Government approves Rs 7,457 crore highway projects in 11 states
Government approved 16 highway projects in 11 states to be executed at a cost of Rs 7,457 crore. “The standing finance committee (SFC) today cleared 16 projects worth Rs 7,456.88 crore for 622 km,” Road Transport and Highways Secretary Sanjay Mitra told reporters. Of these, two projects will be built on hybrid annuity mode, 13 on engineering, procurement and construction mode and remaining one on build, operate and transfer (BOT) mode. The projects are in Maharashtra, Odisha, West Bengal, Andhra Pradesh, Gujarat, Chhattisgarh, Haryana, Uttarakhand, Arunachal Pradesh, Assam and Sikkim. Mitra said two of the projects pertained to Char Dham Yatra connectivity in Uttarakhand on EPC mode. These include Rs 248 crore and Rs 200 crore projects for geometric improvement and widening of stretches on NH 58. The two projects to be built on hybrid annuity mode (HBA) include Rs 905 crore and Rs 1,338 crore projects in Maharashtra for upgradation of NH 66 stretches under National Highways Development Project (NHDP) phase IV. The BOT project pertained to four laning of Haryana/Punjab border Jind section of NH 71 design, build, finance, operate and transfer mode. The projects sanctioned today include five projects under SARDP-NE for Arunachal Pradesh, Assam and Sikkim. Joe Thuney Womens Jersey
L1Bidding creates shabby roads: Deepak Parekh
Pitching for public-private partnership to build urban roads, Housing Development Finance Corporation Chairman Deepak Parekh blamed the bidding process for the “shabby” and “very poor” quality of city roads in the country. “Quality is very poor and every monsoon after rains, we have to redo the roads. This is because state governments have to award to L1, to the lowest tender,” he said at an event in New Delhi. “So the lowest contractor, lowest price bidder will always build a shabby road…I think some (PPP) experiment could be done with city roads.” As Chairman of HDFC, which is India’s largest mortgage lender, Parekh also asked the government to have proper pricing for building infrastructure. “We need better contractors. The government and states must pay proper pricing. They don’t have the resources, they go for the lowest bid. We have to build more permanent roads, which don’t get damaged after every monsoon every year,” he said. Referring to the capital, which gets into a state of chaos every time it rains, Parekh said that while the odd-and-even rule for plying cars on roads didn’t work here, Mumbai and Bengaluru have the added problem of the quality of roads, besides traffic. As a possible solution, Parekh said municipal authorities should be allowed to raise funds by issuing bonds, which will help create quality urban infrastructure. Brett Hundley Jersey
Adani’s Udupi power plant to add 1600 MW by 2020
Udupi Power Corporation Ltd (UPCL), a subsidiary of Adani Power Ltd, will produce an additional 1,600 MW of power at its thermal plant in Udupi by 2020, according to Kishore Alva, Executive Director (Project Development and Corporate Affairs). At present, the plant produces 1200 MW of power. Speaking to a few media persons from Mangaluru, who were taken on a visit to the thermal power plant in Udupi on Wednesday, Alva said the company has signed a memorandum of understanding with the Karnataka Government to set up 2X800 MW coal-based power plant in Udupi with an investment of ?11,500 crore, in its second phase expansion. Stating that the expansion is in the preliminary stage of land acquisition, he said the project is expected to be completed by 2020. UPCL is paying a compensation of ?40 lakh per acre for the land losers. The expansion requires around 725 acres of land. At present, the company has two units of 600 MW each spread across 590 acres in Yellur and Santhuru villages of Udupi district. Set up at a cost of ?6,000 crore, the commercial production from the unit-1 began in 2010 and unit-2 in 2012. The power generated at UPCL is evacuated through 220 kV and 400 kV transmission lines and is supplied to five electricity supply companies owned by the Karnataka government in the State. Jetty at NMPT He said UPCL maintains its own jetty at New Mangalore Port to handle imported coal. The port handles around 3.5 million tonnes of coal for UPCL a year. The company uses the Konkan Railway network to transport coal from New Mangalore Port to the thermal plant in Udupi. Alva said about ?500 crore will be invested for the development of an additional jetty at New Mangalore Port. It will add another six million tonnes of annual handling capacity in the next three years. UPCL has a 15-year agreement with the coal mining companies in Indonesia and Australia for sourcing coal, he said. Wil Lutz Womens Jersey
Power discoms’ turnaround will hinge on efficiency gains, tariff hikes: Fitch
The success of the Indian government’s ambitious power distribution reforms programme including the Ujjwal Discom Assurance Yojana (UDAY) will depend upon efficiency gains registered by the utilities and frequent tariff revisions, research firm Fitch Ratings has said. The Singapore-based ratings firm said in a special report published today the voluntary rehabilitation scheme UDAY for financial and operational turnaround of distressed state distribution utilities has already seen a large number of important states signing up for the programme. “However, the immediate relief provided by interest-expense reduction, while beneficial to the cash flow positions of the discoms, is inadequate to turn these entities profitable. Achieving this goal by March 2019 as per the plan is highly predicated on the ambitious efficiency improvements, coupled with tariff increases that are politically sensitive in India,” Fitch said. UDAY, launched in November 2015, is more comprehensive than previous packages which had focused primarily on debt restructuring. The merits of UDAY include its four-pronged strategy that targets not only a reduction in interest burden but also operational efficiency improvement, reduced cost of power purchased, and financial discipline. There are also financial implications for states signing up for UDAY that do not meet the agreed targets under the programme. Twenty states and one union territory have given in-principle approval so far for UDAY. Of these, 16 have already signed up for the scheme. “Participation by a number of states which are not ruled by the key ruling political party at the centre – the Bharatiya Janata Party – reflects the various merits and wider acceptance of the package. The committed states and UT accounted for almost 77 per cent of the total 2013-14 net cash losses reported by discoms and around 58 per cent of the total debt outstanding at end-September 2015,” the report said. These states house about 56 per cent of India’s total installed capacity. Tamil Nadu stands out among those which have not opted for UDAY and accounted for 25 per cent of 2013-14 net cash losses of all discoms. The Fitch report also states the debt-restructuring slated within the scheme will provide some immediate breathing space following the transfer of 75 per cent of outstanding debt to the states and capping the interest cost on the balance. However, discoms in as many as 12 of the 16 committed states reported cash losses in 2013-14. The aggregate technical and commercial (AT&C) loss in the Indian power sector is very high – ranging from 11 per cent to 71 per cent. UDAY aims to get the discoms to cut these losses significantly — more than 50 per cent in many cases — through 2018-19. The savings benefits from lower AT&C losses alone account for around half of the total savings on average for the states that have committed. For the majority of states, tariff increases are required to reach break-even status even after the other savings to which they are committed. A meaningful improvement in discoms’ economics will especially benefit power generation companies through higher utilisation and timely clearance of dues. The current low capacity utilisation of power plants is driven primarily by stressed discoms, which are unable to buy electricity because of weak financial positions. Fitch said financially stronger discoms will support India’s drive for renewables and financings of those projects. Charles Haley Authentic Jersey
Delhi may see 445 mw of power supply shortage
Aravali Power Company has served a power supply regulation notice to Delhi distribution companies, BSES Rajdhani Power Ltd (BRPL) & BSES Yamuna Power Ltd (BYPL) for non-payment of dues. The regulation will deprive Delhi of 445 MW of power midnight of September 5. Power allocated to these DISCOMs from Aravali Power Company is 445 MW and the average monthly energy bill is around Rs 87 crore for the current fiscal. “Payments by the DISCOMs have become irregular for quite sometime. The matter was brought before the Supreme Court of India, who in their judgement dated 26.03.2014 directed the DISCOMs to ensure payments of all current energy bills with effect from January 2014. However, despite clear directions of the Supreme Court, dues continued to accumulate. On Thursday, the outstanding amounts are Rs 961.58 crore,” said Aravali Power in a statement on Thursday. “In a meeting held by Delhi Electricity Regulatory Commission (DERC) both BRPL & BYPL had given plan for liquidation of outstanding dues based on which regulation notice issued by Aravali Power earlier was withdrawn. Aravali Power has to pay in advance to its fuel suppliers which constitute about 70%-80% of its monthly energy bills. If the above situation continues, APCPL being a single power station company is unable to meet any of its commitments including payment to fuel suppliers, debt servicing requirements and even payment of salaries to its employees,” the company said. Under the circumstances, Aravali Power has no other option but to regulate power to the DISCOMs. A notice for regulation of power supply has been served to BRPL & BYPL which will deprive Delhi of 445 MW of power. Dustin McGowan Jersey
BSES says power regulation notice not to impact supply to Delhi
Reliance Infrastructure-backed BSES has said its two distribution companies have sufficient power at their disposal and the power regulation notice from Aravali Power will not have any impact on the power supply situation in Delhi. Aravali Power, a joint venture company with 50 per cent share of NTPC, 25 per cent of Haryana Power Generation Corporation and 25 per cent of Indraprastha Power Generation, today served a notice to BSES Rajdhani and BSES Yamuna for regulation of 445 Megawatt from midnight Sep 5. The power company said the total outstanding amount from BSES Rajdhani and BSES Yamuna was Rs 961.58 crore as on date which has led to difficulties for Aravali Power in paying to coal suppliers, servicing debt and giving salaries to employees. “BSES is under huge financial stress due to non liquidation of regulatory assets estimated to be over Rs. 16,000 crore as on March 31, 2016. As compared to this, dues payable by BSES to Aravali Power Company Private Limited (APCL) are around Rs 900 crore,” BSES said in a statement. The company further said the payment of dues to power utilities by BSES discoms is sub judice in the Supreme Court. “The judgement in the matter is reserved since February 2015. We are awaiting the Supreme Court judgment, which will clear the path for recovery / liquidation of regulatory assets,” it said. Aravali Power Company, Jhajjar has been supplying power to the BSES DISCOMs in Delhi, viz BSES Rajdhani Power and BSES Yamuna Power since March 2011. The power allocated to these discoms from Aravali Power is 445 MW (372 MW and 73 MW respectively) and average monthly energy bill is presently of the order of Rs 87 crore (Rs 73 core and Rs 14 crore respectively) for the current financial year. Tedy Bruschi Authentic Jersey
No increase in power tariff for consumers in Haryana
Haryana Electricity Regulatory Commission (HERC) has notified the tariff order for 2016-17, under which there is no increase in tariff for any category, and it has been reduced by 37 paise per unit for consumers of all categories. The salient features of this order state that for LT industry with load up to 50kW, fixed charges where applicable and have been reduced from Rs 170/kW to Rs 160/kW, which would benefit 16,728 consumers. For rooftop solar system installed under the new solar policy, the incentive has been increased from 25 paisa per unit to Re 1 per unit from August 1, 2016. Besides, the wheeling charges for open access consumers have been reduced from 85 paisa per unit to 71 paisa per unit. Rebate of 5%would be allowed for the consumers availing supply through prepaid meters. Chris Godwin Womens Jersey
Regional connectivity: AIR India, SpiceJet make the cut; bigger jets don’t
The first set of regional flights may come from Air India and SpiceJet, as the aviation ministry feels these two already have suitable aircraft in their fleet to be the launch airlines for its project to provide air connectivity to towns and small cities. “Bigger jets will not be able to fly these regional routes, but airlines with smaller aircraft can … If Air India increases utilisation of its smaller aircraft, they can surely fly these routes. SpiceJet has also made inquiries about the scheme. Both these airlines will get exclusive rights on that particular route for a period of three years,” aviation minister Ashok Gajapati Raju told ET, when asked about the participation by these carriers. While Alliance Air, the regional subsidiary of Air India, operates a fleet of 70-seat ATRs, SpiceJet has similar-sized Bombardier Q400 aircraft. A need for support from these airlines was felt after the government realised that it would be difficult for any new carrier to lease aircraft due to problems with airlines in India. “Leasing costs for Indian carriers were pushed up due to the Kingfisher Airlines issue (the airline went bust and it took months for lessors to take back aircraft).So, we need to provide a comfort level to these lessors in terms of allowing them to deregister aircraft (and reposes them) when the payments are not coming. They cannot be held at ransom,” said Raju. Analysts, though, don’t agree with the plan to use 70-seat aircraft to make the scheme a success. “Regional connectivity can only be successful with 15 or 20-seater aircraft and it does not make sense for a 70-seater aircraft to be used for regional connectivity ,” said Mark Martin, founder and CEO of Martin Consulting, an aviation consultancy firm. Ryan Miller Jersey
Aviation Ministry may adopt Railways’ model to beat higher fares during festival rush
The aviation ministry is discussing a railways-kind of model to provide relief to flyers from higher fares during festival season and long weekends and is considering allowing airlines to add more capacity for such short periods to bridge the demand-capacity mismatch. “The fares do get high during seasons like Christmas coming and all. For those times, we do not have capacity (aircraft) lying idle that can be used when the demand spikes. The solution could be to bring in more capacity for a brief period to tide over the fare hike. We can ask airlines that we will allow them to bring in aircraft lease for a brief period of time,” Aviation Minister Ashok Gajapathi Raju told ET. The model will be on the lines of Indian Railways, which launches special trains during the festive seasons to accommodate the huge increase in number of people who travel to celebrate these festivals. While the average airfares are lower, they spike during extended weekends and around the festival season, which is traditionally October to December in India. Raju was quick to add that ‘nothing is firmed up now but this could be a solution.’ “It’s a complicated problem and we do not have simplistic answers. If you find a simplistic answer, you will be adding to the problems.” Analysts believe that the idea is logical but the implementation could be tricky. “It’s a great idea and will surely help control the fare surge during such days of the year. I would assume that airlines would also like the idea of bringing in more capacity and getting maximum business during the surge. But the bigger question is the feasibility of such an idea. It will not be easy to ensure that extra capacity in the country gets slots at airports and also excess manpower to make it happen,” said Sharat Dhall, president at Yatra.com, India’s second largest online travel agency. One said wet lease of aircraft as a stop gap arrangement is not a model that is followed anywhere in the world. “How can you control fares by wet leasing aircraft, which itself costs three times higher than dry lease. Wet lease, as it is, is a model for country that does not have enough pilots and crew, which is not the case with us. The government should try to ensure that fuel prices are brought down, as cost of fuel is the largest component on any airline’s balance sheet,” said Mark Martin, CEO at Martin Consulting, an aviation consultancy firm. Raju also said that the competition helps in keeping the fares low. “Competition has ensured it (fares) to come down. What is our problem? Our problem is when the competition is minimal,” he further added. His assertion was seconded by an analysis of fares in the highest band offered by airlines by the Directorate General of Civil Aviation. The analysis shows that airline sell their highest fare band tickets in sectors like Delhi-Leh, Delhi-Dehradun and Chennai-Port Blair — all routes have lesser number of flights, leading to a demand-supply mismatch. Brian Dawkins Womens Jersey
As Indian economy soars, business class flight bookings see a sharp rise
More wealthy Indians are buying business class seats on international flights, primarily as corporates expand their business interests globally and spend on premium air travel for their senior management. A year-on-year comparison done for every month since January by some travel firms for ET revealed bookings in the segment jumped by up to 75 per cent. The growth in popularity in the front end of the cabin is testimony to India’s economic growth — the fastest among major economies — and increased corporate activity that has directly led to a spurt in corporate travel. “The number of people who travel business class has gone up and this is a reflection of business confidence in the corporate sector,” said John Nair, head of business travel at Cox & Kings. “As a result, companies are more flexible and have permitted more senior management to travel business class. Second, in the past couple of years, the capacity from India has not gone up but the number of people who travel in the premium cabin has and, therefore, there is a supply-demand mismatch,” he added. Nair of Cox & Kings said the mid- and long-haul sectors with travel times of five to nine hours are the most popular for business class travel. India has an annual international air passenger traffic of about 55 million. About 60 domestic and foreign airlines ferry international flyers in and out of the country. Of India’s seven major local carriers, four fly international and only Jet Airways and Air India sell business class seats. Out of all international carriers operating in India, Jet has increased capacity at the fastest clip on overseas routes. Industry data showed that Indian passengers are opting more for foreign carriers that have a wider global air network than their Indian counterparts. Data compiled by MakeMyTrip, India’s biggest online travel portal, showed business class bookings on foreign carriers grew by 37 per cent to 88 per cent year-on-year every month from January to August. For example, bookings in August 2016 grew by 88 per cent over August 2015. For Indian carriers, they declined every month except in March and June. The portal compiled data on the basis of an average of spot and prior bookings. Manoj Samuel, executive director of Riya Travels, one of India’s biggest offline travel portals, said there has been an increase in bookings on carriers such as UAE’s Emirates and Etihad Airways, UK’s flag carrier British Airways and German airline Lufthansa, among others. Foreign carriers gain Data also showed that while foreign carriers have been enticing fliers by cutting fares on business class by up to 24 per cent, their Indian counterparts have increased fares by between 19 per cent and 59 per cent, something that may have led to a decline in demand for the latter. Indian carriers have also been facing slower growth rates on the business class segment in domestic flights, as corporates decide not to spend on premium fares on short distance air travel. Local flights in India take less than three hours. Jet Airways, Air India and Vistara sell business class seats on the domestic sector. That segment for carriers grew in the first three months of the year but fell in the subsequent months, data showed. “Actually, demand for sub-four hour flights is falling as people don’t see enough value. The growth is in longer flights,” said Manoj Chacko, chief executive officer at SOTC Business Travel. Fred VanVleet Jersey