Diesel Price Cut: After Airtel & Idea, Reliance to target IOCL, HPCL, BPCL?
Reliance Industries, which started giving a discount of Re 1 on every liter of diesel sold through its pumps in January, has now started advertising the offer in Kerala. The discount was first noticed in January in North and West Indian towns. The move was, at the time, not taken very seriously by players such as Indian Oil Corporation and Hindustan Petroleum Corporation, who felt that it was a response to the discounts offered by state-owned companies to promote electronic payment. In the aftermath of demonetization, state-owned players including Bharat Petroleum Corporation, had started giving a 0.75% discount when customers paid electronically. That translates to a saving of about 45 paise per liter, and that too in the form of a cash back at a later date. However, Reliance Industries is offering an instant discount of Re 1 at the pump with no terms and conditions or limits. But the expansion of the offer could pose concerns for the incumbents. TIME TO WORRY? The move could set the cat among the pigeons of Indian petroleum retailing business and Reliance could disrupt the fuel retailing market like it disrupted the telecom market. The state-owned companies, BPCL, IOCL and HPCL, control over 90% of the petrol and diesel retail sales in India. To prevent competition amongst themselves, they also have identical prices. This ensures that their profit margins are not hit by competitive pressures, and consumers often choose their pumps purely by looking at the quality of fuel they get. This is very similar to the Indian telecom market before the entry of Reliance Jio into it. There were three players — Bharti Airtel, Idea Cellular and Vodafone — and their tariffs, especially for data — was very similar. As a result, consumers chose their provider on non-tariff factors such network coverage and advertising and there was no price-based competition. MALPRACTICES Due to the monopolistic nature of the existing petroleum retailing market in India and the high costs of setting up petrol pumps, the sector has seen the rise of malpractices such as adulteration of fuel and rigging of pump equipment. Moreover, the public sector companies charge a profit margin of around Rs 2 per liter, irrespective of market conditions. Reliance Industries, which has its own sources of petrol and diesel and is not dependent on state-owned oil companies, is trying to bring forces of competition by cutting the price of fuel. Even though the price cut is not as high as in telecom — where Reliance Jio’s prices were about 80% cheaper that those of rivals — in petrol and diesel retailing, even a 1.7% cut in price can result in a huge saving. Many lorry and bus operators, for example, spend millions of rupees on fuel per day and a 1-rupee discount can save them thousands of rupees each day. It remains to be seen how Indian Oil, Bharat Petroleum and Hindustan Petroleum react to the move by Reliance. Reliance owns only around 1,100 pumps, and many of its pumps are non-operational, but each pump can serve a huge customer base, especially those situated on highways and in busy junctions. Bryan Witzmann Jersey
Essar Projects wins 100-km Jalandhar to Amritsar pipeline contract
Essar Projects has won a 100-km pipeline contract from GSPL India Gasnet (GIGL) for laying of natural gas pipelines between Jalandhar and Amritsar. The project for laying of pipelines with diameters “ranging from 12 inches to 18 inches” is “a critical segment of the 2,100-km Mehsana–Bhatinda–Jammu–Srinagar Pipeline (MBJSPL) project that passes through 29 districts in five states,” Essar Projects said in a statement today. The MBJSPL project has been initiated to cater to the growing demand for natural gas in India. The Jalandhar-Amritsar section is among the three sections for which GIGL recently completed the tender evaluation process, the company said. Essar Projects said it has a proven track record of executing cross-country pipelines that carry oil and gas, water, as well as iron ore slurry through challenging geographies and tough terrains. It said it has successfully executed over 5,500 km of cross-country pipelines in India and overseas, servicing clients like GAIL, GSPC, Indian Oil, Hindustan Petroleum, Bharat-Oman Refinery, Takreer, Gasco and Ambatovy Minerals. Shiba Panda, Managing Director, Essar Projects, said: “We are proud to be associated with a project that is integral to building a countrywide gas pipeline grid for India. This win reinforces our expertise as a world-class EPC contractor in the Pipeline segment.” Essar Projects is a engineering procurement and construction company that offers a collaborative end-to-end project delivery model, which is backward integrated into the supply chain and forward integrated into customer needs. Its key projects include Gas Gathering System including trunklines and pipelines of up to 300 km and 35 compressor stations for CBM Field Development at Raniganj, West Bengal, India and crude pipeline for Salaya-Mathura. Dont’a Hightower Jersey
Get 5kg LPG cylinders at Kirana stores soon? OMCs turn to Petroleum ministry for nod
The National Democratic Alliance government is leaning towards the use of the cleaner fuel for cooking instead of traditional sources such as firewood, which have high carbon emission and health hazards. Oil minister Dharmendra Pradhan on Monday said the LPG coverage in the country has gone up to 72%, thanks to the Pradhan Mantri Ujjawala Yojana, which aims to provide free LPG connections to women belonging to the below poverty household category. The budgetary support for the scheme has been increased to Rs. 25 billion for financial year 2017-18 compared with Rs. 20 billion a year ago. The government had in July 2013 approved the FTL scheme for selling 5kg LPG cylinders through company-owned retail outlets of OMCs. Under the Gas Cylinder Rules, 2004, up to 100 kg, or 20 cylinders of 5 kg each, could be stored at the licensed outlets at any point in time. However, over time, such cylinders were also sold through kirana stores by OMCs. In the Gas Cylinder Rule, 2016, PESO however said that 100 kg of LPG can be stored for one’s own consumption only and not for sale. An industry source, requesting not to be identified, said this change under Clause 44 of the rules has created hurdles for the OMCs to sell FTL cylinders to the segment that requires them. A government release dated July 24, 2013, says, “This decision has been taken in view of the fact that over the years, a new category of consumers have emerged especially in big cities who are mobile and thus do not want a permanent LPG connection but still require LPG for their needs. Such customers need flexibility for getting the LPG cylinders as per their convenience and their needs can also be fulfilled by smaller quantities of LPG.” LPG sold through FTL cylinders are available at non-subsidised rate. “OMCs have written to PESO as well to reconsider the decision. The government is in favour of promoting FTL so that access is not denied to anyone, especially the migratory population. The issue is being taken up with PESO,” said a government official requesting anonymity. FE sought responses from the OMCs on the issue but no response came in till filing of the report. NT Shahu, joint chief controller of explosives and head of the department, PESO, however, said that it is in dialogue with the petroleum ministry and is working out the modalities to allow sale of FTL cylinders through kirana stores. India has committed to move towards cleaner sources of fuel to cut its carbon emission as part of the Paris climate change deal. It also plans to increase the share of gas in the energy mix to 15% in the next three years from the current 6.5%. Tyrell Williams Womens Jersey
GoAP urged to maintain Aalo to Bam road under TAH
Frustrated with inordinate delay in proper execution and maintenance of the road from Bam to Aalo section of Tai to Gabu (a part of Potin-Pangin Road), the Memo Ao Youth Association (MAYA) and Pushi Bango Welfare Society (PBWS) has appealed to the state government to start early execution and maintenance of Aalo to Bam road of Tai to Gabu section of the Trans-Arunachal Highway. Addressing reporters at the Press Club here on Tuesday, MAYA Chairman, Kenbom Bagra said that the MAYA and PBWS have submitted numerous memorandums to the GoAP for early execution and maintenance of the said road, but there has been no response from the state government. They had on February 1 last, also initiated a democratic movement in the form of 12 hours chakka bandh. He said that ever since the Border Roads Task Force (BRTF) handed over the project to the MoRTH in 2012, the said stretch of road is in a poor condition, especially at Pushi Bango area, making vehicular movement difficult. “The concession agreement of Potin-Pangin Road was signed on August 14, 2012, in the Ministry of Road Transport and Highway (MoRTH), New Delhi with M/s Potin Pangin Pvt Ltd, represented by ECi Engineering and Consortium for widening and upgrade of the said project, while the BRO handed over the Tai to Pangin road project to MoRTH on September 4, 2014 to facilitate the executing agency to carry out construction work. However, Bagra claimed that “the executing agency has not been carrying out proper maintenance work, causing much hardship to the commuters, while the maintenance of Aalo to Bam road has also been halted after the construction of a temporary by-pass road of Nyorak-Nikte due to reasons best known to the executing agency.” Further, stating that Aalo to Mechuka is a place of strategic importance, with hundreds of army and para military forces vehicles plying despite terrible road conditions, Bagra said that it was a matter of grave concern and urged the state government to accord priority to proper road connectivity in the said area. He also appealed to the Union Minister of State for Home Affairs, Kiren Rijiju to address the said issues at the earliest. PBWS President, Kirnya Bagra said that ever since the BRTF handed over the road construction work to other agencies in 2012, the condition of road has only been deteriorating. The PBWS president further said that the MAYA and PBWS, along with 17 organizations, including Ato Paktu Ao Welfare Society, PAYWA, KKSU and BASU from Basar area and ABSWA from Mechuka and Nyiko Bango area, Mother’s Vision Aalo, AAPWWS and Galo Ane Aalo and other organizations will launch the second phase of agitation in the form of 24 hours West Siang bandh, followed by 36, 48 hours and indefinite period bandh, if their demands are not met with within the next 10 days. Curtis Samuel Authentic Jersey
Naidu asks officials to fast-track road projects
Chief Minister N. Chandrababu Naidu on Tuesday asked officials to speed up the process for declaration of the Amarvati-Anantapur expressway and Outer Ring Road (ORR) of Amaravati as national highways. If this was done, it would be easy to obtain permissions from the Ministry of Forests and also acquire lands. At a review meeting on roads and buildings held at the interim Secretariat near here, Mr. Naidu said that land acquisition for the expressway should be completed in three months so as to complete the project by 2019. The expressway of 598.83 km length passes through the districts of Krishna, Guntur, Prakasam, Kadapa, Kurnool and Anantapur. He asked the Collectors of the five districts to form separate teams for land acquisition. The government would provide necessary staff. A thorough coordination among forest officials and RDOs was required, he said. Railway officials present at the meeting suggested that speed train track could be constructed along the express way. The track could be parallel to the expressway. Earlier, project consultants gave a presentation on the designs of the proposed expressway to connect Amaravati to Bengaluru. They made changes in the alignment following a suggestion from the Chief Minister. The connecting Kadapa-Kurnool roads were designed to prevent passage through the forest area. AP Capital Region Development Authority (CRDA) Commissioner Ch. Sridhar, making a presentation on the new alignment of the Amaravati ORR, said that the distance had increased by two km taking the total distance to197.5 km. Alignment change Likewise, the length of a tunnel proposed near Mylavaram has come down to 4.5 km from 7.5 km. A change in alignment of 200 metres was made near Guntur, he said. Mr. Naidu, responding to it, suggested that an eight-lane ORR be thought of to meet future requirements instead of a six-lane road. The three proposed ORRs—Tirupati-Vaikuntamala, Visakha-Soundaryamala and Amaravati-Boudhamala—should be connected to the Visakhapatnam-Chennai Industrial Corridor road, he said. A sum of ?1,202 crore would be allotted for developing interior and connecting roads. An agency would be floated and a retired police officer appointed as a director to speed up the project. Benz Circle flyover The Kanaka Durga flyover under construction and the proposed flyover near the Benz Circle also came up for discussion. Mr. Naidu set a deadline of August 15 for the Kanaka Durga project. On the Benz Circle flyover, he said the government wanted it to be constructed duly following international standards. A separate meeting would be convened in two days to take a final decision on the flyover, he said. Demarcus Robinson Womens Jersey
16 KEY BRIDGES BUILT IN 2016-17: MUNAT
Public Works Department (PWD) Minister Rajesh Munat on Tuesday said that Rs53 crore had been spent in constructing 16 important bridges in 2016-17. Many crucial big and small bridges had been built providing an easy access to the remote areas of the State, he said. The PWD has also built 18 Railways over and under bridges in high density traffic areas in the State involving a cost of Rs300 crore during the past 13 years, officials informed. Munat informed that currently, five key Railway over and under bridges are under construction at a cost of Rs222 crores in Raipur, Bilaspur and Janjgir-Champa districts.The bridges are coming up at Shankar Nagar, Kashiram Nagar, Lal Kadan, Khoksa and Champa. Notably, the Chhattisgarh Government in May last year also announced that it will take up construction of 63 long-span bridges under ‘Pradhan Mantri Gram Sadak Yojana’ (PMGSY) in different districts of the State, officials informed. On the other hand, as per Prime Minister Narendra Modi’s visionary ‘Setu Bharatam Yojana’, the State Public Work Department (PWD) has initiated efforts for construction of over-bridges and under-bridge at railway crossing across the State for ensuring smooth and accident-free vehicular movement, officials stated. In the State Budget 2016-17, Chief Minister Raman Singh has included the proposal of as many as five railway over-bridges in ‘Setu Bharatam Yojana’ for reconstruction of railway level-crossings, old and narrow-bridges falling on national highways, informed officials, adding that of five bridges, two over-bridges will be constructed between Manendragarh and Ambikapur, two between Mahasamund and Kharir Road (Odisha) and one railway over-bridge at village Keshloor in Bastar district. For construction of four railway under-bridges and four railway over-bridges, the Chief Minister has made a financial provision of Rs13.16 crore from the Department’s general expenditure head in this budget, said Munat. He said that the construction of these eight railway bridges will be costing Rs54.71 crore, of which Rs36.55 crore would be the estimated expenditure for construction of four over-bridges while Rs18.16 crore will be required in construction of four under-bridges. Similarly, the Chief Minister had announced to carry out a survey for construction of over and under-bridges at 41 railway level-crossings on Raigarh-Dongargarh route. The survey work is going to cost Rs1.05 crore. Notably, the project aims to make all national highways free from railway level crossing by 2019 to ensure road safety. Under the project, 208 bridges will be built at a cost of Rs20,800 crore. Also, 1500 old bridges will be reconstructed, which will cost Rs30,000 crore. As many as 29 Road Over Bridges (RoBs) have also been sanctioned by the Central government during the current financial year under South East Central Railway (SECR) division. At present, there are 1,156 sanctioned works for construction of 1,399 ROBs across the country, officials stated. Fund for construction of Road Over Bridges (ROBs)/Road Under Bridges (RUBs)/Subways; elimination of level crossings and other safety works related to level crossings come from Central Road Fund (CRF) as a percentage of cess collected on petrol and diesel by Union Ministry of Finance. A provision of Rs4180.87 crore has been made for South East Central Railway (SECR) in the Union Railway budget to provide a further boost to its development activities. Boston Red Sox Authentic Jersey
Listing possible as Air India looks to restructure ownership
The government is considering a new ownership structure at Air India in an attempt to turn around the fortunes of the loss-making national carrier, according to a report in Livemint. The report quotes two people familiar with the matter as saying that the proposed restructuring stops short of privatisation. The first step involves recasting almost Rs 28,000 crore of working capital debt that Air India owes to banks, by trading it with equity.The next step would involve inducting professionals equipped with proven financial and management skills. The final phase might include listing the company. State Bank of India leads the consortium of public sector banks, which have given these loans to Air India. Air India chairman Ashwani Lohani and SBI chairman Arundhati Bhattacharya have already met twice to discuss the plan. However, the banks, already saddled with bad debts, are proceeding with caution. The report quoted an official as saying that the banks would like Air India to undertake a clear roadmap to keep the airline “sustainable” as a business, where value can be unlocked along the way. A.J. Klein Jersey
Jet Air to recapture lost ground with 11 Boeing 737s
Jet Airways, which has seen a dip in its market share in recent times, will now lease 11 old Boeing 737s in an incremental manner by the end of this year, before phasing them out with the arrival of 75 Boeing 737 Max aircraft from 2018 onwards. “The 11 Boeing 737s are older planes and will be used for temporary basis till the induction of Boeing 737 Max,” said a Jet Airways source aware of the development. It is pertinent to note that Boeing 737 Max will mainly come as replacement for the existing leased aircraft which will be returned on the expiry of their lease. However, a Jet Airways spokesperson refused to comment on the story, calling it speculative. The airline, at present, has a fleet of 114 aircraft which includes a mix of wide-body Airbus A330s and Boeing 777s, narrow-body 737s and ATRs. It has 75 Boeing 737s Max on order which are due for delivery in 2018. Also, the airline is said to have deferred the induction of Boeing 787 aircraft which was scheduled to get delivered by the end of 2017. Jet Airways claims that it does not want to rush into expensive asset purchase game but would rather develop market by way of leasing aircraft, code-shares and strategic partnerships. The airline, in order to back its strategy, said that its code-share traffic has surged from 650,000 passengers in FY14 to 1.22 million in FY15. Gaurang Shetty, whole time director of Jet Airways, during an interaction last year with DNA Money had said, “It’s not that only if you place large plane orders that you are expanding. We keep scanning for all kind of opportunities like leasing of planes to increase our capacity. End of the day, it’s the bottom-line which matters.” M.J. Stewart Jersey
Kempegowda airport posts 22.5% traffic growth
Bangalore International Airport Ltd’s (BIAL) Kempegowda International Airport Bengaluru (BLR Airport) has posted an impressive traffic growth by clocking 22.18 million passengers, marking an overall traffic growth of 22.5 per cent. Air traffic movement witnessed an increase of 19.9 per cent, with the airport now connecting 45 airlines to 66 destinations in India and globally. On an average 60,000 passengers travel through the airport every day. The year also saw the achievement of many new milestones. The airport had a record-breaking two million passengers travelling in November 2016 and an all-time monthly high of 2.15 million passengers in December 2016, the single highest traffic month for any airport in South India. BLR Airport had also reached the landmark milestone of welcoming its 100 millionth passenger in 2016. G V Sanjay Reddy, Managing Director, BIAL, said: “2016 saw another strong year for us at BLR Airport. Despite the many challenges, we have grown exponentially in terms of passenger traffic. Our cargo business has also seen an incremental growth which reaffirms our growth strategy to develop our airport as the cargo hub of South India.” “The recent statistics continue to establish BLR as an airport of choice not only for travellers but also our business partners. We are grateful to all our customers that helped contribute to our success and retain our position as the No 1 airport in South India. We are optimistic about the year ahead and we will continue in our efforts to offer excellent customer service. The new year will see us focusing strongly on introducing innovative and interactive digital solutions that will create value for our customers,” he added. Eddie Robinson Jersey
Low-cost carriers to remain profitable: Aviation report
Indian airlines are expected to report combined losses to the tune of USD 250-300 million as against an estimated profit of USD 122 billion in the previous financial year, according to an industry report. The downward pressure on yields combined with cost creep, is expected to push the consolidated industry back into the red for the 12 months ending March 2017, the Sydney—based aviation think tank, Centre for Asia Pacific Aviation (CAPA), said in a report released here today. “IndiGo, Jet Airways, SpiceJet, GoAir and Air India Express are all expected to remain profitable for the full year (FY17), but at levels lower than in FY2016, while losses are projected to increase at Air India, AirAsia India and Vistara. At a total industry level, losses could reach USD 250—300 million,” the CAPA India Aviation outlook FY2018 report said. IT has also projected higher losses for the next fiscal at USD 380—450 million. Cautioning that the profitless growth is expected to increase viability risks, starting from the next fiscal, CAPA noted that if the Indian carriers continue to expand without sufficient capitalisation, they could face significant challenges when the next external oil price shock hits. According to CAPA, Indian airlines reported a combined profit of USD 122 million in the year ended March 2016, “but this era of profitability is likely to be short—lived. Traffic growth is being stimulated above its underlying demand as a result of excess capacity and competitive fares,” the report observed. Noting that the industry cost dynamics are changing with the operating environment likely to become more challenging, CAPA in its report said, “with expected cost creep of 10 per cent , a close to 10 per cent decline in yields, oil at USD 55—60 per barrel and on exchange rate of USD 1=INR 73—75 , industry losses could widen further to USD 380—450 million in FY 2018. It also said though the low cost carriers are expected to remain profitable, yields could potentially decline further than assumed, given the capacity induction planned. Paul Coffey Jersey