French power major EDF plans $2 billion green bet on India
French state-run power major EDF will invest heavily in renewable energy in India, with projects worth $2 billion in the pipeline, and is bullish about the sector, where it sees electricity tariffs falling 30% in five years, EDF Energies CEO Antoine Cahuzac told ET. India is among the few countries EDF has chosen for a significant expansion of its global portfolio of renewable energy because the country has a huge demand potential, power scarcity and “fantastic” quality of wind and solar radiation, Cahuzac said. EDF is also interested in nuclear energy, for which it has initial agreements with Nuclear Power Corp, but regulatory issues are still under discussion, he said. EDF also has interest in hydropower generation in India and is looking at a few prospects, he said. Lou Brock Jersey
NTPC bullish on power demand, to add 24 GW at Rs 1.6 lakh crore
Amid global economic uncertainty, state-owned NTPCBSE -1.32 % remains sanguine about domestic electricity demand and has planned a total capacity addition of 24 GW entailing an investment of Rs 1.6 lakh crore. “Various projects of the company having an aggregate capacity of around 24 GW are under implementation at 23 locations across the country,” NTPC CMD Gurdeep Singh said while addressing the company AGM today. Singh said, “This (24 GW) includes 4,050 MW being undertaken by joint venture and subsidiary companies. This translates into a capex of about Rs 1,60,000 crore.” The installed capacity of the NTPC group today stands at 47,228 MW, which includes 800 MW of hydro and 360 MW of solar generation capacity. The company has planned an all-time high stand-alone capex of Rs 25,960 crore exceeding the MoU target of 23,000 crore (with the power ministry) and the NTPC group capex stood at Rs 32,091 crore last fiscal. Singh is of the view that the national trends suggest a promising future for NTPC despite the overall atmosphere of uncertainty in the global business scenario. “India is the fastest growing major economy in the world with a huge potential appetite for power consumption… on September 9, 2016, actual energy demand met in India was all-time highest at 3,539 MU and NTPC (with group entities) contributed 866 MU (million units),” he said. “Thus, green shoots are visible as far as upswing in power demand goes and this is in line with our long held expectations of growth.” NTPC has commissioned 10,125 MW in the Twelfth Five Year Plan (2012-17) so far and aims to commission around 4,500 MW more during 2016-17. He also said that under UDAY scheme for revival of debt-laden discoms, bonds worth about Rs 1.66 lakh crore have been issued, relieving the balancesheets of state utilities and thereby enabling higher capacity utilisation by generators. He further informed shareholders that with about 7 billion metric tonnes of geological reserves estimated at its 10 coal blocks, NTPC expects to produce about 107 million tonnes of coal per annum. He also told that the mining operations have commenced in Pakri Barwadih and the company has progressed well in other coal blocks too. The company has moved forward on coal freight rationalisation, thereby reducing coal transportation cost. With improved domestic coal supplies, NTPC has been able to minimise import of coal. With these steps, it has been able to reduce the tariff by 14 paise (4.3%) in the first quarter of 2016-17 from a year ago. Josh Bellamy Womens Jersey
India set to buy Iran oil for emergency reserves: Sources
India is set to buy 6 million barrels of Iranian crude for its strategic oil reserves as negotiations with the United Arab Emirates’ national oil company for supplies are stuck over commercial terms, industry sources said. Such purchases by the world’s No.3 crude importer would boost Iran’s drive to ramp up its oil shipments as it looks to regain market share following the lifting of sanctions over its disputed nuclear programme. Oil markets have been keenly focused on Iranian export volumes over the last few weeks as they get closer to pre-sanction levels – a milestone that Tehran has said is a precondition for discussing a global output freeze to boost crude prices. India, seeking to hedge against energy security risks as it imports about 80 percent of its oil needs, is building emergency storage in vast underground caverns to hold a total of 36.87 million barrels of crude, enough to cover almost two weeks of demand. Three industry sources with direct knowledge of the matter said India would buy 6 million barrels of Iranian Mix crude from the National Iranian Oil Co in October and November to fill half the Managlore storage facility in the southwestern state of Karnataka. They declined to be identified as they were not authorised to speak with media. State firm Bharat Petroleum Corp will buy 4 million barrels in two very large crude carriers (VLCCs) and Mangalore Refineries and Petrochemicals Ltd will import 2 million barrels, the three sources said. They did not give pricing details. “The two refiners decided to buy Iranian Mix as it suits their refineries,” said one of the sources. The step comes as Iran’s daily crude exports to India surged to the highest level in 15 years in August. India in 2014 began talks to lease part of its strategic storage to Abu Dhabi National Oil Co (ADNOC). Under such a deal, India would have first rights to the stored crude in case of emergency, while ADNOC would be able to move cargoes to meet any shift in demand. “Talks have not moved forward with ADNOC despite several rounds of discussion. We (India and the UAE) are stuck on commercial terms,” said one of the sources. ADNOC, India’s oil ministry, BPCL and MRPL did not immediately respond to requests for comment. To take advantage of falling oil prices pending the conclusion of a deal with the UAE, India’s oil ministry instructed BPCL and MRPL to select a grade to fill half the Mangalore facility, the sources said. They chose Iranian Mix. The Indian side last week discussed Iranian oil purchases with Safar Ali Keramati, Deputy Director at National Iranian Oil Company (NIOC) for Crude Marketing and Operations. “If (Indian customers) come to us for extra barrels, then we will do our best to accommodate their demand,” Keramati told Reuters. The 9.75 million-barrel Vizag storage facility in east India is being filled with Iraqi Basra oil. The start of operations at a third facility, at Padur in Karnataka, has been pushed back due to problems in acquiring land to lay a pipeline link to the local port. Elgin Baylor Womens Jersey
ONGC Videsh slapped with service tax demand of Rs 6,100 crore
The Tax Department has slapped a service tax demand of over Rs 6,100 crore on the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), a move that may potentially render its investments in oil and gas fields abroad infructuous. ONGC Videsh Ltd (OVL) has stakes in 37 oil and gas projects in 17 countries around the world. These stakes are held through subsidiaries, branches and joint ventures. For operations of these projects, those units and joint ventures would raise a demand for money on the parent, OVL, which would transmit the investments. The Service Tax Department now contends that the overseas units are rendering a service to OVL and as such the company is liable to pay service tax at the full rate, sources said. The department first issued a demand cum show-cause notice on October 11, 2011 requiring OVL to show cause why service tax amounting to Rs 2,816.31 crore plus interest on such amount and penalty should not be demanded and recovered. The tax amount was calculated based on foreign currency expenditure reported in the company’s financial statements covering period from April 1, 2006 to March 31, 2010. Subsequently, five more demand-cum-show cause notices were issued covering period up to March 31, 2015 to show cause why service tax amounting to Rs 3,286.36 crore, the interest on such amount and penalty should not be demanded and recovered from the company. The Service Tax Department, sources said, has contended that the expenses represent business auxiliary services rendered by the company’s foreign branches and operator of joint venture/consortium to the company. OVL however has contended that service tax is not payable and is contesting the same legally. According to OVL, investments made overseas through subsidiaries or branches or joint ventures do not constitute availing of any service. The company operates the projects at an internal rate of return on investments of 12-13 per cent and if it has to pay 14-15 per cent service tax on such investments, the projects will give negative returns and would become infructuous. Also, it contends that service tax by law can be levied on services rendered within the country. And even if one were to assume that its branches or subsidiaries were rendering any service, they were all overseas and not within India and so cannot be subject to any service tax, sources said. OVL had reported a net loss of Rs 2,093.5 crore in 2015- 16 fiscal on a turnover of Rs 12,772 crore. It had a net profit of Rs 1,904.2 crore on a turnover of Rs 19,148.9 crore in the previous fiscal. It produced 8.916 million tonnes of oil and oil equivalent gas in 2015-16 as compared to 8.874 million tonnes in the previous year. The overall gas production slightly increased from 3.341 billion cubic meters during 2014-15 to 3.406 bcm in 2015-16 and oil production was almost flat at 5.51 million tonnes. Dallas Stars Jersey
To boost regional connectivity, government may allow regional airlines to fly with one aircraft
In an attempt to make it easier for airlines that fly regional routes, the government is likely to allow them to fly for two years with just one aircraft. This will be part of aviation rules being formulated for scheduled commercial airlines — carriers that will also operate on regional routes under the government’s regional connectivity plans that aim at flying on such routes at the rate of Rs 2,500 per hour of flight. “Unlike rules for regional and national airlines, which have to increase their fleet size to three and five aircraft, respectively, within a period of one year, the scheduled commuter airlines will be allowed two years to increase their fleet size. The extra one year will provide that comfort level to these new airlines,” said an aviation ministry official, who did not want to be identified. These rules are being formulated by the Directorate General of Civil Aviation as part of the rules that will govern scheduled commuters airlines. The government, in June this year, had approved a regional connectivity scheme that aims to connect unserved airports in the country through flights with fixed fares atRs 2,500 for per hour of flight. Analysts believe that the government needs to also work on ensuring lower lease rentals for scheduled commuter airlines. “Other than the traffic risk in unused regional airports, potential RCS operators also face non-availability or high cost of leased aircraft. Leasing cost can be as high as 25-30% of the total operating cost of a small aircraft. Given this scenario, lowering the entry barrier and allowing single aircraft owners to register as Scheduled Commuter Operator (SCO) under RCS is a winwin proposition. The idle capacity available with NSOPs in India can be hitherto utilised to connect India’s interiors and the owners can earn additional revenue through the RCS subsidy, code shares and seat trading,” said Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG. Business Aircraft Operator’s Association of India (BAOA), however, says that the government should also ensure that the non-scheduled airport operators are allowed to fly on regional routes and simpler rules should be made to allow airlines to convert to scheduled commuter airlines category. A senior aviation ministry official said he has received a lot of queries from people, who want to launch scheduled commuter airlines. “I have received a lot of queries from business people, who want to launch new airlines. I would not like to name them now,” said the official, who did not want to be identified. Meanwhile, the government is also looking at launching first set of regional flights through Air India and SpiceJet, as these two already have suitable aircraft in their fleet to launch the project and provide air connectivity to towns and small cities. Both these airlines have 70-seater aircraft in their fleet. John Lynch Jersey
24 per cent growth in domestic air passenger traffic in August
Domestic air passenger traffic rose nearly 24 per cent in August to 83.81 lakh passengers from 67.60 lakh registered during the same period last year, according to official data, released today. The domestic air travel demand during the January-August period of this year, however, surged 23.14 per cent to 644.68 lakh fliers as compared to 523.55 lakh passengers flown by the domestic carriers in the same period of 2015. Civil Aviation Minister Ashok Gajapathi Raju, in a tweet, said that the 24 per cent growth in domestic air passenger traffic in August was the highest across the aviation markets. “Another month of record growth for Indian aviation. August records 24% – highest worldwide,” Raju tweeted. The DGCA data showed that no-frills carrier IndiGo carried the most number of passengers at 33.41 lakh with a market share touching almost 40 per cent, while another budget carrier SpiceJet had the highest passenger load factor (PLF) during the month under review at 93.2 percent. National carrier Air India also flew a total of 12.25 lakh passenger during August 2016 with a market share of 14.6 per cent, the lowest so far this year. Hampus Lindholm Jersey
NAL feels time is ripe to inject funds into its 70-90 seater aircraft
The Bengaluru-based National Aerospace Laboratories’ (NAL) efforts to make a 70-90 seater aircraft in India has got a new impetus with the emphasis that the new civil aviation policy lays on enhancing regional air connectivity and the Modi government’s emphasis on ‘Make in India’. NAL has already done the paper design and other analysis for the creation of such an aircraft. However, the project was shelved about three years ago because the government declined its request for close to ?9,000 crore for the project to be brought to fruition. When asked whether this was the right time to pump in funds into this project, Jitendra Jadhav, Director, NAL, told BusinessLine that he thought so as the new civil aviation policy is looking to revive 550 air fields. The aircraft that NAL is developing will be a short take-off aircraft which should be able to land on many of these airfields. Regional connectivity “The new civil aviation policy is talking about regional connectivity. Rather than having a foreign aircraft, we can have a private partnership with some foreign partner and NAL’s design which will be a good Make in India. NAL is good in design. We need a manufacturing partner,” he added . Senior NAL officials told BusinessLine that if the funds were sanctioned, the project could become a reality by 2023. “We are targeting connectivity between 250 and 500-600 km. The efficiency of turbo prop aircraft allows for short distance flying for which you really do not need to fly very high,” Jadhav pointed out when asked as to why NAL was looking at a turbo prop aircraft and limiting it to 70-90 seats. In July this year, the government unveiled its ambitious regional connectivity scheme which will cap airfares at ?2,500 for one-hour flights to unserved and under-served airports that are 476-500 km apart. Flying between airports that are 776-800 km apart will cost ?4,070, while travelling between metros will be a tad more expensive. Viability gap funding The government’s proposal includes providing Viability Gap Funding for fixed wing aircraft flights covering 200-500 km provided at least nine seats are priced at an all-inclusive fare of ?2,500. The government will provide the operator a viability gap funding of ?3,750 per seat sold under the regional connectivity scheme (RCS) up to a maximum of 40 seats per flight. The VGF has been capped at ?4,170 for 776-800-km. To be eligible for the VGF, an operator will have to operate regular services to at least one airport which at present does not have regular flights. Chris Wagner Womens Jersey
Naidu lays foundation for ₹202-cr expansion of Rajahmundry airport
The Andhra Pradesh government, with the assistance of the Union Government, will complete the first phase of the mega Polavaram project on the Godavari and release water even into the left canal by 2018, according to Chief Minister N Chandrababu Naidu. He was speaking here on Monday after laying the foundation stone for the expansion of the Madhurapudi airport at a cost of ?202 crore. The runway would be extended to facilitate the landing of the bigger aircraft and the other facilities would be upgraded at the airport. Land acquisition The Chief Minister said 857 acres had been acquired for the airport expansion works and he thanked the farmers of the area for co-operating with the government. He said ?300 crore had been spent for land acquisition. Airport expansion works would pave the way for the development of the two Godavari districts, he said. He said regardless of what the naysayers might say, he was determined to completing the Polavaram project and lay a firm foundation for the prosperity of the two Godavari districts in particular and the State in general. Centre’s assurance Union Civil Aviation Minister P Ashok Gajapati Raju thanked the Chief Minister for making the land available in quick time and said the Union Government would take all steps to improve the airports in the State. Union Urban Development Minister M Venkaiah Naidu spoke at length on the recent package sanctioned by the Centre for the State and how it would pave the way for its all-round development. He launched a scathing attack on the critics of the package, especially the Congress leaders. BEL facililty at Nimmaluru Earlier, Venkaiah Naidu also laid the foundation stone for BEL’s Advanced Night Visions Products factory at Nimmaluru, Krishna district. The project will see an investment of ?300 crore over the next four years and employment of nearly 1,000. “We will ensure that locals get a good share of the jobs”, he said. The State government has provided 50 acres in the village which is near Machilipatnam. The project is part of BEL’s diversification into night vision products. Hampus Lindholm Womens Jersey
Land issues delaying construction: NHAI
The National Highways Authority of India (NHAI) has said that service road construction between Bhagawan Mahaveer (Pumpwell) Circle and Talapady on the four-lane NH 66 is being delayed for want of physical possession of required land to be handed over by the State government. Samson Vijay Kumar, NHAI Project Director, Mangaluru, Zone, told The Hindu that the authority and the concessionaire—Navayuga Udupi Tollway Pvt., Ltd., are ready to construct the service roads, but for technical reasons. The Special Land Acquisition Officer (SLAO) is unable to disburse compensation to a tune of about Rs. 32 crore to land owners because of their non-availability. Mr. Kumar was responding to a news article “Police will not hesitate to book NHAI if flaws in road building lead to accidents,” appearing in these columns on Monday. On specific queries by The Hindu about incomplete service roads all along four-lane NH 66 between Pumpwell and Talapady, he said though technically the lands (about 16 hectares) vested with NHAI, it cannot go ahead for want of physical possession. The district administration too had conducted special adalats to settle such cases recently and a few were settled. In Udupi district too, possession of about 5 hectares of land is yet to be given to NHAI as about Rs. 21 crore of compensation to land owners is yet to be disbursed. Mr. Kumar said the NHAI has already deposited the entire compensation amount with SLAOs concerned. With regard to absence of median opening at Yekkur Junction on NH 66, Mr. Kumar said initially there was a proposal to provide one. It was deleted as the height of the main carriageway on the other side had to be increased to match the height of the new Road Over Bridge on the Railway line. The authority is willing to provide one, if the City Police suggest so, Mr. Kumar added. Mr. Kumar also said the Dakshina Kannada Deputy Commissioner has appointed a designated SLAO for NH projects in the district to relieve the Assistant Commissioner of Mangaluru revenue sub division from the additional charge. Danny Gare Womens Jersey
As imports get costly, CIL woos power sector afresh
It has been a bad year for Coal India as fuel sales remained flat in the April-August period, sending profits on a tailspin. To survive the slowdown, the miner is looking to substitute imports in the power sector. Behind the project is the rising price of imported coal since February, widening the price gap with domestic coal. According to the “India Coal Market Watch” of mjunction, popular import varieties from South Africa (5,500 kcal) and Indonesia (4,200 kcal) have become costlier by 5.5 per cent and 19 per cent respectively over the past 45 days. Import of thermal coal is down 12 per cent this fiscal. Imported coal is used in power generation for two purposes. While the plants in the hinterland use limited quantities of these for blending, to meet emission standards; coastal power plants (away from the mining zone) run on low quality imported fuel for its freight advantage. Hinterland imports CIL is now planning to replace both the demands, partly or fully. While it is now flush with low-calorific value coal, the limited quantities of high value coal available in Ranigunj in West Bengal and Korea Rewa in Chattisgarh — which did not find too many takers in the past — can be used for blending. To make it workable CIL will make Railways and port authorities party to the negotiation so that coal can be reached to these consumers at a lower price than the imported coal. Considering India’s inefficient transportation infrastructure that (along with taxes) makes landed cost of fuel nearly two times costlier than the price of coal, the practical aspects of this proposal are yet to be tested. But to some extent, it has already started happening — NTPC and Neyveli Lignite have stopped issuing fresh import orders. This will replace nearly 17-18 million tonne of import demand beginning the second half of FY17. NDA-ruled hinterland States such as Chattishgarh, Punjab, Haryana and Madhya Pradesh have stopped issuing fresh import orders, too. Last year hinterland States consumed 37 million tonnes of imported fuel. Many lose ends The greater puzzle of servicing the coastal power plants, which are mostly idle due to low demand, is yet to be solved. A CIL source said these plants used 45 million tonnes of fuel last year, which is enough to generate over 9,000 MW of electricity. How does coal produced in say Odisha or Madhya Pradesh travel 2,000 km to say Tata Power’s ultra-mega power plant at Mundra, by India’s inefficient trains, and still remain cheaper than Indonesian coal delivered at the doorstep by cape-size vessels? Even if the logistics puzzle is worked out, the plan might face serious hurdles from the pricing point. According to Deepak Kannan, Managing Editor, Asia Thermal Coal of Platts, the traction behind the current price rise is weak and is almost solely driven by the Chinese demand for imported coal over domestic fuel. In an effort to cut the domestic production, arguably to offer traction to plummeting prices, China had cut the working days of mines from 330 to 270 for this year. This has pushed domestic prices above imported coal prices. Also, in Indonesia, production suffered early in the year due to unseasonal rains. But, according to Kannan, as we look at the production outlook of the top 10 Indonesian miners contributing up to 80 per cent of the country’s production, no supply constraint is in the horizon. More importantly, Chinese regulator NDRC held a meeting last week. And, the rumour is that Beijing may relax the production cap. If that happens, coal prices should melt down in the fourth quarter. Kannan is not sure if the prices will remain firm next year. And, that’s not music to the ears of CIL. Any meltdown in coal prices may spoil its plan to tap import demands as coastal plants especially will have little logic in replacing imported coal with domestic varieties. Dexter Manley Jersey