Gajapathi Raju flies in face of CIDCO deadline, says Navi Mumbai airport to take 8-9 years
It will take eight to nine years for the Navi Mumbai airport to be built, civil aviation minister Ashok Gajapathi Raju told FE. The minister’s statement is in direct contrast to the ones made by the Maharashtra government body City and Industrial Development Corporation (CIDCO), tasked with the pre-development work for the airport, which has repeatedly said that the airport will become operational by the end of 2019. For the record, the pre-development work is yet to be completed and the bidder that will partner CIDCO in constructing and maintaining the airport is yet to be finalised. “The capacity constraint at the current Mumbai airport is a concern for all of us but constructing the new airport will take at least four years if the development work takes place efficiently. If we take into consideration the time taken to build a greenfield airport in Hyderabad and Bengaluru, it was more than eight to nine years. More so, this airport will be based on a marshy land unlike Bengaluru and Hyderabad, hence it will take more time,” Raju said in the course of an interview. Speaking about the development of airports in the country, the minister said that R15,000 crore will be spent by the Airports Authority of India (AAI) towards this task in the next few years. According to him, the financial condition of debt-ridden state carrier Air India is a matter of concern and the prevailing condition is a kind of ‘debt trap’; some kind of financial reconstruction is the need of the hour to bring down the interest cost. At present, Air India has a total debt of R50,000 crore and an annual interest outgo of almost R4,000 crore. Thomas Steen Authentic Jersey
Nagpur Metro Rail’s solar power dream hits policy hurdle
The plans of Nagpur Metro Rail Corporation Limited (NMRCL) to meet 65% of its energy needs through solar power has hit a policy hurdle. The fate of the project now depends on Maharashtra Electricity Regulatory Commission (MERC). NMRCL’s petition will be heard by the Commission on January 17. Solarization is vital for the success of the Metro Rail project. The cost of MSEDCL power as per the Commission’s latest tariff order is Rs7.33 per unit. This is exclusive of fuel surcharge and electricity duty. On the other hand, NMRCL can get solar power at between Rs5 and Rs6 per unit. “If the electricity cost is low then the fares will be low leading to higher ridership. This will make the project viable and is therefore in public interest. Moreover, solar energy is green and will lead to lower pollution. Foreign lenders have readily granted a loan to the project because of this aspect,” a NMRCL official told TOI. NMRCL wants to go for solarization under state energy ministry’s solar roof top policy. The policy is mainly aimed at residential and commercial consumers and hence the maximum load permitted is 1MW. On the other hand, NMRCL’s solar generation capacity is 14MW and hence does not fit into the policy. NMRCL cannot go fully solar and needs MSEDCL’s power to meet the remaining 10MW load. Only the commission has the powers to consider NMRCL as a special case and grant exemption. MSEDCL though has promised not to oppose the petition. The solarization project has already been delayed due to heavy workload of the commission. “Our tender documents are ready since months. MERC did not accept our petition for two months saying that it was dealing with power tariff petitions of the power distribution companies. Now, we hope that it will decide on our matter expeditiously,” the official said. William Hayes Jersey
State sees strong demand for power in November
Power demand in Tamil Nadu had grown by over 30 per cent in November 2016 from the corresponding period last year, according to data compiled by the Central Electricity Authority (CEA). The data revealed that Tamil Nadu’s power requirement was 8,183 million units (MUs) in November 2016 as against the 8,180 MUs available. In November 2016, Tamil Nadu had a “peak demand” of 13,888 MW, which the State managed to meet. In the comparable period in 2015, the State’s power requirement was 6,273 million units and availability was 6,270 million units. In November 2015, “peak demand” was 12,154 MW, which was met, according to the CEA data. According to Elara Capital, a lower base has helped the southern States register strong growth in November 2016. “Demand in Andhra Pradesh and Karnataka was up 28 per cent each in November 2016 (vis-a-vis a contraction of 4 per cent and 2 per cent respectively in November 2015). Likewise, Tamil Nadu’s demand was up 30 per cent (as against a contraction of 6 per cent in the base year),” it added. The brokerage house also pointed out that so far in FY 17, Karnataka and Tamil Nadu have achieved 11 per cent growth each in power consumption, followed by Andhra Pradesh with 9 per cent. Recently, the Tamil Nadu Electricity Regulatory Commission gave the green signal for TANGEDCO to procure 850 MW of power for the next year (from February 1, 2017 to May 15, 2017). Quinton Dunbar Authentic Jersey
Sri Lanka faces threat of power crisis in 2017, says electricity regulator
Sri Lanka’s electricity regulator on Tuesday informed the Power and Energy Ministry that urgent steps must be made to buy new power plants, postpone maintenance work at the available power plants and increase rooftop solar generation to avoid a power crisis in the first quarter of 2017. The Public Utilities Commission of Sri Lanka (PUCSL) said that a successive failure of monsoon had caused very low hydro reservoir storage, less than 500 GWh, and the Commission’s recommendations were made to mitigate the impact of power shortages during the period from January to April 2017, Xinhua reported. The PUCSL said that the full availability of Lakvijaya coal plant, the country’s only coal power plant, was a key factor in January 2017. The PUCSL suggested to looking into the possibility of shifting any maintenance at the available power plants to avoid shutting down during the critical period January to April. The Commission further suggested the state owned Ceylon Petroleum Corporation to improve the fuel quality in order to get the maximum output from the plant. It was further suggested that CPC should supply fuel as per the requirement. The Ceylon Electricity Board was also suggested to take immediate action to purchase shortage in generation from available plants and the CEB and the Sustainable Energy Authority should “expedite connection” to start commercial operations under small scale generation on Standardized Power Purchase Agreements. Erik Johnson Jersey
In Delhi, no power tariff revision for the first time in five years
For the first time since 2011, power tariffs won’t be revised in Delhi. The tussle between AAP government and LG’s office over the appointment of Krishna Saini as Delhi Electricity Regulatory Commission chief has meant that tariffs will remain unchanged. Sources said discoms might file an appeal with the appellate tribunal, stating that the failure to revise the tariff was a violation of its guidelines and Delhi consumers could face stiff increases in the future to correct this anomaly. Tata Power Delhi recently filed a petition, seeking power purchase adjustment charges equivalent to a 2-3% hike in fuel bills for July-September 2016. BYPL and BRPL are yet to send their petitions. DERC is mandated to give discoms PPAC, according to the orders of the Appellate Tribunal of Electricity. However, it’s unclear how long it will take to process the petition. Sources said the lone DERC member, B P Singh, was passing its judicial orders, as the LG had nullified Saini’s appointment and directed AAP government to begin proceedings for hiring a new chairman. The government is yet to accept the decision and has taken the matter to court. Discoms have also made multiple representations on how static tariffs will affect them financially. They didn’t submit a PPAC in June because there wasn’t much variation in fuel costs to show. This time, they are seeking a hike, citing an increase in cost of gas and coal over the last few months. In 2011, the then Congress-led government had stopped DERC from announcing new tariffs. Bobby McCain Womens Jersey
Putin launches natural gas pipeline supply to Crimea
Russian President Vladimir Putin launched a natural gas pipeline linking Crimea to Russia’s gas pipeline system, which will allow the inhabitants of the peninsula to receive a continuous supply of gas. During the ceremony, Vladimir Putin said via video conference that this is another important outcome for the development of Crimea and its future, Efe news reports. He announced that two power plants will be built within the next two years to meet all the electricity needs of the peninsula’s inhabitants. The length of the natural gas pipeline is 358.7 km. Ukraine has not given up on retaking Crimea, which Kiev considers territory occupied by Russia, while Moscow says that Crimea inhabitants opted mostly to join the Russian federation through a referendum. DeSean Jackson Jersey
Mexico to raise gas price by 20 per cent
Mexico announced double-digit price increases Tuesday for gasoline and diesel, its latest move to deregulate the energy sector and open the key oil industry to private investment and foreign competition. From the first of the year, the maximum price of gasoline will rise by 20.1 percent and diesel by 16.5 percent, the finance ministry said. And that is just the beginning of the end for the country’s longtime fuel subsidies. From February 18, the price ceiling set by the government will be adjusted every 24 hours, the ministry said in new regulations published in the official government gazette. Then, from late March, “supply and demand will determine the price,” said the head of the National Organization of Petroleum Retailers, Jose Carlos Femat Romero. Market pricing will start with the northern states of Baja California and Sonora, and gradually be rolled out nationwide through the end of 2017, he told AFP. The move is part of a landmark energy reform by President Enrique Pena Nieto, who is trying to breathe new life into Mexico’s gigantic but stagnant oil industry. Pena Nieto signed the reforms into law in August 2014, ending a 76-year-old state monopoly on oil drilling and reopening the sector to foreign companies. State oil company Pemex had previously held a monopoly on gasoline and diesel sales and distribution. Finance Minister Jose Antonio Meade sought to persuade Mexicans that the shift to market pricing was not all bad news. “In the country’s history, gasoline has practically always gone up,” he said in a radio interview. “We are going to divorce the price of oil from fiscal and political considerations.” But the price increases are expected to fuel inflation. That, combined with the US Federal Reserve’s recent decision to raise its key interest rate, prompted Mexico’s central bank to hike its own interest rate two weeks ago for the second time in a month. Kyle Van Noy Authentic Jersey
IOC’s Mathura refinery despatches BS VI fuel for testing
IOC’s Mathura refinery has despatched BS VI high-speed diesel (HSD) to two auto companies to test viability and compatibility as part of its efforts to provide cleaner fuel for an eco-friendly environment. “Though the government has set a very stringent target of April 2017 for meeting BS IV and April 2020 for BS VI standard fuel quality, the Mathura refinery has completed the target ahead of the set deadline,” said S M Vaidya, GM, IOC Mathura Refinery. While Honda was supplied five barrels of BS VI standard HSD fuel, Mahindra & Mahindra Chennai received the same full one tanker (20 KL). Vaidya said: “BS VI standard HSD will contain only 10 PPM sulphur and motor spirit will be high standard also… since MS VI is also ready for testing, the refinery is having an interaction with automobile companies on this count.” He thanked Sanjiv Singh, Director Refineries, IOC, for helping complete the target ahead of the schedule. BS VI standard HSD and BS VI standard motor spirit, according to Vaidya, were prepared in the refinery without addition of any machinery. By October 2017, a new unit will go on stream at the refinery, where only BS VI standard HSD and high quality motor spirit will be produced on a mass scale. Expressing “time-bound commitment” of Indian Oil to provide required quantity of BS VI compliant HSD and MS fuel, he said it would enable automobile industries to re-design and test their engines with upgraded BS VI fuel in Indian climatic and road conditions. Interacting with reporters today, Vaidya felt that this would come as a moral booster for the entire automobile industry as oil companies are geared up to meet the target of BS IV and BS VI. Marcus Allen Womens Jersey
IGL may drop Rs 5,000 upfront deposit for piped gas
Looking to push up the conversion rate from liquefied petroleum gas (LPG) to piped natural gas (PNP) by domestic consumers, some of the natural gas distribution companies like Indraprastha Gas Limited (IGL) and Haryana City Gas Distribution Ltd (HCGDL) are considering waiving off the deposit amount of Rs 5,000 on every connection and replacing it with a rental of Rs 25-50 per month. While Haryana City Gas has yet to thoroughly study the financial implication of such a move, E S Ranganathan, managing director of IGL, told DNA Money that the gas company is likely to do away with the upfront deposit on every PNG connection in the Delhi-National Capital Region (NCR) soon. He said the plan has to be approved by his finance department and the Petroleum and Natural Gas Regulatory Board (PNGRB). It will not require the petroleum ministry’s nod. The IGL chief has even worked out the math of such a move. “What we are thinking is, suppose we charge as rent of Rs 25-50 a month, we can waive the Rs 5,000 paid upfront for each connection. This is anyway the customer’s money, which is returned when his service is disconnected,” he said. Ranganathan said currently IGL earns an interest of 6% on Rs 5,000 per year, which comes to Rs 300. He said this annual Rs 300 income per customer from the deposit could translate into a rent of Rs 25 per month. According to him, this will make it easier for new users to start using PNG, for which IGL has already laid the pipeline in areas under its jurisdiction. For instance, IGL, which has over 0.676 million customers in Delhi-NCR, has already spent aggressively on infrastructure to supply natural gas to domestic users, but in many areas, people were still not voluntarily shifting to PNG. Close to 0.25 million residents in these areas are still to make the switch; “there is a pipe reaching right till their homes, but since they have not opted for it, we have not connected it to their house”. Ranganathan feels one of the reasons for people not going in for the PNG connection was the upfront deposit. Initially, he tried to come around this problem by providing easier payment option of equated monthly installment (EMI) to customers but failed to make much dent with it. “When we went for EMI scheme of three installments of around Rs 1,500. People never accepted it. Now, we have introduced an EMI of Rs 500 per bill. This, too, is not working. It’s a human tendency. For instance, if you are paying Rs 800 per month and after shifting (to PNG), I suddenly give you Rs 700 bill for gas plus Rs 500 EMI, you will think I was spending Rs 800 and now I am spending Rs 1,200 per month and think it is expensive,” said IGL head. Rahul Chopra, CEO of HCGDL that distributes PNG in Gurugram, said his company will also evaluate the option and take a decision. He believes the monthly rental option was a more workable solution than deposit model to increase the use of PNG. “I think it is workable and will help increase the conversion rate (from LPG to PNG)”. Citing an example, he said that Haryana Gas had laid pipelines in front of many apartments in Gurugram, where conversion rate was barely 30-40%. “One of the reasons for this was high deposits. Also, many people do not opt for PNG because they are tenants. If there is monthly rent, then they can just take the connection and pay rent for it,” he said. Today, Haryana City Gas has 13 compressed natural gas (CNG) stations and 15,000 PNG domestic connections in Gurugram. Chopra said his company was targeting PNG connections of up to 0.1 million in the next few years. “Gurugram has a population of around 0.4-0.5 million and a 20%-30% penetration would help us break-even faster”. Mahanagar Gas Ltd (MGL), Gujarat Gas Company Ltd (GGCL) and others also take an upfront deposit for PNG connection and have not removed it yet. Clinton Portis Authentic Jersey
City Gas Distributors In A Sweet Spot
City gas distribution companies are poised to gain from rising crude prices and growing adoption of environment-friendly fuels. West Texas Intermediate crude has surged more than 17.6 percent since November 30, when the Organization of Petroleum Exporting Countries announced an agreement to cut production by 1.2 million barrels per day. “The OPEC decision will certainly benefit the city gas distributors,” Jal Irani, senior vice president of Edelweiss Financial Services told BloombergQuint on the phone. With the price of competing fuel, like petrol and diesel rising, the switch to much more economical CNG becomes viable. Jal Irani, Senior VP, Edelweiss Financial Services. Oil marketing companies have hiked prices of petrol and diesel twice since OPEC’s decision, and CRISIL Research expects the trend to continue in 2017. We expect the price of petrol to rise 5-8 percent and that of diesel by 6-8 percent over the next 3-4 months after decision by the OPEC. CRISIL Research Report In the first seven months of the financial year 2016-17, the consumption of natural gas in India grew around 8.5 percent. The demand for petrol and diesel rose 8.9 percent in the same period, while crude oil prices increased 22.2 percent. The growing demand translated into higher stock prices, with Indraprastha Gas Ltd. and Mahanagar Gas Ltd. outperforming the BSE Oil & Gas Index in the last six months. Mahanagar Gas listed on the stock exchanges on July 1. Climate Commitments Edelweiss Securities expects COP21 commitments adopted by 185 nations including India to also improve the prospects of city gas distributors. With widespread pollution across cities on one hand and COP21 commitments on the other, city gas companies are clearly poised for biggest gains. Edelweiss Securities Report At the 21st session of the Conference of the Parties in Paris last year, countries agreed to cut emissions in a bid to keep the global average increase in temperatures below 2 degree celsius. India has committed to generating at least 40 percent of its electricity from non-fossil fuels by 2030. The recent pollution control initiatives by the Delhi government also boosted demand. Indraprastha Gas, which gets all of its revenue from Delhi and the National Capital Region, saw its natural gas volumes grow by double digits in the last two quarters. The ‘Maharashtra City Taxi Scheme 2016’, which could make the use of liquefied petroleum gas or compressed natural gas mandatory for all taxis and radio cabs operating in the state, is expected to aid Mahanagar Gas, which runs gas distribution networks in Mumbai, Thane, and Raigad. The management told analysts in the earnings conference call that it expects the law to come into effect by February. The company has already signed gas supply agreements with Ola and Uber. The two taxi aggregators together have around 20,000 vehicles in Mumbai, and only 3,000-4,000 of them run on CNG, according to Edelweiss’ estimates. Mahanagar Gas will also experience a surge in volumes as new auto rickshaw permits get issued and more state-owned buses start using CNG. 15,000-17,000 additional auto permits in the pipeline implies bright volume prospects for MGL. Edelweiss Securities Report Virtual Monopolies: Above all, Indraprastha Gas and Mahanagar Gas have a virtual monopoly in their respective markets since the Petroleum and Natural Gas Regulatory Board allows five-year marketing exclusivity and 25-year network exclusivity to the winner of compressed natural gas networks. Even if the marketing exclusivity ends, new players will find it tough to break into the market, Ambit Capital said in a report to clients. It would be difficult for other players to get into city gas distribution given that building a compressed natural gas retailing network in a crowded city area and getting domestic allocations where the benefit proposition to the consumer is not quite robust. Ambit Capital Report Client Profile: Gujarat Gas Ltd., another city gas distributor, hasn’t seen the same demand growth due to its unfavourable sales mix. Indraprastha Gas and Mahanagar Gas have similar product profiles with compressed natural gas and pipelined natural gas accounting for 80-85 percent of sales, while Gujarat Gas caters more to industrial and commercial clients. In the second quarter, Gujarat Gas’ industrial gas volumes declined 12 percent. Unlike power and large industrial users where gas competes with coal/liquid-fuel, city distribution has unique advantages of convenience, competitive costs and regulatory support. Ambit Capital Report With pollution concerns on the rise, more industrial and commercial establishments are expected to shift to natural gas. That, in turn, will benefit not only Gujarat Gas but also Indraprastha Gas and Mahanagar Gas. “City gas distribution companies look like a good bet because it gets consumed on the CNG side and the PNG side as well, and the requirement will persist going forward,” Mayuresh Joshi, a fund manager at Angel Broking told BloombergQuint on the phone. “With the cost of gas coming down and new distribution centres opening, the longer run benefits still hold.” Phil Kessel Authentic Jersey