NHAI: Won’t invite bids till land acquired
The National Highways Authority of India (NHAI) will not invite any bids for road projects until it has completed the process of land acquisition and shifting of utilities, and obtained in-principle forest clearance. Similarly, the authority will not commence work on structures, such as flyovers, bridges and rail over bridges, until it has 100% of the land. This is among the new norms that the NHAI has set in its bid to end the trend of huge delays in highway construction on account of lack of required land, statutory clearances and shifting of utilities such as water and gas pipelines and power transmission lines. Non-availability of land continues to delay the construction of flyovers on the Gurgaon-Jaipur stretch even seven years after work started on the corridor. Similarly, the NHAI had to terminate the contract for the expansion of of Chennai-Tada highway project and Delhi-Dehradun stretch for non-availability of land. Sources said 80% of the highway projects are delayed due to land related issues. Till now there has been a practice of awarding highway projects, and also commencing work, without having the required land and other necessary clearances. This often leads to litigation and road developers raising claims on the NHAI for its failure. TOI has learnt that because of the new norms, NHAI did not award a single project in April Ryan Pulock Jersey
Hope to achieve 40km of road construction by end of March 2018: Nitin Gadkari
At the beginning of his tenure as the minister for road transport and highways — Nitin Gadkari had set an ambitious target of constructing an average of 40 kilometres of roads every day. However, three years down the line, the government is yet to meet that target – in fact the pace of road construction stands at 23 kilometres per day. Watch Network18s Marya Shakil catch up with Nitn Gadkari to find out what’s holding back the ministry from meeting its targets? Below is the verbatim transcript of the interview. Q: I am looking at the numbers. Your government, you in particular have built, on an average, 23 km of roads every day. You had set a target of 40 km, of course, 23 km is much more than what UPA did, because their average was around 6-9 km. Did you get too ambitious when you set that target of 40 km per day? A: The target is ambitious, but anyone who is committed for some historical transformation, his ambition is higher. But I am confident that next March end, we will complete that 40 km a day. Again, I want to add one thing. Last year, we awarded the road contract for 16,800 km and that is a world record. It is for Guinness Book of World Record, now we are applying for that. First time in the world, in a country, in one year, there is a road construction contract for 16,800 km. It is a great achievement for our government. Q: What is the reason for this delay? Is it because of land acquisition or are there some states which are not cooperating with the centre? What is the reason why these projects are getting derailed? A: Everywhere in road projects, we need cooperation from the state government. Land acquisition, we are giving compensation, but the acquisition is with the help of state government. Then environment forest clearance, we have to take it from the state government. Encroachment, we need state government cooperation. So, somewhere we need store, sack, we need permission for that. Today, what my feeling is in our whole country, I am not talking politically, we need development oriented approach. Development of country is not a political agenda. It is an agenda for the country and some time, I feel it very bad. The attitude, the approach in the system, I am not blaming politically. It is even in the BJP government also there are some things are there. We are sometimes, people fed up. Some bureaucrats, the system, they do not want to take the decisions. The delays are there. Q: You were recently at the London Stock Exchange where you talked about Masala Bonds. Do you think investment in your area that is road and transport is a big challenge? A: Not a big challenge. Total world investors are ready to invest in India. The credibility of India, the credibility of leadership of Narendra Modi, credibility of Indian government has increased. People have a lot of expectations in the world. When I met with the pensions fund owner, insurance fund owner, bankers, investors, there is a great aspirations and they have great expectations for Indian economy. The fastest growing economy in the world, I do not have a money problem, I do not have technology problem. Q: So, where is the problem? A: My problem is in my system, this government system because this system is not ambitious. They do not want to take this fast track decision making process. The delays are there. The committees are there and there are a lot of negative approach people are there. Q: You have pitched the Motor Vehicles Bill as the Save Life Bill and you were lauded for a very comprehensive bill by your colleagues in parliament as well. This linking of Aadhaar, the sceptics are saying that this is some kind of intrusion to their privacy. A: Not at all. You know that, I am very sorry to say, but it is my duty to tell you the truth. We have 30 percent bogus licences. Is it good for the country? A lot of accidents have taken place, do you know that? The most easiest thing in the world in India is to get licence. You cannot get a licence in UK, you cannot get a licence in USA. The system is very hard and now, in India, anyone can take licence without giving the test for driving. Is it good? So, this is the time for the country, we have to save the life of the people. Every year, in India, we are facing five lakh accidents, 1.50 lakh deaths and that is the reason that we have to improve the system. Driving training system we have to improve, we have to improve road engineering, we have to identify the black spots, we have to improve system related to the RTO, we have to improve the system with car registration, we have to improve automobile engineering, we have to improve the driving licence system. By efforts of all this thing, we can save the life of 50 percent of the people of this country. Q: Is this pitch for Save Lives also something to do with your own personal accident that you feel that there is a need for greater safety on roads? A: 100 percent. I have faced a big accident. My total family was there. My leg, there were four fractures in my leg. A rod is there. It is only because the thing is that on the road, National Highway, I am a Minister for this, from Ramtek to Nagpur, on that road, there was a tree and because of red tapeism, the government, the collector and the forest department not giving the permission for that and there was cataract to my driver, the police driver and that day, the accident took place. It is not good. I am very sensitive about it. I have faced the
Rooftop lag in solar power flop- India fails to reach even half of target, blame on Centre’s policies
Faulty policies prevented India from achieving even half its solar energy target during the last fiscal year, experts say, despite Prime Minister Narendra Modi’s projections of the country as a future global leader in the sector. Many experts blame the lag on the government’s exclusive focus on big-ticket solar plants at the expense of decentralised rooftop solar energy, which can involve even individual households but finds its subsidies withdrawn since 2014. A report by the ministry of new and renewable energy says the country increased its capacity for solar energy production by about 5.5GW (gigawatt) between April 2016 and March 2017, against a target of 12GW. India, whose total solar energy capacity is now about 12GW, has set itself a target of 100GW by 2022, which many consider “over-ambitious”. Overall, the country generated just 11.3GW of grid-connected renewable energy in the 2016-17 financial year, less than 70 per cent of its target of 16.7GW. The ministry report says that apart from wind power and waste-to-energy, India did poorly. “Implementation of rooftop solar is taking place at a much slower pace and it seems unlikely that the government would achieve its 40GW target by 2022,” a report by the PHD Chamber of Commerce and Industry and credit rating agency Care Ratings, released at the National Solar Summit 2017, warned. It advocated specific policy initiatives to support rooftop solar power generation, including incentives to attract investments. India’s total rooftop solar installation stood at 1.247GW on December 31 last year, which is just over 3 per cent of the targeted 40GW by 2022. Last month, the Niti Aayog said that rooftop solar energy generation needed to be promoted “between residential, commercial, industrial and agricultural sectors with a target of achieving 20GW capacity by 2019-20”. Harjeet Singh, a global climate change expert associated with Action Aid, said: “Although there has been improvement compared with earlier years, we are falling back on solar mainly because of failures in the solar rooftop sector.” He added: “This is an important sector as it does not require land, which otherwise is a problem while setting up large-scale solar plants.” An analysis by the US-based NGO, World Resource Institute, too has cited “slow progress on solar rooftop installations, poor transmissions and lack of access to finance”. Some experts also blame the coal lobby for the tardy growth of solar energy in coal-rich eastern India. “Clearly, the coal lobby is pushing back solar energy growth in these states as coal is available there,” said solar energy expert Santipada Gon Choudhury. Bihar, Jharkhand and Bengal have together installed hardly one per cent of their combined target of achieving a capacity to generate 12GW solar energy by 2022. Bengal power minister Sobhandeb Chattopadhyay, however, blamed the state’s poor performance solely on the “Modi government’s abolition of solar energy subsidies, including solar rooftop subsidies, from 2014”. To offset the lag during 2016-17, India will need to increase the rate of solar capacity additions to at least 18GW per year if it is to reach the 100GW goal in 2022. Some experts, however, are optimistic. “India needs to look at its ambitious solar target but things have started to improve,” Sanjay Vashisht of Climate Action Network of South Asia said. “The price of solar energy has fallen below that of coal-based energy, and the future seems bright,” added Chandra Bhushan, a climate expert from the Centre for Science and Environment. India’s overall renewable energy target for 2022 is 175GW, as mentioned in New Delhi’s formal commitment to the United Nations Framework Convention of Climate Change during the Paris climate summit of 2015. Isaiah Wynn Jersey
Work begins on India’s first green energy corridor project
India today conducted the ground-breaking ceremony for its first green energy corridor project with an ultra high-voltage direct current (UHVDC) link over 1,800km with the aim to bring power to 80 million people. The project by state-run Power Grid Corporation of India (PGCIL) is being executed by ABB Group in partnership with Bharat Heavy Electricals Limited (BHEL). “This link is a key element of integrating renewable energy with the main grid. It will integrate thermal and wind energy for transmission of power to high consumption centers located thousands of kilometers away, supporting electricity demands in the south and transmitting clean energy to the north, when there is excess wind power,” a statement issued by the ABB said. The mega project is worth over Rs 4,350 crore. The Raigarh-Pugalur 800 kilovolt (kV) ultrahigh-voltage direct current (UHVDC) system aims to connect Raigarh in Central India to Pugalur in the southern state of Tamil Nadu. “The project is a great example of the Make in India initiative where design, engineering, manufacturing of major components and project execution is done locally,” the statement said. According to the statement, HVDC technology has assumed greater significance worldwide to transmit more power over longer distances. Willie Young Womens Jersey
GST may push up cost of solar power projects
The goods and services tax may increase solar energy project costs by 12%-18% and generation costs by 40-50 paise per unit, some industry leaders said, although the government said the new taxation regime won’t have much of an impact on them. However, officials said even if costs increase, it won’t affect project economics because the additional charges can be passed on to customers. “Following GST, solar projects will be about 18% costlier on an average, while cost of generation would go up by around 20%. We have estimated the incidence of GST to be around 23%-25% on various inputs for the segment,” said Ratul Puri, chairman, Hindustan Power Projects. “It would require project developers to go back to banks for additional funding for projects under construction. It might require a minimum of three months to get additional funding, thus delaying projects.” Power, coal, renewable energy and mines minister Piyush Goyal had said earlier the GST rates would not have much impact on his sectors. Sunil Jain, CEO at Hero Future Energies, said solar modules, which weren’t taxed earlier, will have an 18% levy, while inverters – a major component in solar projects used to convert direct current into alternating current – would now be taxed at 28% instead of zero. Taxes on cement and other materials have been increased, he added. “Our calculation suggests that project costs would go up by at least 16% on an average, since electricity has been excluded from GST and thus would not qualify for input tax credit. This translates into a 40-50 paise per unit rise in generation costs,” he said. “The new regime will result in an increase of 18% in module cost, about 12% in inverter cost and 3% in all service costs – increasing overall project cost by about 12%,” said Vinay Rustagi, managing director, Bridge to India, a consulting firm. “New rates would hit more than 10 GW of ongoing utility scale projects and pose a threat to their viability.” Ashvini Kumar, managing director of Solar Energy Corporation of India, the company that arranges solar project auctions on behalf of governments, doesn’t anticipate any stumbling blocks. “Almost all power purchase agreements include a clause that allows hikes or declines in power generation costs as a result of change in laws – GST in this case – to be passed on to consumers,” Kumar said. “The math behind tariffs quoted by developers in successive auctions thus remains intact since they would be able to pass this on.” Kyle Juszczyk Authentic Jersey
Failure by states to pay for renewable power may trip 2022 target
States are lagging behind in meeting their renewable purchase obligation target which is a key policy instrument to meet the goal of installing 175 gigawatt (GW) of green energy by 2022, stakeholders and experts say. Renewable purchase obligation (RPO) refers to the mandate imposed by law on some entities, mainly power distribution companies, to procure a certain part of their power requirement from renewable sources. Consulting firm Bridge To India, in a recent report, said the Union Ministry of New and Renewable Energy has allocated individual targets for states in line with the eight per cent solar RPO target for the country for March 2022, but says actual performance varies highly across states and enforcement is poor. “Power being a concurrent subject, solar renewable purchase obligation targets are actually administered and regulated at the state level. Unfortunately, because of poor finances of discoms (power distribution companies), the obligations have never been enforced anywhere in India on a consistent basis,” the consulting firm’s Managing Director Vinay Rustagi told IANS. He alleged that the state electricity regulators have also been “very lenient”. The market intelligence provider and research firm Mercom Capital Group also pointed out that India made remarkable progress over the last seven years since the inception of the Jawaharlal Nehru National Solar Mission (JNNSM) in 2010. But around 10 GW of solar installation is “not as impressive as it sounds”. The 2022 target includes 60 GW from wind power, 100 GW from solar power, 10 GW from biomass power and five GW from small-hydro power. India needs to install 90 GW of solar in five years — a rate of 18 GW a year to meet the target. “Due to the lack of enforcement of RPO regulations and the absence of penalties when obligations are not met, many of the state discoms are not complying fully with their RPO targets,” the research firm said, adding if all states had adhered to the RPO targets set by respective state electricity regulatory commissions, 17.7 GW of solar power would have been installed by 2016-17. “In the Indian market, strict compliance and penalising states to push for higher installations levels are not enough. There are a lot of underlying issues that the government needs to address — discom financials, must-run status, transmission and evacuation issues, on-time payments and payment guarantees,” the research firm’s CEO Raj Prabhu told IANS. In general, southern states along with Gujarat, Rajasthan and Madhya Pradesh have been at the forefront of compliance, whereas Maharashtra and Uttar Pradesh are lagging far behind the target, Rustagi said. In respect of eastern states, Solar expert S.P. Gon Chaudhuri said lower penetration of renewable energy in the region was one of the major reasons for West Bengal, Jharkhand, Odisha and Bihar failing to meet the RPO target. The eastern states, which are coal rich, have not done enough to attract private investors in renewable energy and experts say these states must incentivise renewable energy developers. “West Bengal’s RPO target by 2022 is 5,000 megawatt while its present achievement was only 27 megawatt. An estimated Rs 20,000 crore of investments would be required in the next 4-5 years to meet the state’s target. The state cannot invest such a huge amount. Private participation is the need of the hour,” Chaudhuri told IANS. Rustagi said RPO targets are being scaled up every year; so even if states buy an increasing amount of renewable energy, their relative performance is unlikely to change in the next 3-4 years. According to the Mercom Capital’s research note, as states crawl to fulfil their renewable purchase obligation, cumulative installation figures for solar and wind energy have increased exponentially, but unless compliance improves drastically it will be a challenge to meet the 2022 installation goals.
Tata Power says generation capacity crossed 52,000 million units in FY17
Tata Power, India’s largest integrated power company, today said it has crossed generation of 52,000 million units (MU), collectively from all its power plants in FY17. The company also reported capacity increase by 16 per cent in FY17 as compared to FY16. The company, together with all its subsidiaries and jointly controlled entities, has an installed generation capacity of 10,613 MW (as of May 2017) as compared to 9,180 MW in FY16 from various fuel sources such as thermal (coal, gas and oil), hydroelectric power, renewable energy (wind and solar PV) and waste heat recovery. Tata Power said the company’s consolidated generation through all its subsidiaries stood at 52,512 MU as compared to 47,347 MU in FY16. The company’s Mundra plant reported generation of 27,460 MU, while Maithon plant reported 7,357 MU. Trombay Thermal Power Station generated 6,394 MU, Jojobera Thermal Power Station generated 2,833 MU and Haldia reported generation of 779 MU. Industrial Energy Limited reported generation of 2,457 MU, TPREL generated 556 MU through clean sources of energy (Solar & Wind) and WREPL generated 884 MU. “The Company aims to pursue a well charted growth strategy by demonstrating a high level of commitment towards cleaner sources of generation thus increasing the share of non-fossil fuel based generation output to 35- 40% by 2025,” Ashok Sethi, Chief Operating Officer and Executive Director, Tata Power said. The company said Tata Power continues to be on the lookout for feasible organic and inorganic projects, both greenfield and brownfield, in India and abroad. Ty Montgomery Jersey
Proposal to extend oil production cut could lead to under investment: Dharmendra Pradhan
Oil producing countries’ proposal to extend production cut could end up creating possibility of under investment in the sector and leaving consumers’ demand unmin the long run, Oil Minister Dharmendra Pradhan has said. “While the production cut is an attempt to arrest the slide in prices, however, it also has an inherent chance of under investment and consumer’s needs not being met in the long run, which is not in the interest of a balanced and healthy global oil and gas market,, an Oil Ministry statement quoted Pradhan as having told representatives of oil cartel OPEC in Vienna. Pradhan co-chaired the 2nd India-OPEC Institutional Dialogue at the OPEC headquarters two days ahead of the OPEC Ministerial meeting scheduled from May 25. Pradhan highlighted the importance of India – OPEC engagement and discussed the effects of the production cut of 1.8 million barrels per day by OPEC and non-OPEC countries on the global oil market volatility, according to the official statement. Oil prices have risen 11% since May 9 on media reports that a pledge by OPEC and other producers, including Russia, to cut supplies by 1.8 mbpd would be extended to March 2018, instead of covering just the first half of this year. There have also been reports of producers considering deepening the production cut. Pradhan stressed that the OPEC should work towards “Responsible Pricing,, which would allow India to provide energy to the common and marginalised people who have been deprived of access to energy so far. Higher crude prices would retard growth rate which will result in slowing down the demand of crude oil, he said. Pradhan said India’s energy mix was undergoing major changes with renewables becoming important. “The oil Industry is at a delicate cross road and higher crude prices will give a further push to renewables,, he said. About 86% of India’s import of crude oil, 70% of natural gas, 95% of LPG are from OPEC countries. Andy Levitre Jersey
GAIL in time-swap deal for US LNG
State-owned gas utility GAIL India Ltd today said it has signed a first-ever time-swap deal to sell some of its US liquefied natural gas (LNG) as it rejigs the supply portfolio in line with domestic demand. GAIL Chairman and Manging Director B C Tripathi said the company is to receive LNG from its shale gas project in US from March next year. It has however time swapped some of the supplies. Under the agreement, it will g15 cargoes or about 0.8 million tonnes of LNG from an unnamed trader this year. In return, GAIL will sell 10 cargoes or about 0.6 million tonnes next year from Sabine Pass on the US Gulf coast. “We imported 55 cargoes of LNG on short or medium term contracts in 2016-17. This equals to under 4 million tonnes of LNG in a year. This volume we expect to replace from our US portfolio,” he said. GAIL has a deal to buy 3.5 million tonnes a year of LNG for 20 years from Cheniere Energy and has also booked capacity for another 2.3 million tonnes at Dominion Energy’s Cove Point liquefaction plant. Against a supply of 5.8 million tonnes of LNG from US, GAIL has been able to create a market for just under 4 million tonnes in India and so it wants to sell of the remaining overseas. Tripati said GAIL had separately signed a deal with Royal Dutch Shell to sell about 0.5 million tonnes of its US LNG. So from a potential supply of 5.3 million tonnes (after the Shell deal), GAIL feels Indian market can absorb only 4 million tonnes or so. “We hope to replace the short and medium term contracted volumes with US LNG,” Tripathi said, adding that the company has floated a tender to time-charter four LNG ships to ferry the gas in its liquid form (LNG) from US coast to Dahej in Gujarat. The LNG that GAIL will receive this year between April and December under the time-swap deal will be at oil-linked prices. The sale of US gas next year will be at a premium to its pricing formula on a free-on-board (FOB) basis. Tripathi said there are not many new takers for imported LNG particularly in the power sector which is price sensitive, thereby forcing the rejig of supply portfolio. The company is also renegotiating price and time of supply of 2.5 million tons per annum of LNG by Gazprom of Russia. GAIL is saddled with long-term deals for US and Russian gas after it went on a contracting spree between 2011 and 2013 when when the fuel was scarce and prices kept rising. Devin Hester Jersey
How will the new tax rates impact the oil and gas sector?
How will the new tax rates worked out by the GST Council last week impact the petroleum sector? The oil and gas industry will be left with stranded taxes, higher blockage of working capital and dual compliance under the GST regime effective July 1, tax experts say. “Upstream and downstream companies will be left with stranded taxes leading to higher blockage of working capital, on which they will suffer opportunity loss,” K Ravichandran, Senior Vice President at rating agency ICRA said. India will roll out GST that includes most goods and services but excludes crude oil, natural gas, petrol, diesel and jet fuel. Other oil products such as kerosene, liquefied petroleum gas and naphtha are included in the GST. This means oil companies will have to comply with both the old and the new tax regimes. But the tax credit can’t be transferred between the two systems. Input tax credit allows an oil producer at time of paying the tax on the final output to deduct the tax already paid on inputs (purchase of machinery, crude oil etc). As most of the core petroleum products have not been included in the GST ambit, the tax credit which could have been availed cannot be availed under the new tax regime effective from July 1. “Procurement of goods and services for the upstream and downstream sector will be under GST whereas the majority output will be outside the ambit of GST. This would mean that the majority of GST paid on goods and services by these companies would be a cost to them. This would substantially increase their costing,” said Abhishek Jain, Partner, Indirect Taxes at E&Y. Ravichandran also said the biggest issue will be complying with both GST and existing tax framework as five products are kept outside GST. This will lead to higher compliance-related efforts by companies. The oil ministry had recently submitted its concerns to a Parliamentary panel on the issue including additional stranding of taxes on inter-state purchase of goods, non-availability of credit on local purchase of goods, additional burden due to levy of GST on stock transfer and dual compliance. “The GST Law would not apply on five petroleum products including Crude Oil, Natural Gas, High Speed Diesel, Motor Sprit, and ATF. Consequently, the main products of the E&P Sector, Crude Oil & Natural Gas, shall continue to be leviable to existing levies. However, purchase of goods and services required for exploration and production of Crude Oil and Natural Gas, would attract GST. Hence, it would have adverse implication on E&P Sector,” The ministry submitted to the Parliamentary Standing Committee on Petroleum and Natural gas. State-run ONGC produces Value Added Products such as LPG, Kerosene, Naphtha, ATF and HSD in addition to crude oil and gas. Crude Oil, Natural Gas, HSD and ATF would continue to attract taxes under existing law — Excise Duty, VAT/CST, OID Cess, NCCD, and Royalty — whereas LPG, SKO and Naphtha would be under GST. This would create a complex situation for dual compliance of GST as well as existing laws in addition to increase in compliance cost. The GST council has finalized a four-tier GST rate structure of 5 percent,12 percent, 18 percent and 28 percent with lower rates for essential items and highest for luxury and de-merit goods, many of which would also attract an additional cess. The centre last Thursday released the list of goods which would fall under each tax rate category. According to the document, Kerosene, Liquefied Propane, Liquefied Butane and Liquefied Petroleum Gases (LPG) for supply to consumers will be taxed under the 5 percent bracket. Also, coal gas, water gas, producer gas and similar gases, other than petroleum gases and other gaseous hydrocarbons will also be taxed under the lower tax bracket. “Currently excise duty is nil on PDS Kerosene and LPG-domestic as they are subsidised products. VAT varies from nil to 5% in different States. Hence there will be marginal increase in consumer prices in certain States,” Ravichandran said. Prashant Modi, Chief Executive Officer and Managing Director of Great Eastern Energy Corporation, India’s first coal bed methane producer, hailed the tax structure given under GST and called for inclusion of natural gas under the GST regime. “This is a very positive move for the energy sector. Also, natural gas being a clean and environment-friendly hydrocarbon should be brought under the GST at 5% at the earliest in order to enhance domestic production and consumption. This will also help in achieving reduction in the import of LNG.” Modi said. Under the new system, products that will be taxed under the higher rate of 18 percent include petroleum oil and oil obtained from bituminous minerals, Superior kerosene Oil, Fuel oil, Base oil, textile oil, lubricating oil, waste oil, petroleum gas and other gaseous hydrocarbons such as propane, butane, ethylene, propylene, butylene and butadiene. Greg Lloyd Authentic Jersey