The truth behind Indias electricity exporter status
The ministry of power last week claimed that India had become an electricity exporter for the first time. “As per Central Electricity Authority (CEA), the designated authority of government of India for cross border trade of electricity, first time India has turned around from a net importer of electricity to net exporter of electricity,” the ministry said in a statement, adding that upcoming cross-border transmission lines with Nepal, Bangladesh and Myanmar will continue to increase sales. India exported around 5798 million units of electricity to Nepal, Bangladesh and Myanmar, which is 213 million units more than the import of 5,585 million units from Bhutan during the April-February period in fiscal year 2016-17. Exports to Nepal and Bangladesh increased 2.5 and 2.8 times, respectively, in the last three years. Does India’s status as an electricity exporter mean that it has started producing surplus electricity? The reality is a large number of India’s households are still living without electricity. Available government data shows there is a discrepancy in the percentage of villages electrified as against the share of rural households electrified. The former set of figures is often cited to portray India’s electrification challenge as an already accomplished one. What explains the wide gap between the share of electrified households and villages? According to the Deen Dayal Upadhyaya Gram Jyoti Yojana website, a village is deemed electrified if basic infrastructure such as distribution transformer and distribution lines are provided in the inhabited locality as well as the Dalit Basti hamlet (where it exists), and electricity is provided in public places like schools, panchayat office and health centres. Here’s another interesting thing. For a village to be considered electrified, at least 10% of total households have to be electrified. But the actual supply of electricity is not mentioned in the definition of electrification. Such a definition means that village electrification numbers have little bearing on the supply of electricity in reality. Data from 2011 census shows that almost one-third of the households in the country were dependent on kerosene as a source of lighting, with the situation being worse for rural households. This is even as over 84% of villages had been electrified in 2011-12, as per data with the Centre for Monitoring Indian Economy (CMIE). International comparison also underlines the fact that Indians consume much less electricity in comparison to their peers. The ratio of domestic and world electricity consumption (per capita) was broadly similar in India and China in 1990. Latest data shows that China has surpassed the global average in terms of power consumption, whereas India is still stuck at its pre-reform relative electricity consumption levels. In 1990, India reported 273 kilowatt hour (kWh) of electric power consumption, as against 511 kWh in China and 2,120 kWh in the world. In 2013, these figures were 765 kWh, 3762 kWh and 3104 kWh, respectively, as per World Bank data. India’s efforts to sell electricity to its eastern neighbours might bring strategic and diplomatic benefits and also open new frontiers for exploring electricity generation opportunities in the region. Such developments, however, should not make us oblivious to the fact that a large majority of Indians are still living in darkness in villages which have been declared electrified on paper. Christian Covington Jersey
Hydro power projects of 11,928 Megawatt capacity under construction: Goyal
Forty three hydro-electric projects, with total generating capacity of 11,928 MW, are under construction, the Lok Sabha was informed today. Out of these 43 projects, 16 are stalled due to financial constraints and other reasons, Power Minister Piyush Goyal said. The total power generation capacity of the 16 projects is 5,163 MW and the anticipated completion cost of these projects would be Rs 52,306 crore while their original cost was Rs 27,027 crore, he said. “As per the calculation made by the Central Electricity Authority, the annual loss of energy generation from these stalled projects is about 15,564 million units,” he said during Question Hour. The minister said a panel to monitor power projects, set up by the Ministry of Power, independently follows up and monitors the progress of the hydro projects. He said the CEA monitors the progress of under- construction power projects through frequent site visits and interaction with the developers and equipment suppliers. “Regular reviews are also undertaken in the Ministry of Power to identify the constraints areas and facilitate faster resolution of the hydro projects,” Goyal said. John Lynch Authentic Jersey
Saudi Aramco keen to take stake in west coast refinery
Saudi Aramco, the world’s largest oil producer, is interested in picking a stake in India’s biggest oil refinery being planned to be set up in Maharashtra at a cost of Rs 1.8 lakh crore. State-owned Indian Oil Corporation (IOC), Bharat Petroleum Corporation (BPCL) and Hindustan Petroleum Corporation (HPCL) together plan to set up a 60-million tonnes a year oil refinery on west coast to meet the rising fuel needs of the country. “Saudi Aramco and Abu Dhabi National Oil Co (Adnoc) are talking to us for investments in the Indian oil sector,” Oil Minister Dharmendra Pradhan said at the Global Natural Resources Conclave here. Later talking to reporters, he said Aramco is interested in picking a stake in the west coast refinery while Adnoc is keen on petrochemical projects. “Aramco is talking of stake in the refinery,” he said. He, however, did not go into how much stake the Saudi national oil company will pick. “Let’s see,” is all he said. IOC holds a 50 per cent stake in the project while BPCL and HPCL have 25 per cent each. The 60-mt a year refinery will be set up in two phases, along with a mega petrochemical complex. The phase-1 capacity will be 40 mt together with an aromatic complex, naphtha cracker unit and a polymer complex. This will cost Rs 1.2-1.5 lakh crore and will come up in 5-6 years from the date of land acquisition. The mega complex will require 12,000-15,000 acres and land on the Maharashtra coast has been identified, he said. The second phase, involving a 20 mt refinery, will cost Rs 50,000-60,000 crore. IOC has been looking at the west coast for a refinery as the company found it tough to cater to requirements in West and South with its refineries mostly in the North. HPCL and BPCL too have been looking at a bigger refinery because of constraints they face at their Mumbai units. The mega west coast refinery will produce petrol, diesel, LPG, ATF (aviation turbine fuel) and feedstock for petrochemical plants in plastic, chemical and textile industries in Maharashtra. A top official at one of the state refiners said the project will be funded with 60 per cent debt and 40 per cent equity. The three refiners will chip in Rs 72,000 crore in equity. Fifteen mt a year is the biggest refinery any public sector unit has set up at one stage. IOC recently started its 15 mt unit at Paradip in Odisha. Reliance Industries holds the distinction of building the biggest refinery in India till now. It built its first refinery at Jamnagar in Gujarat with a capacity of 27 mt, which was subsequently expanded to 33 mt. It built another unit adjacent to it for exports, with a capacity of 29 mt. The refinery being planned by the state-owned firms will be bigger than that. The phase-1 itself will be bigger than any one single unit. India has a refining capacity of 232.06 mt, which exceeded the demand of 183.5 mt in 2015-16. According to the International Energy Agency (EA), this demand is expected to reach 458 mt by 2040. Alec Ogletree Jersey
HPCL reworks fiscal pact for Rajasthan refinery, work to start
State-owned HPCL’s long-pending 9 mtpa refinery at Barmer in Rajasthan will go on stream soon, with the state government agreeing to a revised fiscal package for the project, Oil Minister Dharmendra Pradhan said today. “Very soon, work will start on the Rajasthan refinery project. We have finalised the financial assessment,” he said at the Global Natural Resources Conclave here. Later talking to reporters, he said fiscal incentives for the project have been revised and a memorandum of understanding (MoU) is likely to be signed in Jaipur later this month. “The fiscal package negotiated by the previous (Congress) government had put a big burden on Rajasthan. Now, that has been balanced,” he said. He did not provide details of the revised fiscal incentives being offered by the Rajasthan government. “Work on the project will start very soon,” he added. The project, which has been in the works for nearly five years now, is projected to cost Rs 41,000-42,000 crore, up from the previous estimate of Rs 37,320 crore. HPCL, in March 2013, had signed an MoU with the Rajasthan government for setting up the refinery-cum-petrochemical complex in the Thar desert near the oil discoveries made by Cairn India. But the refinery never took off as a change of guard in the state led to the Rajasthan government putting on hold the fiscal incentives for the project. While the size of the refinery remains the same, the unit will cost more because it now has to be built to produce Euro-VI grade petrol and diesel, officials said. Engineers India Ltd (EIL) is doing a feasibility study. The HPCL board, in March 2013, had approved setting up of the complex at a cost of Rs 37,320 crore. Half of the crude oil requirement at the proposed refinery at Barmer was to come from the neighbouring oil fields of Cairn India. The rest was to be imported crude. At that point, HPCL had asked the state government to extend fiscal benefits like the ones extended by Gujarat and Odisha to new refinery projects to make the Barmer unit viable. The concessions included 50 per cent exemption in excise duty, waiver of VAT on products sold in Rajasthan and the state government picking a small stake in the project. Originally, the state-owned Oil and Natural Gas Corporation (ONGC), which owns 30 per cent interest in the Barmer oil fields of Cairn India, in 2005 had committed to building the refinery, but later started soft-pedalling the project. In 2012, HPCL entered the fray and proposed to take 51 per cent stake in the same. ONGC, which originally had the authorisation from the government for processing the Barmer crude at the proposed refinery, willingly made way for HPCL. Cairn India, which holds 70 per cent interest in the fields, currently produces about 1,60,000 barrels per day oil (8 million tonnes a year) from the Rajasthan fields. For HPCL, which has only two refineries in Mumbai and Visakhapatnam, the project will help meet fuel demand in the north. Pierre Pilote Womens Jersey
Private sector infrastructure investment may stay elusive for another year
At the start of financial year 2016-17, there seemed to be a clear government push to increase public sector spending to revive private investment cycle in the infrastructure and energy space. As the sector steps into the current financial year, there appears to be little progress; the wait for private investments could get longer by another year, industry experts believe. It will take time for private investments to come up. There is excessive capacity in manufacturing, so investments might not be forthcoming. In infrastructure, there is uncertainty. There are issues of funding, as banks are wary of lending to these projects with non-operating asset concentration, says Madan Sabnavis, chief economist, CARE Ratings. In the financial year 2016-17, in addition to budget allocations made to the infrastructure and energy sectors, public sector companies operating in these segments have also made significant investments. Industry analysts are of the view that while these investments have helped various private companies survive, the next 12 months would decide if private investments will trickle in. Public sector investments made in the energy sector includes state-run power producer NTPC’s Rs 17,520.68 crore in the first nine months of FY17, as against Rs 16,156.50 crore in the same period last year, according to data shared by the company. Data sourced from Petroleum Planning and Analysis Cell (PPAC) shows state-run oil companies in the April-February 2017 period spent close to Rs 91,781crore, higher than the combined target of Rs 87,603 crore. The construction companies have seen their order books filling up, and the construction cycle has picked up due to government spending. However, private investment in infrastructure remains muted. Though some new developers are emerging, solving the NPA issue remains a prerequisite to brining back private investment. With early signs in deal activity, and government considering ways to resolve the financial stress, the next 6-12 months could be interesting, said Manish Agarwal, partner, leader & infrastructure, PricewaterhouseCoopers Pvt. Ltd. In railways, Business Standard earlier reported according to the sources, railways had spent Rs 68,059 crore till December 31, in the first nine months of the last financial year. “In railways, where there is scope for private investments to come in is in the station development segment. In this segment, I expect commitments to be made in the current financial year, which actual private investment would start coming in only after 12 months time. Other ambitious projects like the bullet trains and the DFIC projects will take longer to see any private investments being made, said Vishwas Udgirkar, senior director, Deloitte India. In the road sector, National Highways Authority of India (NHAI) in the April-January period has awarded engineering, procurement and construction (EPC) projects worth Rs 17,967.87 crore. Data for the awarding remaining two months of the last financial year are yet to be shared. Udgirkar added the current financial year may see some private investments trickling in based on the financial closures achieved for hybrid annuity model (HAM) projects in the last financial year. For roads again, through HAM, commitments of some private investment has been made in the last financial year, we may see this forming in capital investments being in the current financial year. As far as EPC projects and public spending through these EPC projects are to be spoken of, it has helped the private companies survive, whether it has helped make the private sector financially healthy to re-invest would be difficult to say,” he added. Even as private investments may elude for a little longer, some public sector companies are expected to continue with their capital expenditure plans. NTPC Ltd looks to invest another Rs 30,000 crore on a standlone basis in the current financial year. The capex shall be used for capital expenditure of NTPC’s up-coming hydro and thermal projects over 21,000 MW in construction along with new Solar, wind capacities, new expansions etc. the company said in an email response. Hindustan Petroleum Corporation Ltd (HPCL) on the other hand said it plans to spend Rs 7,000 crore in the current financial year, which would be marginally higher from its last financial year capex. Chris Thompson Jersey
HAL turnover rises
Hindustan Aeronautics Ltd (HAL) has posted profit before tax at ?3,294 crore in fiscal 2016-17, registering 0.18 per cent growth compared with last fiscal’s ?3,288 crore. Though PBT was barely above last year’s level, the company posted the highest ever turnover of ?17,406 crore for the fiscal under review, registering 4 per cent annual growth from ?16,736 crore in the previous fiscal. The defence major has said it is “business as usual.with the company doing well on expected lines”. In a statement, HAL Chairman and Managing Director T Suvarna Raju said, “We paid ?800 crore to the government by interim dividend. This is in addition to ?162 crore paid as dividend tax.” He added that HAL’s PBT was at ?3,294 crore. HAL said it received orders worth ?21,000 crore in FY 2016-17, that included 12 Do-228 aircraft for the Indian Navy, 32 advanced light helicopters for the Indian Navy and the Coast Guard, and AL-31 FP engines for Su-30MKI.The production of 12 Su-30MKI aircraft in Phase-IV was one of the company’s main achievements. The Indian Air Force (IAF) had ordered a total of 270 Su-30MKI fighters, out of which 230 are already in service. Evan Rodrigues Authentic Jersey
Cabinet approves India-France MoU in civil aviation
The Cabinet today cleared the pact between the Airports Authority of India (AAI) and France’s DGAC for technical collaboration in the civil aviation space. The memorandum of understanding (MoU) would be between AAI and Civil Aviation Authority (DGAC). An official spokesperson tweeted that the Cabinet has approved ‘India-France MoU in civil aviation’ sector. The pact will be “beneficial for enhancement of skills and expertise of AAI’s officers”, the tweet said. Furthermore, the MoU will be beneficial for imparting training to engineers, technicians and managers, among others. AAI manages a total of 125 airports, including 11 international ones, and also provides Air Traffic Management Services (ATMS) over entire Indian air space and adjoining oceanic areas, as per its website. Austin Czarnik Authentic Jersey
Govt to pump in Rs 1000 crore for upgradation of Guwahati airport
Assam industry minister, Chandra Mohan Patwary said Union civil aviation ministry will pump in Rs 1000 crore for creation of new passenger and cargo terminal at Guwahati airport. Patwary said, “Union civil aviation ministry has inked MOU for regional airlines under which viability gap funding will be done for flights operation in Northeast India.” He added that passenger handling capacity will increase significantly. “We are also creating warehouse facility in the airport.” According to the minister the five day long river festival of Namami Brahmaputra has generated business interest both within and outside the country. He said, “Investors from both India and abroad are keen to invest in Assam. We will make Namami Brahmaputra festival a calendar event following its success.” Bangladesh has accorded necessary clearance for dredging river Brahmaputra from Sadiya in Assam to Chittagong port in Bangladesh. Around Rs 250 crore will spent for dredging on Bangladesh part. Patwary said, “Dredging Corporation of India will do the dredging and silt recovered from the same will be used for highway construction. Detailed project report preparation for dredging of Assam part of Brahmaputra will be prepared soon.” Willie Snead IV Womens Jersey
35 airports don’t have night landing facility in India: Government tells Lok Sabha
As many as 35 functional airports in the country do not have night landing facility, Civil Aviation Minister Ashok Gajapati Raju said today. Airlines have to apply to the Airports Authority of India to facilitate night landing facility in a particular airport and then process of offering the convenience starts. “There are 47 licenced landing airports in the country while 35 are yet to apply for it,” he said during Question Hour in the Lok Sabha. The Minister said improving the infrastructure, including night landing facility at the airports, was a continuous process and is undertaken by the Airports Authority of India depending upon factors like commercial viability, traffic demand, operational requirements, demand from airlines and technical feasibility. Endorsing BJP member Abhishek Singh’s statement that “airports are not for cattle grazing but for the use by the aircraft”, Raju said the central government was promoting the aviation sector and it has now become fastest growing aviation market in the world. Mitchell Trubisky Authentic Jersey
India plans high speed diesel pipeline to Bangladesh
India plans to build a pipeline to carry high-speed diesel (HSD) to Bangladesh, similar to a project it announced last week to supply fuel to Nepal. A formal proposal on the friendship project could be announced when Bangla Prime Minister Sheikh Hasina meets her Indian counterpart Narendra Modi here on April 8, people in the know said. The cross-border pipeline will run from Siliguri in West Bengal to Parbatipur in northern Bangladesh. Until the project is completed, HSD will be transported from Assam’s Numaligarh Refinery to Bangladesh via rail and one such consignment will be flagged off by the two prime ministers. In fact, supplies to Bangladesh has already begun from Numaligarh Refinery. Recently, it dispatched the first consignment of HSD to Bangladesh – a railway rake containing 2,281 metric tonnes of the fuel chugged off from the refiner’s marketing terminal at Siliguri to the Parbitipur depot of Bangladesh Petroleum Corp (BPC). Each such consignment will travel some 516 kms – 253 km in India and 263 km in Bangladesh – on an existing rail line. Numaligarh Refinery and BPC have signed a sale-purchase agreement which includes a joint initiative for the construction of a 131-km pipeline, with a capacity to carry 1 million metric tonnes a year of fuel products, to Parbatipur from Siliguri. The neighbouring countries are also contemplating building a gas pipeline. State-run Oil and Natural Gas Corporation and BPC are in talks to build the 6,900-km pipeline that is proposed to link Chittagong in Bangladesh and Sitwe in Myanmar with India’s northeastern states. The pipeline project is part of the government’s Hydrocarbon Vision-2030 for the northeastern region. A joint LPG plant is planned at Chittagong from where the gas will be piped to the northeastern region. The project had figured in the talks during Modi’s Dhaka trip in 2015. India last week announced that it will lay pipeline to supply fuel to Nepal and jointly market it in the Himalayan nation. State-run Indian Oil Corporation will help build the pipeline to supply petrol, diesel and cooking gas. Franco Harris Jersey