Acquisition of loss-making stakes worries ONGC officials
The series of acquisitions of loss-making stakes from the private players in the Krishna-Godavari Basin by the Oil and Natural Gas Corporation (ONGC) have remained a major cause for concern among the officials who have been associated with the public sector major for several decades and played a key role in its successful expansion. They are terming the deals as “forcible purchases” by the ONGC and seeing it as the result of intended involvement of politicians to benefit the private players. Cairn India and the Gujarat State Petroleum Corporation (GSPC) have already offloaded their assets to the ONGC, while the buzz is that another corporate giant is to follow suit. According to highly placed sources, the corporate major is all set to transfer its assets in the KG Basin to the ONGC. Deliberations are in progress at the high-level with regard to the price fixation and the very recent GSPC acquisition deal has given a boost to those negotiations. The ONGC, which has already been developing the Ravva oil and gas field in the KG Basin in association with Cairn India, is now acquiring a major share in the GSPC’s Deen Dayal West field block located near Mallavaram, about 35 km from here. Despite severe criticism from different quarters, the Central government has prompted the firm to acquire 80 per cent participating interest of the GSPC along with operatorship rights, at a purchase consideration of $995.26 million. The code of conduct is deterring the officials from expressing their views in public and their efforts to discourage the ONGC Board from clinching such deals are in vain. “Decisions on acquisitions should be taken by the board of directors basing on expert opinion, but not by the political leaders. The forcible acquisitions of loss-making assets will have an adverse impact on the overall performance of the ONGC very soon,” a senior official associated with the ONGC has told The Hindu. “Assets belonged to the private and corporate majors in the KG Basin are nothing but the off-shoots of the ONGC, as we are the foremost explorers of oil and natural gas here. After thoroughly enjoying profits from the assets, the firms are offloading them to the ONGC for a maximum price following drop in the revenues,” another senior official has pointed out. “The deal in progress is much bigger than that of the Cairn India and the GSPC and it may be pushing the ONGC into heavy losses soon,” lamented another official, who has been transferred from the KG Basin. Though there is an instance of the ONGC turning the fortunes for the loss-making Mangalore Refineries and Petrochemicals Limited following its acquisition, the officials term it as “rarest of the rare” case. Pittsburgh Steelers Authentic Jersey
Petronet LNG: Rising LNG prices a concern
Rising spot prices of liquefied natural gas (LNG) could spoil the party for Petronet LNG (Petronet), which has been a favourite of the street post delivering healthy volumes in the latest September quarter. The fact that spot LNG prices are trading closer to its two-year high levels could weigh on LNG demand in India, believe analysts. This in turn could impact Petronet’s volumes as well as financial performance going ahead. Rising LNG prices reduces its competitiveness versus other fuels such as Naphtha and have already started hitting consumption demand. LNG consumption from the power sector, for instance, has declined 41 per cent on a month-on-month basis in October. “With the restart of Dabhol capacity post monsoons, ShellHazira’s additional freed up capacity and imminent commissioning of the Mundra LNG terminal in FY18, near term upsides to capacity utilisation for Petronet’s Dahej terminal is constrained, in our view,” says Amit Rustagi, analyst at IDFC Securities. Notably, most analysts covering the stock are factoring in 100 per cent capacity utilisation at Petronet’s Dahej terminal in FY18, which could now be at risk. With gains of about 59 per cent in the past one year, the Petronet scrip has been on a roll so far and commands rich valuation of 17 times FY18 estimated earnings. The valuation does not adequately factor in the risks emanating from rising spot LNG prices, and hence is susceptible to downsides from here on. On the flip side, ramp up in use or pay contracts could provide some support to Petronet’s earnings and cap the earnings downside thereof. Amongst Petronet’s key expansions, its Kochi pipelines should take another two years at least to complete and could see lower losses once Bharat Petroleum’s Kochi refinery ramps up. Petronet expects its Gorgon (Western Australia) facility to witness full ramp up in July 2017. Analysts at Credit Suisse though believe that given that Gorgon prices are 50-60 per cent higher than spot LNG it will be challenging to sell in the Indian market. In this backdrop, investors would keenly watch out for management commentary on the demand trends and the outlook from here on. The use or pay contracts lends visibility to Petronet’s earnings and drive expectations of 22-25 per cent compounded annual growth in its earnings over the next couple of years. These expectations, however could be toned down to factor in the recent weakness in consumption demand and weigh on Petronet’s stock price and valuations, believe analysts. A.J. Green Womens Jersey
Rajasthan exempts electricity duty for solar rooftop units to encourage renewables
In what would further encourage investments in renewable energy projects, the state government has exempted electricity duty of 40 paise per unit for rooftop solar and captive units. The decision is expected to help Rajasthan reach closer to 2300 MW rooftop solar capacity by 2022, a target given to it by the Centre. The duty cut is expected to have a positive impact on the new capacity lined up. Recently, Rajasthan Renewable Energy Corporation (RREC) issued rate contract order for 25 MW rooftop plants and empaneled companies to design, supply and install these projects. People interested to put up rooftop plants can reach these vendors who are also required to guarantee 5 years of maintenance. “These projects enjoy a subsidy of 30% provided by the government. Capacity of these plants vary from 1 kWh to 500 kWh. The 2300 MW target given to Rajasthan by the Centre for solar rooftop is steep, but we have all the necessary policies in place to achieve that,” said B K Doshi, managing director, RREC. He said tenders for another 5 MW has been issued on Friday and the projects will be come up on the government buildings in the divisional headquarters of the state. “We have adopted Resco model for the 5 MW under which the consumer can install a solar power plant and not pay anything upfront. A power purchase agreement is signed between the installer and the consumer. The installing company will make the investment and the consumer will pay for the power,” added Doshi. Rooftop has received a fillip after the Rajasthan announced net-metering policy by which an individual can use the power he o r she generates and the surplus can be fed into the discom’s grid. The state already has an installed rooftop capacity of 47 MW. “The duty exemption will create a lot of momentum in the rooftop segment by encouraging individuals and institutions to set up their own plants. They can actually cut down on power costs while contributing to the green energy,” said Sunil Bansal, promoter of city-based Diwakar Renewable & Infra Pvt Ltd. Trevor Daley Womens Jersey
MPCB ignores norms, allows new Koradi unit too sans flue gas desulphuriser
The Maharashtra Pollution Control Board (MPCB) continues to neglect norms set by its governing body — the ministry of environment, forest and climate change (MoEFCC). The Maharashtra State Power Generation Company Limited (Mahagenco) was given permission to start operating two new units at Koradi thermal power expansion project some time back, ignoring the lack of flue gas desulphuriser (FGD), which is mandatory. Now, permission has been given to start the third unit too, thus permitting operation of entire project without the mandatory FGD. The Koradi expansion project comprises three units with installed generation capacity of 660MW each for a total of 1,980MW. The project is situated on the city’s outskirts. Citizens in Godhni, Nari, Nara, Mankapur, Jaripatka and adjoining areas are complaining of a lot of smoke emanating from the projects regularly. However, energy minister Chandrashekar Bawankule, who also resides at Koradi, has reportedly pressurized MPCB to permit operation of new units at Koradi without FGD. Bawankule did not respond to TOI’s call and message.Mahagenco officials said process to install FGD has started. The MPCB’s consent appraisal committee, headed by additional chief secretary Satish Gavai, met on December 16 to permit Mahagenco to operate unit no. 10 at Koradi expansion project. “Consent to unit no. 9 was given on condition of installation of FGD by April 30, 2017. Industry shall obtain clarification/amendment in environmental clearance regarding installation of FGD from MoEFCC within three months by March 31, 2017,” the committee said. The environmental clearance issued by MoEFCC to the project on January 4, 2010, said that Mahagenco was supposed to install FGD in first of the three new units and start operations. Installation of FGD in remaining two units was to depend on results obtained from the first unit. Thermal power stations emanate sulphur dioxide (SO2), which can lead to acid rain in adjoining areas. Prolonged exposure to high SO2 level can cause diseases like cancer. Therefore, FGD, a pollution control equipment installed in thermal power plants to reduce SO2 content in emissions, was made mandatory. “Sufficient space has been left at all three units to install FGD. Process to appoint consultant for planning and executing FGD has been started, “ one official said. The official further adds,” FGD is not at all required at the plant. Indian coal contains 0.5% sulphur, which is quite low. Still, request has been made to MoEFCC to extend time limit for FGD installation up to December 2017, which is as per new notification. Ambient air quality norms at the project are within the provided limits.” Matthew Lorito Authentic Jersey
NTPC’s total installed capacity increases to 48,028 MW with Kudgi unit commissioning
India’s largest power generator’s total installed capacity has increased to 48,028 Megawatt with commissioning of its 800 MW unit at Kudgi Super Thermal Power Station in Karnataka. In a statement today, NTPC said this is the first 800 MW unit commissioned by NTPC. The Kudgi power plant will have a total capacity of 4,000 MW comprising three units of 800 MW in the first stage and two units of 800 MW in the second stage. As on today, NTPC has 19 coal-based, seven gas-based, nine solar, one hydro and nine subsidiaries or joint venture power stations. NTPC said it has capacity of over 23,000 MW under implementation at 23 locations across the country including 4,300 MW being undertaken by joint venture and subsidiary companies. The company further said it has a vision to be the world’s leading power company, energizing India’s growth and plans to become 130 Gigawatt company by 2032.
Sukhbir Badal lays foundation of Rs 600 crore ethanol refinery in Punjab
With elections round the corner and the model code of conduct expected to be enforced soon, Punjab deputy CM and SAD president Sukhbir Badal and his Union minister wife, Harsimrat Kaur Badal, laid the foundation stone of a Rs 600-crore, seocnd-generation ethanol bio-refinery at Tarkhanwala village in Bathinda. The two SAD heavyweights conducted the state government even after Union minister of state for petroleum and natural gas Dharmendra Pradhan could not make it to the event. Pradhan addressed the event through a video conference. To produce 100 kilo litres of ethanol every day, the plant will be using 400 metric tonnes of bio mass, including farm stubble. The SAD-BJP alliance turned the official function into a political rally, as BJP Bathinda district president Mohit Gupta, SAD’s Bathinda Rural candidate Amit Rattan, Sukhbir, and Harsimrat asked people to give another chance to the SAD-BJP tie-up, while speaking at the event. Harsimrat had on Saturday inaugurated a skill centre at Industrial Training Institute, Bathinda, and upgraded six government high schools to the senior secondary level. Marcus Foligno Jersey
PM Modi kicks off Rs 1.06-lakh crore worth infrastructure projects for Mumbai
Prime Minister Narendra Modi today laid foundation stones of many key infrastructure projects, including the country’s longest sea bridge and two metro lines in the city, entailing investment of over Rs 1.06 lakh crore. “Developmental works of over Rs 1.06 trillion are getting started in a single city at a single event. This will be a big milestone in the city’s history,” Modi said at a public rally at the MMRDA grounds in suburban Bandra-Kurla Complex. He kick-started progress on the much-delayed and ambitious projects, months ahead of local elections to the nation’s richest civic body. Projects include 22.5-km Mumbai Trans Harbour Link that will connect the city’s eastern suburbs with the mainland across the harbour, via a 16.5 km sea bridge and a viaduct. The Rs 17,843-crore project, for which multiple consortia have shown interest, will connect Sewri in central-east Mumbai with Nhava Sheva across the harbour which is close to the nation’s largest container port JNPT. To be completed by 2019, MTHL will also help increase connectivity to the proposed Navi Mumbai international airport. Modi also laid the foundation stones of two new metro projects — the 23.5-km DN Nagar-Bandra-Mankhurd Metro-2B corridor and the 32-km Wadala-Ghatkopar-Thane-Kasarvadavli Metro-4 corridor– through a remote control at the event. The two metro lines, part of a plan to have a 200-km metro network across the Mumbai metropolitan area cutting through densely populated suburbs serving as feeders for the island city, will be built at an investment of Rs 10,986 crore and Rs 14,549 crore, respectively. Both the metros will run 6-coach trains and is expected to carry 1,800 commuters per trip each. The Mumbai Metropolitan Region Development Authority is aiming to reduce the overcrowding in suburban local trains run through these metro projects and also reducing the vehicular traffic woes. The Prime Minister also laid the foundation stone for multiple works to be carried out as part of the third phase of the Mumbai Urban Transport Project with an investment of Rs 52,000 crore across the megapolis. Major among these are suburban networks including two more lines between Virar-Dahanu Road, Panvel-Karjat double line suburban corridor and trespass control at 22 locations. Modi also laid the foundation stone for flyovers to ease traffic congestion at critical spots which include two flyovers at Bandra’s Kalanagar Junction. He also laid the foundation for a Rs 3,600-crore grand memorial for Shivaji Maharaj, the 17th century warrior king, off the city coast. Authentic Jersey
Something is lacking, Raju tells Air India staff
Sending out a stern message to Air India staff, Civil Aviation Minister Ashok Gajapathi Raju said something is lacking when it comes to commitment shown by them, compared with rival airlines. While acknowledging that Air India, which turned operationally profitable last fiscal, has “done better”, the Minister emphasised on the need to ensure more cohesiveness at the national carrier. Raju, who has been generally supportive of Air India, is of the view that the carrier has definitely done better but there is always scope for improvement. “The cohesiveness still has to be built in (at Air India)…you have the advantage of different types of airlines, competition is there,” Raju said in an interview. “Commitment shown by some of their staff and the commitment shown by Air India staff — there is still something lagging.” It is a good airline and has served the country well, he noted, but “see, everywhere job is assured if that institution is there. If the institution goes, what happens to your job?” “Everyone will wish them well. Its financial books are bad and it needs to improve on. They have to develop strategies. They are on the right track,” he added. Johnny Hekker Authentic Jersey
Infra Ministries to gauge value of big projects in FY18
Planning to cash in on smart city bonanza by buying a property near a new metro line or highspeed rail corridor? It won’t come cheap now. Starting next fiscal, the government will tap into the premium that public investments generate for private landowners. The government looks set to initiate value capture financing (VCF) for all infrastructure projects in 2017-18. According to sources, the policy will be formally launched by Prime Minister Narendra Modi in February next year. The public financing tool, which is popular the world over, is based on the logic that the government makes large investments in public infrastructure, leading to rapid economic development in those areas, including higher land prices. A value capture financing tool would mean tapping into this increment through additional taxes and then using finances to fund future infrastructure projects in the same area. The move will require all infrastructure ministries to first identify the area of influence, which would not only include the actual project area, but also where the project would have an impact. Then the ministry would make a value impact assessment and understand how much financial value the project would generate over the next decade or two. These studies would be a part of the detailed project report (DPR). The infrastructure ministry would then need to identify a VCF tool and then initiate consultations with the state government. An MoU would be signed between the Centre and the state government and urban local body (if present). The MoU would include the ratio in which funds collected from application of VCF tool would be shared. The funds collected would be put aside in an escrow account. Ben Chiarot Jersey
Aviation PSUs to be rated against set goals in new review system
The aviation ministry is to start reviewing the performance of public sector undertakings (PSUs) under its aegis on a balance scorecard methodology, the favoured form in private enterprises, starting next month, doing away with the conventional ways of reviewing PSU performance. “We are trying to institute a disciplined performance management system using the balance scorecard methodology. Over the last three months we have worked with each of the Public Sector Undertakings (PSUs) to develop a balance scorecard that provides a comprehensive assessment of short-term and longterm performance. This will be reviewed by the ministry on a monthly basis,” minister of state for aviation Jayant Sinha told ET. Under the balanced scorecard methodology, an organisation’s performance is monitored against strategic goals on the basis of a few listed criteria. In this case, all PSUs under the aviation ministry will be reviewed under 8-10 criteria. From now on, the ministry, which used to measure Air India’s on-time performance, will also review factors leading to it – like aircraft availability, seasonal factors and other reasons leading to OTP. The new review model has been suggested by Sinha, an investment banker turned politician. The first review of all three PSUs under the ministry — Air India, Airports Authority of India (AAI) and Pawan Hans Helicopters — will be done by Union Aviation Minister Ashok Gajapati Raju and Sinha in January next year. An Air India official explained that this move will help in simplifying a lot of things and surely help improve “The personnel department of the airline had made a format for a similar kind of review plan a couple of years ago but that was never implemented. This initiative of the ministry will help the airline in increasing its efficiency in the long run,” a senior airline executive, who did not want to be identified, added. The official said there are a lot of instances when poor coordination between two departments has led to inefficiencies. “While the engineering department has to provide planes, the commercial department has to fill planes with passengers. Now, a slight coordination glitch within the two departments has the potential to impact operations badly. With the ministry reviewing it, it will improve coordination between departments and improve efficiency.” the official added. Carlton Fisk Womens Jersey