Oil consumption growth likely to spike this fiscal year
Oil consumption growth in the current fiscal year will likely exceed 10.9% of the previous year, if the current consumption trend continues, an oil ministry arm has said. A 7.8% jump in the consumption of petroleum products in the country in April-June, compared to 5.2% in the year-ago period, has prompted this prediction from the Petroleum Planning and Analysis Cell (PPAC). “Typically, April-June is sluggish in performance than the rest of the year. Going by the trend, it’s likely petroleum products consumption growth for 2016-17 could be better than that of last year,” the PPAC said in its monthly review. A higher fuel consumption signifies faster clip of economic growth for the country, currently growing at 7.6% annually. In April-June, the biggest consumption growth was recorded in petrol (10%), liquefied petroleum gas (7.8%), fuel oil (22.9%), bitumen (13.9%) and aviation turbine fuel (12.1%). For diesel, the most consumed petrol product in India, it rose 4.7%. Kerosene dived 7.7% following a general shift towards cooking gas and increased power availability. In June, diesel consumption grew 1.5%, the slowest month-on-month pace since July 2015, mainly because people anticipated favourable prices in May and July and shifted some offtake away from June, according to PPAC. Domestic prices follow international trends and are revised fortnightly, prompting dealers to temper order sizes on price change anticipation. Higher power availability and good monsoon, that affects road transport and lowers diesel consumption for farm pumps too contributed to lower diesel figures, the PPAC said. In June, petrol sales rose 4.4%, much lower than quarterly growth of 10%, primarily due to shifting of offtake as buyers anticipated lower prices in May and July, PPAC said. Growth in consumption of petrol was higher than diesel mainly due to increasing consumer preference for petrol-driven vehicles as the price differential has waned and policy thrust on scrapping older diesel vehicles gotten louder, PPAC said. Brad Marchand Authentic Jersey
SpiceJet, Jet Airways top India’s Most Reputed Domestic Private Airlines list: BlueBytes
When it comes to flying high in Reputation in Indian Aviation, national carrier Air India ranks first. SpiceJet leads in Domestic Private Airlines followed by Jet Airways with a 34% lower Brand Rep Score. While Indigo Airlines trails Jet with a Brand Rep Score 9% lower. In the International Private Airlines segment Singapore Airlines leads the way followed by Etihad with a Brand Rep Score 19% below the category leader. Emirates Brand Rep Score was 27% lower than Etihad. BlueBytes in association with TRA Research (both part of the Comniscient Group), released ‘India’s Most Reputed Aviation Brands 2016′ – the first in the Reputed series, and is set to launch a monthly report hereon on different sectors. The study evaluates brand’s Reputation with a two-pronged approach of media analysis and a survey of consumer influencers. “Reputation is a measure of the effectiveness of transmitted belief about attitudes showcasing Respect. In an industry where most players provide very similar services and the differentiators are barely a handful, having a good reputation becomes essential. A solid Reputation alone can be the distinguishing feature for Indian Aviation players to stand out from the clutter of the competition,” said Pooja Kaura, Chief Spokesperson for India’s Most Reputed Brands. The study was conducted within the Aviation industry – 21 airline brands that have measurable media coverage in India were selected for the study. BlueBytes tracked all the brands’ news in all the major English and Hindi print media (newspapers and magazines) across 9 cities as a representative of the news across all publications. A total of more than 30,000 articles related to different Aviation brands were captured in the period between June 15, 2015, and June 16, 2016. In addition to media analysis, the consumer’s perception was also studied. Devan Dubnyk Authentic Jersey
Air India’s hidden subsidy shows that the govt uses the company merely as a political tool
In spite of having the most bloated personnel structure in the industry, Air India continues to provide the worst service in the skies. Just recently, its on-time performance was shown to be much lower than other carriers that employ far less people per aircraft. In short, Air India does less work through more personnel. And all this colossal waste is funded by public money, that is, money hard earned and produced by you and me. That Air India still continues to be funded by public money with its very high employee per aircraft number and low on time performance is a matter of shame. Any matter of shame, on the part of who are not shameless, would have provoked some action. However, the government seems to be in no mood to stop funding Air India and stop haemorrhaging of public money. Thus, in an age of republicanism and democracy, the expensive Maharajah burns public money like all maharajahs have done in the past. The turbaned Maharajah icon of Air India is now a cruel, cruel joke. The amount of subsidy that has been injected into Air India by the people of the various states of the Indian Union is huge. Since the Union government extracts this money directly from states and puts them in a common pool, this element of states is not apparent. I will discuss later how and why this matters. Since April 2012, the Union government has pumped in more than Rs 22,280 crore to Air India’s core equity as part of its turnaround plan. This is part of the Rs 30,000 crore committed to Air India by Union government as part of its turnaround plan. Let’s realise what this subsidy is for. This is for passenger air services — a service that less than 5% of the population will ever avail and that too is the top 5% earning group of the population. However, the subsidy for this would come from the people of the states at large and hence, this is the worst form of regressive subsidy where the poor are subsidising a company that provides services to the rich. That this scandal continues is broad daylight is probably a huge sign of the classist nature of public discourse and policy making in the Indian Union. But there is a huge, huge hidden subsidy that no one talks about and that does not seem to matter. Let me explain by example. I am employed in a government-funded institution. One would think that public funds or government funds, since they are funds of the people, should be held to the highest level of thrift and value-for-money when spending and should not be wasted one bit since I am spending money given in trust by the public. The standards of responsibility would have to be high. Marlon Humphrey Jersey
State asks Centre to improve interstate air connectivity
The state government has urged the Centre to improve both interstate and intrastate air connectivity as part of the regional connectivity scheme (RCS). It has put forth a proposal of four routes to be declared as RCS ones in Odisha. It has also proposed to improve connectivity with major cities in the neighbouring states to the ministry of aviation. At present, Odisha has 20 operational airstrips. This includes the Biju Patnaik International Airport. “People living in the western, northern and southern parts of the state will be immensely benefited if air connectivity increases,” said state tourism minister Ashok Chandra Panda. The proposed routes include Bhubaneswar-Berhampur-Jeypore, Bhubaneswar-Utkela-Jeypore, Bhubaneswar-Sambalpur-Rourkela and Bhubaneswar-Angul-Rourkela. The minister also requested that these be declared as interstate routes connecting Bhubaneswar airport to important cities like Raipur in Chhattisgarh, Visakhapatnam in Andhra Pradesh, Ranchi in Jharkhand and Kolkata in West Bengal. Larry Warford Authentic Jersey
Government may leverage Air India to operationalise regional connectivity scheme
With no commitment coming from private carriers to join the ambitious regional connectivity scheme (RCS), the National Democratic Alliance government may bring in Air India Regional to operationalise the scheme aimed at bringing air travel to remote areas. Started as Alliance Air in 1996, the carrier was a low-cost arm of the erstwhile Indian Airlines and became a wholly owned subsidiary of Air India following the historic merger of the two state-run airlines. A senior official from the ministry of civil aviation, requesting anonymity, said that Air India would be asked to operate small ATR planes on some of the RCS routes in the initial stage to create demand. The official explained that similar steps were taken in the past and private airlines had followed where Air India had been the sole carrier. “We expect private airlines to join sooner or later once Air India flies to those smaller airports. It would create demand in the adjoining areas or even in other parts, if the national carrier is able to make it to just one of the destinations in a particular state,” the official said. The state-run carrier could also be asked to dry-lease more small aircraft for the regional push as private carriers in India don’t have too many of these machines in their respective fleets, he added. Under a dry lease, only aircraft is provided by the lessor. However, if crew is also provided by the lessor, then it is called a wet lease. J.R. Sweezy Authentic Jersey
SpiceJet plans regional connectivity push
Budget carrier SpiceJet on Friday raised the bar of customer comfort and convenience with the launch of smart mobile check in facility at GMR Hyderabad International Airport Limited and outlined plans to tap the growing opportunities in regional connectivity where the Government is seeking to provide a major push. Ashok Gajapathi Raju, Union Civil Aviation Minister, inaugurated the facility and expressed that the country’s civil aviation sector would continue to sustain the growth witnessed in the recent times. Ajay Singh, CMD, SpiceJet Ltd, said, “The airline has managed to turn around from being a sinking airliner after taking it over in January 2015. Over the past 11-12 months, it has consistently registered occupancy levels of over 92 per cent that only reflects how it is on growth path.” Transfer dispute Refraining to comment on the Delhi High Court order wherein the airliner was asked to deposit Rs. 580 crore in a transfer dispute between Kalanithi Maran and Spicejet, Ajay Singh, said, “The matter is sub-judice. At this point it would not be appropriate to comment on the development. We will have to wait for the order before we can comment on the matter.” The court on Friday sent the share transfer dispute between Kalanithi Maran and SpiceJet to arbitration relating to the transfer of 18 crore warrants by SpiceJet to its former promoter Maran. “India has been growing at a fast rate over the past few years and we expect the sector to continue the growth. This will mean new fleet acquisition and we are in talks with both Airbus and Boeing. In addition, we expect to add three more aircraft to the 14 aircraft fleet in couple of months to strengthen the regional connectivity,” he said. Currently, SpiceJet connects its network with a fleet of 26 Boeing 737NG and 14 Bombardier Q-400s. Smart check-in The Smart Check-in facility uses Bluetooth Low Energy and Near Field Communication technologies and enables customers who have booked their tickets through the SpiceJet Mobile App to check in without any hassle. The service has been initially introduced at Hyderabad Airport and will soon be available in all airports supporting e-boarding facility. SGK Kishore, CEO, GHIAL, said, “As an airport operator, we encourage and explore newer ways to improve passenger processing. We are the first Indian airport to implement end-to-end E-boarding process and soon coming with other digital interfaces for passengers. Our focus on digitisation at the airport is in line with the Prime Minister’s dream of Digital India.” “We are also working on a solution, where we may be able to do away with stamping of a cabin bag,” he said. Alexander Edler Authentic Jersey
Global investors likely to be cautious on NIIF investments: Report
Even as India is “aggressively” trying to attract funds for the Rs. 40,000-crore National Investment and Infrastructure Fund (NIIF), global investors are likely to adopt a “cautious” approach over investing in it, a report by BMI Research has said. The company, a part of the Fitch Group, said infrastructure sector in the country continues to face challenges, which is discouraging international investments. “Indian government is aggressively trying to attract foreign investments into its infrastructure sector, seeking $1 trillion in investments, however, we expect that international investors will continue to remain cautious over investing in the fund which seeks to fill the funding gap in India,” the company said in its latest report. Till date, NIIF has secured support through memorandum of understandings (MoUs) with sovereign wealth funds, including Russia’s Rusnano, Abu Dhabi Investment Authority and Qatar Investment Authority, the report added. However, BMI Research said: “While encouraging that there is interest in the fund, there is yet to be any formal commitment of capital.” The government had created NIIF in December last year as an investment vehicle for funding commercially viable greenfield, brownfield and stalled projects. While the government will invest Rs. 20,000 crore in NIIF, the remaining amount will come from private investors. BMI Research further said, “The potential of India’s $6 billion NIIF will not be fulfilled in the short-term, even as projects are selected for investment. “Crucially, the Indian infrastructure sector continues to present various challenges hindering the attraction of the market for international investors.” On the reasons behind the lack of interest from global investors in investing in NIIF, it said that it is likely on account of India’s investment outlook, which remains challenging. “The country scores below regional average in both our operational and project risk Index, with particularly low score for crime and security risk and construction risk, highlighted by the fact that a third of projects — worth a combined value of $210 billion — are delayed,” it said. However, BMI Research expects India’s construction and infrastructure sectors to grow by an annual average of 6.4 per cent between 2016 and 2025. “While we expect NIIF to continue to fund projects itself, we believe international backers, which the fund is looking to tap, are likely to adopt a wait-and-see attitude before investing in the fund, largely owing to a still challenging operational environment and high project risks which threaten timely returns on investment,” it said. Natrell Jamerson Jersey
IRB Infra bags Rs 2,100 crore project from NHAI
Toll road firm IRB Infrastructure Developers said it has bagged a contract worth Rs 2,100 crore from NHAI for a six-laning project in Rajasthan and Gujarat. “IRB has emerged as a preferred bidder for the project of six laning from Udaipur to Rajasthan/ Gujarat border on section of NH-8 in Rajasthan and Gujarat,” the company said in a statement issued here. The Rs 2,100 crore project is to be developed on design, built, finance, operate and transfer (DBFOT) under the National Highways Development Programme (NHDP) phase V. The concession period for the project is 21 years including construction period of 910 days, the statement said. “Subject to award, IRB’s construction order book will stand to increase to around Rs 10,000 crore, to be executed in the next four years. This will boost the company’s construction order book visibility for next three to four year,” IRB said. With this project, the company will have 21 build-operate-transfer (BOT) road projects, out of which 13 projects are under operation. Zack Smith Authentic Jersey
101 infra projects see Rs 1.29 lakh crore in cost overruns
As many as 101 infrastructure projects sized Rs 1,000-crore and above have reported a cost overrun of Rs 1.29 lakh crore, as per official data. The Statistics Ministry monitored 286 infrastructure projects, each worth Rs 1,000 crore or more across sectors such as power, railways and roads in April 2016. “The total original cost of the 286 projects was about Rs 9,40,160.86 crore and latest reported anticipated completion cost is Rs 10,69,547.02 crore, which reflects an overall cost overrun of Rs 1,29,386.16 crore,” according to the latest report for April. As per the report, out of the 286 projects, 2 projects are ahead of schedule, 54 are on schedule, 123 delayed and 101 projects reported cost overrun and 41 projects reported both time and cost overrun with respect to their original project implementation schedules. During the reference month, out of 286 projects, 123 projects are delayed with respect to original schedule and 31 projects have reported additional delay vis-a-vis the date of completion reported in the previous month (March, 2016). The report stated that the additional delay is in the range of 1 to 13 months in respect of projects relating to power, petroleum, urban development and road transport & highways sectors. It said the expenditure incurred on these projects till April is Rs 4,57,160.26 crore. Out of 286 projects, 101 projects have cost overruns with respect to original cost. Cost overrun of these is 101.72 per cent while during the last month, it was 103.84 per cent in 100 projects out of 278 monitored projects. In comparison with the last month, the number of projects reporting cost overruns decreases from 35.97 per cent to 35.31 per cent, it said. Out of 123 delayed projects, 22 projects have overall delay in the range of 1 to 12 months, 18 projects have delay in the range of 13 to 24 months, 59 projects have delay in the range of 25 to 60 months and 24 projects have delay of 61 months and above. During April, there are 117 projects which are showing time overruns of more than 6 months and 99 projects which are having cost overruns of more than Rs 100 crore and 40 projects are having both time overruns of more than 6 months and cost overruns of more than Rs 100 crore. Speedy implementation of projects assumes significance in view of government’s push to move towards high growth trajectory of over 8 per cent and touch double-digit mark over the next few years. Kevin King Authentic Jersey
There’s need to revisit existing format of PPAs for thermal power plants: EAS Sarna, Ex-Power Secy
FOrmer Secretary (Power) to Government of India, EAS Sarna said that there was need to revisit the existing format of the power purchase agreements (PPAs) for thermal power plants to eliminate the necessity of having to pay for deemed generation. Sarna in a letter to Comptroller & Auditor General of India (CAG) and others has written that state power utilities signing PPAs with private companies with a “deemed generation” clause, which forces them to pay for the power they may not need during lean period, should be reviewed. Further special audit of private sector thermal plants is necessary to safeguard the public interest. In his letter Sarna wrote, “In the liberalised regime introduced by amendments to the Electricity Act in 2003, the Centre and the States went berserk in clearing a very large number of thermal power projects, mostly coal-based, proposed by private companies, leading to a surplus thermal capacity which was meant to cater to the steady component of the electricity demand. In the past, the Central Electricity Authority (CEA) used to exercise due diligence in regulating additions to thermal capacity so as to minimize the backing down of thermal plants. The liberalised regime of 2003 discontinued such a regulatory oversight, opening the floodgates to proliferation of private thermal generation capacity across the States. Instead of assuming the risk of finding alternate consumers for the power generated by them, the private developers setting up thermal power plants took undue advantage of the over exuberance displayed by the States in inviting investments and forced them to sign PPAs with a deemed generation clause, thereby transferring the risk of finding an outlet for their power to the States. In the liberalised set up that exists today, the private developers should be persuaded to take on some risks. The States ought to have so designed the format for competitive bidding as to obviate the scope for having to pay for the power they may not need during the off-peak hours. In such a case, it is for the private developer to find alternate sets of customers to absorb their surplus power. The losses to the public exchequer on account of the “Deemed Generation” clause in the PPAs are mindboggling large. These are amounts that public sector utilities are forced to pay to private companies and indirectly, the huge cost burden is passed on either to the electricity consumers in the State. As an immediate measure to stop this plunder of public money, there should be an embargo on additions to thermal power capacity, especially in the private sector. Simultaneously, there is need to revisit the existing format of the PPAs for thermal power plants to eliminate the necessity of having to pay for deemed generation. In the liberalised set up that exists today, the private developers should be persuaded to take on some risks.” EAS Sarna requested the CAG to conduct a special audit of this across the States as otherwise the losses to the public exchequer would continue to mount to a formidable proportion. It is important that this issue is analysed thoroughly and the matter is posed for discussion in the Parliament and the State legislatures. Dre Kirkpatrick Authentic Jersey