Flying high on shorter routes
Though the jury is still out on how many airlines will benefit from the Government’s Regional Air Connectivity Scheme (RCS), Alliance Air, the regional arm of Air India, is hoping to turnaround its fortunes through the program. Alliance, one of the five carriers who were awarded routes under the RCS, is most likely to be the first to start operating flights under the scheme. Part of the Government’s UDAN initiative to link smaller cities, the Scheme aims to breathe life into unserved airports. Alliance has some inherent advantages when compared to Air Odisha and Deccan, which too were awarded routes. It already has a flight to Delhi to Bhatinda, which will now get subsidy under the RCS; and on the cards are flights linking Shimla and Ludhiana to Delhi. Under UDAN, services should begin within six months of being awarded the route. The loss-making company at present has a fleet of 72-seater and 48-seater ATR aircraft that fly to 34 destinations. Under the RCS, Alliance has been awarded 15 routes. CS Subbiah, Chief Executive Officer, Alliance Air, admits there are risks involved in flying into markets few want to go, but is quick to add that the RCS plan will help. “Viability Gap Funding (VGF) fits into our business plan as we are allowed to go to a place where the Government is willing to subsidise part of the risk.” Under the RCS, the Government will provide VGF for fixed-wing aircraft covering 200-500km, provided at least 50 per cent of the seats are priced at an all-inclusive fare of ?2,500. It’s most likely that 18-20 seater aircraft will operate in many of these routes. The Government will provide the operator a viability gap funding of ?3,750 per seat sold under the RCS, up to a maximum of 40 seats per flight. The VGF has been capped at ?4,170 for routes that span 776-800km. To be eligible for the VGF, an airline will have to operate regular services to at least one airport, which at present does not have regular flights. “VGF will cover about 30 per cent of our costs. The costs associated with the risk of entry into a nascent market are partly covered by VGF ,” Subbiah says. The CEO says that the funding will help Alliance keep the fares low to woo customers who would otherwise travel by Shatabdi and Rajdhani trains. For instance, the flight from Bhatinda, home to one of the biggest Army cantonments, will allow a soldier to reach his family in Chennai in six to seven hours. A train journey would take more than 50 hours. Challenges At the same time, challenges remain. Says Subbiah, “The first four months are going to be crucial till we establish the product in the market and people start flying. First of all we need to create awareness.” In the past, non-availability of funding had forced the airline to withdraw from Chennai-Puducherry and Delhi-Durgapur-Kolkata routes. Then there are logistical issues too. Alliance’s Shimla flight, for instance, could run into some financial trouble. Given the height at which Shimla is located the airline will not be able to take more than 30 passengers from Delhi, while fewer than that number will be able to fly back (with a baggage allowance of 10kg per passenger). To make the Shimla flight financially viable the airline has also approached the Himachal Pradesh Government for financial assistance. While Subbiah declined to get into specifics, the airline is rumoured to have asked for over ?50 crore annually. However, Subbiah is keen to start the Shimla flight at the earliest as during the summer, people from Delhi will prefer to fly rather than spending hours by train or road to reach the hill station. He is hoping that the timing of the flight — in peak summer months — will save time on marketing the service. “We are keen to capture the traffic in the summer months so that by the time winter comes the traffic becomes regulated. Besides a lot of Government employees come down to Chandigarh, and taking the flight will save them a lot of time,” he points out. Depending on the success of the flight, Alliance could also look at increasing its frequency. This will also serve another purpose; as the aircraft flies more, the fixed costs get spread out. “Which means that the cost of operations is likely to come down. Affordability will increase so you can take more risks,” says Subbiah. He is also betting on success for another reason — Air India has a wide network locally and internationally, and passengers travelling from the interiors will be able to connect to the Air India network. “We feel that ultimately the regional networks have to converge into the national networks. We expect that in six months, transfer passengers (from Alliance to Air India and vice-versa) should be contributing about 20 per cent to our revenues. That will be very good traffic if we get it. This is slightly on an optimistic note. A pessimistic note will be about 10 per cent,” Subbiah concedes. Tiger Williams Womens Jersey
Dedicated import cargo processing area established
A dedicated import cargo processing area has been established at the Tiruchi international airport. The facility catering exclusively to import cargo dispatched in foreign airlines has been created adjoining the existing export freight terminal. The need for a dedicated import cargo processing area was felt as the one which existed earlier was converted into a full-fledged international courier terminal which is awaiting commissioning for several months now. The new area created to exclusively handle import cargo has been set up on over 150 square metres. It has been split into three segments – storage area, examination point and delivery area. A ramp has been provided to connect the import cargo processing area with the export freight terminal for easier movement of men and materials. The import processing area has access to the city side of the airport which has witnessed steady rise only in export cargo movements over the years. Brian Poole Authentic Jersey
Varanasi airport gets ‘major’ tag after handling more than 1.5 million flyers in 2016-17
Varanasi may have to wait a few more years for the ongoing redevelopment to show results but its airport already appears to have gained from its exalted status as Prime Minister Narendra Modi’s Lok Sabha constituency. It was recognised as a major airport in January by the central government after it handled more than 1.5 million passengers in 2016-17, completing three years of above-average growth. The airport, which saw passenger growth of about 8% and 2% during FY13 and FY14, respectively, flew much higher than the national average of over 20% during the past three fiscal years starting fiscal 2014-15. The change will help Varanasi attract a larger share of the government’s airport investment plan. The airport’s financial plans and performance would also now be reviewed by Airports Economic Regulatory Authority (AERA), which would mean a professional assessment of its finances and charges. Charges at minor airports are calculated by the aviation ministry. “Varanasi has been one of the best-performing airports in the country and is growing further. Its growth can only be termed phenomenal,” said a senior aviation ministry official, who did not want to be identified. Industry analysts say that the passenger growth during the period at the airport is much higher than comparable airports such as Lucknow and Patna. “Overall, the growth in Varanasi does not seem to be driven by connectivity to more cities but the increased frequency of flights from existing cities,” said Sharat Dhall, chief operating officer at Yatra-.com, an online travel portal. “Major routes have been roughly the same during the last 4 years which leads to the prima facie conclusion that PM Modi representing Varanasi is drawing significant attention to this city,” Dhall said. “It does seem that Varanasi is enjoying the Modi effect with a clear surge in passengers to the city over the past 3 years, well ahead of other comparable cities such as Lucknow and Patna,” he said. Dhall said the growth will be sustainable “if the business and tourism projects initiated are executed upon and lead to Varanasi becoming a real hub for both business and tourism”. A tourism ministry official added that there are big plans to tap the city’s tourism potential which will further help the growth of the city. “There are plans to start a helicopter service with base in Varanasi that will connect Buddhist pilgrimage centres around the city. This will further give a boost to tourism and air travel in the city,” said the official who did not want to be identified. Mike Komisarek Authentic Jersey
Reliance commissions world’s largest and most complex Ethane Project in record time
India’s largest private company, Reliance Industries Ltd on Wednesday announced the completion of its Ethane Project. This includes commissioning of Reliance ethane receipt & handling facilities and ethane cracking, at its Dahej Manufacturing Facility in Gujarat in a world record time of less than three years. Reliance is the first company to globally conceptualize large-scale imports of ethane from North America as feedstock for its cracker portfolio in India. The project involved seamless integration of several elements across a complex infrastructure value chain. This includes securing ethane refrigeration capacity in the US Gulf coast; delivery of dedicated Very Large Ethane Carriers (VLECs) to carry ethane from the US Gulf Coast to the West Coast of India; construction of ethane receipt and handling facilities; laying pipelines and upgrading crackers (to receive ethane) at Dahej, Hazira and Nagothane Manufacturing Facilities. “This successful start-up underlines ours ability to build world-scale capacities and infrastructure using complex technologies, such as marine transportation of cryogenic ethane, handling of ethane at (-) 90 deg.C, supply of ethane to the crackers in an energy efficient way and pump ethane from Dahej to other locations. The execution of this project at this scale and magnitude is a first in the world,” the company said It added that the Shale Gas industry in North America has grown exponentially in the past 5 years. Consequently ethane has become one of the most competitively priced feedstock for US crackers. The supply of Ethane to our crackers at Dahej, Hazira and Nagothane will provide feedstock security and flexibility, enabling us to select the most optimal feed mix based on market conditions. This will improve the cost competitiveness of our existing crackers and enable us to optimize the portfolio in a volatile market environment. Reliance Industries Limited (RIL) is India’s largest private sector company, with a consolidated turnover of INR 2,96,091 crore ($44.7 billion), cash profit of INR 40,737 crore ($6.1 billion), and net profit of INR 27,630 crore ($4.2 billion) for the year ended March 31, 2016. RIL is the first private sector company from India to feature in Fortune’s Global 500 list of ‘World’s Largest Corporations’ – currently ranking 215th in terms of revenues, and 126th in terms of profits. RIL ranks 238th in the Financial Times’ FT Global 500 list (2015) of world’s largest companies. RIL ranks 121st on the Forbes Global 2000 list (2016), continuing to be the top-ranked Indian company. RIL’s activities span hydrocarbon exploration and production, petroleum refining and marketing, petrochemicals, retail and 4G digital services. Edinson Volquez Jersey
Gehlot hits out at Pradhan, Raje over ‘half truths’ on refinery, says 4-yr-delay led to massive loss
By delaying the Barmer refinery project by four years, the state has suffered revenue loss, job loss and business loss, which together combined is much more than ?40,000 crore that the BJP government in Rajasthan claims to have saved by inking a fresh deal with HPCL, former chief minister Ashok Gehlot said Wednesday. The Congress leader also accused Union Minister for Petroleum Dharmendra Pradhan of speaking half truths and asked him to get the two memorandums of understanding (MoUs) – one signed during Gehlot’s tenure and the other by Vasundhara Raje government — probed. “The Union minister was here to announce the revised MoU, but he did not explain how ?40,000 crore was saved. He did not mention when the project will start making profits. The Union minister should have made the contents of the MoU public. What was stated Tuesday by Pradhan and CM Raje had no facts,” Gehlot said during a press conference at his residence. Rajasthan government and HPCL Tuesday inked a revised MoU of Rs 43,129 crore for setting up the refinery in Barmer district, which will produce BS-VI-compliant fuel. Under the new terms and conditions, the refinery cost has come down to Rs 16,845 crore, which was Rs 56,040 crore in the previous MoU done by the Congress government in 2013, Pradhan had said. “The project was delayed by four years resulting in revenue loss for state and delay in employment generation. It also delayed setting up of ancillary units and related businesses. Gujarat earned ?1,500 crore in VAT every year due to this delay. This loss combined together is much more than ?40,000 crore that state claims to have saved,” Gehlot said. He said the BJP government was “forced” to start the refinery project keeping in mind the state polls in 2018 and added “people will not forgive them for the crime”. He said Raje had questioned why state had only 26% equity share in the original MoU. Even the revised MoU has fixed state’s equity at 26%, he said. “The state share has not increased, rather refinery cost has escalated by ?6,000 crore. From the revised MoU it is unclear what the Internal Rate of Return (IRR) will be. When we inked the MoU, RRI was 15%. If the RRI is less in the revised MoU, then the state will earn less profit,” he said. He further said that “instead of misleading people by presenting partial facts, the union minister should direct the HPCL to get the both MoUs investigated to let the truth come out”. Gehlot said, the original MoU had put a condition that to avail ?3,736 crore interest free loan every year for 15 years, the joint venture company — HPCL Rajasthan Refinery Limited — would have to maintain the commercial production of at least 9 million metric tonne (MMT) per annum. In case of less production, the quantum of loan was to be reduced proportionately, he added. Hitting out Raje, the former chief minister said, “She was never interested in the refinery project. We had asked Cairn India in 2003 to set up the refinery and even initiated talks with the ONGC. However, Raje didn’t take it up after coming to power in 2004.” Magnus Paajarvi Womens Jersey
Government halves the size and financial aid for its largest-ever rooftop solar project
The renewable energy ministry has halved the size of its largest-ever rooftop solar tender and also cut the financial assistance offered for it. Ashvini Kumar, managing director of state-run Solar Energy Corporation of India (SECI), which had released documents related to a tender for installation of 1GW of rooftop solar plants across buildings of 12 central ministries, told ET the tender size has been reduced to 500 MW. He did not provide any more details. The 1 GW project would have doubled India’s rooftop solar capacity from 1020 MW as of end October 2016. The tender also incentivised speedy completion of projects by linking the government’s financial assistance to it. For instance, in all states, apart from the special category ones, developers would get Rs 18,750 per KW as assistance if they completed at least 80% of the project within 15 months. Projects in special category states —mostly the hill states —would get Rs 45,000 per KW under the same terms. The figure was progressively lowered, depending on the extent of completion, while those who failed to get at least 40% of their project done in 15 months would get no assistance at all. An official who did not wish to be named, said, the ministry of new and renewable energy (MNRE) has now earmarked Rs 1,040 crore as the total amount that will be available as financial assistance for the project. It has also slashed the assistance offered across the board — for instance, those completing 80% of their project in 15 months will now get Rs 16,250 per KW in the general category states and Rs 39,000 per KW in the special category ones. The actual assistance may be even less as the ministry has ruled that it should be no more than 25% of the benchmark cost of the project in general-category states and 60% in the special-category ones. The benchmark cost will be the lowest cost quoted during the bidding process. “It is true that developers are unhappy with the changes,” the official said. “Calculation of the roof area has been done aggressively,” said Sunil Bansal, general secretary, Rajasthan Solar Association. A developer who did not want to be named, said, “There is nobody at SECI at present to take ownership of rooftop development.” SECI’s Kumar refuted both allegations. Of the 500 MW, 150 MW will be set up under the capex model (where the building owner also owns the solar project) and 350 MW under the resco model (where the building owner leases the roof to the developer). According to SECI calculations, there is space available to set up 1,105.31MW of solar plants across 12 ministry building rooftops. Some ministries own staggeringly large rooftops —the SD Agricultural University in Palanpur, Gujarat, for instance, has enough rooftop space to install 375.67 MW of solar modules. Nolan Cromwell Jersey
NTPC weighs pooling of fixed charges for coal & gas projects
India’s largest power producer NTPC Ltd is considering pooling fixed charges for all its coal and gas-based projects in a move that it claims will help maximise output from stations that generate low-cost electricity and reduce consumer tariffs. “As a state-run company, it is NTPC’s responsibility to see that electricity from all our cheaper stations is dispatched first. NTPC will not benefit even a single paisa from the scheme. On the contrary, the entire benefit will be passed on to state power distribution companies,” a senior company executive said on condition of anonymity. “Fixed charges of all NTPC coal and gas-based stations shall be pooled, which means all states would pay at the same rate of fixed charges,” he said. NTPC will make a formal presentation before power ministers and top power officials of all states at a two-day conference scheduled to be held in a few weeks. Industry experts said the mechanism could benefit some states to lower costs but might increase expenditure for some. However, NTPC said the proposal will result in lower power purchase cost of all the states. Post pooling, NTPC proposes to put its lowcost stations on optimum utilisation and use its costlier power plants sparingly in ‘reserve shut down.’ Mel Ott Womens Jersey
NTPC joint venture to cut power supply to 3 states over pending dues
A joint venture of state-run NTPC has decided to snap power supply to three states of Tamil Nadu, Karnataka and Telangana from its Vallure thermal station over non-payment of dues of Rs 1,388 crore. The NTPC Tamil Nadu Energy Company Ltd (NTECL) has issued a notice for regulation of power supply to Tamil Nadu, Telangana and Karnataka to the extent of 1,229 MW from its Vallur Thermal Power Station (1500 MW), for non-payment of long outstanding dues of Rs 1,388 crore, a source said. “The regulation or suspension of power supply shall be implemented from 00:00 hrs of April 26, 2017, and is expected to seriously affect power supply position in these states,” the source said. The NTECL, a joint venture company between NTPC and Tamil Nadu Electricity Board, is engaged in generation, transmission and distribution of electricity. The joint venture was formed for setting up a 1,500 mw coal-based power station at Vallur, Ennore in Tamil Nadu utilising the existing infrastructure facility at Ennore and supply power mainly to Tamil Nadu and also to Kerala, Karnataka and Pondicherry. Sheldon Richardson Womens Jersey
Gadkari Reviews NHAI Projects, Calls for fast Tracking of award and Construction
The Minister of Road Transport & Highways and Shipping, Nitin Gadkari has emphasized on fast tracking the award and construction of National Highways projects. In a review of NHAI projects on Tuesday, Gadkari said that while a record 16,271 km of National Highways have been awarded and 8231 km constructed during the year 2016-17, work needs to be done at a much faster pace to award more projects and construct those that have been awarded. The minister also said that there will be an award for the best performing Project Director and Regional Officer. He said the Mumbai-Vadodara, Bangalore-Chennai and Delhi-Amritsar-Katra Expressways are to be sanctioned by June 2017. Tender for 33 wayside amenities is also to be floated by June 2017. Electronic Toll Collection will be made available on all lanes on all toll plazas by 31 March, 2018. Referring to the problem of land acquisition as one of the hurdles in implementation of projects, Gadkari called for positive cooperation with the concerned state governments to tackle the issue. He also called for expeditious resolution of issues like forest clearances, appointment of independent engineers, change of scope etc. Beau Allen Womens Jersey
States can borrow directly from foreign agencies for infra projects
The Union Cabinet has approved new rules to allow financially sound state government entities to borrow directly from other countries which give Official Development Assistance for major infrastructure projects. In such cases, the state government concerned will give a guarantee and the Centre will provide a counter-guarantee. For instance, the Mumbai Metropolitan Region Development Authority, a Maharashtra government entity, would be allowed to directly take an ODA loan from the Japan International Cooperation Agency (JICA) for the Rs 17,854 crore Mumbai Trans-Harbour Link project. The JICA loan portion is expected to be Rs 15,109 crore. The existing guidelines did not allow direct borrowing by state government entities from external agencies. Finance Minister Arun Jaitley said several state agencies were implementing infrastructure projects of national importance. These projects, even if viable and sound, have huge funding requirements. And, borrowing by state governments for such projects might exhaust their respective borrowing limits. A state government is allowed to borrow to the extent that its fiscal deficit does not exceed the limit of three per cent of its gross state domestic product (GSDP). The 14th Finance Commission provided a further flexibility of 0.5 percentage points to states, subject to stiff conditions. Under the change in rule, this additional borrowing by state entities for such infra projects will not count for the three per cent ceiling applicable on states. It allows financially sound state entities to directly borrow and repay the loan required for such major infra projects, without burdening the state exchequer, the finance minister said. The new arrangement will be subject to fulfilment of certain conditions. For instance, all repayment of loan and interest to the funding agencies will be directly remitted by the borrower concerned. External assistance plays a key supportive role in financing of many infra projects, social sector projects and in building of institutional capacity. This role has gained further significance in view of the large gap in funding requirements for major infra projects of states. At present, external development assistance from bilateral and multilateral sources is received by the Centre for projects or programmes in the central sector, for projects implemented by central public sector undertakings, and on behalf of state governments for state sector projects or programmes. The country has an estimated funding requirement of Rs 43 lakh crore ($646 billion) for infra projects over the next five years. About 70 per cent of this would be needed in power, roads and urban infrastructure. The recent N K Singh panel report on a new Fiscal Responsibility and Budget Management law has recommended bringing down the combined state fiscal deficits to 2.5 per cent of their GDP in the medium term, from the current 2.98 per cent. Larry Warford Jersey