High hopes and rough landings for India’s smaller airlines
Indeevar Varma, a human resources manager from Ahmedabad in the western state of Gujarat, was put off flying with Air Costa, a small regional budget Indian airline, after he says he “was bounced like a ball” during “a rough landing” when he travelled from Hyderabad to Ahmedabad several months ago. “That was the worst landing I’ve encountered,” Mr Varma recalls. Apart from that, “there was nothing unique about the airline but the planes were OK”, he says. Having avoided the carrier for some time, a few weeks ago he decided to give Air Costa another go. He booked a ticket from Ahmedabad to Hyderabad for March 7. A few days before the flight, he received a text message saying the flight had been cancelled. It was on February 28 that Air Costa, which was founded in 2013 and is based in south India, suspended flights as it faces a cash crisis. The sudden suspension follows a similar situation eights months ago, when Air Pegasus, a Bangalore-based regional carrier with three 66-seat aircraft, abruptly stopped flying because of financial difficulties, after operating for just over a year. These events raise questions over the viability of regional carriers in the cut-throat aviation market in India, where a flurry of regional services in the past couple of years launched with high hopes. Air Costa is desperately trying to raise funds from investors. The airline is owned by LEPL Group, which has interests in property and renewable energy and was founded by the entrepreneur LP Bhaskara Rao. Robby Fabbri Authentic Jersey
Air India rot runs deep amid understating losses, bleeding international ops
Air India has been under reporting losses for at least four years, says the country’s top auditor. This under-reporting is not any insignificant amount but a sum of over Rs 6,800 crore between 2012-13 and 2015-16. The airline has, as expected, said it did not do any under provisioning while asserting that its Rs 105 crore operating profit in FY16 was indeed a profit, never mind the observations of the Comptroller & Auditor General (C&AG) that the airline actually posted an operating loss of Rs 321 crore last fiscal. Since the two erstwhile airlines (Air India and Indian Airlines) merged to form the present entity, the measly Rs 105 crore operating profit was the first time in a decade that the word ‘profit’ was used for Air India in any form. Now even this figure has been called into question, raising doubts about the accounting standards followed by the state-owned carrier. As the airline and the C&AG continue to differ over what ‘provisioning’ actually means in standard accounting practice, it is interesting to examine the detailed explanations and instances C&AG has given in its report, of Air India’s operational blunders during the four years under review. Mike Hoffman Jersey
Yes, Air India Never Made Any Profit, It Under- Reported It’s Original Loss Of Rs 321 Crore
Apex Auditor, Comptroller and Auditor General (CAG) has revealed that Air India had actually incurred an operating loss of Rs 321.4 crore last fiscal year. However, Air India reported that it had made an operating profit. The CAG said that there was no fudging of numbers, however, the figures reported by the airline are “actually under-reporting of loss”. Air India, still alive on taxpayers’ money, reported an operation profit of Rs 105 crore in 2015-16, a first in over a decade. “For 2015-16 where Air India has reported an operating profit of approximately Rs. 105 crore, the audit of Air India’s standalone accounts for 2015-16 has been completed,” Deputy CAG Pradeep Rao said. About the operating profit which Air India has stated it has made in 2015-16, Rao said that in the view of CAG, “it is actually an operating loss of Rs. 321.4 crore”. Based on the observations made by statutory auditor of the company and the subsequent check by CAG, “we have found that they have not made provisions which they should have made in terms of standard accounting procedures”, he noted. Rao spoke about Air India’s financial performance during the 2015-16 fiscal while briefing reporters about the CAG’s performance audit on ‘Turnaround Plan (TAP) and Financial Restructuring Plan (FRP) of Air India Ltd’. Starlin Castro Jersey
BJP win revives Jewar airport hopes
With BJP’s clean sweep in the Uttar Pradesh assembly elections, a proposed mega infrastructure project — an international airport in Jewar — could finally see the light of day. Talk of the second international airport in Greater Noida resurfaced on Saturday, with the winning candidate for the Jewar assembly seat, Dhirendra Singh, listing it as his priority and Union minister for culture and tourism Mahesh Sharma, who is the MP from Gautam Budh Nagar, saying he would fulfil his promise to the electorate. Union home minister Rajnath Singh, while campaigning in Jewar last month, had also said the Jewar international airport, first proposed by him when he was CM of UP in 2001, had already got the required approval from the Centre. “Prime Minister Narendra Modi is keen to develop world-class infrastructure in the country, which will help generate jobs,” Sharma told TOI. “The people of UP have shown their faith in the PM’s policies. We in turn will fulfil the aspirations of the people and my constituencies. We will seriously work towards establishing the airport in Jewar,” Sharma said. Jack Roslovic Authentic Jersey
CIAL Model redefines perceptions of development: CM
Chief Minister Pinarayi Vijayan on Saturday lauded the Cochin International Airport model of development, saying that the growth of the airport had led to changes in perceptions on developmental activities. “The CIAL model refutes the general perception that ensuring development is the responsibility of the government alone,” the Chief Minister said. He was speaking at the inauguration of the international terminal (T3) at the airport. He also opened the four-lane road linking the airport to the national highway along with an over-bridge. The Chief Minister also launched the augmentation of the solar power generation capacity at the airport. “The Kannur airport is expected to be ready in another six months, and a detailed survey for a possible airport near Sabarimala is under way,” he said. The State government has taken up issues pertaining to the Kozhikode airport with the Civil Aviation Ministry. The Directorate of Civil Aviation has also been contacted. Land acquisition for the airport will be expedited, Mr. Vijayan added. The Chief Minister said CIAL had also displayed its social responsibility by providing jobs to those who were displaced by the airport project. Besides, the airport authority is providing a total of ?17 crore to various panchayats and the Angamaly municipality for various development projects, which include drinking water projects in the neighbouring panchayats. Alex Galchenyuk Womens Jersey
Make solar power generation easier, fix net meter flaws, officials told
The Dakshin Haryana Bijli Vitran Nigam (DHBVN), in an effort to ratchet up solar power generation, will take steps to make net meters easily available in the city. Sudhir Chabbra, chief engineer (commercial), has directed all subdivision officials to ensure a hassle-free procedure is followed to get net meters installed at consumers’ homes. There were allegations that some consumers are not getting the rebate mandated as per the solar policy owing to some glitches in net meters. On Thursday, the chief engineer (commercial) wrote to senior officials of DHBVN in Hisar, stating that accounting of solar power generation and rebate is not being carried out properly at many rooftop solar plants set up by consumers. “This is creating a lot of hardships to consumers, and is adversely affecting the scheme,” the letter read. This hurdle poses a serious concern as the department is taking all efforts to scale up the drive to ensure maximum number of consumers install rooftop panels. “The scheme is designed to tackle air pollution arising out of the use of diesel gensets across Gurgaon,” an official said. The chief engineer asked billing agencies concerned to ensure that proper accounting is carried out through net meters and rebates are given to eligible consumers. “It has also been instructed that field officials should also be sensitised on the issue and a simplified procedure for initiation of billing should be sent to all sub-divisional officials so that the computer-generated billing can be launched by March 31,” an official told TOI. Discom officials said the software that will carry out billing as per the guidelines is in the final stages of completion. “The consumers are facing trouble since the software is not ready. All the preparations have been done now. We are in the final stage of the process.” In an attempt to lure more people into adopting solar power generation, the Haryana government came up with the grid-connected solar plant scheme in 2014, making it mandatory for consumers with area up to 500 square yards to install solar power panels at their houses, for which the government will award them “bountiful” subsidy in power consumption. The same policy has been made mandatory for schools, malls, hotels and industrial units also. Under the Haryana renewable energy department guidelines, domestic consumers can avail of Re 1 incentive per one unit solar power they generate. Industrial consumers can avail of 25 paisa per unit of power generated. According to officials, around 31 net meters have been installed in Gurgaon and around 10 MW solar power is generated. The department, according to them, is planning a three-fold increase in solar power generation this year. As many as 60 more net meters will be installed in the city to achieve the target. According to an official, to get solar panels installed, applicants are supposed to get a sanction from additional deputy commissioners. “Only suppliers authorized by the Ministry of Renewable Energy will install the system,” the official said. A 1KW solar power panel costs Rs 75,000–80,000. “When the system is installed, the relevant papers will be uploaded in the portal,” the official said. “The discom will check that system and issue the consumer a certificate for net metering. At this step, the discom lines will be connected with the plant. The bi-directional meter will be then added to the system,” he said. Menelik Watson Authentic Jersey
India’s solar capacity grows over 3 folds to 10,000 Megawatt in three years
India’s solar power generation capacity has crossed 10,000 megawatt (MW), a more than three-time jump in less than three years as government pushes for renewable energy sources to meet galloping demand. The milestone came as NTPC Ltd, India’s largest power producer, commissioned a 45 MW solar power project at Bhadla in Jodhpur, Rajasthan. “Bright Future: India has crossed 10,000 MW of Solar power capacity today. More than 3 times increase in less than 3 years,” Power, Coal, Mines, New & Renewable Energy Minister Piyush Goyal tweeted. India solar power generation capacity stood at 2,650 MW on May 26, 2014. As much as 14,000 MW (or 14 gigawatt) of solar projects are currently under development and about 6 GW is to be auctioned soon. In 2016, about 4 GW of solar capacity was added, the fastest pace till date. According to power ministry estimates, another 8.8 GW capacity is likely to be added in 2017, including about 1.1 GW of rooftop solar installations. Government is targeting 100 GW of solar and 60 GW of wind energy capacity by 2022. Total renewable energy generation capacity is envisaged at 175 GW by 2022. Earlier last month, lower capital expenditure and cheaper credit had pulled down solar tariff to a new low of Rs 2.97 per unit in an auction conducted for 750 MW capacity in Rewa Solar Park in Madhya Pradesh. The auction was conducted by a joint venture of Madhya Pradesh government and Solar Energy Corporation of India (SECI). Last year in January, solar power tariff had dropped to a new low, with Finland-based energy firm Fortum Finnsurya Energy quoting Rs 4.34 a unit to bag the mandate to set up a 70-MW solar plant under NTPC’s Bhadla Solar Park tender. In November 2015, the tariff had touched Rs 4.63 per unit following aggressive bidding by US-based SunEdison, the world’s biggest developer of renewable energy power plants. Joe Flacco Jersey
European Union: Renewables made up 16.7 per cent of energy mix in 2015
European Union statistics show that renewable sources accounted for 16.7 percent of the bloc’s energy consumption in 2015, nearly double the share a decade earlier. EU statistics agency Eurostat said Tuesday that renewable energies’ slice of the cake was up from 16.1 percent in 2014. In 2004, the first year for which data are available, the figure was only 8.5 percent. The EU’s target is to reach 20 percent across the bloc by 2020. Eurostat said that 11 of the 28 EU countries have already reached their own national targets for 2020. In 2015 Sweden had by far the biggest share of renewable energy, which accounted for 53.9 percent of its total consumption. Luxembourg and Malta had the smallest share, with only 5 percent each. Ryan Anderson Womens Jersey
3 CIL subsidiaries slash valuations by at least 75%
Boards of three subsidiaries of state-run Coal India Limited have slashed valuations of the shares of these companies by at least 75% over the values declared earlier this month. The earlier valuations, according to the merchant banker of the listed monopoly miner, did not reflect the true valuation of either the subsidiaries or the parent. But even as the valuations have been reduced, the amount of money that Coal India will receive post reduced valuation through proposed share buybacks remains the same at Rs 5,063 crore. In fresh announcements of buyback post revaluation, the number of shares to be bought back has been increased to keep the total sum the same. Four of Coal India’s eight subsidiaries, including Central Coalfields, had announced share buy-backs last month. As part of the exercise, the boards of these companies had valued their shares. The earlier valuations included factors that are considered for valuing international companies, resulting in higher valuations, said a Coal India executive, who did not wish to be identified. Later it was realised that some of these factors may not be relevant for Indian coal companies, he said. A fresh valuation exercise was thus conducted, leaving out factors that were irrelevant for India. This resulted in reduced valuations for three subsidiaries –Northern Coalfields, Mahanadi Coalfields and South Eastern Coalfields. “Since these subsidiaries are not listed, there was no market driven share valuation available for these companies and the merchant banker had to resort to theoretical norms to ascertain their value,” the executive said. Initially, shares of Northern Coalfields were valued at Rs 1.629 lakh per share of face value Rs 1,000 each. The valuation has been reduced 81% to Rs 30,260 per share. Shares of Mahanadi Coalfields were initially valued at Rs 2.922 lakh per share of face value of Rs 1,000. This has been revised to Rs 35,796 per share. Similarly, shares of South Eastern Coalfields were earlier valued at Rs 79,777 per share, but have been subsequently revalued at Rs 19,599 per share. While shares of the three subsidiaries are now valued between Rs 19,599 and Rs 30,260 per share, shares of its parent, Coal India, were offered at Rs 225-245 per share in 2011. The stock opened at Rs 288 on the Bombay Stock Exchange and reached an all-time high of Rs 440 in 2015. On Tuesday it was quoting at Rs 295 at the Bombay Stock Exchange. “While Coal India’s equity base is almost 620 crore, with each share having a face value of Rs 10, the shares of subsidiaries hold a face value of Rs 1,000 each, and the total number of shares for each of these subsidiaries is a few lakh only, resulting in many times higher valuation for each share than the parent’s,” the executive said. Shea Weber Womens Jersey
Coal supplies to power plants to depend on PPAs
Power companies that win coal contracts with the Coal IndiaBSE -0.03 % Ltd (CIL) in the forthcoming auctions will have to ensure that they sign long and medium-term contracts for power supply with discoms within two years. Coal supplies to the power plants will start only after they sign the power contracts. The Cabinet Committee on Economic Affairs (CCEA) is likely to consider the new coal contracts policy for power plants in its next meeting. The clause was required to ensure misuse of coal, said a senior government official. However, private power companies call the clause unfair as discoms have not been floating power requirement tenders regularly. They say the proposed auctions will put winning companies at a disadvantage when they compete for bagging power supply tenders floated by state distribution companies. “Signing power purchase agreements (PPAs) is not in the control of the power companies. There have not been many long-term contracts in the last seven years and looking at the low demand, subdued price of power in the market and falling prices of renewables, the probability of signing PPAs is very low. “We already have an example of mine auctions wherein those who took mines without PPAs have not been able to secure PPAs and operationalize their mines till date. The coal auction policy also puts companies that take part in it at a disadvantage visa-vis those getting coal from CIL at notified price, thus distorting the competitive landscape,” said Association of Power Producers director general Ashok Khurana. As per the proposed policy, the government will auction coal for companies that have the letters of assurance (Lo-As) for coal signed by staterun Coal India with power plant developers. The policy also proposes that all future coal tie-ups by CIL will be allotted to state distribution companies that in turn will call tariff-based competitive bids from companies on the lines of ultra-mega power projects. The policy proposes to auction coal to commissioned and to-be-commissioned power plants with a rider that they will sign the PPAs within two years. Earlier the government proposed to auction coal separately to power plants with PPAs and power plants without PPAs. In July last year, the Cabinet Committee on Economic Affairs had deferred decision on the policy for award of CIL contracts to power firms. The government has already finalised a policy for auction of Coal India contracts to unregulated sectors such as steel and cement. The private steel and cement firms will have to indicate their coal requirement and their end-use projects to the coal ministry before bidding for supply from Coal India Ltd. Brian O’Neill Jersey