Air India: Divestment of govt stake unlikely this financial year
As discussions around Air India pick up steam in the government, the process of actually divesting the national carrier will be a long drawn one and will require multiple cabinet approvals, Business Standard has learnt. Senior government officials who are part of the deliberations said at least two approvals of the Union Cabinet, led by Prime Minister Narendra Modi, could be necessary, and that any dilution of the centre’s 100 per cent stake is highly unlikely this fiscal. If and when privatization is finally decided upon, the first cabinet approval will be an ‘in-principle approval’. That will set the stage for Finance and Civil Aviation ministries to start the process of valuation of the debt-ridden airline, decide upon the eligibility of buyers and identify prospective suitors, decide upon the method of sale, take decisions on what to do with the airline’s assets and its Rs 46,570 crore debt, dealing with employee unions, and hiring financial and legal advisors for the sale. Once this process is complete the matter will be taken up by cabinet again, to give its final approval. Sources said that the draft cabinet note, which is being circulated among the ministries, is only for the first ‘in-principle’ approval. “Privatising Air India is a difficult and long-winded process. The way it is being portrayed in certain sections of media is that a decision is imminent and the sale will happen quickly after a one-time approval by the cabinet. It is more complex than that and we may need to approach the cabinet multiple times,” said a senior official. “Right now, we are just the initial stages of these deliberations, and are still dealing with a number of issues before any approval is sought,” the person said. As reported by Business Standard earlier, the Civil Aviation Ministry is still said to be considering the option of retaining ownership of the national carrier, and running it after retiring debt. As part of inter-ministerial discussions, a number of options have been discussed and retaining ownership is one. The options being discussed are either reviving the airline, going for privatization, or reducing the airline’s debt by selling off the assets. Other issues being deliberated upon deal with the issue of the airline’s lenders’ willingness to convert debt into equity, and whether to sell its subsidiaries separately – Air India Engineering Services Limited (AIESL), Air India Transport Services Limited and Hotel Corporation of India (owner of Centaur Hotels). The other issues being discussed, as per the official, include whether go for some sort of a retrenchment by laying off workers through employee voluntary retirement scheme, fleet management, and whether foreign companies should be allowed to buy stake in the national carrier, though no decision has been finalised yet. India allows foreign institutions to own stakes of up to 100 per cent in local airlines, but overseas airlines can own up to a 49 per cent stake. MacKenzie Weegar Womens Jersey
Surjewala upset over Jewar airport
Haryana Congress MLA Randeep Singh Surjewala has taken strong exception to the recent decision of the Central government to set up an international airport at Jewar in Uttar Pradesh, saying that the interests of Haryana were being sacrificed at the “altar of political expediency”. Mr. Surjewala, who represents Kaithal in the Haryana Legislative Assembly, said that the United Progressive Alliance (UPA) government had granted in-principle approval for a green field airport in the State in 2013-14. The present BJP government in Haryana, he said, had failed to protect the State’s claim. He added that the Centre had made a unilateral announcement about setting up an international airport at Jewar, ignoring Haryana’s claim for one at Jhajjar, Meham or Karnal. Fred VanVleet Authentic Jersey
I would love AirAsia to own 100 per cent in Indian arm: Tony Fernandes, CEO, Air Asia Group
AirAsia Group CEO Tony Fernandes had always wanted AirAsia India to fly to foreign cities early and had argued against the norm stipulating minimum five years and 20 aircrafts for domestic airlines to fly abroad. Last year, India scrapped that scheme to allow all airlines to fly abroad provided they deploy at least 20 aircraft for domestic operations. Fernandes now says flying abroad is not a rush for him any longer because his airline can do a lot in India, and would “love to” own 100 per cent in AirAsia India, a 49:51joint venture with the Tata Group. In an interview with ET at the Paris Air Show, Fernandes says AirAsia is already the lowest-cost airline in India and that he wants to make flying affordable for an ordinary taxi driver in the country. Edited excerpts: How has been your experience in India? My story of India is that when a taxi driver picked me from Delhi airport and told me that it took him four days to reach Delhi from Madras (Chennai). I was shocked. I asked him how much he can pay to fly. And he gave me a price. We are about two-thirds of the way to make that man fly. India is a country that I do not want to screw up. There has been so much opposition to us. Some of them are of our own doing. But I am happy with the way we are going and India is not a simple country, it is a complicated one, and that is further complicated due to intense competition. You mentioned about some mistakes of your own doing. Can you elaborate? I think there’s only one, which I do not want to talk about because it is quite well documented. We have done well. We have waited for the law to change. We are clear, and have a clear path moving ahead. There was so much opposition to us and we have been involved in issues, where we were not even involved, like the issue with the Tatas. They have been great partners. They have stuck with us and we have also stuck with them. Tyler Higbee Womens Jersey
Now, Airports Authority of India revises bidding norms for Jaipur, Ahmedabad airports
The Airports Authority of India (AAI) has reworked the bidding parameters for awarding operation and maintenance works of Ahmedabad and Jaipur aerodromes to private players amid the process hanging fire for over a year. Seeking to attract more bidders, the contracts would now be awarded for 15 years instead of the 10-year time frame while the same entity could be awarded the two projects. Along with putting in place revised parameters for bidders, the AAI has again extended the deadline for submitting the bids for Operation and Maintenance (O&M) of Ahmedabad and Jaipur airports. With the deadline being extended for the sixth time in nearly one year, the process for awarding the contracts would be further delayed. Jerian Grant Womens Jersey
Gaganning for aircraft glory
The Centre is soon expected to issue the notification to make GAGAN (GPS Aided GEO Augmented Navigation), the indigenously developed navigation system, mandatory for new aircraft registered in the country from January 1, 2019. This would enable the country to break free from the over-dependence on the international tech regime led by the Global Positioning System (GPS) of the US and Global Navigation Satellite System of Russia. It will also plug the gap in covering equatorial region. Sources in the Civil Aviation Ministry confirmed that GAGAN, jointly developed by Indian Space Research Organisation (ISRO) and the Airports Authority of India, is ready for full optimisation and has obtained an international certification for approach and precision landing operations (APV1/1.5) over the subcontinent. The Director General of Civil Aviation has conducted rigorous ground tests for two years meeting the prescribed international civil aviation requirements, said ISRO Chairman AS Kiran Kumar, adding that GAGAN-compliance would very soon be made mandatory for aircraft. “Any GAGAN-enabled receiver will provide accurate positional information which can be relied upon,” he said. India is only the fourth country in the world to have the capability to provide certified satellite-based augmentation services over its Flight Information Region, thus elevating it to the group of elite nations that can provide a platform for transition to satellite-based navigation. Patrik Nemeth Jersey
Govt divided over Air India future
The civil aviation ministry will prefer to sell off Air India’s subsidiaries to partially clear the national carrier’s huge debts rather than go in for an immediate privatisation. The ministry has objected to Niti Aayog’s proposal to sell off Air India as there will be no takers given the huge debt of Rs 52,000 crore. All the options to restructure Air India’s debt for a turnaround, including the Niti’s Aayog’s suggestion on privatisation, are expected to be taken up by the cabinet this month. According to the civil aviation ministry, hiving off some of Air India’s subsidiaries such as the engineering and ground handling units could raise cash; this and the restructuring of debt could nurse the airline back to health. ×”Trying to sell something which has few takers is bad strategy… and spending money to sell something is even worse,” said top civil aviation ministry officials. At the preliminary inter-ministerial meetings, the ministry has questioned the proposal to write off debts or restructure them just to make the carrier attractive to a private buyer. If such a step is indeed taken, the government can itself run the airline as Air India has started making profits, instead of bringing in a private party. Air India had made an operating profit of Rs 105 crore in the last fiscal. “We are saying that if the cost of privatisation is the government having to write off debt, then is it worth it?” officials said. Till now, the finance ministry has staved off any loan write-off plans, while the lenders are not too keen to restructure without seeing some money on the table. Officials consequently feel selling off subsidiaries could be a better way to earncash that could be brought to the table while negotiating a debt recast with lenders. Some of Air India’s subsidiaries are ground handling arm Air India Air Transport Services, Hotel Corporation of India (which owns Centaur at Delhi and Lake View in Srinagar), the charter business as well as engineering arm Air India Engineering Services. Officials feel the sale of the subsidiaries or even the sale of strategic stakes in them could fetch between Rs 20,000 crore and Rs 25,000 crore. Derrius Guice Authentic Jersey
ONGC gets green nod for exploratory drilling in KG basin
State-owned Oil and Natural Gas Corporation (ONGC) has received environmental clearance for drilling five wells to explore shale gas and oil in the KG basin of Andhra Pradesh at an estimated cost of Rs 217 crore. ONGC has been operating in the Krishna Godavari (KG) basin for the past more than 35 years. The exploratory efforts so far have led to the discovery of 65 small-to-medium sized hydrocarbon fields with about 356 million tonnes (oil and oil equivalent gas) of initial in-place on-land reserves. The current production of oil and gas is 750-800 tonnes per day and 2.5-3 million cubic metres of gas, respectively, from various facilities in this area. Since the KG basin holds significant promise for additional reserve accretion, the petroleum ministry is keen on continuing the exploratory activity. Against this backdrop, the ONGC proposal for further exploration of shale gas and oil in the KG basin was examined by the environment ministry. “The proposal was first vetted by the expert appraisal committee. Based on its recommendation, the environment ministry has given the final environment clearance to ONGC for exploratory drilling of five wells in the KG Basin,” a senior government official said. The approval has been given subject to certain conditions, the official noted. According to the proposal, the ONGC plans to drill wells in the on-land PML blocks in West Godavari, Bantumilli extension, Suryaraopeta, Mahadevapatnam and Mandapeta in Krishna, West Godavari and East Godavari districts to assess the hydrocarbon potential of shale. The project is estimated to cost Rs 217 crore. About 5-6 acres of land to drill each well will be required and the duration of drilling will be 90-120 days per well. All these wells will be drilled with water-base mud only, it added. The exploratory wells are drilled to assess presence of shale gas, which also provide leads for initiating further exploration programmes to exploit huge potential of shale gas resources for ensuring energy security of the country. India’s known oil and gas reserves form a mere 0.8 per cent of the world reserves of petroleum. ONGC is the largest producer of oil and gas in the country, contributing 72.4 per cent of the crude oil and 48.5 per cent of the natural gas production. At present, over 78 per cent of India’s oil requirements are being met through imports. Marcus Williams Jersey
BHEL Bags EPC Order For 15 MW Solar Photovoltaic Power Plant
Bharat Heavy Electricals Limited (BHEL) has secured an order for setting up a 15 MW Solar Photovoltaic (SPV) Power Plant on Engineering, Procurement and Construction (EPC) basis, in Gujarat The order has been placed on BHEL by Gujarat Alkalies and Chemical Limited (GACL) for setting up the SPV Power Plant at Gujarat Solar Park at Charanka in Gujarat. Significantly, this will be BHEL’s first ground-mounted Solar PV project in the state of Gujarat. The company is presently executing over 180 MW of ground-mounted and rooftop Solar PV projects across the country. BHEL has been contributing to the national initiatives for developing and promoting renewable energy based products on a sustained basis, since the past three decades. The company has enhanced its state-of-the-art manufacturing lines of solar cells to 105 MW and solar modules to 226 MW per annum. In addition, space-grade solar panels using high efficiency cells and space-grade Battery panels are manufactured at its Electronic Systems Division, Bengaluru. BHEL is one of the few companies in India whose solar business is backed by a dedicated R&D team. BHEL offers EPC solutions for both off-grid and grid-interactive SPV power plants and has set up solar plants in various locations in India including the Lakshadweep Islands for island electrification. Willie Snead IV Womens Jersey
‘India’s thermal plants may become economically unviable’
India’s ultra thermal plants, designed to run on foreign coal, may no longer afford to do so economically in the future, says a top financial analyst with a leading US-based institute. This can be seen in the case of India’s two largest thermal power projects in Gujarat’s port town of Mundra — Adani Power’s 4.6 GW and Tata Power’s 4 GW plants. Both are no longer competitive owing to nearly doubled price rise of coal from Indonesia since their planning and incapability to hike tariffs, says Tim Buckley, Director of Energy Finance Studies Australasia with the Institute for Energy Economics and Financial Analysis (IEEFA). Adanis’ Mundra plant has previously been disclosed to be operating with 100 per cent imported coal from Indonesia while Adani Power has been operating at a net loss, and has been doing so for the last seven years, Buckley told IANS in an email interview. The Mundra plant is by far Adani Power’s largest and is the intended destination for the majority of its thermal coal imports from the Carmichael proposal in Australia under Adani’s “pit to plug” strategy. After an adverse Supreme Court ruling disallowing any tariff revision to compensate for higher cost of imported coal, Adani Power discontinued 1,250 MW of power supply from Mundra due to unviability of running these units on imported coal. “These plants will curtail production rather than lose money with every unit of production. It is a likely conclusion that a $1-2 billion write down of Adani Power’s $5bn plant is on the cards. As it stands, this plant is a clear stranded asset,” said Buckley. Adani Power has approached state-run Gujarat Urja Vikas Nigam (GUVNL) to bail out its Mundra plant. According to reports, one option for GUVNL is to take a majority stake in the plant post a write-down of equity. Likewise, Tata Power has written to the central government proposing to sell 51 per cent equity of its ailing asset for a nominal fee of Re 1, citing challenges faced by the company since Indonesian coal prices doubled. According to Buckley, a written-down plant can be reconfigured to be viable, particularly if cheap ($20/tonne) domestic coal can be procured in proximity to the plant without exorbitant rail freight costs. However, a key requirement is that blending in low energy and high ash Indian coal requires high quality existing Australian thermal coal which is high energy and low ash. But coal from Carmichael would be low energy and high ash and far from ideal for blending with cheap domestic Indian coal, he said. Commenting on Energy Minister Piyush Goyal’s recent assertions that India would need to keep importing coal, including from the proposed Carmichael mine, Buckley said: “The strategic aim to cease non-coast power plant usage of imported thermal coal within the next two to three years means domestic operators will need to reconfigure their plants so that they can use domestic coal.” In May, the Indian government stated that it was considering auctioning Coal India’s domestic coal for supply and blending at import coal-based power plants where possible. As India works through and resolves domestic supply shortages, the need for imported thermal coal will continue to progressively decline. India targets for all public sector undertakings to be using 100 per cent domestic coal by this fiscal, following NTPCs move to virtually cease coal imports in 2016-17. “As proof of the gradual success of this program to protect India’s current account deficit and currency, Indian coal imports peaked in 2014-15, and have progressively declined since then. May 2017 saw a six per cent year-on-year decline for the month,” said Buckley, who is in Mumbai and New Delhi this week. For India, tapping renewable energy sources is a great opportunity, he said. “The move away from thermal fuel imports improves the balance of payments, helps improve the currency and hence reduces imported inflation generally,” Buckley added. An IEEFA report titled “NTPC as a Force in India’s Electricity Transition” showcases how the Indian government is shifting rapidly towards a low-carbon economy — a step towards achieving the 2015 Paris Climate Agreement aim of cutting greenhouse gases from burning fossil fuels. India’s draft “Ten Year Electricity Plan” calls for a staggering 275 GW of renewable energy by 2027, in addition to 72 GW of hydro and 15 GW of nuclear energy. Phil McConkey Womens Jersey
India should aim to get 40% electricity from nuclear power by 2050: M R Srinivasan, Former AEC chief
Indigenous manufacturing of major components and ensuring a strong participation from the domestic industry are the major challenges before the Indian nuclear power programme now, says former Atomic Energy Commission (AEC) chief M R Srinivasan. “For a large nuclear power capacity to be built in a country like India, it is very important to have major components made within the country. Otherwise economics will be not so good,” Srinivasan told IANS in a wide-ranging interview here on the sidelines of the Atomexpo 2017 organised by Rosatom. Lamenting that nuclear power formed only three per cent of India’s electricity generation, he said: “in our view by 2050 we should have a much larger nuclear component, may be 30 per cent to 40 per cent of the overall electricity capacity,” he said, adding, “We think there is a scope for India to substantially increase nuclear power.” Srinivasan said while the country should encourage solar and wind power to the maximum extent, for the base load requirements the way forward was either nuclear or gas. “Base load requirements will be substantial, it will not be less than 50 to 60 per cent. That capacity will have to come from coal, gas or nuclear,” he said. The widely respected atomic energy expert said there was a great scope for a substantial increase in the share of nuclear power in the country’s overall electricity capacity and highlighted India’s collaborations with the international community, particularly the strong scientific cooperation with Russia, in the field. “Cooperation among the international community is a good thing…Of course in the context of Russia, our cooperation is very good, it has become strong. We hope the scientific cooperation between India and Russia in the nuclear field will intensify over a period of time,” the 87-year-old scientist said. Having worked in his early years with Homi Jehangir Bhabha, considered the father of India’s nuclear programme, Srinivasan said that Bhabha had also stressed on self-reliance. “He recognised that when we develop it (atomic power) fully we should be largely self-reliant. That means we should create internal capacities in India,” said Srinivasan, replying to a poser on Bhaba. Calling the present NDA government at the centre “supportive” of harnessing India’s nuclear power potential, the Bengaluru-based veteran atomic scientist exuded confidence that the authorities would continue to back the programme. “Our challenges will be to see to it that the Indian industry participation is strong, and they also make necessary investments, training of personnel, so that the economy can move ahead,” said the Padma Vibhushan awardee. Queried on the safety of India’s nuclear power plants, Srinivasan said: “They are operating safely, their radiation discharge is far below the authorised limits, personal exposures are very low, and there has been no accident related to release of nuclear material.” The fact that they had been operating for very long, he added, was proof that they are safe. “The debate on safety of nuclear projects is a continuing debate. But I think by and large people in India accept nuclear power, so long as those reactors are operating well, and they see benefits for the economy.” He described the Kudankulam nuclear power plant in Tamil Nadu as one of the safest reactors. “It has got one of the safest designs. We have worked jointly with Russia to make sure it has got what is called a passive heat removal system,” Srinivasan said. “It has got multiple levels of safety and redundancy built into the systems and it has been validated for all the earthquake or tsunami and other circumstances at the site. It is a very safe site; it is a very safe design without a doubt,” he said. Anton Stralman Womens Jersey