Airline industry to post record $35.6 billion in 2016
The global airline industry will post a record profit of $35.6 billion in 2016, the International Air Transport Association (IATA) has said. This will be the highest absolute profit generated by the airline industry. IATA, which represents some 265 airlines comprising 83% of global air traffic, expects the airline industry to make a net profit in 2017 of $29.8 billion. “Airlines continue to deliver strong results. This year we expect a record net profit of $35.6 billion. Even though conditions in 2017 will be more difficult with rising oil prices, we see the industry earning $29.8 billion. That’s a very soft landing and safely in profitable territory. These three years are the best performance in the industry’s history—irrespective of the many uncertainties we face. Indeed, risks are abundant— political, economic and security among them. And controlling costs is still a constant battle in our hyper-competitive industry,” said Alexandre de Juniac, IATA’s Director General and CEO. “We need to put this into perspective. Record profits for airlines means earning more than our cost of capital. For most other businesses that would be considered a normal level of return to investors. But three years of sustainable profits is a first for the airline industry. And after many years of hard work in restructuring and re-engineering the business the industry is also more resilient. We should also recognize that profits are not evenly spread with the strongest performance concentrated in North America,” said de Juniac. Haason Reddick Authentic Jersey
Delays dog infra projects, cost overrun at Rs 1.47 lakh cr
A combination of factors including delay in regulatory approval, lack of funds and land acquisition issues are taking a toll on 115 mega infrastructure projects, which face a cost overrun of Rs 1.47 lakh crore. The projects in question, each worth Rs 1,000 crore or more, are part of a total 339 across sectors such as power, railway and roads that were examined by the Statistics Ministry in August 2016. “The total original cost of 339 projects was about Rs 10,91,090.86 crore and the latest reported anticipated completion cost is 12,38,844.26 crore, which reflects an overall cost overrun of 1,47,753.40 crore (13.54 per cent of the original cost),” said the Flash Report on Mega Projects for August 2016. “During the last month (July 2016), the overall cost overrun for 329 projects was Rs 1,47,339.86 crore (14.19 per cent of the original cost).” As per the report, the expenditure incurred on these till August 2016 stood at Rs 5,17,080.79 crore. Of the 339 infra works, 115 have seen a cost bump-up, which worked out to 114.13 per cent, while in July, it was 108.50 per cent. However, the number of projects reporting inflated cost fell to 33.92 per cent in August, from 34.95 per cent in July, it added. According to the report, the factors at work as reported by implementing agencies are delay in land acquisition, forest clearance, supply of equipment, funds constraints, geological surprises, problems in setting up equipment, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilisation by the contractor, Maoist issues, legal cases and contractual hurdle and law and order, among others. During the month under review, of 339 projects, 122 are delayed with respect to the original schedule and 7 have reported additional delay. In August 2016, there are 116 projects that overshot schedule by more than 6 months and 113 with a higher cost of more than Rs 100 crore, and 45 projects have both time and cost overruns of more than 6 months and over Rs 100 crore, respectively. The report further stated that out of the 339, 3 projects are ahead of schedule, 74 on schedule and 122 delayed. A total of 115 projects reported a cost spike and 46 saw both time and cost overrun with respect to their original project schedule. It has been observed that the project agencies shy away from reporting revised cost estimate and commissioning schedule for many projects, which suggests that the time and cost overrun figures may have been under-reported. Jonathan Quick Womens Jersey
NHAI’s compensation for toll revenue loss insufficient: ICRA
Road regulator NHAI’s decision to give relief on interest cost and operational expenses is a welcome step but the compensation is insufficient as it does not cover debt repayment obligation, ratings agency ICRABSE -0.33 % said. Post demonetisation of currency notes of Rs 500 and Rs 1000, government suspended user fee collection on National Highways with effect from November 9 which went on till December 2 (midnight). “NHAI’s plan to provide immediate relief by covering 90 per cent of interest cost and O&M expenses (lower of actual and projected at the time of bidding) for the period during which tolling is suspended is a welcome move, however, the compensation does not cover the debt repayment obligation,” ICRA said. The proposed compensation mechanism based on Operations and Maintenance (O&M) and interest costs, could lead to disputes with developers given the huge revenue loss for them, it added. “Given that the revenue loss is greater than Rs 1 crore in most of the BOT (Toll) projects and even in terms of the net realisable fee, it is around 6.6 per cent (24/365*100), some of the developers want Clause 41 to be invoked in this case,” ICRA Vice President Shubham Jain said. Under this, NHAI is obligated to place the concessionaire in the same financial position as it would have enjoyed had there been no such change in law. In which case, the clause also provides for cash compensation for revenue loss in order to protect the net present value of the cash flows to the developers, he added. Classifying the temporary suspension of toll collection as a political event under force majeure, the NHAI plans to provide compensation to the extent of 90 per cent of interest cost for the 24-day period, only to the extent of the interest accrued on principal amount of debt provided by senior lenders for financing the total project cost (or the NHAI-approved refinancing package as the case may be), Jain said. Interest on any top-up loan availed by the developers will not be considered, he added. Unlike annuity road projects, where principal repayment falls due on semi-annual basis (in sync with semi-annuity payments from authority), majority of the toll road projects have monthly debt-repayment frequencies, he said. “With only interest cost and O&M expenses getting compensated, the compensation will be inadequate from the debt servicing point of view, unless the project has debt service reserve account or other cash reserves to fall back on,” Jain added. National Highway Authority of India (NHA) has suffered an income loss of around Rs 1,238 crore due to suspension of toll collection on highways till December 2 post demonetisation. Average toll collection per day is Rs 51.59 crore from fee plazas under NHAI, and taking into account the exemption till December 2, the income loss to NHAI due to suspension of toll collection on highways is around Rs 1,238 crore. P.K Subban Jersey
Road transport and highways ministry seeks 50 per cent more funds for next year
The road transport and highways ministry is seeking a budgetary allocation of Rs 86,000 crore for the next fiscal year to fund its highway expansion plan in line with the government’s plans to boost public spending and create more construction sector jobs. The amount sought from the finance ministry is almost Rs 29,000 crore, or about 50%, higher than what the roads ministry had received in the last budget. Most of this grant would be used for the government’s programme to construct greenfield economic corridors mostly as expressways, a ministry official said. Almost 44 such economic corridors have been lined up to connect ports, backward areas and several district headquarters to existing highway networks. “The target for the next financial year would be to construct around 15,000 km of roads,” the official said. “This year we could do around 9,000 km, which is a little less the target for current fiscal.” The roads ministry has a target of constructing 10,000 km of highways this fiscal. Road construction pace has picked up this year to reach an all-time high of 27 km per day, which the ministry expects could be raised to over 30 km a day in the next couple of months as construction clearances for several new projects have already been received. The official also said the ministry would raise money through National Highways Authority of India (NHAI) bonds as well. However, the amount is yet to be finalised. Chris Conte Jersey
Airlines seek clarity on pilot certification while leasing foreign-registered aircraft
India’s airlines have asked the Directorate General of Civil Aviation (DGCA) to provide clarity as per new guidelines on pilot certification requirements when foreign-registered aircraft are leased and operated in India. “Currently, the only way to operate foreign-registered aircraft in India is to wet lease them, which means the pilots and crew come with the aircraft. Also, wet leases can only be done for a limited period,” said an executive who heads aircraft purchase and financing at an Indian low-fare carrier. Wet lease entails the hiring of an airline crew along with a plane. In dry lease, which is more prevalent, crew are not part of the contract. The new rules proposed by the regulator will enable operators to import foreign-registered aircraft and operate them on foreign registration with Indian crew. This will make the aircraft leasing environment user friendly, the civil aviation ministry said in November. “The DGCA’s new guidelines pave the way for us to also bring in foreign aircraft on dry leases which me ans only planes and no foreign crew need to be leased.It’s a great step, but there is no clarity on what certification the pilot flying these planes should have. Should he or she have certification of the aviation authority from the country where the aircraft is registered,” the executive said. Currently , any aircraft that is being brought to India has to be first registered with the local regulator. The rule has been seen as a hurdle in taking planes on lease by airlines at a time when India is pushing for increased regional air connectivity . Exemption from this rule will make it easier for lessors to take back their aircraft in case of a dispute with the airline operating the aircraft. Hence, the step may encourage them to formulate easier leasing contracts with lower rentals. The proposed guidelines are to help carriers under the new regional aviation policy aimed at connecting small cities and towns. “Operation of foreign registered aircraft are ideal and convenient for startup airlines, when exploring new routes or during seasonal fluctuations and sudden peaks in demand,” the new rule says. Jaleel Scott Authentic Jersey
Dharmendra Pradhan Launches Customer Awareness Campaigns To Educate Customers About Cashless Transactions At Pumps
Minister of State (I/C) for Petroleum & Natural Gas Dharmendra Pradhan too launched Customer Awareness Campaigns for digital transactions at petrol pumps, the recent ones being at the auto Care Centre, a flagship HPCL Retail Outlet at Niti Marg, New Delhi and also at BPCL Outlet at Moti Bagh, New Delhi. Digital awareness campaigns to educate people about cashless transactions is clearly the flavor of the moment across the nation. Digital awareness campaigns to educate people about cashless transactions is clearly the flavor of the moment across the nation. The Customer Awareness Campaign focuses at spreading digital awareness and facilitating the common man to use Cashless payment options during day to day transactions. With the introduction of Cashless payment options like Credit & Debit Cards, POS terminals, e-Wallet options and Loyalty Cards at Retail Outlets, the campaign reinforces the fact that convenience lies in being cashless in today’s time. The various digital payment solutions available to the general public, were also showcased. Speaking on the occasion, Sh. Dharmendra Pradhan said that the campaign will fulfill the objective of moving towards digital transactions. Transition will be towards less cash and then towards cashless. For this purpose, all service providers have been brought on board, and a MoU has been entered with Common Service Centers (CSCs) of Ministry of Electronics and Information Technology, who will be deploying trainers at Oil Marketing Companies’ Retail Outlets across the country to train the general public on use of various Digital/Cashless payment modes and to promote them. Tie-ups have been done with Public sector banks, Paytm, Mobikwik, Oxygen, Citrus, Olamoney, Ideamoney, Jiomoney, Airtel money, Vodafone MPS, Freecharge etc. In one month all retail outlets in Delhi will be covered under the customer awareness cum training programmes, and subsequently it will spread to all the ROs across the country. Sh. Dharmendra Pradhan said that in the first phase, all Retail outlets numbering more than 53 thousand in the country will be covered in the campaign which will be further expanded to cover Gas distributors, LPG stations, bottling plants and other establishments. He said that Petrol pumps will not provide fuel through cashless transactions but also dispense cash. So far, 3413 retail outlets have been dispensing cash and they have dispensed Rs 63.55 Crore so far through PoS machines against swiping of debit cards. He said that almost 99% ROs in Delhi have PoS machines. Task force have been set up to look into the expansion of cashless services, overcome the hurdles in the path, facilitating such services through feature phones also, and exploring ways to undertake such transactions in offline mode. Today’s Customer Awareness Campaign for Digital transactions is yet another Consumer-empowering initiative launched by MOP&NG and a step forward promoting the vision of #CashlessEconomy of our Hon’ble Prime Minister, Sh. Narendra Modi. Teemu Pulkkinen Authentic Jersey
SECI Launches Largest Rooftop Solar PV Tender of 1 GW for Government Sector
As a step towards fulfilment of the Government of India’s target for installation of 40 GW rooftop solar power plants by the year 2022, Solar Energy Corporation of India (SECI) has launched a tender of 1000 MW capacity for development of grid-connected rooftop solar capacity for Central Government Ministries/Departments. This is the largest rooftop tender launched by SECI and is expected to give a big boost to the hugely potent rooftop solar power generation segment. The 1000 MW tender, one of the largest globally, is a move to rapidly escalate rooftop solar capacity in the country,and comes in quick succession to SECI’s earlier tender of 500 MW capacity, targeting buildings in the residential/institutional and social sectors. SECI is the leading PSU in the rooftop solar segment, and has already commissioned over 54 MW capacity of rooftop solar projects under multiple government schemes. The 1000 MW tender is especially targeted at utilising the numerous buildings of the Central Government Ministries/Departments. The highlight of this tender is its innovative ‘Achievement-Linked Incentives scheme’ wherein the incentives in terms of capital subsidy shall be provided on the basis of performance achieved by designated Ministries/departments against their committed targets in the given time span. In this scheme the Grid connected rooftop solar systems shall be installed with the financial assistance for MNRE in the form of Incentives. The power generated from the systems shall be used for meeting the captive requirement of the buildings and the surplus power, if any, shall be fed to the grid under the net-metering arrangement of the respective State. Ministry of New & Renewable Energy (MNRE) has allocated 21 Ministries/ Departments to SECI interalia Ministry of Human Resource Development, Ministry of Finance, Ministry of Urban Development, Ministry of Parliamentary Affairs etc. The ministries have shown great enthusiasm and have assured their commitment with submission of “Green Energy Commitment Certificates” to MNRE for implementation of Grid Connected SPV power plants at the roof of their offices/other buildings etc., as part of their Clean energy initiatives and achieving National target of alleviating Global Warming. Various ministries/department have been sensitized by MNRE/SECI for implementation of Grid connected rooftop systems. MNRE has also collated the demand of the various Ministries/departments for implementation of the systems. Based on the indicative list of sites provided by MNRE and various interested Ministries, SECI is carrying out a potential assessment which shall be provided to the solar PV developers (SPD). The SPDs will be selected state-wise through national competitive bidding process and provision of one Rate / state shall be kept in the scheme. The 1000MW capacity will be distributed between CAPEX and RESCO modes of implementation in the ratio 30/70. In this scheme, SECI in consultation with MNRE, is also introducing a Payment Security Mechanism which is apparently a first in the history of the rooftop programme, with the assurance of all rightful payments to the SPDs under RESCO model. SECI has also tied up with Financial institutes (FIs) Banks such as IREDA and SBI for disbursement of loans with Special Discount Packages to be offered by these institutions to the developers. Mike Cammalleri Authentic Jersey
ONGC awaits DGH nod for $5 billion KG-D5 gas development plan
Oil and Natural Gas Corp is awaiting nod of upstream regulator DGH to commence investing $5.07 billion in bringing to production oil and gas discoveries in its Bay of Bengal block KG-D5. About a year back ONGC submitted to the Directorate General of Hydrocarbons(DGH) a field development plan (FDP) for bringing to production 10 oil and gas discoveries in KG basin block KG-DWN-98/2 (KG-D5), which sits next to Reliance Industries flagging KG-D6 fields. DGH so far has not approved the FDP, an official said. A meeting of the block oversight panel, Management Committee (MC) headed by DGH, has been called next week to review the FDP, he said. “Without waiting for the approval, tendering for long-lead items has started to ensure the 2019- 20 schedule for starting production is not missed,” he said. The board of ONGC had on March 28 approved an investment of $5,076.37 million for developing Cluster-II discoveries to flow natural gas from from June 2019 and oil by March 2020. “While the FDP was submitted a year, the board gave investment approval in March after the government allowed higher rates for deepwater discoveries, thus making KG-D5 viable,” he said, adding since then DGH nod is awaited. In 2014, ONGC had announced plans to start gas production from 2018 and oil by 2019 but a final investment decision was made contingent upon government approving a remunerative price for the deepsea block as the current rate of $2.5 per million British thermal unit was unviable. The government in March announced a new pricing formula for difficult areas that would at current prices give developers just about $6 per mmBtu price. KG-D5 gas fields are viable at that price, he said. The 7,294.6 sq km deepsea KG-D5 block has been broadly categorised into Northern Discovery Area (NDA – 3,800.6 sq km) and Southern Discovery Area (SDA – 3,494 sq km). The NDA has 11 oil and gas discoveries while SDA has the nation’s only ultra-deepsea gas find of UD-1. These finds have been clubbed in three groups – Cluster-1, Cluster-II and Cluster-III. Gas discovery in Cluster-I is to be tied up with finds in neighbouring G-4 block for production but this is not being taken up currently because of a dispute with RIL over migration of gas from ONGC blocks, the official said. From Cluster-II a peak oil output of 77,305 barrels per day is envisaged within two years of start of production. Gas output is slated to peak to 16.56 million standard cubic meters per day by end-2021. Cluster-2A mainly comprises of oil finds of A2, P1, M3, M1 and G-2-2 in NDA which can produce 77,305 bpd (3.86 million tonnes per annum) and 3.81 mmscmd of gas. Cluster 2B, which is made up of four gas finds — R1, U3, U1, and A1 in NDA — envisages a peak output of 12.75 mmscmd of gas, the official said, adding that peak output is likely to last 7 years. Cluster-3 is the UD-1 gas discovery in SDA in ultra deepsea that poses technological challenges. Cody Kessler Womens Jersey
‘Levy on airlines can disrupt competitive conditions’
Describing India as among the “most open” aviation markets, international airlines grouping IATA’s chief Alexandre de Juniac has said the country stands to benefit from the regional air connectivity plan but imposing levy on carriers can disrupt competitive conditions. While being appreciative of the Indian government putting in a “consistent plan” for the aviation sector, Juniac also emphasised the need to have the right infrastructure and lower costs for the airlines. “In general, we are not favouring levies because we think that it is a disruption or disturbance in the competitive conditions,” Juniac told in an interview here. His comments come against the backdrop of the government levying up to ?8,500 per flight on major routes from December 1 in order to fund its ambitious regional connectivity scheme. The scheme — UDAN (Ude Desh ka Aam Naagrik) — seeks to connect small cities by air as well as make flying more affordable for the masses. “Regional connectivity is good for air traffic but using levy, tax or cross subsidy system, let’s name it as it is, is not convincing,” he said, adding that it is being opposed by many operators as something which would not be efficient. To provide viability gap funding for the flights operated under UDAN, a levy would be imposed on every departure on major air routes such as New Delhi, Mumbai, Chennai, Hyderabad, Bengaluru and Kolkata. Under the scheme, fares for one-hour flights would be capped at ? 2,500. Brandon Montour Jersey
Aerospace and aviation industry should double turnover in 5 years: Ananth Kumar
Considering the huge potential the aerospace and aviation industry holds, the country should double its turnover in the next five years, said Union Minister Ananth Kumar. Addressing a conclave organised by the Bangalore Chamber of Industry and Commerce (BCIC) on Indian aerospace and aviation industry, Kumar said: “If the Indian aerospace and aviation sector needs to grow, we need to set up specific growth targets. This sector has all the potential to exceed its own targets. The business turnover by public sector, which is $4 billion, needs to double.” Similarly, the MSME sector, which plays an important role, needs to grow several times from its current minuscule $0.5-billion base. “We can do that. We need to start to dream of higher turnover from today’s conclave itself,” he said. He further added: “This will not happen overnight, we require five years of confabulation and constantly talking with industry players and vigorously pushing it with the Central and the respective State governments. A lot of work is needed to achieve this target, only then can we realise the dream of making the Indian aerospace and aviation sector world class.” Kumar listed out the potential of the industry and said India is projected to be the second-largest global player in civil aviation by 2030. The fleet size is expected to increase by nearly 2,000 wide-body aircraft. The general and regional transport aircraft are also expected to grow by about 1,000 over the next 10-15 years. The demand for civil helicopters, too, is expected to grow by a similar number. Just in military aviation, the projection is that there would be a demand to the extent of $100 billion over the next decade, with an offset creation of about 35 per cent. Kumar said: “All in all, this industry presents a huge opportunity and we need to be ready with a combination of the right policy intervention and the right amount of encouragement in the form of reducing ease-of-doing business parameters. “It is a matter of great pride for our government that as a result of several path-breaking policy changes and interventions, we are seeing the entry of the private sector in a big way. Many of them had taken initial steps, but now, most are beginning to accelerate and scale up their plans. The fact that both large Indian business houses and global majors are showing keen interest, augurs very well for this sector and I expect that we are on the cusp of a phase of explosive growth in this sector.” Austin Hooper Authentic Jersey