India’s oil consumption to outpace China’s this year, Platts Analytics
Oil consumption in India is likely to increase by 7-8% this year, overtaking the demand growth in China for the third year in a row, as the demonetisation impact is expected to be for a short-term, according to Platts. The demand for LPG (liquefied petroleum gas) and transport fuels will increase, while demand for naphtha will get a boost due to new petrochemical projects. “For the third year in a row, India’s oil demand growth will outpace China’s demand growth,” Platts Analytics said in a note, while adding that it was likely to rise at around 7% to 4.13 million barrels a day in 2017 as compared with 3% in China’s oil demand to 11.5 million barrels a day. The cash crunch after the move of demonetisation is likely to dampen temporarily the country’s consumption for oil products in the first 3-month period or maybe a slight longer period, it said. “Whereas the growth fundamentals for oil demand in India continue to be high, slow growth in the starting months of this year due to demonetisation may dampen the overall growth of oil demand in 2017 to a little below of 2016 levels of 9%,” it said. “The dramatic increase in oil demand in India highlights no faltering signs. The country will continue to be a driver of growth in Asia in 2017, Platts said. Indian government’s drive for clean fuel, sharp expected growth in demand for transport and air travel, and the insatiable rise in petrochemicals will serve as a driver for petrol, LPG, jet fuel and naphtha, supporting oil products to reach close to double-digit growth this year, equivalent to the growth seen in 2016, if not higher. Diesel demand is likely to increase by around 4.5-5% in 2017, a little lower than the levels in 2016, as demonetisation had impacted the rural incomes. The demand for LPG is likely to grow by around 10.5% year-on-year in 2017, as compared to the estimated 11% in 2016. However, the demand for naphtha is likely to witness a double-digit growth. Juan Lagares Authentic Jersey
HPCL to restart crude unit at Vizag refinery in 2-3 days – Chairman
Hindustan Petroleum Corp will restart a 36,000 barrels per day crude unit at its Vizag refinery in 2-3 days, its chairman M. K. Surana said on Monday. HPCL had shut the crude unit at 166,000 bpd southern Indian plant last Friday following a minor fire in its crude unit due to a pipeline leak, the company spokesman said on Saturday. Remaining units at the refinery were operating normally, the spokesman had said. Chase Utley Authentic Jersey
India fuel consumption to hit 200 million tonnes in 2016/17 – Oil Ministry
India’s fuel consumption is likely to hit 200 million tonnes in 2016/17, an oil ministry executive said on Monday, in what would be the highest such level in at least 16 years. “Demand for petroleum products is increasing as the economy grows. India has the best growth amongst the large economies in the world … we have massive hunger for petroleum products,” said oil ministry Additional Secretary A K Sawhney. India’s fuel consumption surged 10.9 percent to 183.5 million tonnes in 2015/16. A level of 200 million tons would compare to almost 1 billion tonnes in U.S. fuel consumption and to around 575 million tonnes of demand in China. Kansas City Chiefs Womens Jersey
Budget 2017: Government may accord infrastructure status to low-cost housing
The government may tweak the definition of the infrastructure sector in the upcoming budget to include low-cost or affordable housing, a move that would reduce costs for developers and attract investors, two people with the knowledge of the matter told ET. The change is being proposed about a month after Prime Minister Narendra Modi announced concessions on interest rates for low-cost housing loans under the Pradhan Mantri Aawas Yojana. “If we want housing for all by 2020, re-categorising affordable housing as infrastructure is essential. The government had sought feedback about this about a week ago,” a person familiar with the development said. “I see this happening in the upcoming budget.” The government has been pushing Modi’s pet project of providing about 20 million houses across India by 2020. IT has reached out to senior finance ministry officials and the Reserve Bank of India for feedback on the proposed change and how to prevent it from being misused. “The important thing here would be to define affordable housing or low-cost housing. And these projects will have to be insulated in a way that no one is able to take money out without completion of the project,” another person aware of the development said. Real estate developers have been under stress as they have borrowed funds at a higher cost. In addition, banks are reluctant to lend money to the sector and the situation worsened after the November 8 announcement scrapping high-denomination currency notes, leading to a fall in real estate sales. “If affordable housing is given infrastructure status, it would lower the borrowing cost for the developers. Also, regulations should be simplified to directly borrow foreign debt, which can cost around 4-5% on dollar return,” said Hemal Mehta, a partner at Deloitte Haskins & Sells. Industry experts said that while it may appear to be a small change, categorising low-cost housing as infrastructure could have far-reaching results. “Real estate industry has been asking for the infrastructure status for affordable housing for last three years, but this time it is only logical that it could go ahead. This is mainly because the prime minister has announced the new scheme and infrastructure status will help reduce the borrowing cost and help accelerate growth,” said Jeenendra Bhandari, partner at MGB and Co, an audit and tax firm. The government’s focus is on affordable housing in the rural areas and there could be additional tweaks in this aspect in the budget. Emailed queries sent to finance ministry officials, the Central Board of Direct Taxes and the RBI did not elicit any response. Regulations will have to be changed so that low-cost housing projects do not attract adverse taxes but easier project finance even from investors outside India, the people in the know said. Industry experts said a change in status, along with clear guidelines, could mean low-cost housing could attract investment from foreign pension funds and insurance companies. “These projects could have a dollar-denominated debt and offer a return of 4-5%. This would work well for both domestic developers as well as foreign investors,” an expert said. As per the recommendations, the government can look at allowing tax-free returns to foreign investors that invest in low-cost housing. This could solve some of the funding issues the sector is facing. Andreas Athanasiou Womens Jersey
NHAI to seek nod from traffic police before expanding Delhi-Gurgaon Expressway underpass work
National Highway Authority of India (NHAI) will have to keep the district traffic police in loop before expanding the construction work of three underpasses on Delhi-Gurgaon expressway and a flyover on old Delhi-Gurgaon Road. In fact, improvements have been suggested in the NHAI’s construction plan so there is least congestion on roads and commuters do not face any discomfort. A meeting was held between senior police officers, road safety officers (RSO) and NHAI officials earlier this week. Following which a joint inspection was conducted by traffic cops, RSOs and NHAI on Friday. Sources told TOI that the team found over two dozen flaws in the NHAI’s three-phase construction plan for the building underpasses at Rajiv Chowk, Signature Tower and IFFCO Chowk, while, a flyover will be constructed on Old Delhi-Gurgaon Road. These flaws were identified on the basis of the snarls they could cause, or even didn’t offer a carriageway for the vehicles to cross while the construction work was on. For instance, the Rajiv Chowk was often being choked in past couple of weeks due to the NHAI’s construction work. “During inspection it was noticed that the highway authority is also supposed to widen the road in addition to constructing the underpass. They could have first widen the road so vehicles had a carriageway to move on and would have taken internal lanes to construct the underpass. But instead they took over the main road instead and as a result there is now a bottleneck at the stretch and commuters are facing the difficulties,” said Rajive Nandwani, a road safety officer. In fact, a water pipeline burst near Rajiv Chowk earlier this week, led to choking of the junction. Similarly at Maharana Pratap Chowk, the construction work has narrowed down the road space which is leading to snarls. The remaining lanes, including the one coming from bus stand are badly damaged and have potholes which makes it difficult to drive over it. Following this, NHAI has been asked to take a nod from the traffic police before expanding to any other parts of the road near these underpasses. “We have suggested them some improvements in their construction plan so there is always room on the road for vehicles to move. The joint team inspection will be done whenever they would want to expand the area under construction because once the area is dug up, nothing can be done till it is filled,” said Sibash Kabiraj, joint commissioner of police. “For now we have asked them to give road users some space near the statue at Maharana Pratap Chowk and widen the old Mehrauli-Gurgaon Road. There is some construction material lying on the slip road coming from Signature Tower towards this crossroad which will be removed by the end of coming week,” adds JCP Kabiraj. Valeri Nichushkin Authentic Jersey
Roads and renewables infrastructure deals seen rising in 2017
Deals in the infrastructure space are set to increase as companies put dozens of assets across roads and renewable energy sectors on sale, according to analysts and investment bankers. A number of such deals have either been announced or are in the due-diligence stage and will likely be completed in 2017. A number of infrastructure-focused funds and overseas pension funds have announced plans to invest in India’s roads and renewable energy projects. “Within infrastructure, roads is a sector where one will see deal activity improving, primarily because there are multiple operating assets available for a transaction that do not have construction risks involved and thus have better appeal to a financial investor. Also, there are multiple buying platforms emerging apart from the existing road platforms, as financial investors will also become acquirers of road assets via structures such as InvITs (infrastructure investment trusts). It is now a question of buyers’ and sellers’ expectations meeting at a certain valuation benchmark,” said Navneet Singh, executive director and head, infrastructure group, Avendus Capital. Also, while deals in the thermal energy sector are expected to remain subdued due to the presence of only a handful of buyers, predominantly looking for operating assets, “the renewable sector, primarily solar, will see activity in fund-raising as companies will continue to need additional capital to build their projects,” Singh added. Several Indian infrastructure developers, weighed down by debt, have announced exits from individual highway projects to monetize assets and repay creditors while renewable energy firms evaluate fund-raises and going public. The infrastructure sector raised about $3.78 billion in 2016 across 36 transactions, including mergers and acquisitions (M&A), private equity (PE) investment and two initial public offerings (IPOs), analysis of monthly data from investment bank Equirus Capital Pvt. Ltd showed. This compares with $2.9 billion raised in 2014 and about $3.7 billion raised in 2015. According to data from Grant Thornton India, about $2.91 billion was raised from 39 M&A and PE transactions in 2016 across engineering, infrastructure, and clean-tech sectors. Funds such as US-based I Squared Capital, Indian asset manager IDFC Alternatives’ infrastructure fund, Canada’s Brookfield Asset Management, Australia’s Macquarie Group, and the Canadian pension funds Canada Pension Plan Investment Board (CPPIB) and Caisse de Depot et Placement du Quebec (CDPQ) have committed large investments in the sector and are looking to buy assets across roads, thermal power and renewable energy to build their own portfolio in India. CDPQ, for example, had last year committed investments of $150 million for renewable energy in India and also joined hands with Tata Power Co. Ltd and ICICI Venture to launch a platform to facilitate investments in power projects with an initial capital of up to $850 million. Infrastructure Fund II of multi-asset manager IDFC Alternatives, for example, plans to buy certain operational road assets by March. “A number of deals in the sector have been signed or announced over the last 12 months but many are yet to close. One noticeable trend seen is that closing and funding control acquisitions require significantly higher involvement and patience than buying simple passive minority stakes,” said Aditya Aggarwal, partner (infrastructure) at IDFC Alternatives. “Going forward, I would expect a lot more mid-sized M&A activity in renewables given that significant solar capacity would get commissioned from the equity lock-in restrictions in 2017. Likewise, I expect the TOT (toll-operate-transfer) model to be a game changer in road sector investments this year,” Aggarwal said. The government is looking to monetize 75 national highways operated by the National Highways Authority of India (NHAI) through international competitive bidding under the so-called TOT model, where investors including foreign funds will participate. Similarly, road developers including Sadbhav Infrastructure Projects Ltd and Gayatri Projects Ltd are looking for buyers for some of their operational assets. Hyderabad-based Gayatri Projects is carrying out the process of demerging its roads assets into a separate entity to bring in a financial partner or look at selling the portfolio either entirely or as individual assets to foreign funds, managing director T.V. Sandeep Kumar Reddy said. He expects the demerger process to be over by end of March. Among upcoming deals this year is Larsen and Toubro Ltd’s (L&T) plan to transfer its build, operate, transfer (BOT) assets to Canadian pension fund CPPIB by March. A number of companies including IRB Infrastructure Developers Ltd, Sterlite Power Grid Ventures Ltd, IL&FS Transportation Networks Ltd, GMR Infrastructure Ltd and MEP Infrastructure Developers Ltd are gearing up to raise money and cut debt via the InvIT route. InvITs are trusts which manage income-generating infrastructure assets, typically offering investors regular yield and a liquid method of investing in infrastructure projects. Josh Rosen Authentic Jersey
Ramp up copter production, Defence Ministry tells HAL
With the armed forces projecting the need for some 700 helicopters — light utility and armed — the Defence Ministry (MoD) has asked the public sector giant Hindustan Aeronautics Limited (HAL) to ramp up production, speed up existing under-development projects and start out-sourcing work. The HAL, headquartered at Bengaluru, produces some 22-24 advanced light helicopters (ALH), the Dhruv, annually and some 200 of these are flying; however, the requirement is huge. In the second phase, rapid production of light utility helicopters (LUH) and light combat helicopter (LCH) will start. Prototypes of both are ready but need operational clearance. The MoD wants HAL to produce up to 85-90 copters per annum of these three types – the Dhruv, LUH and LCH — said sources, while adding that out-sourcing of some work had been suggested on the lines of global manufacturing practices. Andre Johnson Jersey
CBI case a ‘shock’; will hit Air India hard, says Ashwani Lohani
With CBI registering a case related to software procurement at Air India, airline chief Ashwani Lohani today termed it as a “shock” saying the omnipresent shadow of vigilance and other probe agencies over processes undertaken by the executive has caused maximum damage to the public sector. The case has come as a shock because ostensibly as per the stand taken by the company as well as its parent ministry, there may be procedural lacunae but “there is no apparent malafide in this case”, he said. While observing that “perhaps there is more to it than meets the eye,” Lohani in a strongly-worded blog also said regardless of the issue, such an investigation is bound to hit the company hard. Besides, there is the pain of digging out old papers, questioning of many including the innocent and the honest and its attendant ramifications, he noted. CBI has registered a case against unknown officials of Air India, German firm SAP AG and IT major IBM in connection with alleged irregularities in procurement of software worth Rs 225 crore by the national carrier in 2011. “Air India that has been a victim of gross indecision in recent years and only lately had started to come out of its slumber will also take a hit, I am absolutely certain, as an outcome of the unfortunate turn that this case has now taken,” he said. In the blog titled ‘Pinning the executive down Those who idle shall commit no mistakes!’, Lohani said he was unable to appreciate the basic premise that a non-executive is required to keep an eye on every single aspect of working of the executive. “… that we should have checks and balances that are highly tilted in favour of the checks,” he added. Lohani, who took over as Chairman and Managing Director of Air India more than a year ago, has been steering efforts to revive the fortunes of the national carrier. Known for speaking his heart, the Air India chief said the case would further strengthen the belief that following processes is important and deliverance can take a back seat. “The omnipresent shadow of vigilance and other more powerful investigative agencies over the minutest processes undertaken by the executive is one single factor that has caused the maximum damage to the public sector in our nation,” he noted. Air India is surviving on a Rs 30,000 crore bailout package for a ten-year period which was extended by the previous UPA government. Ryan Kesler Jersey
44 airports have potential for operations under UDAN: Report
About 44 airports across the country have “high potential” for operations under the ambitious Regional Connectivity Scheme (RCS) for civil aviation, UDAN, according to a report brought out by apex industry body FICCI has said. “Based on the geographical, operational and commercial parameters, 44 out of the 414 underserved and unserved airports have high potential under RCS. “We have also identified around 370 potential destinations for the shortlisted airports, including metros, state capitals and important commercial, industrial and tourism centres,” said the FICCI report, brought out in concert with global professional service company KPMG. Uttar Pradesh has four high potential RCS destinations, three each in Maharashtra, Rajasthan, West Bengal, Assam, two each in Arunachal Pradesh, Meghalaya, Bihar, Karnataka, Himachal Pradesh, Gujarat, Chhattisgarh and one each in Andhra Pradesh, Telangana, Tamil Nadu, Odisha, J&K, Puducherry, Lakshadweep, Daman and Diu, Haryana, Madhya Pradesh Jharkhand and Uttarakhand. “So far 22 states have joined the RCS and we have identified 30 airports where operations could be started immediately,” Union Civil Aviation Secretary Rajiv Nayan Choubey told PTI. RCS, or UDAN ((Ude Desh Ka Aam Naagrik), was introduced as part of the National Civil Aviation Policy 2016 and was formally launched in October last. It provides an opportunity to take flying to the masses by way of fiscal incentives, infrastructure support and monetary subsidies (viability gap funding). Noting that RCS was a good scheme, Regional Director of International Civil Aviation Organisation Arun Mishra, however, said India did not have the wherewithal right now for RCS to become successful. “They are trying to build the wherewithal but it will take some time,” he said. “We have to be careful about creating the enabling conditions for this scheme to become successful. One of the most important things is the right size of aircraft that you need.” He said a plan was required to induct smaller aircraft for RCS operations. “Many of the airports (identified for RCS) do not have big runways, so they can’t take regular aircraft. We need to induct smaller aircraft for short runways for short takeoffs and landings. “Those aircraft are not available in our country,” Mishra, who earlier served as Director General of Civil Aviation, pointed out. Also, Mishra said, there was shortage of pilots and crew. “Small aircraft need specialised crew. We need a special initiative from the government to build that up. Pilots and engineers can’t come overnight. We need to train them,” he added. “India produced only about 200-300 pilots every year. “The Civil Aviation University in China has 2000 trainers. It has 265 aircraft for training purposes,” the ICAO official pointed out. Observing that aviation created high value jobs and has multiplier economic effect, Mishra said “one aircraft that comes to the country, creates 600 jobs, directly and indirectly. These were not regular jobs that paid Rs 5,000 or Rs 10,000 a month but those that paid Rs 50,000 or Rs 60,000.” “Essentially, necessary infrastructure needs to be created for RCS to become successful. Airports Authority of India has readied 55 airports and there they can start the RCS,” Mishra added. Meanwhile, the FICCI report suggested that Viability Gap Funding under RCS be extended from the proposed three to five years or more as these airfields might taken even longer to become financially sustainable. RCS operators should also be allowed to use pilots, cabin and maintenance crew of other airlines and allow foreign registered aircraft for operations. Nolan Ryan Jersey
Govt to spend Rs. 16k cr in the next 5 yrs on airport infrastructure
The government is now working on a national level plan to make unused airstrips operational again, which will offer easy air connectivity to the people who are living in far-flung areas of the country. For this, the government will be spending Rs.16,000 crore in the next five years to upgrade the airport infrastructure, said Civil Aviation Secretary R. N. Choubey on Friday. Choubey was speaking at the Aviation Summit 2017, jointly organised by Ministry of Civil Aviation, government of Andhra Pradesh and Federation of Indian Chambers of Commerce and Industry (FICCI) in Vijaywada city of Andhra Pradesh. “We want to increase the number of air passengers to such a level that in the next five to seven years, India will become the third largest aviation market in the world. That’s the kind of market which is available here,” he said. Under the regional connectivity scheme, the government is providing 50-60% viability gap funding to airlines that connect unconnected airports, he added. Choubey informed that this is the first time that the civil aviation sector has achieved parity with the railways. “Civil aviation sector in India has achieved annual turnover of Rs. 1.4 lakh crore as compared to Rs. 1.6 lakh crore of Indian railways, he said. “Our airfare is comparable now with the fares of AC trains. Civil aviation was perceived in India as a mode of transport for only the rich. But now the change in perception among people as well as policy is happening,” he added. Gareon Conley Authentic Jersey