New civil aviation policy faces delay over auction proposal
The new civil aviation policy that seeks to ease the rules for airlines to fly overseas and radically increase regional air connectivity will have to wait, as the Prime Minister’s Office has ordered to go slow on it. The civil aviation ministry had discussed the new policy with other ministries such as finance, home, external affairs and commerce and even prepared a note to be presented before the Cabinet to seek its approval. But lack of consensus between the two civil aviation ministers and among senior officials of the ministry over a key proposal — auction of rights for foreign airlines to fly into India — has probably led the PMO to throw the spanner in its works, people in the know said. “Our Cabinet note is ready and we were about to send it when the PMO asked us not to send it till further orders,” said a senior aviation ministry official, who did not want to be named. A section of the aviation ministry, including Cabinet minister Ashok Gajapathi Raju, wants auction of bilateral rights to bring in transparency in the allocation, the official said. “The other section that includes junior minister Mahesh Sharma and officials are, however, opposed to any kind of auctioning of bilateral rights, as no other country in the world does it,” the official added. Currently, bilateral rights are negotiated between two countries and the increase in allocation is decided on the basis of demands made by the airlines from both negotiating countries. Government officials in the know of the matter said the external affairs ministry, which has a major say on bilateral traffic rights as the policy involves foreign governments, has approved the aviation ministry’s proposal to conduct auction. When asked, aviation secretary RN Choubey said the ministry had not sent the Cabinet note on the policy yet as “internal discussion are continuing”. But, he denied any involvement of the PMO. “No instructions have been given by (the) PMO,” Choubey said in an SMS response. The information officer for the PMO, Sharat Chander, didn’t respond to SMSes sent to him. When called, Chander said he will get back but didn’t respond until press time on Wednesday. While the differences are over whether or not to auction the bilateral rights, the delay in clearance of the new aviation policy would also affect the government’s plan to abolish the so-called 5/20 foreign flying rule. According to this rule, an Indian carrier will have to fly in the domestic sector for at least five years and have a fleet of 20 aircraft to fly international. The aviation industry is divided on the issue of its abolition, with airlines like Jet Airways, IndiGo, SpiceJet and GoAir — they got permits to fly overseas after operating five years in the domestic sector — opposing the proposal and newer carriers Vistara and AirAsia India favouring its abolition. According to the new rule that proposes to replace 5/20, airlines must allocate 20 aircraft or 20% of their total fleet of aircraft, whichever is higher, to the domestic sector if they wish to fly overseas, ET had reported first on March 9, 2016. The draft of the aviation policy released late last year also sought to make millions more fly by limiting airfares to.`2,500 per hour on short routes and making hundreds of mostly unused airports and airstrips in small cities and towns operational. Chris Hubbard Womens Jersey
Mumbai airport Customs better than global counterparts: Survey
A Finance Ministry-sponsored survey has revealed that 69 per cent respondents at the Mumbai airport Customs rated their experience as “better or somewhat better” than other international airports. In a first of its kind survey, CBEC had engaged L N Welingkar Institute of Management, Mumbai (WE School), to conduct a survey of ‘passenger satisfaction’ levels of Customs clearance process at the Chhatrapati Shivaji International Airport in Mumbai, one of the largest in terms of international passenger traffic in India. Asked to rate their experience, “69 per cent rated their experience with the Mumbai airport Customs as better or somewhat better than other international airports, 15 per cent rated on par and about 16 per cent felt it was worse”, the ministry said. The sample size of the survey was 731, duly representing demographics, nationalities and profession, among others. The study found that passengers are sensitive to the time they spend on the entire Customs clearance process. In the case of Green Channel passengers, threshold time is ‘up to 15 minutes’ while in the case of Red Channel passengers, threshold time appeared to be in between 15-29 minutes. Pre-arrival self-calculation/assessment and payment of Customs duty levied, dedicated Customs clearance channel for those international passengers who have connecting domestic flights to board, ease of Customs clearance process at the airport are some of the important recommendations. Among findings, the respondents appreciated the improvement in Customs clearance process over the years. Thirty five per cent mentioned that the clearance process has drastically improved while 37 per cent felt that there is a marginal improvement. According to the passengers, three areas that require major improvement are access and availability of information, speed of process and greater transparency of duty assessment process. “Customs assessment for TV and jewellery appeared to be less widely known and are two commodities causing maximum discord,” the survey found out. Roman Josi Womens Jersey
Infra companies keen on investment trusts, but want more clarity
Infrastructures developers such as IRB, GMR and IL&FS are keen to launch their infrastructure investment trusts after Sebi announced guidelines last week, but may hold their plans for more clarity on disclosure and accounting norms. An infrastructure investment trust (InvITs) offers an opportunity to promoters of projects to sell their stake in completed projects to the trust, which in turn can raise longterm and tax-free funds from unit holders. Markets regulator Securities & Exchange Board of India (Sebi) issued the norms for public issue of units of these InvITs which are likely to pump in liquidity into an otherwise cash-strapped infrastructure sector. “We are keen to tap this route for fundraising but until we have more clarity on accounting standards, disclosure and prospectus norms, we cannot go ahead with it. We expect Sebi to come out with guidelines on that soon so that this fund raising option can be exercised,” said IRB InfrastructureBSE 2.08 % Developers’ promoter and Chairman Virendra Mhaiskar. IRB and GMR InfrastructureBSE 1.07 % have already received the regulator’s approval for the trust while others such as Infrastructure Leasing & Financial Services have sought the regulators nod. L&T is also considering this route for fundraising. “We will look at it if we have the comfort that it will get long term investors since it is a product modelled for institutional and long term investors. Investors looking for short term gain may get frustrated if they invest in it,” L&T Chief Financial Officer R Shankar Raman said. The guidelines announced by Sebi last week give these developers more flexibility by allowing sponsors to reduce their holding in the trust to 10% from 25% mandated earlier. It also allows them to invest in two-level special purpose vehicle structure and increase the number of sponsors to 5 from 3. But companies may have to tweak their plans and may be able to raise less than what they had planned initially after Sebi detailed the eligibility criteria for projects that can be included. “We were earlier hoping to put all 12-15 of our projects into a trust, which would have had an enterprise value of Rs 15,000 crore. But according to the guidelines, only 6 of our projects are eligible which have a total enterprise value of Rs 7,000-8,000 crore,” said Mhaiskar. Most infrastructure developers are struggling with low cash flows and have heavily leveraged balance sheets, which constraints their ability to bid for new projects. Several projects, and even holding companies, are on the block but there have been far too few deals. “Very few deals are going through in the secondary Market even though a lot of projects are looking for equity investments as there’s a valuation mismatch. We will have to see what kind of valuation these trusts can fetch as it is a new route and there could be some teething issues,” said Shubham Jain, vice president at the rating agency ICRA. Infrastructure developers are refraining from bidding for new projects given their financial constraints with a number of bids for Build-Operate-Transfer (BOT) road project falling to 3-5 from about 20 during 2011-12. Timo Meier Womens Jersey
Dharmendra Pradhan unveiled new refining technology at Honeywell India Technology Center in Gurgaon
Indian Minister of Petroleum and Natural Gas Dharmendra Pradhan unveiled a new refining technology at Honeywell’s India Technology Center, which is dedicated to helping Indian refiners get more clean transportation fuels from every barrel of oil. The technology is one of several being developed at the center by Honeywell UOP, a world leader in developing and licensing process technologies used in oil refining and the production of petrochemicals and renewable fuels in India and globally. The company has invested about $40M at the facility, which is one of the main technology development hubs for Honeywell UOP outside the U.S. It also develops technologies for other Honeywell businesses in the region. “The Indian government is committed to innovation and being an early adopter of technologies to drive growth for the country. I am pleased to launch this new Honeywell technology today, dedicated to making Indian refiners more competitive and efficient,” Shri Pradhan said. The technology inaugurated at the event is a pilot plant specifically designed to develop advanced hydrocracking catalysts that can more efficiently produce higher yields of clean-burning diesel fuel from crude oil. The technology can allow Indian refiners to get more from each barrel of oil, helping reduce imports of crude oil while producing environmentally preferable diesel fuels. “The Hon’ble Prime Minister’s visionary call to realize a 10 percent reduction in the country’s crude imports by 2022 has already set a challenge before the Indian hydrocarbon sector, making this advanced hydrocracking technology the solution of choice to help meet this goal and meet the growing demand for energy in India,” said Steven C. Gimre, Managing Director, UOP India Private Limited. In the past, Honeywell UOP has helped India meet its goal for production of petrol and diesel in the 1980s and to implement Euro III and Euro IV fuel specifications in the 1990s. Today, Honeywell UOP’s technologies are deployed in every refinery in India. More than half the country’s oil and more than 70 percent of the country’s gasoline are made with Honeywell UOP processes, and more than 85 percent of the nation’s biodegradable detergents are produced using Honeywell UOP technologies. More recently, Honeywell UOP entered into a collaboration agreement with Indian Oil Corporations Limited (IOCL) to develop a range of biofuels technologies. “Honeywell India employs close to 15,000 people to deliver innovative technologies that help customers improve energy efficiency, safety, security, and productivity – all of which are key imperatives for India. Honeywell and its employees are creating solutions and technologies in India, for India, and for the rest of the world,” said Anant Maheshwari, President of Honeywell India. Honeywell is aligned with and has a significant Make in India footprint with seven manufacturing facilities in Chennai, Dehradun, Gurgaon, Pune and Vadodara, and five technology and engineering centers in Bangalore, Gurgaon, Hyderabad and Madurai. Artie Burns Authentic Jersey
India’s LNG imports rise 45% in April
Imports of LNG have steadily risen over the years, albeit at varying rates of growth from about 7 bcm in FY06 to about 21 bcm now. With liquified natural gas (LNG) prices hovering around a benign $5/mBtu for several months coupled with drop in domestic production of natural gas, India’s gas imports have risen a steep 45.4% annually in April. The LNG imports for the month of April stood at 2,142 million metric standard cubic metres (mmscm) compared with 1,473 mmscm in the corresponding month last year, according to petroleum ministry data. On the other hand, the gross gas production from domestic fields dropped 6.9% to 2,488 mmscm in April 2016 against the same month last year. In the full year of 2015-16, the LNG imports witnessed a surge of 14.96% at 21,309.28 mmscm against 18,535.73 mmscm in FY15. The domestic natural gas output fell 5.5% in FY16 at 25,306.73 mmscm. “Industrial and commercial segments are the largest consumers. With the expected pick-up of power generation and industrial manufacturing, imports are likely to grow further in FY17. Some new urea plants under implementation as well as some on the drawing board are likely to be drivers of incremental demand. Over the next five years, demand from city gas is also likely to grow faster than that of industrial segment and thus, its share in overall demand is expected to increase to double-digit figures,” said Kalpana Jain, senior director at Deloitte in India. Imports of LNG have steadily risen over the years, albeit at varying rates of growth from about 7 bcm in FY06 to about 21 bcm now. Overall gas consumption, has increased, especially FY14 onwards, to compensate for the decline in domestic production. In March, gas volumes to the tune of 7.62 mmscmd have been auctioned to different stranded power stations to run operations. “India’s total domestic production has been a sort of bell curve over the last 10 years,” explained Jain. The production was 32 billion cubic metres (bcm) in FY06, which increased to a high of 52 bcm in FY11 and thereafter reduced to about 32 bcm in FY16. While the overall production dropped, production of PSU explorers ONGC and OIL has largely remained flat in the range of 25-26 bcm. Production from private players, particularly RIL, ramped up from FY08 to FY11 and then declined substantially from FY12 onwards. The flat production by PSUs is primarily because of two key factors—most of their producing fields are old and have crossed peak production stage and second, new discoveries are either yet to commence production or have not reached their full potential. “New fields being brought on production are not large enough to significantly offset the decline in production from older fields. Besides, some fields which are likely to be large reserves, such as ultra-deep water blocks in eastern coast, are in difficult to produce areas which probably require higher gas price to justify investment,” added Jain. Indian domestic fields do not operate in a pattern where output could be ramped up immediately. Such production increase is possible on a short notice where output is varied based on global price and economics of fields as those in West Asia or Russia. Given that India is an import-dependent country, all developed and producing fields are in any case operated at optimal levels as regulated by the directorate general of hydrocarbons (DGH). The government’s efforts to spur investments in exploration and production is recent and given the long gestation of oil and gas investments, it could take time to bear fruit.
Slump in LNG prices delays production at Mozambique gas field
Production at the Mozambiquegas field, in which Indian state firms have 30% interest, will get delayed by about three years with the first output likely only in 2021, as plunging gas prices cast a shadow on investment decisions and make buyers scarce. “It’s aclassic chicken and egg situation,” said a source with direct knowledge of the matter. “Gas purchase agreements can’t be finalised quickly as the final investment decision (FID) hasn’t been made, and an FID can’t be made because there is no visibility on who will buy the gas.” At the heart of this complex situation is the massive three-fourths drop in liquefied natural gas (LNG) prices in two years. A supply glut has brought down spot LNG prices to about $4.25 per unit, upending the market rules and leaving buyers and sellers with little pricing certainty with which to strike long-term deals. Many of those caught in long-term expensive deals prefer spot cargoes these days. The Mozambique project, however, is not unique in this as many other projects globally face the same stress brought on by the price crash. To be sure, the Mozambique project has entered into preliminary agreements with several buyers for its natural gas. But those agreements haven’t entered the final, binding stage since, according to a source, buyers first want to see investment commitment from the promoters of the Mozambique field. Another source said the investors in the project are hesitant in committing to long-term deals at current prices and are therefore delaying the project. The FID for the project is now expected only by the end of 2016, according to the source. The output would start only in 2021, he said. The first LNG from the project was expected by 2018, Oil and Natural Gas Corporation (ONGC) had said while announcing its first stake buy in the project in June 2013. ONGC and Oil India had jointly agreed to purchase 10% participating interest from Videocon Mauritius Energy Ltd for $2,475 million in Rovuma Area-1block in Mozambique with an estimated recoverable reserves of 35 to 65 trillion cubic feet. Just two months later, ONGC agreed to buy additional 10% stake from Anadarko for $2,640 million. Bharat Petroleum Corporation had entered the project in 2008 with a 10% stake. Anadarko Petroleum Corporation, with its 26.5% interest, is the operator of the block. According to the source quoted above, $5-6 billion has already been invested in the Mozambique project and another $25 billion is further needed. Michael Grabner Womens Jersey
RIL, BP on way to end dispute with government
Reliance Industries (RIL) and joint venture partner BP Plc are moving towards ending their dispute with the government on gas pricing, but are yet to officially approve the proposal for it, industry sources said. RIL and BP declined to comment on the matter. RIL, BP and their partner Canada’s Niko Resources are contemplating pulling out of the arbitration against the government as the government’s policy changes announced in March requires them to drop the case if they want to accept the higher gas prices being offered. On April 13, EThad reported that RIL, BP and Niko have formally started the process of developing their deep sea fields, which industry executives say signals their intention to withdraw arbitration against the government a necessary condition if they want to charge market price for natural gas. At that time, BP had said: “The recent reforms announced by the Government of India will provide the much needed impetus to the Indian oil and gas industry. Together with our partners, we are working with the Government to progress activities in our blocks.” In March, the government announced a new policy that links the pricing of gas from undeveloped difficult fields such as deep sea and high-pressure, high-temperature areas to alternative fuels, effectively doubling the prices. While the maximum price available to domestic natural gas is $3.06 per unit, difficult fields can avail of $6.61per unit. But the policy states that any operator engaged in litigation against the government cannot avail of these prices. Top executives of Reliance and BP met government officials recently to discuss plans to develop discoveries affected by the new policy. In a report on Wednesday, Bloomberg said RIL and BP intend to complete the withdrawal from multiple arbitration proceedings, at least one dating back to 2011, before they finalise plans to restart developing discoveries in the KG-D6 block off the east coast of India, among other exploration areas they hold. Byron Buxton Authentic Jersey
First round of bidding for discovered small fields to begin from July 15
The first round of bidding for discovered small fields will start from July 15 with the last date of bid submission being kept on October 31. Dharmendra Pradhan, Minister of State (Independent Charge) for Petroleum and Natural Gas, said the Ministry will aim to complete the contract signing and award of the fields by maximum January 2017. On offer would be 67 fields clubbed into 46 contract areas. The fields have resources worth Rs. 70,000 crore locked and were previously owned by ONGC and Oil India, Pradhan said. The two companies could not develop the fields because of the small size and unattractive pricing. “Even if they were offered revenue sharing contract, marketing and pricing freedom, which is being offered to the bidders, ONGC and Oil India may not have been able to develop these fields,” Pradhan said after launching the first round of bidding for discovered small fields. Already 130 wells have been dug in these fields and they have 48 million tonnes of in-place oil reserves as well as 38 billion cubic meters of in-place gas reserves. Pradhan said that roadshows for the bidding round will begin in Mumbai on June 6. “To attract and encourage start-up companies in the hydrocarbon exploration and production business, we will also host a roadshow in Bengaluru and keeping in mind our focus on developing eastern India, we will have a roadshow in Guwahati,” the Minister said. Devin Funchess Jersey
Economy on fast-track; need to boost infra, cut logistic costs: Gadkari
In an interview to Bloomberg TV India, Union Road Transport, Highways and Shipping Minister Nitin Gadkari crystal gazes at what was missing in the earlier regimes and what has been achieved by the Modi government in the last two years He also outlines the challenges and the road ahead for the fastest-growing major emerging economy. Starting with a stark slowdown, the NDA government has been able to pull up GDP growth to 7.5 per cent even as the global economy remains feeble and the neighbouring China is in a crisis. The Modi government is decisive, it has a vision and has fast-tracked decision making process, and this has changed the scenario, he says. Excerpts: Two years have passed. . Before we get into some specific things, I want your big picture assessment. Two years down the line, are you satisfied with the overall performance of the government as well as your Ministry? I feel that this is the first time a government is with a vision and a government has a commitment for gaon, gareeb mazdoor and kisaan (village, poor, worker and farmer). And that reflects in the policies. This is a decisive government. Prime Minister Narendra Modi has a vision. The government has a fast-track decision-making process and definitely the scenario has changed. You talk about the coal sector, now we have a surplus there. You talk about the power sector, now we have a surplus. Now you talk about road sector. At a time when the government took charge, road construction was only 2 km per day. Today, it has reached 25 km per day. In the port sector and in inland water sector, things are progressing. In case of agriculture sector, there is no black marketing of urea. There is no lathi charge on farmers because of urea. From last year, urea production is in surplus. So a lot of things are changing. You have given a time period of 60 years to Congress and we are just completing two years. It will not be appropriate to compare our two years with the 60 years of the Congress. I am confident that we have basically changed the track of the economy. Our economy is now on a fast track. We are going to increase employment potential. These will result in increase in GDP. When Manmohan Singh was Prime Minister, the GDP growth rate was 4.5 per cent in FY13 and 4.7 per cent in FY14. Today, the GDP growth is over 7.5 per cent. Agriculture growth has also increased. Still, we are facing a lot of problems. In the last two years, there were a lot of problems, challenges, and some negative things were there. But still our government has succeeded in giving a good vision to the country and we are moving fast. Infrastructure building in different fields, Digital India, Make in India, Start-up India — these are the new visions. Innovation, entrepreneurship, technology and research — these are the things we are focusing on. The way in which the Prime Minister visited different parts of the world, he is recognised as a world leader. There is a lot of respect for the country and for the Prime Minister in the whole world. There are great achievements. We have improved the relations with our neighbouring countries — Nepal, Bhutan and Bangladesh. We have solved the land dispute issue with Bangladesh. But still there are many challenges. You are not only a Union Minister, but also have been the BJP president. And now that the Congress seems to have been restricted to just a few states, what changes, as far as the political discourse in the Parliament, do you perceive? Although the Bankruptcy Bill has been passed, what about some of the pending reforms? Is the climate likely to change Do you feel the Congress will continue to remain the way it was? Do you expect an improvement in relation with the Congress and other parties on the floor of the Parliament? Poverty and unemployment are two very important issues for the country. I sincerely feel that these are still the issues only because of the wrong economic policies, bad and corrupt governance and the visionless leadership of the Congress party. I have serious reservation about the economic policies created during the Congress rule. Now we are facing drought. No drinking water is available in villages. There is no water available for farmers. But the Congress government purchased aircrafts worth ?70, 000 crore. I never understood what the priority was. When there were a lot of private players who were ready to invest in the aviation industry, what was the need for the government to invest ?70,000 crore in purchasing aircraft? This is a wrong economic policy. The country needed a development-oriented government, a transparent government, a corruption-free government and a government with a vision for development. Our government has these qualities. There is no charge of corruption against our government. That’s why the economy is changing. But still there are challenges. World economy is under recession now. China is facing economic crisis. In such a scenario, it is difficult for us to work in our country also. We have to increase our exports, we have to increase investments and foreign investments across sectors. These are the challenges before us. But I always have faith. There are some who convert problems into opportunities and there are some people who convert opportunities into problems. But our government under the leadership of Prime Minister Narendra Modi is confident that we can convert problems into opportunities and we can make India socially and economically strong. I want to request you to tell us about water-bone transport. Since India is a mainland country we continue to get stuck at red lights and we forget that there is no red light in rivers or seas. In the future what is the plan? You are absolutely correct. This sector was totally neglected by the previous government. In China, 47 per cent of
List of smart cities could cross 100, hints Venkaiah Naidu
The number of Smart Cities may end up at more than 100, the government indicated on Tuesday as it announced allowing seven state capitals -Bengaluru, Patna, Shimla, Amaravati (Andhra Pradesh), Thiruvananthapuram, Naya Raipur and Itanagar- to participate in the competition. These capital cities were left out of the mission. Moreover, Meerut and Rae Bareli from UP, both of which had scored similar marks resulting in a tie for the 13th nomination from Uttar Pradesh will also be allowed to submit their plans. Even Jammu and Srinagar from J&K will be allowed to compete. “One city from each of these states will be selected based on the quality of Smart City plans,” urban development minister M Venkaiah Naidu said. Neither Centre nor the UP government was ready to take a decision between Rae Bareli and Meerut considering the political implications. While Rae Bareli is Sonia Gandhi’s constituency, BJP won Meerut Lok Sabha seat in 2014. Responding to what the logic is behind bringing more cities into this competition when the total number of cities and for each state have been capped, Naidu said, “It’s not necessary that all the nominees from states can qualify. So, there will be room for new cities. If we get more budget once the GST is passed, we may go for more cities under this scheme. The list of 100 cities will act as light houses,” he said. Stephen Curry Jersey