centers, helping achieve the federal goal of boosting regional aviation connectivity in a country that relies on crowded railroads and rickety roads to link its cities to the hinterland. Among eleven airlines applying for regional flights under the plan patronized by Prime Minister Narendra Modi, SpiceJet has offered to operate regional flights out of Mumbai, Kolkata and Delhi without cash support from the government, according to two government officials. The program, Ude Desh ka Aam Nagrik or UDAN, aims to enhance grassroots adoption of aviation as a transportation medium and offers carriers cash subsidies for selling up to 40 seats at Rs 2,500 for each hour of flight. “SpiceJet would earmark 20 out of 70 seats as regional seats on flights operated to these destinations. Of the 20 seats, 10 seats would be sold at Rs 2,500/ hour of flight. Barring these ten, the rest would be sold at market rates,” said an aviation ministry official, who did not want to be identified. An email sent to SpiceJet did not elicit any response until the report went to print. All other airlines have opted for subsidies under the plan that offers the carrier cash. The regional connectivity program will also witness the return to commercial aviation by G R Gopinath, considered the father of low-cost flying in the country. Deccan Aviation, owned by Gopinath, has applied for flights in the Northeastern states. “They plan to make Shillong their base and connect destinations in Northeast with 14-seater aircraft,” said one of the officials quoted above. About eleven airlines, including AI, have bid to connect 43 regional airports in the country in the first phase, said an Airports Authority of India (AAI) official. Apart from Alliance Air, SpiceJet, and Deccan Aviation, other carriers that have applied include India Fly Safe (Sajjan Jindal Group), TurboMegha (Trujet Brand), Air Odisha (flights within Odisha), Airlines Allied Services Ltd (flights within Rajasthan) and Bharat Aviation (flights within Maharashtra). “This is in the first phase. But we will keep adding flights in the future as we aim to provide connectivity to all 600 airports across the country,” said the official, referring to the Regional Connectivity Scheme (RCS). Analysts said many regional airports may make sense for airlines with a pan India network as they may pick passengers from these airports to feed their network. “We believe that many RCS routes have significant profit potential especially for 48 and 78 seater aircraft. This is further enhanced when a pan India carrier links it up to its national and international grid. Putting up a bare minimum seats under RCS and seeking zero cash subsidy is a smart strategic move. It enhances the pan-India operator’s chances of winning the bid since smaller players may find it difficult to offer higher number of RCS seats at zero cash subsidy. The operator would enjoy all the fiscal and monetary benefits of RCS, no airport charges and a three year exclusive operating rights on that route,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG. “It helps the govt too. The subsidy saved can be used to revive other non-operational regional airports. By showcasing success in the very first round of bidding, more airlines may get interested in the second round of RCS bids which will happen in a few months from now. This will give a fillip to investments, tourism and job creation in the interiors of India, which is the broader objective of RCS,” he added. The government, which expects the first regional flight to start in a month, expects the subsidy outgo during the first year of regional operations to be about Rs 350 crore. Linus Ullmark Womens Jersey
Air India appoints McKinsey to advise on business plan
Air India has appointed McKinsey as consultant to advise on firming up its long term strategic business plan. The consulting firm will give AI a detailed cash-flow based on the plan it prepares, which will focus on redrawing of network. It will also tell the national carrier how much global airlines of its size should be generating and advise on bridging the gap. “McKinsey will also advise us on marketing strategies and help us bring our frequent flyer programme to global standards,“ said a senior AI official. The airline had shortlisted three firms -McKinsey Bain and EY -from a number of applicants on the basis of presentations made to the AI brass, following a tender inviting proposals issued last October. The move to take a consultancy help in network planning comes at a time when the government has drawn up ambitious plan for AI. It has decided that AI, which currently has 118 planes, will almost double its fleet in next four years without burde ning the taxpayer-funded exchequer further. The airline will grow by leasing aircraft instead of purchasing them. By March 31, 2020, AI group is looking at a fleet of 232 planes as some planes from the 111-aircraft order placed in 2006 are yet to be delivered. AI will take on lease 40 more Airbus A-320s for the erstwhile Indian Airlines that serves domestic and nearby international routes. It will order about 35 more turboprops.And AI Express, which currently has 17 Boeing 737s, will get 18 more B-737. The airline’s total loan is about Rs 50,000 crore, of which Rs 28,000 crore is working capital loan at an interest rate of 10%. It is seeking to convert, whatever possible of this working capital loan to 7% LIC loan. Switching Rs 10,000 crore alone will lead to a saving of Rs 300 crore annually in debt servicing, the airline says. The annual debt servicing of Rs 4,000 crore remains a sore point with the airline. Aviation minister Jayant Sinha is spearheading the effort to revive AI through innovative financing. He suggested that AI also speak to LIC for conversion of some high-cost loan to cheaper debt. A financial support of Rs 30,231 crore was approved for AI in 2012 of which it has received Rs 22,280 crore as equity infusion till March 2016. Of AI’s current fleet of 118 planes, 41 are wide body planes used on long haul and a handful domestic routes; 66 narrow body used on domestic and nearby international routes and 11regional jets. Nemanja Bjelica Womens Jersey
Slash taxes to support aviation to drive economic growth: IATA
Global airlines’ body IATA has asked governments across the world to slash taxes and support the aviation sector through improved infrastructure to drive economic growth, generate employment and connect people. “Our world has grown much wealthier through trade and travel. Air travel liberates people to live better lives and makes our world a better place… Aviation is the business of freedom and we must continue to work together to make it so,” Alexandre de Juniac, IATA’s Director General and CEO, said at the US Chamber of Commerce 2017 Aviation Summit in Washington. Making a strong plea for reducing the tax burden on airlines, he said the ‘Airlines for America’ (body of major US carriers) “estimates that taxes account for more than a fifth of the cost of the average domestic ticket. “In a country as big, beautiful and full of opportunity as the US, why have a taxation policy that discourages travel? Travel stimulates the economy with tourism dollars and business development. We hope that the Trump Administration will create jobs by dramatically reducing the tax burden on travel.” Contending that the aviation sector in the US contributed USD 680.1 billion to GDP and supported 6.2 million jobs, de Juniac sought a reduction in the tax burden on aviation and air travellers, besides a new approach to the provision of air traffic services. Michael Irvin Authentic Jersey
Air India aims to raise $470 million to fund Dreamliner planes
National carrier Air India has floated a tender to raise a bridge loan of $470 million (Rs 3,149 crore) for financing the remaining four of its ordered Boeing 787 Dreamliner planes. The last date of bidding for banks is March 21. The state-run carrier had in 2005-06 placed an order for 27 Boeing 787 Dreamliner planes as part of the mammoth 111 plane order placed with the american plane maker and its European rival airbus. The deal was valued at $15 billion. Air India is financing all these planes via sale and leaseback agreements, which means it sells each delivered plane to a lessor at a premium and then leases it back for monthly rentals. The bridge loan is being raised as an interim funding arrangement until sale and leaseback contracts for the planes is signed. In the tender document, Air India said it has concluded sale and leaseback agreements for 21 planes which it is currently operating, and tied up for bridge loans for the 23rd and 24th plane which were delivered in November 2016 and January 2017. Sale and leaseback of the two planes is also under process. Jacob deGrom Womens Jersey
Small fields, big concerns
The hydrocarbon exploration project at Neduvasal in Pudukkottai district and Karaikal is part of the Union government’s attempt to tap small fields of reserves, described as Discovered Small Fields (DSF), to enhance the country’s oil and gas production and reduce its dependence on imports. On February 15, the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, approved the award of contracts for exploration of 31 contract areas of 44 fields, including 28 on land and 16 offshore, discovered by the ONGC across the country. The project at Neduvasal DSF, recommended for award to a private company, Gem Laboratories Pvt Ltd., seeks to extract both oil and natural gas from hydrocarbon sediments in an area of about 10 sq. km. Although seismic surveys undertaken over the past several years had identified an exploration location at the village, no exploration well has been sunk there so far. However, in 2007, the ONGC sunk six exploration wells at various hamlets around Neduvasal such as Karu Nallandarkollai, Vanakankadu, Kottaikadu and Mullankurichi South and North. Steve Young Authentic Jersey
Oil and gas: Hurdles to domestic production
Prime Minister Modi wants India to reduce its oil and gas imports by 10 per cent by 2022. This seems a tough ask given the many challenges in increasing domestic production. The ongoing protest in Neduvasal village in Tamil Nadu’s Pudukottai district is symptomatic of a key risk — that of getting local consent for hydrocarbon projects in onshore areas. Worried that drilling for oil would pollute their lands, farmers in Neduvasal have been protesting against work in a block allotted under the Discovered Small Fields bidding. For years, protests by farmers in Tamil Nadu and Kerala have held up the Kochi- Bengaluru-Mangalore gas pipelines being laid by GAIL. With land becoming a premium resource, such protests can increase in the future. The HELP (Hydrocarbon Exploration Licensing Policy) regime brought in last year seeks to address pain points in the older NELP (New Exploration Licensing Policy). It is an extension of the liberal rules for the auction of the discovered blocks surrendered by ONGC and Oil India. The HELP has progressive provisions — easy-to-implement revenue-sharing contracts, unified licensing policy that lets exploration of all hydrocarbons in a block, open acreage licensing that allows on-tap bidding, and pricing and marketing freedom for new gas production from difficult terrains. But the fly in the ointment could be the revenue sharing mechanism replacing the erstwhile production sharing contracts (PSC). In PSCs, contractors could recover costs before sharing profits with the government. This reduced their risk significantly. But in the revenue sharing mechanism under HELP, contractors have to share revenue with the government from the start of production; costs cannot be recovered first. Whether industry players will be game for this in high-risk exploration ventures needs to be seen. Market-linked gas pricing Then, there is the problem of formulae-based gas pricing. Unlike crude oil, domestic gas price in India is not market-linked. From November 2014, it is being determined every six months as a weighted average of four international benchmarks — US-based Henry Hub, Canada-based Alberta gas, UK-based NBP and Russian gas. Given the prolonged weakness in international gas markets, domestic gas price has gone downhill. From $5.05 per mmbtu during November 2014 to March 2015, the price has crashed to $2.5 a unit during October 2016 to March 2017. Gas imported into India costs $6-$7 a unit currently. There is no incentive for contractors to scout for domestic gas. Market-linked pricing is imperative to encourage gas production in the country. Under the HELP, the pricing and marketing freedom for domestic gas is restricted to new gas production from deepwater, ultra deepwater, and high-pressure, high-temperature areas. Here too, the price is subject to a ceiling, based on a formula, involving the import price of alternative fuels. The current gas price notified for such blocks is $5.3 a unit, not exactly commensurate with the risks involved. There is also the danger of the government nudging PSU companies to make sub-optimal investments. In December, ONGC acquired the Gujarat-government controlled GSPC’s 80 per cent stake in the not-so-successful Deen Dayal asset for $1.2 billion. There are apprehensions in many quarters that this is a bailout deal for GSPC that is straining under high debt, though ONGC denies this. Sub-optimal capital allocation, if any, will impede the ability of the PSU companies to invest in the future. Oakland Athletics Womens Jersey