India to launch ‘NHAI International’
The government is planning to launch a dedicated international subsidiary of the National Highways Authority of India (NHAI) to take up roads and highway projects abroad, particularly in South Asia. Simultaneously, India is also looking forward to setting up joint ventures (JVs) for road construction in neighbouring countries. Union Transport Minister Nitin Gadkari said his ministry was considering a proposal to launch “NHAI International” for undertaking roads and highway construction projects abroad. Experts say that such a subsidiary could be in the form of a special purpose vehicle (SPV) which will collaborate with foreign companies to bag international projects. The minister said India is keen to participate in road construction in neighbouring countries like Iran, Nepal, Bhutan, Bangladesh, Myanmar and Sri Lanka through joint ventures. “We are promoting road construction joint ventures in Nepal, Bhutan, Bangladesh, Myanmar and Sri Lanka. Sri Lanka has already agreed to allot a couple of road projects in northern Sri Lanka to us,” Road Transport and Highways Minister Gadkari told IANS in an interview. “We have plans to develop road projects in Iran as part of the development of Chabahar Port-related projects.” On the domestic front, the minister has set his sights on achieving a target of construction of 40 km of roads per day in the next year or so. “If I could achieve 23 km per day from the rock bottom 2 km per day in three years, there is no reason I could not reach close to my next target of 40 km per day in the next one year or so,” Gadkari said. “Projects like road and highway construction, including tunnels, over-bridges and roadside amenities and other related projects also depends on various other factors like weather conditions and local issues.” As per various estimates, India has one of the longest road networks across the world at over five million kilometres. The network consists of national highways, state highways, major district roads and rural roads. Out of the total road network, national highways and expressways account for only two per cent, but are used to transport more than 40 per cent of all goods and passenger traffic. The slow average speeds on these highways due to high road density and non-availability of access-control measures allows cargo laden trucks to travel only 225-250 km per day. The overall target is to increase the national highways length to two lakh kilometres but delays in land acquisition and a famine of private investment has slowed down progress. For 2016-17, 23 km of roads were constructed per day, up from 16.6 km a day in 2015-16. In the Union Budget 2017-18, the central government allotted Rs 64,000 crore ($9.55 billion) to NHAI for roads and highways and Rs 27,000 crore ($4.03 billion) for the Pradhan Mantri Gram Sadak Yojana (PMGSY) that is focused on rural roads. However, road and highway construction did not gather pace automatically, as the minister recalled three years back there were 400 projects which were stuck due to problems relating to land acquisition, environment and forest clearances, and rail over bridges. “There was an atmosphere of gloom and disillusionment. Contractors were unwilling to continue with the projects and bank NPAs (non-performing assets) were piling up,” Gadkari said. “I encouraged all the stakeholders and organised face-to-face meetings with the state government officials, bank managers, NHAI officials and the contractors. “In the last three years we have collectively resolved most of the knotty issues, cleared road blocks and put the projects back on track. There is hardly any project which is stuck.” Reggie Lewis Womens Jersey
Highway construction target for Nitin Gadkari-led Road Transport Ministry: Is 30 km per day too much of a stretch?
Road transport and Highways Minister Nitin Gadkari’s target of awarding 25,000 km and building 15,000 km of roads in the last fiscal may have been missed by a wide margin, but that hasn’t come in the way of what his ministry looks to accomplish ahead, with the targets remaining unchanged for the current fiscal. While there is a general view among experts that the targets are unrealistic, ministry officials consider going past the 30 km/day mark in the present fiscal (target is 41 km/day) doable. In April, the first month of FY18, highway construction logged 679 km, averaging 22.63 km/day, a tad higher than the 22.5 km clocked in the last fiscal. Significantly, April is considered the most conducive month for highway construction in India, with the onset of the monsoon slowing down the pace of work for a few months. Notwithstanding this, a top official in the Ministry of Road Transport and Highways (MoRTH) sounded confident of construction breaching the 30-km/day mark in the current fiscal. “It is good to have a minister like Gadkari who publicly professes targets. If the construction figure touches 30-31 km/day, it will please me, as a citizen, to see that the country is moving in the right direction,” says Vinayak Chatterjee, Chairman, Feedback Infra. As against Gadkari’s target of building 15,000 km of highways in 2016-17, 8,231 km were constructed. The minister had attributed the wide miss — which yet remained the highest ever figure clocked by the ministry and the National Highway Authority of India — to problems in land acquisition and utility shifting, non-availability of aggregates, poor performance of contractors and delay in clearances. Having kept the target at the same level for the current fiscal, Gadkari is pushing his officials to get their act together. He has also stepped up the monitoring system, with problems faced by the implementing agencies being addressed expeditiously. Overall, the National Democratic Alliance (NDA) government has done considerably better than its predecessor United Progressive Alliance (UPA) on the road construction front. As against the average 5002 km of highways built in the last three years of the UPA regime (15,005 km in all), highway construction in the first three years of the NDA regime went up to 6,234 km/year, marking a 24% jump. When the Narendra Modi government took over in May, 2014, the construction rate stood at 11.67 km/day. Under the new regime, it grew to 12 km/day in 2014-15 and 16.6 km/day in 2015-16, touching a record 22.5 km/day in the last fiscal. On the award front too, the Modi-led government’s first three years have outpaced the previous government’s last three years in office. While the UPA-II government awarded work for 15,380 km of highways in its last three years, the figure shot up to 34,349 km for the 2014-17 period — 7.980 km in 2014-15, 10,098 km in 2015-16 and 16,271 km in 2016-17. The Union government has taken several steps to reverse the drying up of private investment in the sector. It eased the exit policy for developers to enable them to invest in new projects and introduced the hybrid annuity model wherein the Centre bears 40% of the project cost. As per the new rules, projects worth below Rs 500 crore are awarded by the highways secretary, those up to Rs 1,000 crore by the road transport and highways minister and only projects above that value need the approval of the Union Cabinet. It generally takes two to two and a half years for a developer to execute a highway project. Saku Koivu Authentic Jersey
Government looks at three options for disinvestment of Air India
The government is looking at three options for Air India disinvestment, including holding up to 49% in the national carrier, even as it is almost certain to take over a large part of the debt burden to make the airline more attractive for buyers. Sources said while there has been a recommendation to completely exit the perpetually loss-making airline, another possible route to follow is the Maruti model, where the government handed over majority control to Suzuki, for which it received a premium. Later the government reduced its stake further through a public issue. A chunk of government shares were also sold to Indian banks and financial institutions through a bidding process, which was more like warehousing them before being offloaded in the markets. Several global airlines, where governments have exited, have offered large chunks of the holdings to the public. The Air India divestment has gathered momentum in recent weeks with NITI Aayog recommending up to 100% stake sale, along with writing off debt. Finance minister Arun Jaitley too has backed the idea and he has held at least one round of consultations with civil aviation minister A Gajapathi Raju, with sources indicating that the entire process will be speeded up. The sources added that various options are being looked into and a final decision will be taken by the Union cabinet. But before moving the cabinet the civil aviation ministry has to decide if foreign airlines will be permitted to hold a majority stake in the airline. Qatar Airways has already said it wants to have a domestic airline in India and is yet to make an application for a startup. Last June, the Modi government had allowed Indian carriers to be fully-owned by foreign entities. While foreign carriers are still required to cap their stake at 49% in airlines here, they can get a foreign partner — like a sovereign wealth fund or an institutional investor — and not look for an Indian partner for the remaining 51%. It is also looking to tackle some key issues including how to structure the deal financially and if the government should retain some shares. How to monetise AI’s assets and its two subsidiaries — aircraft maintenance and ground handling and the fate of employees are other crucial issues. AI, which is weighed down by loans of over Rs 50,000 crore, has been trying to restructure a part of debt but banks refused to play ball, saying it would open the floodgates for similar requests from other stressed PSUs. This also helped firm up the decision for privatising AI. “India is a huge market and it needs three-to-four strong airlines to be able to cater to the growing travel needs of its people. At the moment, big airports in Gulf and Southeast Asia have are transit hubs for flying people between India and rest of the world. Unless we have strong Indian airlines, foreign carriers will continue to get stronger thanks to us,” said an official. India is now the world’s third largest domestic air travel market, as last year it pushed Japan to number four spot. On the international-cum-domestic air travel front, India saw a combined traffic similar to the UK in 2016 and they are both at number four spot now. Ray-Ray Armstrong Jersey
Jet Airways in talks to buy 50 single-aisle jets
Jet Airways India Ltd, the country’s biggest full-service carrier, is in talks to buy 50 narrowbody jets on top of a pending order for Boeing Co 737 Max aircraft, a person with direct knowledge of the plan said. The most likely model the airline is considering is the 737 Max, though it is also looking at Airbus SE’s A321neo jets as well as the 737 Max 10, a stretched version Boeing may introduce in Paris this month, the person said, asking not to be identified as the discussions are confidential. Jet Airways could sign the deal in the next two months for deliveries starting 2024, the person said. The order may be worth at least $5.6 billion. Jet Airways continuously reviews its fleet in response to demand, but won’t comment on speculation, a spokesman said in an email. A representative for Boeing said in an email that the planemaker is in constant communications with airlines in India about their needs but doesn’t discuss specific conversations publicly. An Airbus spokesman declined to comment. Jet Airways, in which Abu Dhabi’s Etihad Airways PJSC owns a 24 per cent stake, is expanding its fleet as competition intensifies in India, one of the world’s fastest-growing aviation markets, where carriers offer cut-throat, below-cost fares to attract passengers. The Indian carrier made its first annual profit in seven years in the 12 months ended March 2016, mainly due to a drop in oil prices — the biggest cost for an airline. Airlines in Asia are ordering hundreds of new planes to meet surging demand as an emerging middle class spends more of its disposable income on air travel. In India, market leader IndiGo has ordered 430 A320neo jets and is in talks to buy 50 ATR turboprop aircraft, while budget carrier SpiceJet Ltd. has ordered as many as 205 Boeing jets. Pending Order The 737 Max is the fastest selling aircraft in Boeing’s history, with 3,700 orders from 87 customers from around the world, according to the Chicago-based company’s website. In 2015, Boeing said Jet Airways had an order for 75 Max 8 variants due for delivery starting 2018. The current list price of the Max 8 is $112.4 million before customary discounts for large orders. Jet Airways, which has 10 Boeing 787s on order, is also in talks with the planemaker to defer deliveries of the Dreamliners by two to three years, as the airline can use its existing relatively new 777 jets for a few more years, the person said. The carrier disclosed the 787 order in 2007 and has repeatedly delayed taking deliveries of the aircraft since 2011. In about three years, Jet’s A330s will exit its fleet, the person said. Kevin Byard Authentic Jersey
Developers see solar tariff at Rs 1.5 a unit
Solar power developers are bullish on clean energy and hopeful about tariff coming down to as low as Rs 1.5 per unit on falling equipment cost and cheaper credit with assured purchase pact. Solar power tariff came down to all-time low of Rs 2.44 per unit in the auction conducted for Bhadla solar park last month mainly due to lower equipment and borrowing costs. The new rate of solar power is even below the average rate of coal-based power produced by staterun NTPC at Rs 3.30 per unit. “Developers are bullish on renewables particularly solar energy. They think even Rs 2.44 per unit tariff is high in view of lowering of cost of equipment and avenues available for cheaper funding,” said a source in the ministry of new and renewable energy. Chandler Jones Jersey
Solar energy boom turns to bust for Indian manufacturers
Some of India’s biggest solar equipment makers are facing financial collapse, priced out by Chinese competitors as Prime Minister Narendra Modi’s government prioritises cheap power over local manufacturing despite his ‘Make in India’ push. Though President Donald Trump is pulling the United States out of the Paris accord on climate change, India is sticking to its huge renewable energy programme. That has created a multi-billion-dollar market for Chinese solar product makers, who are facing an overcapacity at home and steep duties in Europe. India’s solar power generation capacity has already more than tripled in three years to over 12 gigawatt (GW) as Modi targets raising energy generation from all renewable sources to 175 GW by 2022. Chinese companies have gained the most from that increase, accounting for around 85 percent of India’s solar module demand and earning around $2 billion, according to industry data. The total annual market could jump to more than $10 billion in the next few years going by the government’s capacity targets. Local companies such as Jupiter Solar, Indosolar Ltd and Moser Baer India Ltd, however, are struggling to win contracts. Orders funnelled through a domestic-content policy have all but dried up after the World Trade Organization last September upheld an earlier ruling that found the move violated global trade norms. As a result, Jupiter said it could shut shop by July after delivering their last orders this month; Indosolar auditors have raised doubts over it remaining as a “going concern”; and Moser Baer says it needs support from its lenders to revive its solar business. “TORPEDOED” Indian solar power plant developers – including companies backed by Japan’s Softbank and Goldman Sachs – are quoting ever-lower tariffs in auctions to win big projects, encouraged by steep drop in Chinese solar equipment prices. That is squeezing out Indian cell and module makers, many of which have inferior technology, depend on imports of raw materials, have limited access to cheap loans and operate below capacity. Chinese modules are 10-20 percent cheaper than those made in India, company and industry executives said. “The WTO ruling has torpedoed everything. It’s not a case of one company – we have the largest cell operating capacity – everybody below us will shut down one after another,” Jupiter CEO Dhruv Sharma told Reuters by phone. Chinese companies were selling solar cells in India at 19-20 U.S. cents, around 35 percent below his production cost, he added. There are more than 110 Indian solar cell and module makers registered with the government, out of which consultancy Bridge to India expects only a handful to survive. Santosh Vaidya, a senior official in the Ministry of New & Renewable Energy, said the government was working on several initiatives to promote the domestic solar manufacturing industry. He did not elaborate. GOING THE TELECOM WAY India’s promise, and need, as a market for solar is obvious. It is one of the lowest per-capita consumers of electricity in the world and more than 200 million of its people are still not connected to the grid, making it crucial for the government to aggressively push for cheap power. Despite its low labour costs, it is not alone in buckling under pressure from Chinese competition. Earlier this month, Germany’s SolarWorld, once Europe’s largest solar panel maker, said it would file for insolvency. Indian companies produced an estimated 1.33 GW of modules last year out of the total capacity of 5.29 GW, according to Bridge to India. Total consumption of modules – 60 percent of a solar project’s cost – was around 4 GW. Solar project developer SB Energy, a joint venture between SoftBank, Taiwan’s Foxconn and India’s Bharti Enterprises, said it had discussed the shortage of local manufacturing with the government. “Lack of significant domestic solar manufacturing capacity is a concern, as this is a major gap,” SB Energy Executive Chairman Manoj Kohli said, drawing a parallel with India’s huge mobile phone market but negligible local production. Several company executives said a lack of scale, absence of raw material supply chains and rapidly changing technology were some of other reasons Indian firms were unable to compete with Chinese manufacturers such as Trina Solar and Yingli. “The government is busy bringing power prices down … but you can’t build castles on graves,” Gyanesh Chaudhary, CEO of module maker Vikram Solar told Reuters. “Without a domestic manufacturing ecosystem, no public policy can last for a long time.” Markus Golden Authentic Jersey
OilMin forms ‘super-board’ to monitor ONGC, OIL performance
The oil ministry has formed all- powerful review committees to monitor performance of ONGC and Oil India, and will have power to relinquish any oil and gas field for auctioning to private firms. Being dubbed as ‘super-boards’, the committees will be headed by the ministry’s upstream nodal authority DGH, and will review and monitor performance of areas given to Oil and Natural GasB Corp (ONGC) and Oil India Ltd(OIL) on nomination basis. The two panels – one each for ONGC and OIL, will review from annual work programme and budget to declaration of a discovery as commercial as also reservoir and production performance, monitoring of development activities and collaborations with other explorers. “The advice/decision of the Review Committee shall be implemented forthwith by the NOC (national oil company) concerned and the progress of implementation shall be reported to the Review Committee through DGH at its next meeting,” the May 25 order issued by Atanu Chakraborty, Director General, Directorate General of Hydrocarbons (DGH), said. The order follows ministry’s unhappiness with state explorers particularly on delays in projects linked to output enhancement. It has already ordered a detailed review of board of directors of ONGC for a possible revamp of the functional heads. “They have all the powers to do so. We have to live with it,” said a senior official at one of the two explorers. “If they want to create a ‘super-board’ so be it,” he said. The panels will be headed by DG, DGH and will have two other members from DGH – one Deputy DG and another head of Division in charge of NOCs-monitoring. One representative of ONGC or OIL not below the rank of director will be nominated by the NOCs. Also, the manager of the asset that is under review would be co-opted as member of the committee, the order said. ONGC produced 86 per cent of its 26.13 million tonnes of crude oil in 2016-17 fiscal from fields given to it on nomination basis. Natural gas production from nomination fields accounted for 93 per cent of the total output of 25.34 billion cubic meters. In the order for ‘Constitution of Review Committees for Management of Oil and Gas Resources of Nomination Fields of National Oil Companies (NOCs)’, Chakraborty said the panels are being constituted drawing from powers given to DGH by the oil ministry orders. The order for the constitution of the committees will “come into force with immediate effect,” he said. The review committee will meet at least once every three months. The powers of the panels include “annual work programmes and budgets in respect of exploration operations and any modification and revisions thereto” and “annual work programme and budgets in respect of development and production operations and any modifications and revisions thereto.” It will also review “proposals for surrender or relinquishment of any part of the area included in the nomination field”. Fields relinquished by NOCs are auctioned to private firms by the government. The first such auction was concluded last fiscal with 67 of fields relinquished by ONGC/OIL being put on sale. “Performance of non-producing/sub-optimally producing” fields as well as “reservoir and production performance of producing fields” would also be reviewed by the panels, the order said. Field development plans (FDP), feasibility reports of commercial discoveries in nomination fields and monitoring of development activities for early monetisation will also fall within the ambit of the committees. “Proposals for ‘field surveillance’ by DGH for better reservoir management” will also be under preview of the committees, the orders said, adding collaboration with licensees or contractors of other areas would as reviewed by them. Also, proposals for an appraisal programme or revision, declaration of a discovery as commercial discovery along with proposed development area will be function of the panels. Roosevelt Nix Authentic Jersey
Russia overtakes India in domestic air travel growth: IATA
India is no longer the world’s fastest growing domestic air travel market. Russia overtook India by witnessing 16.7% growth in April 2017, over the same month last year, while India grew in this period at 15.3%, according to International Air Transport Association (IATA). The global average domestic air travel growth rate this April (over the same month last year) was 7.7% and in the new pecking order, India is at number two followed by China at 12.7%, Japan at 6.7% and the US at 4.7% .. India’s domestic air travel has been booming due to low crude prices, which in turn allowed airlines here to offer cheap airfares. But in the past two months as crude firmed up, airfares also rose and the domestic skies started becoming a tad less crowded in terms of growth slowing down. Exactly two months ago, in March, IATA had said that India had been the world’s fastest growing domestic air market for 22 months in a row. This meant that till March, India saw the highest growth in domestic air travel over the same month in the previous year for almost two years. Dave Cash Womens Jersey
Air India selloff: Government should exit completely, national carrier tag redundant now
Should the government retain a minority stake in Air India to preserve the ‘national carrier’ tag, even after it agrees on the modalities to sell off this loss-making airline? If retaining a minority stake would be the consensus among the wise men in New Delhi tasked with Air India’s future, it would indeed be a travesty. The national carrier tag was important in the decades when India was a closed economy, when Air India was the sole airline operating on the domestic as well as on international skies and when it was thought to represent Indian hospitality. But today, when private airlines own a majority of the domestic market by passengers and when overseas routes too are no longer a monopoly of the Maharaja, what sense does it make for the government to retain any control whatsoever in Air India? The airline needs to be handed over in entirety to a private bidder, as and when the selloff process begins. Not only will this intent of complete exit provide assurance about government’s sincerity regarding the selloff, it would also signal complete freedom for the new owner to take critical decisions – even with a minority equity share, the government may otherwise well interfere in decision making. Speaking at an interaction with media today, Niti Aayog Vice Chairman Arvind Panagariya said that though his organisation has already given its recommendations on Air India selloff, the government has to take a call on several crucial aspects of the proposed sale: 1) Whether the airline should be sold off at all 2) If the decision is in favour of a selloff, then should the universe of buyers include foreign buyers or should the sale be restricted to Indians? 3) Should the government retain some stake in the airline to retain its ‘national carrier’ tag 4) Should the entire Rs 52,000 crore debt on Air India’s books be written off or should only a part of this be written off by the government. Panagariya said that Niti’s recommendations have been submitted to the Prime Minister’s Office, and now the PMO along with the Ministry of Civil Aviation will have to take a call on the selloff. While declining to divulge details of his recommendations on Air India disinvestment, Panagariya was quite clear that the current debt on the airline’s books was “very very large and selling it with this (debt) will be very very difficult. Even if the sale were to be open to both, domestic and foreign buyers, will the government write off the entire debt or only a part of it – that decision needs to be taken”. An official close to developments had told Firstpost earlier that it is possible to break up Air India into two distinct parts: 1) The airline itself with aircraft and related assets and 2) Air India’s subsidiaries and the real estate. This official had said that the sensible way to get maximum value in any selloff would be to offload just the airline to a prospective buyer. The government could then simultaneously dispose off the subsidiaries and real estate for a total consideration of close to Rs 20,000-21,000 crore. In fact, an inter-ministerial group has already begun deliberations in the second part, specifically on monetising land assets. The same person had further said “All this is known to people involved in the selloff process. Now, the ball is in DIPAM’s (Department of Investment and Public Asset Management) court. Once DIPAM accepts the proposal drafted by Niti Aayog, things will move forward. DIPAM will take the proposal to the Cabinet Committee on Disinvestment. If this committee approves the proposal, then ads will be put out for transaction advisors and valuers.” DIPAM is expected to form several committees to examine and fine tune the selloff process, comprising top officials of the ministry of civil aviation, Air India, Finance Ministry and DIPAM itself – the entire selloff process of Air India could take at least 8-12 months. Mark Recchi Authentic Jersey
Privatising Air India: Tatas eyeing state-run carrier?
Air India is all in the news and buzzing on the social media big time though much to the discomfort of its approximately 19,000 employees, since the Modi government strongly favours the carrier’s privatisation. Who, in the words of civil aviation minister Gajapathy Raju, will be the “bakra” (scapegoat)? Tatas, as the rumours say, given that no business group knows Air India better than them. A purported meeting between Tata Sons chairman N Chandrasekaran and Arun Jaitley in New Delhi on Thursday set the media tongues wagging amid the finance minister publicly stating that the government needs to get out of loss-making Air India and the official think-tank Niti Aayog also advocating complete privatisation of the carrier. If the impossible (handing over of Air India) happens, it would mark a milestone not only for Indian civil aviation sector, but also for the Tata Group who owned the carrier before nationalisation.