Regional air connectivity to bring down cost of flying to Rs 2,500 an hour: Sinha
The regional air connectivity scheme, UDAN, will see the number of operational airports in the country shoot up by over 50, while the cost of travelling will come down to as low as Rs. 2,500 up to an hour of journey (via air). According to Jayant Sinha, Union Minister of State for Civil Aviation, there are 75 operational small airports in the country and this number will increase to “over 125” with the successful implementation of UDAN (acronym for Ude Desh ka Aam Nagrik) – the new scheme through which the government hopes to make flying to Tier-II and III cities viable. “We are building new airports, adding new terminals. We are improving the efficiency of existing terminals. The regional connectivity scheme will see us go from 75 operational airports to over 125,” the minister told BusinessLine on the sidelines of the Momentum Jharkhand Global Investors’ Summit. “We have significantly stepped up investments in airports,” he added, pointing out that Jamshedpur was one such region that was proposed to be connected through UDAN. Drawing a reference to Jharkhand, the minister said “in a year or two” the Centre will be able to connect all major cities of the state. “Our goal is to provide connectivity to all of India’s major cities,” the minister maintained. Affordable pricing With traffic growing by over 20 per cent, there will obviously be “capacity constraints” but the Centre is taking all possible actions to ensure decongestion and utilisation of existing capacities. According to Sinha, the cost of flying is coming down because of technology. And if oil prices remain at “reasonable levels’, it would be one of the cheapest modes of transport after Railways. “Viability gap funding will enable us to offer seats at Rs. 2,500 up to an hour of flight. So it will be very affordable,” he said. Private airliners, Sinha maintained, will obviously take a call on the routes depending on commercial viability. And the introduction of viability gap funding will only boost connectivity, making many more routes viable. Tech Disruption Disruption in mass transport is also on the cards with companies such as Hyperloop proposing new-age rapid transit options. Asked whether such proposals might lead to disruptions in regional air connectivity schemes, Sinha said these technologies are still “futuristic” and yet to see “mass adoption”. “These are futuristic technologies that (are) decades away from being adopted in the mass market. We welcome innovations and new futuristic technologies. But regional connectivity will be available very soon,” he added. Johnny Hekker Authentic Jersey
NHAI seeks early High Court order to open bids for NH-24 widening
National Highways Authority of India (NHAI) has approached the Delhi high court for its early order on a petition, which has held up awarding of work to widen a crucial portion of NH-24, the main highway connecting Delhi with Uttar Pradesh. Delhi HC had held the final hearing in December on the petition filed by a road developer, who was disqualified by NHAI during the bidding process for the stretch between Delhi Border and Dasna. But the court has reserved the order. The 19.3 km stretch is the most congested and passes through residential and commercial areas such as Indirapuram and sector-62, Noida. To realize the ambitious widening of road from the Nizamuddin Bridge to Hapur, NHAI has divided the entire stretch into three sections for faster execution. While Nizamuddin Bridge to Dasna stretch will be made 14-lane, Dasna to Hapur stretch will be converted into six-lane. While the works on Nizamuddin Bridge to Delhi Border and Dasna to Hapur have already started, the remaining portion – Delhi Border to Dasna stretch is yet to be awarded. It has been delayed several times in the past 13 months because of lukewarm response from the bidders. Melvin Ingram Authentic Jersey
Govt weighs whether to auction or award road projects to ADIA
The government is contemplating whether to award operational highway projects to the Abu Dhabi Investment Authority (ADIA) in a government-to-government (G2G) deal or to auction them. The ministry of road transport and highways wants to auction the road projects identified under the Toll Operate Transfer (TOT) model, aimed to monetize India’s public funded national highways. Under the TOT model, National Highways Authority of India (NHAI) plans to lease as many as 75 national highway projects, which are operational and have been generating toll revenues for at least two years. “The road ministry along with NHAI have already given their comments for a concessionaire agreement,” said a government official, requesting anonymity. ADIA is the sovereign wealth fund of Abu Dhabi. G2G deals are struck to reduce the prolonged transaction process, a case in point being India’s decision to buy Rafale fighter jets off-the-shelf from French manufacturer Dassault Aviation SA. “ADIA is very keen on a G2G deal for TOT projects. As per the negotiations, ADIA may get the project but the agreement that is to be signed will be a critical thing. Tomorrow, for example, if the road is to be augmented from four-lane to six-lane who will do it, who will bear the expenses, what will be ADIA’s rights and obligations? They agree to do maintenance but in case of major repairs who will bear the expenses? All these things need to be sorted out before going ahead with any such G2G deals,” the official added. Under the TOT model, the right of collection of user fee or toll in respect of selected operational NH stretches constructed through public funding is proposed to be assigned for a specific time period to developers and investors against upfront payment of a lump-sum amount to the government. Further, during the tenure of the contract, the operation and maintenance responsibility would remain with the assigned developer. Nitin Gadkari, minister for road transport and highways, favours the auction route. “Such an interest was expressed but we would prefer a tendering process to keep transparency,” Gadkari said, declining to elaborate further. The Economic Times in February last year reported about ADIA expressing interest in taking up 50 highway projects on TOT basis. “ADIA wants the projects to be awarded under a G2G deal on a negotiated basis,” said a government official aware of the development, requesting anonymity. This comes in the backdrop of the government stepping up its engagement with the energy-rich nation. India hosted Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan as the chief guest at its 68th Republic Day annual parade. India and the United Arab Emirates signed as many as 14 bilateral agreements to deepen economic and strategic cooperation. “Awarding projects through the negotiated route is an option provided it follows the principle of transparency and the route is used to discover the right price. Also, G2G negotiations are qualitatively on a better footing,” said Vishwas Udgirkar, partner at Deloitte Touche Tohmatsu India LLP. While an ADIA spokesperson declined to comment, queries emailed to India’s ministries of roads and surface transport, external affairs and NHAI on 27 January remained unanswered. ADIA and other investors such as Ontario Teachers’ Pension Plan had earlier evinced interest in brownfield road assets. In 2015, the UAE agreed to invest as much as $75 billion in infrastructure projects in the country during a visit by Prime Minister Narendra Modi in August. However, the pact aiming to put together the administrative structure for the management of funds from the ADIA and India’s National Investment and Infrastructure Fund is yet to materialize. Jon Weeks Jersey
Govt’s push for highway projects likely to benefit road developers
Several road builders including Sadbhav Infrastructure Project Ltd, PNC Infratech Ltd, Ashoka Buildcon Ltd, and NCC Ltd are expected to benefit from the increased budgetary allocation to India’s national highways, analysts and companies said. The government in its Union budget on 1 February announced an allocation of Rs64,900 crore for the construction of national highways for fiscal year 2017-18, up from about Rs58,000 crore for FY 2016-17; and maintained allocation to the roads sector under the Pradhan Mantri Gram Sadak Yojana (PMGSY) at Rs27,000 crore. Road developer Ashoka Buildcon is expecting its order book to rise to Rs8,000 crore in fiscal year 2018 from Rs5,000 crore in the current fiscal and expects execution to rise by 25-30% year-on-year, managing director Satish Parakh said. “The allocation for national highways will likely be used very efficiently by the ministry. Execution is expected to pick up pace this year as projects will be under the new land acquisition act,” Parakh said. Hyderabad-based NCC Ltd, too, expects an increase in the number of awards in the new fiscal. “For NCC, roads remain a major component of our business, but we will bid very carefully on the basis of fundamentals without sacrificing the margins. The pace of order allocation is likely to improve further based on the Union budget,” said Y.D. Murthy, executive vice-president of finance, NCC. Higher allocation towards roads and highways will be a positive for road engineering, procurement, construction (EPC) firms such as KNR Constructions Ltd, Sadbhav, IRB Infrastructure Developers Ltd and J Kumar Infraprojects, according to Angel Broking’s post-budget report. The allocation will be a positive for road developers and EPC contractors as it would translate to higher road awarding and construction, IIFL Wealth Management said in its report on 2 February. “The pace of construction of PMGSY roads has accelerated to reach 133km roads per day in 2016-17, as against an average of 73km during the period 2011-2014 and a further outlay of Rs27,000 crore will boost the rural road construction project of the government,” brokerage firm KR Choksey said in a post-budget report. The Modi-led government’s thrust on speeding up construction of highways means that these companies stand to win increased business. In the past year, the government has also been pushing for the hybrid annuity model, where it will share 40% of the project cost and allocate funds to the developer to start work. Owing to highly leveraged balance sheets in the sector, only a handful of developers such as IRB Infrastructure, Sadbhav Infrastructure and IL&FS Transportation Networks Ltd continue to bid for projects under the build, operate and transfer (BOT) model.Several other large companies such as Larsen & Toubro Ltd (L&T) prefer projects under the government-funded EPC model. In the BOT model, the developer builds the project with its own money, operates it for a specified period and transfers it to the government. “While there is increase in budget allocation for roads and highways sector by 12% for FY 2017-18, that is much below the average annual increase of around 33% during the last three years… Less increase in allocation for national highways would mean that private sector investment under PPP (public private partnership) would be an important source of finance,” according to Vikash Kumar Sharda, director of capital projects and infrastructure at PwC. Jake DeBrusk Womens Jersey
India may meet its energy needs from moon by 2030
India may be able to meet all its energy requirements from resources on the moon by 2030, a scientist associated with the ISRO said on Saturday. Sivathanu Pillai, a distinguished professor at the Indian Space Research Organisation (ISRO), said here that India’s all energy requirements can be met through Helium-3 mined from the moon. “By 2030, this process target will be met,” Pillai said while delivering the valedictory address at the three-day ORF-Kalpana Chawla Space Policy Dialogue, organised by Observer Research Foundation. Pillai, a former chief of BrahMos Aerospace, said mining lunar dust, which is rich in Helium-3 is a priority programme for the ISRO. According to an ORF release, Pillai said other countries are also working on the project and there is enough helium on the moon, which can meet the energy requirements of the world. “In a few decades, people will be going to the moon for honey-moon,” Pillai quipped. Lt. Gen. P.M. Bali, Director General, Perspective Planning, Indian Army, said the launch of GSAT-7, India’s first dedicated military satellite, is a testimony to the country’s outlook towards using the outer space for national security. He noted that India possesses one of the largest constellations of communication and remote sensing satellites covering Asia Pacific. Lt. Gen. Bali said although India continues with a civilian orientation to its space programme, the changing regional and global realities require it to also develop military assets in space and on ground as an emerging regional and global power. He said there is a need for a dedicated military space programme with adequate resources at its disposal because of “the changing realities in our neighbourhood”. Joe Montana Womens Jersey
Subsidy extension unlikely for stranded and under-utilized gas-based power plants
The government is unlikely to extend the subsidy support scheme for stranded and under-utilised gas-based power stations. The scheme is due to end next month. The power ministry is of the view that a long-term solution should evolve for bailing out the 24,000 MW gas-based power stations languishing for want of fuel, sources in the know of the development said. Senior officials in the ministry of power declined to comment on the issue. Power companies have asked the government to extend the scheme for another two years. “We have been requesting to continue with this scheme as a short-term solution till a longterm solution can be evolved for making gas-based generation viable,” said Ashok Khuarana, director general at Association of Power Producers. “This present scheme helps stem interest accrual, thereby keeping capital cost under control. Non-extension of the scheme would result in continued accrual of interest, which may make it difficult to turn around the projects subsequently.” The power ministry held two rounds of imported gas auction starting from June 2015 to September 2015 and from October 2015 to May 2016. The bidders indicate the total incremental electricity they would generate using the e-bid regassified liquid natural gas (RLNG) as well as quote subsidy requirement. In the last round of auction held in March 2016, the bidders agreed to forego subsidy. Association of Power Producers has recommended continuation of the scheme to the ministry, arguing that it would be at zero cost for the government as subsidy determined in the third round was negative. The Union Cabinet in March 2015 approved the mechanism for importing gas for stranded and underutilised power plants, and supply of such electricity through a support. It was decided that to make gas affordable, states will forego taxes while gas transporters and import terminals will also offer discounts on charges for their services rendered to import LNG for this purpose. The Centre allocated `7,500 from the Power System Development Fund to support the scheme to help plants use 30-35% of their capacity and repay debt. The scheme was started in 2015-16 for stranded gasbased power plants and plants receiving inadequate domestic gas. The stranded plants were able to meet partial debt service obligations due to the scheme as they operated at low plant load factors of 30%-50%. However, of late, state distribution companies are averse to buying the gas-based generation as low cost power is available from renewable plants and spot markets. Steven Stamkos Authentic Jersey
Wind power installations may cross 5,000 MW this year
Sarvesh Kumark, Chairman of Indian Wind Turbine Manufacturers’ Association, is confident that wind power installations in India will cross the 5,000-MW-mark. The previous high was 3,472 MW of fresh capacity set up in 2015-16. The Association’s General Secretary, D V Giri, is a shade less optimistic. While 5,000 MW is not impossible, he says, upwards of 4,500 MW is certain. Year-end installations 5, 000 MW is a heady number — just two years back the sector struggled to achieve half of it. In the first ten months of the financial year, till January, the sector added 2,094 MW, which means close to 3 GW would need to be put up in just two months. However, a rush of activity towards the end of the year is not uncommon, as power producers hurry to finish the projects by March, so that they could avail themselves of the depreciation benefits and also be ready for the peak winds of summer. In 2015-16 installations of 3,472 MW, as much as 1,700 MW came in March alone. Further, the ‘generation-based incentive’ scheme, under which the government gives 50 paise a kWhr of electricity generated by wind turbines, expires this March. Year-end installations will therefore peak, as developers rush to meet the March deadline. This year, the highest installations are likely to come from Andhra Pradesh, around 2,500 MW, Sarvesh Kumar said. Gujarat (around 1,000 MW) and Karnataka (700 MW) were the bigger markets this year. Industry insiders feel that 2017-18 will be good too. One reason is that an additional demand for 1,000 MW will come from the ‘competitive bidding’ process that is under way, through which some developers will win mandates to sell wind power to the government-owned Solar Energy Corporation of India. At the end of January, India had 28,871 MW of wind capacity. It ranks fourth in the world after China (145,362 MW), US (74,470 MW) and Germany (44,947 MW). The government aims to see 60,000 MW by 2022. Hyun-Jin Ryu Womens Jersey
The historically low solar tariffs at Rewa
Solar energy has become the cheapest it has ever been in India, thanks to historically low tariffs achieved in the reverse auction bid for three units in the Rewa plant in Madhya Pradesh earlier this month. But what does this mean for the solar industry in India? What exactly happened? The two-day reverse auction bid for three 250 MW blocks in the Rewa solar plant in Madhya yielded a tariff of Rs 2.97 for each of the blocks and a levelised tariff of Rs 3.3 over the course of the 25-year power purchase agreement. The winners of each of the bids were Mahindra Renewables, ACME, and Solenberg Power. The Rewa plant is a joint venture of Solar Energy Corporation of India and Madhya Pradesh Urja Vikas Nigam (MPUVN). A reverse auction in such a scenario is basically a situation where companies bid for a unit by offering the lowest tariffs at which they will sell the energy generated from the unit. The lowest tariff wins the bid. How were such low rates achieved? Companies bidding for the Rewa units were able to commit to such low tariffs because of various factors, some to do with the industry, and others to do with the specific bid. The industry-related factors include the fact that solar energy producers in India have been able to greatly reduce their costs due to the import of cheap photovoltaic panels from China. In addition, in keeping with the government’s renewable energy push, especially its commitment to achieve 100 GW of solar energy by 2022, it has expedited the land acquisition process and has reduced excise duties on various components required to set up a solar plant. Specific to the Rewa bid, the Madhya Pradesh government implemented a few favourable and unique structures in the project power purchase agreements. For example, it included a state government guarantee for the contracted capacity by the utility as well as a compensation for deemed generation in case of non-availability of grid. These factors allowed the bidders to commit to lower tariffs than they would otherwise have been able to. What does this mean? While this does mean that solar energy will be cheaper, several industry experts have warned that, at such low tariffs, margins are also very slim. This could mean that even a slight increase in input prices—such as pricier imports from China—could push many of these projects into unprofitability. Jihad Ward Authentic Jersey
Government mulls 50 percent subsidy on solar powered cold storage facilities
To facilitate farmers store their horticulture produce for longer period, the Telangana government is considering provision of 50 % subsidy on ‘solar powered cold storage’ with the help of Central government assistance under MIDH (Mission for Integrated Development of Horticulture). According to officials, as part of its pilot project to help farmers store their horticulture produce including fruits and vegetables for selling it next day, the Horticulture Department has requested the Central government to allocate an amount of Rs 75.5 crore for 1000 units for the year 2017-18 under MIDH component special interventions in Post Harvest Management. Each unit will cost Rs 12 lakh. If the government assistance in the form of subsidy is available the burden will be reduced to half. “Mostly, small and marginal farmers cultivate horticulture crops in the State. But due to lack of facilities to store the produce and also to increase shelf life in different climatic conditions, about 30 percent of the produce is becoming stale each year. Because of this most of the farmers are not getting better prices, while on the other hand even the consumers failed to get fresh produce,” informed a high official of Horticulture Department. Telangana is the second largest producer of fruits and vegetables with 6.734 lakh hectares under different horticulture crops. The total production of horticulture crops is 81.65 lakh metric tonnes. Of this, fruits are grown in an area of 3.235 lakh hectares and vegetables on 1.718 lakh hectares with a yield of 41.97 lakh metric tonnes and 31.95 lakh metric tonnes respectively. The Solar power cold storage also called as ‘Portable Solar Micro Cold Room’ has been developed by a group of young IITians of Kharagpur under the brand name ‘Ecofrost’. The facility which is totally operated on solar energy has a storage capacity of 5 metric tonnes capacity. The official informed that the eco-friendly model has pre-cooler as well as cold storage components with a power back up of about 30 hours. Interestingly, it runs without any batteries and only with the help of solar panels. “What the IITians have developed is an innovation of its own in the entire Asia, state adopts it, we would be the first in availing this kind of technology for horticulture,” added the official. Agriculture Minister, Pocharam Srinivas who had recently launched the Portable Solar Micro Cold Room at Center of Excellence at Jeedimetla in Hyderabad, described this latest adoption of technology by some private firms in the State as a boon for the farmers. The Minister felt that the anxiety levels of farmers who fear rotting of their produce can now store it for longer period and avoid panic selling. Fozzy Whittaker Jersey
Direct Benefit Transfer leads to Rs 50,000-crore savings for government in 3 years
Savings due to Direct Benefit Transfer (DBT) over the last three years have touched Rs 50,000 cr as on December 31, 2016, as per latest government figures. This amount is equivalent to the subsidy paid out under DBT in this financial year, implying nearly a year’s subsidy was saved. “The savings figure is expected to significantly rise further in the next financial year as the government will be bringing a total of 533 central payout schemes in 64 ministries under the DBT mechanism by March 31, 2018 as per the directions of PM Narendra Modi,” a top government official told ET. Presently, 84 schemes in 17 ministries are covered under the DBT, up from 34 schemes as on March 31, 2015. “Under UPA, the talk was only about big scams and several lakh crore rupees of losses. There is no scam now…instead we have saved nearly Rs 50,000 cr by crediting the subsidy amounts directly in the bank accounts of the correct beneficiaries and eliminating ghost beneficiaries,” the top official added. Nearly 33 crore people receive various subsidies directly in their bank accounts now through DBT. As per government’s interim figures as on December 31, the cumulative DBT savings stand at Rs 49,650 cr, pending information from many states. The top government official pitted this figure against the one of Rs 48,860 cr of subsidy transferred through DBT in this financial year till December 31, 2016. The total DBT payout since 2014 till date has been Rs 1.6 lakh cr. “This implies that nearly one year of total subsidy payout has been saved by the government through DBT,” the official said. Though the DBT mechanism started in 2013 under the UPA on a pilot basis, it took off in a major way only under Modi government after the LPG subsidy scheme (Pahal) was commenced through the DBT mechanism in November 2014. “We saved Rs 15,192 cr in 2014-15, Rs 20,951 cr in 2015-16 and nearly Rs 14,000 Cr in 2016-17 till December 31, 2016 through DBT,” the official said. The government says it has saved almost Rs 14,000 cr in its Public Distribution Scheme (PDS) by deleting 2.33 cr ration cards so far and better targeting of beneficiaries through DBT. Rs 7,633 cr is cited as the savings in the MGNREGS scheme by the government so far. Rs 399 cr is cited as savings in the National Social Assistance Programme. The biggest saving of Rs 26,408 cr is cited in the LPG PAHAL scheme, including Rs 4,824 Cr in the first nine months of this financial year. The LPG subsidy payout qualifies as the world’s largest cash transfer programme, Centre claims. The government is sticking to its guns on the LPG subsidy savings figure despite the Comptroller and Auditor General of India (C&AG) poking holes in the same in a recent report saying the savings were “exaggerated”. C&AG said the government had assumed that the 3.11 cr blocked or inactive customers would have availed 12 subsidised cylinders apiece rather than only 6 cylinders as per national average per capita consumption of cylinders. The major schemes new on DBT platform over the next one year will include Pradhan Mantri Ujjwala Yojana, Atal Pension Yojana, PM Suraksha Bima Yojana and PM Jeevan Jyoti Bima Yojana, PM Crop Insurance Scheme and PM Gramin Awas Yojana. Justin Braun Womens Jersey