Govt oil subsidy burden to be within budgetary allocation in FY2017 despite crude price rise; positive for upstream cos: ICRA
With crude oil prices of $50-60 for the balanced months in FY2017, government oil subsidy burden to be around Rs 170-190 billion for FY2017, which would be well within budget allocation of around Rs 270 billion for the current fiscal, ICRA today said.“Thus, the fiscal position of the government of India is unlikely to be affected for FY2017,” K Ravichandran, Senior Vice President, Head Corporate Sector Ratings said. The gross under-recoveries on subsidised domestic liquefied petroleum gas (LPG) and public distribution system (PDS) kerosene are expected to increase by around Rs 12-15 billion for FY2017 with every $5/bbl sustained increase in crude oil prices for the rest of FY2017. The impact of higher crude oil prices on the government fiscal may be limited in FY2018 as well because gross under recoveries would not increase significantly up to crude oil prices of $60-65/bbl due to ongoing regular small hike in prices of subsidised LPG and kerosene on a fortnightly/monthly basis. In terms of impact on foreign exchange outgo, the rise in crude oil prices along with recent depreciation in rupee against US dollar are expected to increase net crude oil and petroleum products import bill of the country by around $4 billion for crude oil prices of $55/bbl for the rest four months in FY2017. Read more: OPEC output cut could force government to slash excise duty on fuel, bring relief for upstream firms Assuming a rise in the average crude oil price to $55/barrel in the remainder of the year from the average of $45/barrel in April-November 2016, would have a first round impact of raising average WPI inflation by around 50 bps and CPI inflation by around 20 bps in December 2016-March 2017. As per existing under-recovery sharing formula, the government bears domestic LPG subsidy upto Rs 18/kg (around Rs 255 per cylinder) under the Direct Benefit Transfer for domestic LPG (DBTL) and kerosene subsidy up to Rs 12/litre. “Post ongoing small increase in LPG and kerosene prices, the threshold crude oil prices for these subsidy levels would be around $55-60/bbl for kerosene and nearly $65/bbl for LPG. Hence, PSU upstream companies (ONGC and OIL) are likely to benefit from rise in crude oil prices as their net realisations would increase with nil or minimal under-recovery burden upto the level of US$60/bbl, as per the current subsidy sharing formula,” said Ravichandran. Private crude oil producers would directly gain from higher crude oil prices. Nonetheless, at crude oil prices beyond $55/bbl, upstream companies may feel the pinch of higher cess burden levied at domestic crude production as the same was revised to 20% ad-valorem (16.67% on net sales realisation) from fixed Rs 4500 /MT (US9/bbl) in the Union Budget 2016-17, he added. The downstream crude oil companies are expected to report inventory gains in Q3 FY2017 resulting from spike in crude oil and petroleum product prices. However, higher crude oil prices would also lead to higher working capital borrowings and interest burden, negatively impacting the net profitability in the ensuing quarters. Besides, marketing margins of oil marketing companies may moderate with sustained increase in crude oil prices and increasing competition from private retailers. Organization of the Petroleum Exporting Countries (OPEC), on November 30, 2016, has agreed to cut total crude oil production of its member countries by 1.2 million barrels per day (mbpd) from January 2017. The decision by the OPEC has led to spike in global crude oil prices by around 15% with Benchmark Brent Crude futures touching $54/bbl. The deal by OPEC also includes coordination with Russia, a large crude oil producer but not an OPEC member. Any further rise in crude oil prices and sustainability at higher levels would depend upon actual cut in production by different OPEC members and Russia up to their commitment levels. Notwithstanding that, oversupply in global crude oil market may persist in the medium term with higher crude oil prices giving pricing power to US shale oil producers to raise production levels. Thus, with rebalancing of the market, global crude oil prices may not increase significantly over the medium term. Lane Johnson Authentic Jersey
Eight-fold path to decongest Bengaluru roads
We can approach a solution to the vexed problem of road traffic if we pay attention to one simple concept: flow. While there are degrees of truth in all the arguments put forth by different groups, what’s lost is that conceptually , the problem of traffic is a problem of flow. If we focus on improving flows, we can enjoy some respite from the tyranny of traffic. Here’s an eight-fold path to improve traffic without spending massive amounts of money. 1. Focus on the flow. Don’t get mesmerised by road-widening projects that are not only messy but might not improve the situation. Unless a road is of uniform width throughout its length, flow is unlikely to improve much by widening.Uneven road width causes congestion and can actually worsen the situation. 2. Remove road cholesterol.In many places almost 40% of the road is unusable because, like clogged arteries, circulation of traffic is choked by various blockages. Potholes, construction material, parked cars, autorickshaw stands and street vendors interrupt traffic flow and not only cause congestion points but also endanger safety of motorists and pedestrians.Make it compulsory for construction material and debris to be placed in bins, with a fee charged for occupying road space. Make parallel parking compulsory , draw parking lots and assign a serial number to each of them. Move autorickshaw stands away from street intersections. Ensure street vendors occupy designated lots. 3. Get cows and other animals off the road. It’s astounding that a city that connects India to the global economy tolerates herds of cows on major roads.Cows might be holy but that does not prevent them from causing congestion and endangering their own lives and the lives of motorists. 4. Make all lanes of uniform width. Today , lanes are mostly not marked, and where marked, they bisect the available road width. The lack of lane markings and lanes of varying widths create no behavioural triggers for people to drive in a disciplined manner. 5. Enforce queuing for right turns. A major reason for congestion on major roads is that when vehicles wait to turn right, they don’t queue up but line up side by side in an rightturning arc. All vehicles that intend to go straight ahead or turn left are blocked. 6. There have to be more directional signs. Overhead gantries identifying lanes for left, right and straight ahead are necessary. These must be placed well ahead of intersections so that vehicles can change lanes much before the intersection. 7. The stop line at intersections must be prominent. It must be a lakshman rekha crossing which should attract severe penalties. Cameras already exist that can enforce this easily. 8.Although pedestrians ought to have the first right on the road, they are constantly robbed of their safety and dignity . Traffic lights for pedestrian crossings seem to have been designed for Olympic sprinters, as it is almost impossible to cross even a midsized road in the ten seconds allocated for it. Skybridges and underpasses are impractical if they have steep staircases or are at unnatural crossing points. At times where traffic lights are sought to be synchronised to create “green channels” and smooth traffic flows, the pedestrian’s rights must not be sacrificed. Michael Gallup Jersey
Either abolish toll on highways or charge us one time annual fee, say truckers
Toll tax on highways is a cancer and needs to be removed, one major truckers’ body demanded on Wednesday, as it claimed that truckers are ready to pay one time annual toll amount rather than paying it each time. Though All India Motor Transport Congress (AIMTC) is pushing this demand for the past few years, this time they revived it as government struggles to resume toll collection from Friday night. The truckers’ body also said that one of the ministers of state they recently met had agreed that “the disease of toll has to be eradicated”. However, the government has maintained that there is no question of scrapping toll on highways since it needs funds to expand the existing highways and build new ones. It also argues that users have to pay for better service, something that many of the commuters don’t agree as the service is often not up to the mark. During an interaction with officials from highways ministry and NHAI on Wednesday, representatives of AIMTC said that resumption of toll collection may not work even for 2-3 days and many of the trucks would stop operating. “Government must find alternate ways to get the toll amount rather than making everyone stop at toll plazas. We want to pay annual fee and operate throughout the year without any hurdle,” one of them said. Truck operators claimed that since government announced demonetisation, corruption on roads and highways has increased. If earlier enforcement officials negotiated at Rs 200 or Rs 300, now it’s not less than Rs 500 and in several cases taking new Rs 2,000 notes has become a trend. “What can you do when you have to run a business? Many a times even drivers short change owners since all these transactions are not in record,” said a truck operator. The truckers’ body has demanded that government should allow the operators to withdraw Rs 15,000 from their accounts per truck per trip. Meanwhile, the ministry has asked truckers to use RFID tags and give debit cards to their drivers so that more transaction can happen through electronic mode. “But they told us that they are getting one lakh fresh tags. Will that be enough when we have crores of vehicles?” asked a trucker. Government is considering if it can come out with some secured pre-paid coupons that can be issued to truckers which they can deposit to pass through toll plazas quickly. Quincy Wilson Authentic Jersey
Construction of 69 Bridges for Better Road Connectivity Between India and South East Asia
Construction of 69 Bridges for Better Road Connectivity Between India and South East Asia India is funding construction of 69 Bridges on the Tamu-Kyigone-Kalewa Road (149.70 kms) Section” and construction of 120.74 kms road between Kalewa and Yargi section” of the India-Myanmar-Thailand (IMT) Trilateral Highway, in Myanmar to improve connectivity with South East Asia by road. The Trilateral Highway starts from Moreh (Manipur) in India up to Mae Sot in Thailand through Myanmar. Construction of 130 km length stretch of road connecting Moreh (India) / Tamu (Myanmar) to Kalewa in Myanmar has already been completed by Border Roads Organization of India. For construction of 69 bridges including approach roads in the Tamu-Kyigone-Kalewa road section (149.70 kms) and construction/upgradation of the Kalewa-Yargi road section (120.74 kms) of the IMT Trilateral Highway in Myanmar, appointment of Consultants to finalise tender documents and award of contracts has already been completed. This information was given by the Minister of State for Road Transport and Highways Shri Pon. Radhakrishnan in written reply to a question in Lok Sabha. Jordan Matthews Jersey
Maha inks MoU with NHAI to plant trees along National Highways
To expand its afforestation drive and increase tree cover in the state, Maharashtra government’s Forest Development Corporation of Maharashtra Ltd (FDCM) has inked a MoU with National Highway Authority of India to plant trees along the national highways passing through the state. The project involves planting trees in the next two years along 10,000 km national highways that pass through the state beginning from March 2017. While the state FDCM will plant the trees, the NHAI will bear the cost of the project, states the MoU. Maharashtra Forest minister Sudhir Mungantiwar said afforestation is the government’s mission and it is taking it very seriously. “We are planting trees on both sides of the National Highways taken for upgradation. There is only one planet in the universe where life exists. And life exists because of trees. Thousands of crores have been spent in trying to search for life on Mars but we have not found anything as yet in spite of so much spending. Humans cannot exist without trees,” Mungantiwar told PTI. As per the agreement, the demarcation and fixing of boundary pillars of the said lands (under national highways) will be done by the NHAI. The FDCM will carryout the plantation on the said lands falling within the boundaries of the state. The Ministry of Surface Transport has in its Green Highways Policy 2015 has provided for creating Green Corridors along the national highways. The policy document lays down the criteria for plantation of trees and shrubs, taking into account the traffic visibility, planting trees along the curves and minimum distances of planting line from the toe or berm of the highway. Josh Reynolds Authentic Jersey
Demonetisation: National Highway Authority of India forgoes toll worth about Rs 1,238 crore
The National Highway Authority of India would suffer an income loss of Rs 1,238 crore due to suspension of toll collection on highways till December 2 post demonetisation, Parliament was informed on Thursday. Post demonetisation of currency notes of Rs 500 and Rs 1000, government has suspended user fee collection on National Highways with effect from November 9, 2016 (17:30 hrs), Minister of State for Road Transport and Highways P Radhakrishnan said in a written reply to Lok Sabha. NHAI issued necessary instructions to concessionaries, including BOT, OMT operators, and the commuters have been allowed to travel through the user fee plazas without paying any fee from November 9, 2016 (17:30 hrs) to December 2 (midnight), he added. “The average toll collection per day is Rs 51.59 crore from the fee plazas under NHAI, which is not accruing to the Government with effect from November 9, 2016 (17:30 hrs),” the Minister informed the House. Taking into account exemption till December 2 (midnight), the income loss to NHAI due to suspension of toll collection on highways is be around Rs 1,238 crore. In a separate reply, Radhakrishnan said: “Government will suitably compensate the toll operators for loss incurred due to suspension of fee collection.” The decision was taken to ensure smooth traffic flow across all National Highways and provide relief to the cash-strapped people lining up outside banks and ATMs after Rs 500 and Rs 1,000 notes were scrapped. The government had announced its decision to keep the toll collection in abeyance till November 11 mid-night, which was later extended to November 14, 18, 24 and later to December 2. Pavol Demitra Jersey
Anjan Mukhopadhyay appointed executive director at Bhel
Anjan Mukhopadhyay, 58, has been appointed as the executive director of power sector at Bharat Heavy Electricals’ eastern region, with effect from 24th November, 2016. Prior to this, he served as general manager at the same division. An Electrical engineer from Indian Institute of Engineering Science and Technology-Shibpur, Mukhopadhyay started his career in BHEL Haridwar unit as an Trainee Engineer in 1981 and has more than 35 years of professional experience in having handled diverse functions in BHEL. Production, technical services, total service solution, project management, construction management & execution in different BHEL manufacturing unit and power sector sites. Under his leadership, eastern region in BHEL created new benchmarks in project execution. He was instrumental in commissioning of the first 500 MW unit of WBPDCL successfully. According to a statement released by Bhel, during his stint at the power division, he has been instrumental in effectively coordinating and collaborating with all organization units of BHEL in order to achieve financial and physical turnover, cash collection, capacity addition, technical and commercial closure and various other targets. He has effectively contributed in order to achieve continuous improvement for the region in all the four perspectives — financial, customer, internal operations and learning and innovations over the years.
Kerala State Electricity Board confident of tackling power crisis in the state
Though the new power minister, M M Mani, has been hinting at the possibility of power restrictions in the coming days, top Kerala State Electricity Board officials say that the situation is not that bad. According to the officials, the chances of a load shedding or any other form of major power restrictions were remote now. “It’s true that the power scenario across the country is bad at present. Kerala, being a state mostly dependent on power generated outside the state, will obviously suffer in the event of even a mild turmoil in the national power scene. But the situation, as of now, has not aggravated to a position that would force the board to impose load shedding or power cuts,” said an official. Read More: Power Min to nudge states for cheaper energy to powerlooms Sources said, the repair work in the Moolamattom power station was progressing satisfactorily and the work on the penstock valves would be completed by December 6. Three of the six generators in KSEB’s biggest hydel station were out of action after a leakage was detected in the penstock pipe that carry water to the generators. “The present crisis began with the central allocation from the Talcher power plant in Odisha coming down. One unit in Koodankulam atomic power plant is also out. The board is also not getting the power we have contracted with a private power generator. All this have contributed to a daily power deficit up to 500 MW,” said a board director. “However, we have made arrangements for purchase of power from outside the state. There will be price difference, but we are confident of facing the crisis without power cuts or load shedding,” he added. Meanwhile, the state government is learnt to have given KSEB the go ahead to honour long term power purchase agreements, the procedural correctness of which was questioned by the state power regulatory commission. The regulator had earlier refused to fully accept the agreement reached between KSEB and various power generating companies for purchase of 865 MW power for 25 years from December 2016. The annual purchase of 6,440 Million Units (MU) power at an average rate of Rs 4.11 per unit would come to around Rs 2,650 crore. It would total to Rs 66,225 crore on completion of the 25 years of agreement period. Bryan Witzmann Authentic Jersey
Essar Power commissions Hazira unit, completes 270 MW project
Essar Power today said its subsidiary at Hazira in Gujarat has commissioned the second and last unit of 135 mw, making the 270-mw project fully operational now. The company said commissioning was done in a record 53 days – from IBR hydrotest to final synchronisation – making it among the swiftest in the industry. The first unit was commissioned in July last year. With this, the 270-mw multi-fuel power plant, which is 100 per cent captive to Essar Steel Hazira, is now fully operational. The plant runs on multiple fuels, like coal (both domestic and imported) and corex gas, simultaneously. Read More: Essar Power expects to turn profitable this year Essar Power has a target capacity of 6,100 mw, and this commissioning makes 80 per cent, or 4,840 mw, operational now. On the commissioning, company Chief Executive K V B Reddy said over the last two years, increased coal availability as well as strong operational efficiencies have helped improve performance significantly. Essar Power has operational capacity of 4,840 mw, of which 3,240 mw is coal-based and 1,600 mw gas-based. Its operating plants are located at Mahan in Chhatisgarh and at Hazira, Salaya and Vadinar (all in Gujarat). Troy Aikman Authentic Jersey
KCR tells power staff to give up Dec 6 stir plan in Telangana
Chief minister K Chandrashekhar Rao (KCR) on Thursday instructed officials to examine the possibilities of regularising all the outsourced employees working in Telangana Transco, Genco and Discoms in a phased manner. Accordingly, KCR asked the electricity employees’ unions to call off their proposed strike on December 6 and invited them for talks. Interestingly, only 24 hours ago, he told officials to act sternly with the employees who threatened to go on strike. During a review meeting held at Pragati Bhavan, the chief minister felt that the outsourced employees who have been working for several years on nominal salaries should be regularized on humanitarian grounds and asked officials to prepare guidelines in this regard. He also asked the unions to drop their proposed stir and meet energy minister K Jagadeeshwar Reddy on Friday and sort out the problems. In this context, the CM recalled that salaries of the employees working in electricity department were increased substantially in the past and salaries of the outsourced employees were also hiked. The state government is also ready to amicably settle all the issues raised by the employees, he said. Telangana Genco and Transco CMD Prabhakar Rao and other officials brought to the notice of the chief minister the demands of electricity employees and outsourced workers. They informed the chief minister that the outsourced workers were rendering services in the management of sub stations, power lines, power plants as well as handling administrative work. However, the chief minister reiterated that employees working in the power sector could solve their problems through discussions with the government and hence there is no need for them to go on a strike. The chief minister also asked the employees not to fall prey to the strike call given on political considerations and not to put general public to inconvenience by going on a strike. Nick Fairley Authentic Jersey