GST to have marginally negative impact on new solar projects: ICRA
The GST rate of five per cent on solar PV cells and modules is likely to have a marginally negative impact on new solar power projects, says ICRA. The GST rate of five per cent is finalised on solar PV cells and modules as per the notification dated June 3, 2017 which thus clears the ambiguity surrounding the applicable rate, the rating agency said in a statement issued here today. “This in turn is expected to have a marginally negative impact on new solar power projects due to an increase in capital cost arising from higher tax rate applicable under GST, given that the solar energy sector has been availing various exemptions and concession rates in indirect taxes,” ICRA said. According to ICRA’s group head and senior vice- president Sabysachi Majumdar, the impact of the GST rate on capital cost for new solar power projects is estimated to be limited at about six per cent, which would thus translate into an increase in levellised cost of generation by 11-12 paise per unit for such projects. “With this, the developers who have already won solar power projects under the competitive bidding route especially in last six month period, where the execution is under progress would incur a higher capital cost as against the cost envisaged at the time of bidding,” he said. Majumdar said given that the competitively bid-based solar tariffs have significantly come down over the last 4-5 month period, timely approval by regulators for pass-through of any higher cost incidence due to change in taxation which is permitted under change in law, remains crucial from developers’ perspective. According to ICRA, the solar project awards in last 5-6 month period stood at about 2.5-3 GW mainly under National Solar Mission route and state policy route, wherein tariffs have fallen from Rs 4.4 unit in November 2016 to Rs 2.44 in May 2017 for projects in Badla Solar Park in Rajasthan. The viability of such bid tariffs hinges on structuring of debt with longer tenures, competitive funding costs and the ability of the project developers to keep the cost of modules within the budgeted levels, the rating agency pointed out. “Besides, the timeliness in seeking approvals, land acquisition and development of associated infrastructure remains critical for projects outside the solar park, given the strict timelines for project execution as per PPA,” Majumdar said. Nathan Eovaldi Womens Jersey
‘India First’ policy shuts China bidders out of Gail pipeline projects worth Rs 3,000 crore
The government’s ‘India first’ policy for official procurement has ejected Chinese companies from pipeline projects worth Rs 3,000 crore being built by state-run Gail India Ltd, giving a big boost to domestic steel firms and carrying forward Prime Minister Narendra Modi’s ‘Make in India’ mission. Indian steel firms are poised to win orders worth tens of billions of dollars without losing business to Chinese supplies which they find suspiciously cheap. A spokesperson for Gail India said the guidelines for domestic preference are being imposed on all tenders that have not been opened so far. All future tenders will impose this condition. Government sources said that preference for Indian firms is likely to be extended beyond the steel and power sectors. The government is already studying more ways to give preference to Indian firms without violating international commitments, sources said. Steel minister Chaudhary Birender Singh told ET that all tenders from central and state governments as well as state firms, where the project is worth more than Rs 50 crore, will give preference to domestic firms unless the quality or quantity is not locally available, or if there is a 15% value addition in India. value addition in India. “This is a new and novel idea to see how we can increase consumption (of domestic steel). These guidelines will be incorporated in any tender in the future,” the minister told ET. ‘Set up Entire Plant’ He said state-run Gail India wanted to purchase pipes worth about Rs 3,000 crore, starting with orders of Rs 1,000 crore in the first phase. The steel minister said foreign firms were free and welcome to invest in India. “If there’s a transfer of technology, then we’d invite anybody to set up a plant in India. If he wants to set up the entire plant, he is welcome,” he said. The move comes as a big blow to China, where stateowned media has sharply criticised similar steps initiated by the minister for power, coal, renewable energy and mines, Piyush Goyal, in the power sector. Goyal had told ET last month that future projects will not be open for bidding by companies from countries that do not allow Indian firms to bid. Chinese state media has reacted strongly against the loss of business in India. Recently, Global Times, published by state-owned People’s Daily said debarring of Chinese firms in the power sector was new evidence of India’s “overly suspicious approach towards China”. It said the move could backfire because India’s power sector was marred by shortages. The power minister had told ET that business relations should be based on reciprocity – a concept lauded by a top executive of General Electric. However, Global Times said it would be difficult and costly for India to find proper replacement for goods and services offered by Beijing. Indian government officials and industry executives say Chinese firms should not be allowed in sectors where Indian firms are barred by Beijing. Indian executives also say China has a huge surplus capacity in steel which it wants to dump in India. Western companies, particularly those in the European Union, have also complained about a flood of Chinese imports, which they say are being dumped in their markets at the cost of local manufacturing and jobs. John Brown Authentic Jersey
Assam Gas submits EoI for Barauni-Guwahati pipeline
A 750-km proposed natural gas pipeline will link the Northeast with the national grid to meet increasing fuel needs of households and factories in the region, as part of the Modi government’s plan to expand gas availability and double the gas pipeline network in the next few years. Assam Gas, a state government enterprise, has submitted an expression of interest to the Petroleum and Natural Gas Regulatory Board (PNGRB), the downstream regulator, to lay, build and operate the pipeline from Barauni in Bihar to Guwahati via Bongaigaon. It has also proposed to build spur lines to link both the banks of the river Brahmaputra to connect with Arunachal Pradesh and Nagaland. Another spur line is proposed to connect to Tripura through Meghalaya and Barak Valley. PNGRB has now begun a consultation process and sought views from all natural gason the proposed pipeline. The demand for natural gas in its operational area far exceeds the existing supply, Assam Gas said in its proposal, highlighting that it had identified an additional demand of at least 13 million metric standard cubic meters per day (mmscmd) in Assam. The company currently handles about 5.5 mmscmd of natural gas. “If gas is made available, the demand will increase as new potential consumers are setting up units as part of the government of Assam’s efforts to stimulate industrial growth. As there has been no significant new gas finds in the northeastern region, it is necessary to bring in gas from outside the region,” the company said. It further said, “The company is fully capable of mobilising resources, has the necessary experience and expertise and has the support of the government of Assam at the highest levels to execute the project.” The proposed pipeline will have a capacity of 15 mmscmd and will source gas at Barauni from Jagdishpur-Haldia pipeline being built by GAIL State-run GAIL is building a 2,620-km gas pipeline from Jagdishpur in Uttar Pradesh to Haldia in West Bengal, Bokaro in Jharkhand and Dhamra in Odisha. The pipeline will have the capacity to transport 16 mmscmd of gas, which is expected to be received from multiple sources including liquefied natural gas or LNG from import terminals at Dahej, Dabhol and Dhamra, and coal bed methane field of Reliance Industries in Madhya Pradesh. The proposed pipelines of Assam Gas, GAIL and other companies are expected to significantly enhance the country’s gas pipeline network. The government aims to double the gas pipeline network to 30,000 km in the next few years. Ryan Kalil Womens Jersey
ONGC may buy out government’s entire holding in HPCL
The Department of Investment and Public Asset Management (DIPAM) will shortly seek cabinet approval for Oil and Natural Gas Corp to buy the government’s entire stake in refiner Hindustan Petroleum Corp Ltd in line with the oil ministry’s proposal of creating a domestic oil giant, people with direct knowledge of the matter told ET. The move is based on the recommendations of consultancy Deloitte, which the oil ministry had hired to suggest ways of restructuring state firms. The ministry has left it to the department of investment to decide on how the divestment in HPCL should be achieved, although it’s suggested the refiner be retained as a separate unit of ONGC, and not merged with it. “The divestment of HPCL stake will help government generate resources that could be deployed for social welfare,” said one of the persons cited above. The government owns 51.11% of HPCL and 68.07% of ONGC. At current prices, a sale of the entire HPCL stake could fetch the government about Rs 28,000 crore. The combined market value of ONGC and HPCL is Rs 2.76 lakh crore, or $42 billion, which is comparable with Rosneft’s $52 billion. Sam Steel Jersey
In Air India sell-off bid, banks and oil companies may be ultimate losers
Oil marketing companies and banks may find themselves at a loss as the government tries to reduce Air India’s borrowings before putting up the debt-ridden national carrier for sale. The Civil Aviation Ministry and the Finance Ministry are in the process of meeting banks and oil companies to get haircuts for Air India’s debt, ET Now reported citing unnamed sources in the Civil Aviation Ministry. According to the report, the two ministries are meeting banks to get haircuts for Air India’s debt and simultaneously are also holding meetings with oil companies to reduce Air India’s dues. the report adds that the government absorbing a part of Air India’s debt is an option to find a good buyer for the beleaguered airline, with the Cabinet to take a final call on the quantum of disinvestment in Air India. Last week, in an obvious reference to potential difficulties in finding a willing buyer for the debt-laden behemoth, Civil Aviation Minister, Ashok Gajapathi Raju had proclaimed that it might be difficult to find any ‘bakras’ to buy Air India. “There are hardly any bakras around,” Minister for Civil Aviation Ashok Gajapathi Raju said in an interview to CNBC TV18. “To get one is difficult, and businessmen are businessmen,” he added. HomeIndustry In Air India sell-off bid, banks and oil companies may be ultimate losers In Air India sell-off bid, banks and oil companies may be ultimate losers The Civil Aviation Ministry and the Finance Ministry are in the process of meeting banks and oil companies to get haircuts for Air India’s debt before putting up the debt-ridden national carrier for sale. By: FE Online | Published: June 7, 2017 1:08 PM 23 SHARES Facebook Twitter Google Plus Oil marketing companies and banks may find themselves at a loss as the government tries to reduce Air India’s borrowings before putting up the debt-ridden national carrier for sale. (Image: Reuters) Oil marketing companies and banks may find themselves at a loss as the government tries to reduce Air India’s borrowings before putting up the debt-ridden national carrier for sale. The Civil Aviation Ministry and the Finance Ministry are in the process of meeting banks and oil companies to get haircuts for Air India’s debt, ET Now reported citing unnamed sources in the Civil Aviation Ministry. According to the report, the two ministries are meeting banks to get haircuts for Air India’s debt and simultaneously are also holding meetings with oil companies to reduce Air India’s dues. the report adds that the government absorbing a part of Air India’s debt is an option to find a good buyer for the beleaguered airline, with the Cabinet to take a final call on the quantum of disinvestment in Air India. Last week, in an obvious reference to potential difficulties in finding a willing buyer for the debt-laden behemoth, Civil Aviation Minister, Ashok Gajapathi Raju had proclaimed that it might be difficult to find any ‘bakras’ to buy Air India. “There are hardly any bakras around,” Minister for Civil Aviation Ashok Gajapathi Raju said in an interview to CNBC TV18. “To get one is difficult, and businessmen are businessmen,” he added. You may also like to watch: Air India Offering Tickets At Price Of Rajdhani: Find Out Details Last month, Finance Minister, Arun Jaitley confirmed the government’s intent to exit the ailing state-run carrier, in order to lighten the debt load without apparently losing much of the value that it provides to the country’s aviation industry. “History has given us a second chance that a good investor should come, which has credibility so civil aviation ministry will consider it,” Arun Jaitley said, referring to proposed disinvestment of Air India, in an interview to Doordarshan TV. Air India, under intense competition from leaner, more efficient and often cheaper private airlines, is reeling with a debt of about Rs 50,000 crore, with about Rs 28,000 crore in working capital debt, and about Rs 4,000 crore in interest burden alone. It has not turned a profit since at least the year 2007. “To run Air India, you have invested Rs 50,000 crore. That money is government’s money, that’s your money. It could have been used for school education,” Arun Jaitley said during the interview. The carrier has received bailout packages worth about Rs 24,000 crore out of a total Rs 30,000 crore approved but has failed to revive its fortunes amid private airlines continuously gaining market share. Denis Savard Authentic Jersey
Privatising Air India to change the perception about Modi government’s reformist credentials
There is a buzz in the air about the possible privatisation of Air India (AI), that quintessential public sector white elephant. Since 1991, this has been seen as the ultimate litmus test of every Indian government’s reformist convictions, which none has yet managed to conquer. That is ironic, since on several occasions the respective governments of the day have managed far more substantial economic reforms. Consider two examples from either end of the 26 years since liberalisation began. First, Prime Minister Narasimha Rao’s dismantling of industrial licensing was much more impactful than the government getting out of any one company or sector. Similarly, the enactment of the Goods and Services Tax (GST) by the present government heralds a seismic shift in India’s economy. While Rao deftly used India’s looming international repayments default to push through his reform, Prime Minister Narendra Modi had to manage his economic magnum opus without any such crisis for cover. The former is often appreciated for his shrewd use of the old adage to never waste a good crisis, and the latter deserves similar kudos for sheer persistence. For GST did not arrive on autopilot. No stone was left unturned to make it happen, despite many setbacks along the way, including widespread rumours last year that the government was no longer serious about it. Nevertheless, to investors and markets there is something sexy about privatising a marquee Public Sector Undertaking (PSU) that does not seem to be matched by more structural reform, at least in the short term. That could be for a variety of reasons, one being that the fiscal benefits of privatising a prominent PSU boondoggle are immediately visible. The bleeding of public finances that is stanched may be relatively small compared to, say, the fiscal deficit. But it is more or less undisputed, whereas agreeing on the exact long-term benefits of a deeper reform is usually beset with many ifs, ands, or buts. Despite sporadic PSU selloffs, it has long been known that India finds it difficult to decisively put behind decades of misguided government efforts at running commercial enterprises. Even using the term privatisation has proved a taboo, with euphemisms like strategic disinvestment being favoured instead. Other attempts at political correctness have included reliance on Public Private Partnerships (PPPs) as an alternative to encouraging outright private sector investment. That camouflage opened the doors for private investment into such previously forbidden areas as infrastructure, where the gap between what is needed and available from public coffers is gargantuan. But the results have been discouraging, mostly due to the public sector partners’ bureaucratic DNA overpowering their role as the fig leaf in these projects. That such subterfuge was felt necessary despite the desperate need for private investment, says a lot about Indian politicians’ diffidence about selling reforms on merit and logic. It should be instructive that reformist legends like Thatcher and Reagan were not alone in having to market their policies. Even autocratic China’s Deng Xiaoping, who otherwise had no need to persuade the Chinese public about anything much, turned salesman for economic reforms. There are indications that change is in the air. Modi’s aggressive marketing of his Aadhaar-linked rejig of the cooking gas subsidy, as well as his political pitch for GST during recent state election campaigns, augur well. If enough of his colleagues take the cue – not to mention down and out opposition leaders looking for a new game plan – it might even represent a turning point. Taking stock of this government’s track record on economic reforms would have to acknowledge not just the once- in-a-generation GST, but also a bunch of other measures. Those should include mid-level efforts on both the legislative front, such as the one permitting more Foreign Direct Investment (FDI) in the insurance sector, as well as executive fiats, like the recent one abolishing the Foreign Investment Promotion Board (FIPB) altogether. There are a number of other such measures, such as the deregulation of diesel pricing, the bankruptcy law, permitting the private sector to invest in railways and defence, and back into commercial coal mining. But there remain a number of items on investor and markets’ wish lists that are still pending, including labour law reform, deregulation of kerosene and fertiliser pricing, and many more. When many commentators were critical of the government’s cautious approach to reforms back in 2015 and 2016, they may not have fully understood the dynamics of political capital. For instance, its lack of numbers in the Rajya Sabha could not be overcome, leading to an early setback in the ambitious attempt to redo the land acquisition act. But irrespective of whether or not commentators have given enough credit to this government’s economic reforms in the meantime, they can today rightfully ask for greater boldness from it. And the PM, his pockets bulging with the most political capital he has ever had till now, would do well to heed them. On Air India, finance minister Arun Jaitley was reported to have said that if the private sector could run 86% of civil aviation, it could very well run 100%, and without a Rs 50,000 crore public subsidy for one airline. If that sentiment is translated into action, it would dramatically change the perception about this government’s reformist credentials. Saku Koivu Womens Jersey
Regional connectivity: Airlines flag slot problems
Non-availability of take-offs and landing slots at Mumbai, Bengaluru, Pune, Hyderabad and Chennai is posing a threat to the success of the regional air connectivity (RCS) scheme, airline operators pointed out at a meeting convened by the Karnataka government on Tuesday. Representatives of all major carriers including IndiGo, Jet AirwaysBSE 0.61 % and Air India participated in the meeting and listed the issues they are facing with regard to regional connectivity, and gave suggestions to infrast ructure minister RV Deshpande and additional chief secretary, infrastructure development DV Prasad. The turboprops too would need peak-hour slots if regional connectivity scheme has to meet passenger needs, they said. The second round of bidding under the regional connectivity scheme will happen next week, and the Ministry of Civil Aviation is trying to make the scheme simpler and more attractive for airline operators. The Centre and the states are consulting airline operators and compiling their suggestions before going for the second round of bidding which also involves routes to small airports in Karnataka, among the others. The airline executives told Deshpande that since airlines deploy smaller aircraft such as ATR for RCS operations, ATRs usually take more time for take-offs compared to larger aircraft. Metro airports prefer slotting bigger aircraft to turboprops precisely because of this reason. This is a minor roadblock as well. The other problem they are facing, the executives said, is shortage of parking area at major airports which has come in the way of exploring newer routes under the RCS scheme.The success of the RCS scheme depended more on the government fixing the infrastructure issues at large airports. A BlueDart executive suggested to the government to extend the RCS scheme beyond passengers, and include cargo flights as well. The potential in the cargo sector, according to an observer, could be bigger than that of passenger sector. “Karnataka is very enthusiastic to promote regional connectivity, and we are also keen to have no-frills airports that will meet the passenger needs at fewer costs,” said Prasad, the additional chief secretary, infrastructure. Minister Deshpande and Prasad explained the facilities available at regional airports in Karnataka, and the concessions the state government is offering to airline operators. The minister urged the airlines to operate more flights from Mysuru, Hubli and Belgaum. Michael Roberts Jersey
Want regulators, pilots to work together: Jayant Sinha
Union minister Jayant Sinha has said that regulators and pilots should work together in a “very collaborative manner”, amid DGCA complaining to the police against some pilots. The Directorate General of Civil Aviation (DGCA) has filed a police complaint against 34 pilots of Jet Airways, IndiGo, SpiceJet and GoAir for allegedly posting “obscene” messages on a WhatsApp group against officials at the regulator. Following the complaint, Delhi Police had yesterday questioned 13 pilots. When asked about the incident involving the pilots and the DGCA, Sinha said it was “unfortunate”. “It is obviously quiet distressing that (such) kind of language has been used and of course, we are hoping that… cooler minds will prevail and the matter will settle down,” the Minister of State for Civil Aviation said. “We obviously want our regulators and our pilots to be working together in a very collaborative and cooperative manner,” he said. Jayon Brown Authentic Jersey
Revenue from toll operations to grow by 10-15% in FY18: MEP Infra
In an interview to CNBC-TV18, Jayant Mhaiskar, VC & MD of MEP Infrastructure spoke about the latest happenings in his company and sector. The company currently has an order book of close to Rs 4,000 crore of hybrid annuity projects to be executed over the next two-and-a-half years, he said. He expects the revenue topline to be around Rs 1,800-2,000 crore on a year-on-year (YoY) basis for the next two years. “The revenue on toll side would likely to grow steadily between 10 percent and 15 percent on YoY basis,” he further added. MEP Infra also plans to deleverage in the coming months with the help of the Infrastructure Investment Trust (InvIT), said Mhaiskar. Currently the company has total consolidated debt of around Rs 3,000 crore and is likely to transfer close to Rs 1,300-1,500 crore of debt to InvIT. Gary Sanchez Authentic Jersey
CM Khattar seeks Nitin Gadkari’s help to end Kherki Dhaula toll bottleneck
The Haryana government has approached the highways ministry to find solution to Kherki Dhaula toll plaza on Gurgaon Expressway, which has been a traffic bottleneck. Chief Minister Manohar Lal Khattar has sought Nitin Gadkari’s intervention to shift the toll plaza beyond Manesar. Sources said Khattar has raised how the toll plaza at Kherki Dhaula beyond Gurgaon has become a roadblock in investment flow to Manesar industrial area. He has suggested Gadkari to direct his ministry officials and executives of National Highways Authority of India (NHAI) to take up the issue with the present concessionaires of Gurgaon Expressway and Pink City Expressway, which are implementing the six-laning of highway between Gurgaon and Jaipur. For long, the Haryana government has been raising the need to do away with the toll plaza with NHAI and has even offered to pay a portion of the compensation that the highways authority would have to give to the present concessionaire. But NHAI has not accepted it. TOI has learnt that one of the options that the Centre may consider is shifting the toll plaza to Bilaspur, about 16 km away from the exiting toll plaza. But officials admitted that this will be a tricky issue since it involves two concessionaires. They added buying back the Gurgaon Expressway project is a huge loss-making proposition for NHAI. First, NHAI would have to hold talks with the existing concessionaire of Gugaon Expressway and then would have to hold negotiations with the Pink City Expressway concessionaire. Sources said since any move of buying back a highway stretch could amount to benefiting the loss-making concessionaires, NHAI would have to take proper safeguards. TOI had earlier reported that against the demand of Rs 2,000 crore to remove the toll plaza, Haryana’s industrial development agency, HSIIDC, had offered to pay Rs 600 crore. Removal of Kherki Dhaula toll plaza will benefit lakhs of commuters who travel to Manesar and those who plan to shift to Gurgaon’s news sectors, around Dwarka expressway and Southern Peripheral Road. The demand for doing away with the Kherki Dhaula plaza had started soon after NHAI and the former concessionaire of the expressway had struck a deal to end toll collection at Sirhaul border near Udyog Vihar. Toll rates for all types of vehicles have gone up since the first toll plaza was removed. There have been several protests by residents’ organisations and by industry associations against the existing toll plaza. As per the contract agreement, the present concessionaire is allowed to collect toll from all vehicles till 2023. John Miller Jersey