Infrastructure and Energy Sector

ajay_ijn

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there is a lot of news on infrastructure sector like ports, highways, power and also on energy. Since we cannot post all this in economy thread and it also is high importance to economy and public welfare of India. I have created this thread.

Govt proposes easier terms for road projects
Govt proposes easier terms for road projects
The government plans to ease several conditions in the model concession agreement (MCA) for highway projects to address key complaints from construction companies and attract more bidders.

The changes include significantly increasing the stakeholding in the conflict-of-interest clause, removing the termination clause for concessionaires, introducing an exit clause for the lead partner in a special purpose vehicle (SPV) and changing the minimum threshold limit of projects executed by a company bidding for a new project.

A senior roads and highways ministry official said the proposals have been submitted to a committee headed by Planning Commission member B K Chaturvedi that was constituted by Prime Minister Manmohan Singh to resolve issues impeding road projects.

The committee also comprises Finance Secretary Ashok Chawla and Road Secretary Brahm Dutt and is expected to submit its report on August 24.

The stakeholding threshold in the conflict of interest clause has been raised from 5 to 15 per cent. Earlier, SPVs in which any developer had more than a 5 per cent shareholding each were barred from bidding for the same project. By raising the cut-off to 15 per cent, the official hopes that fewer potential bidders will be eliminated from the bidding process.

Current norms also bar the lead partner in an SPV to exit by selling its stake after the construction of the project is over and is mandated to stay till the concession period is over. The new MCA proposes to introduce an exit clause for the lead partner.

The termination clause in the MCA currently allows the National Highways Authority of India (NHAI) to take back tolling rights from a concessionaire anytime before the concession period is over, if the concessionaire has recovered its investment on the project. The government now proposes to remove this clause, to introduce a higher comfort level for bidders.

The government is also considering easing the threshold limit to allow more potential bidders. Currently, a company bidding for a project of Rs 5,000 crore should have undertaken similar projects worth Rs 10,000 crore (or double the size of the project it is bidding) in the previous five years.

These measures to attract more bidders have become urgent, given Roads and Highways Minister Kamal Nath's target to build 20 km of roads per day from the current 3 km a day. Taking it forward, the NHAI has come with an annual work plan to put for bids projects worth Rs 1 lakh crore.
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lets hope nath can do a lot more than what previous guy did.
 
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ajay_ijn

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Road Ministry seeks $3-b World Bank loan

Road Ministry seeks $3-b World Bank loan
Road min seeks $3-b World Bank loan- Infrastructure-Economy-News-The Economic Times
NEW DELHI: The road transport and highways ministry is seeking a loan of $2.96 billion from the World Bank to develop 5,937 kms of highways,
cutting across 14 states in the country. The proposed loan would cover 70% of the project cost, while the rest would come from the government.

Funds from the World Bank are expected to hasten the pace of development of these road projects that have been identified for construction with full government funding.

A senior ministry official said these road stretches have low traffic projections that warrant funding by the government. “We have now written to the finance ministry seeking loan from the international bank to fund a large portion of these highways that are outside the National Highways Development Programme (NHDP),” the official said requesting anonymity.

Not all highways are part of the government's NHDP, which was started by the Vajpayee government in 2000. The UPA government has now identified 6,376 kms of road to be developed over the next few years with government funding. Out of this, 5,937 kms will be developed using the World Bank fund.

The government-funded road stretches (annuity projects) include several single-lane highways connecting district headquarters in the country. These stretches are neither part of the ambitious Golden Quadrilateral (GQ) highways that connect all the major metros nor part of any major arteries such as the East-West and the North-South corridors.

"As these roads are considered less important, they are left out of the major highway development projects. World bank funding will bring much needed seriousness into these stretches," the official said.

Government's decision to approach international funding agencies for developing non-NHDP highways is surprising as its earlier projects have received their flak for numerous delays. Earlier this year, the World Bank and the Asian Development Bank (ADB) had expressed concern over the delay in implementing the highway projects funded by them.

"The international agencies want highway development as per international practice. They want timelines to be met and safety standards not compromised. When highway development agencies (NHAI or state governments) fail to meet the agreed terms these agencies do not want further release of the fund," the official said.

He said that the government would now ask for block-funding as loan in any case has to be repaid as per agreed terms. In this kind of funding arrangement, the entire loan amount is released in one installment rather than the usual practice of releasing funds in installments.

"Due to global economic meltdown, there is pressure on the World Bank and ADB by member countries to relax the norms for granting loans," the official said.

The government plans to invite bids for 14,395 km with an estimated cost of $20.68 billion during 2009-10. It has set a target to invest $70 billion in road sector by the end of 2012.

Interview with Ira Magaziner,chairman of Clinton Climate Initiative on setting up mega solar power plant in gujarat
http://www.business-standard.com/in...lower-than-coal-plants-in-five-years\/369366/
Ira Magaziner, chairman of Clinton Climate Initiative - a programme of the Willam J Clinton Foundation is hopeful that the cost of solar power generation in India will be lower than coal based plants in the next five years.

CCI, which is in the process of setting up four Solar Parks across the world with an overall maximum capacity of 20,000 Mw today signed an MoU with Gujarat government on Monday for setting up in what is billed as world's largest solar project. Talking to Maulik Pathak, Magaziner shared his plans of tapping this sun-shine sector. Excerpts:

So you have finally firmed your plans on Gujarat after exploring for over a year now. Have you identified the location?
We have identified about three to four locations and will be finalising them in the next three to four weeks. About 5,000 hectares of land is required for the project.

We have been to many places where they talk and talk. Finally, we came to Gujarat where people act. CCI is aiming to set up solar park with a generation capacity of 3,000 Mw which could go up to 5,000 Mw. The cost of the project would be about $ 8-10 billion for 3,000 Mw and for 5,000 Mw it would be about $ 15 billion. The feasibility study will be over in 2010 and the plant will start in 2012.

How much solar capacities has Clinton Climate Initiative planned worldwide?

We are planning to set up four solar parks across the globe. We are looking at South Africa, California in US, Australia and Gujarat. All these projects are of the same size as of now. The overall capacity to be generated from solar in the four projects could go as high as 20,000 Mw.

From the progress made so far, we feel that the Gujarat project will be the first to come up. And this would be the world's largest solar project.

The cost of generation for solar power is very high as compared to other fossil fuel fired units.
A 'solar park' can decrease the cost of solar power significantly. The intial cost for setting up the project is very high. Once the plant is set up, its cost comes down. There is no extra cost except managing the mirrors.

You don't have to adjust to any fluctuations in cost. In fact there is no fuel cost. It (solar plant) can go on as long as the sun shines. Ofcourse, we got to make arrangements when the weather is cloudy. As per our calculations, the cost of solar power generation in India will come down to Rs 5-6 per kilo watt hour/unit in next five years. And this will be lower than the cost of a coal fired plant.

How do you propose to finance these projects? How many developers have shown interest in the Gujarat project so far?
As the project is very costly in the initial phases we will arrange finance for the solar developers.

We are already in talks with Asian Development Bank for this. As I said earlier once the project takes off, the cost of generation goes down, so finance is essential initially. About 10 international developers have already shown interest in the project.

The Central government had recently written to the state to consider setting up a solar SEZ in Gujarat. Any plans to park your solar project in the SEZ? Also, do you propose to set up hybrid plants?
We have held talks with the Central government on this. In fact, we are very hopeful about the National Solar Mission.

Along with developers, research and development, even component manufacturers have shown interest in our project. So there is a good export market. We can certainly consider that (SEZ). Hybrid plants are something else that we are considering at the moment.
 

ajay_ijn

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GAIL likely to invest Rs700 crore in Mynmar-China gas pipeline

GAIL likely to invest Rs700 crore in Mynmar-China gas pipeline
domain-b.com : GAIL likely to invest Rs700 crore in Mynmar-China gas pipeline
GAIL (India) Ltd, is studying a proposal for investing Rs700 crore in an 890- kilometre long pipeline from a gas field off Myanmar coast to China, B C Tripathi, chairman and managing director of GAIL, said yesterday.

''We have received a proposal from South Korean companies (Daewoo International Corp and Korea Gas ) for joining the project. We are examining the prospects,'' Tripathi told reporters after the company's AGM.

The pipeline may cost $1.5 billion, of which GAIL's investment works out to be about Rs700 crore.

Daewoo International holds 51 per cent operating interest in the two offshore Myanmar blocks - A1 and A3, the gas from which will be sold to China ad India.


Korea Gas Corp (8.5 per cent), GAIL (8.5 per cent) and ONGC Videsh Ltd (17 per cent), and Myanmar Oil & Gas Enterprise (15 per cent) are the other stakeholders.

The in-place reserves from the A-1 block have been assessed by Houston-based consulting firm Ryder Scott at 2.88 trillion cubic feet to 3.56 trillion cubic feet.

Gas supply from the blocks is expected to start in the first half of 2013, with initial output from the first phase pegged at 10 million standard cubic metres a day (mmscmd).
"Finally it will be ramped up to 16 mmscmd," Tripathi said.

If GAIL decides to participate in the pipeline project, it may like to go through with its joint venture with China Gas, the GAIL director (finance), R K Goel, said.

"We have already taken approval from the Myanmar government and the existing consortium to permit our alliance to associate in the joint venture," Goel said.

According to studies, China's current natural gas consumption is twice that of India. While natural gas forms 8 per cent of India's commercial energy supply, it is only 3 per cent in China, which wishes to raise it to 10 per cent. China's projected gas demand will, therefore, outstrip that of India.

It has an operating terminal at Guangdong and is building another four along its eastern seaboard. Other than Myanmar, China has also signed an LNG contract with Qatar and another with the French company, Total to ensure uninterrupted gas supply.

India-Myanmar pipeline
India too plans a gas pipeline from Myanmar. However, Bangladesh, through which the gas pipeline was earlier conceived, and India are locked in some boundary disputes.

The tri-nation pipeline project was initiated by a Bangladeshi private company, the Mohona Holdings Limited way back in 1997. The pipeline was to run through Arakan State in Myanmar and the Indian states of Mizoram and Tripura before crossing Bangladesh to reach India's West Bengal capital Kolkata.

The governments of India and Myanmar approved the Mohona proposal for the cross-border pipeline. But Bangladesh did not approve it.

The laying of this 900-km tri-nation pipeline was agreed to in principle by the energy ministers of the three countries in Yangon in January 2005.

If the pipeline is constructed through Bangladesh, its length would be 900 km long. On the other hand, if it is laid through the Northeast bypassing Bangladesh, the pipeline will have to cover an additional 500 km.

Last November, tbe North-Eastern states have asked the petroleum ministry to route the proposed gas pipeline from Myanmar to India through the region, excluding Bangladesh.

GAIL has also favoured routing the pipeline through Mizoram, Assam, Bihar and West Bengal.

According to the revised plan, the trunk pipeline for importing gas from Myanmar will be connected to the proposed Jagdishpur-Haldia gas pipeline at Gaya in Bihar after passing through Aizwal, Guwahati, Jalpaiguri and Siliguri.

The pipeline will also have the provision to transport gas from developing gas fields in Tripura and Assam. However, the union government has not yet reached a final agreement on the line.
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I never there was burma-bangladesh-india pipeline being planned.
 

ajay_ijn

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India can add 60,000 to 70,000 MW in five year plan, to miss target of 78,000 MW
India to miss target of adding 78,577MW - Economy and Politics - livemint.com
The inability to meet the target could hurt India’s ability to meet rising demand for power. India has a power generation capacity of 150,000MW and it planned to add 78,577MW in the 11th Plan (2007-2012). Mint had reported in August 2007 that this target would likely be missed. By Brahma’s estimate, the shortfall would equal 23.64%.

At the current rate of progress, India will add 60,000 MW by 2012, Brahma said in an interview. “With effort we will reach 67,000-68,000MW. However, this will be the best capacity that will ever be added in a single Plan (period)... If government gives us gas, then we can touch 80,000MW.”

This miss will further aggravate the current 12% peak-hour power shortage.

Missing power generation targets isn’t new to India. In the Eighth Plan period (1992-97), a generation capacity addition target of 31,000MW was set, but only 16,000MW was achieved. In the Ninth Plan (1997-2002), against a target of 40,000MW, only 19,000MW achieved. In the 10th Plan (2002-07), against a target of 41,000MW, only 21,000MW was added. Progress on the current Plan so far has been as bad with only 9,300MW of generation capacity added in 2007-08 against a target of 12,000MW. And only 3,500MW was added against the target of 11,000MW in 2008-09.

“I could say 40,000MW is certainly achievable, 60,000MW is a possible target (but) 77,000MW looks a bit difficult,” former Planning Commission member Kirit Parikh said in March.

Fuel supply issues are a common problem. A case in point is coal, which accounts for almost 70% of the power generated in India, and which has become a scarce commodity. Other reasons for missing the target include poor transport infrastructure, shortage of equipment.

“There is no denying the fact that coal shortage may be one of the key reasons for India being unable to meet the capacity addition targets,” said Dipesh Dipu, principal consultant (mining) with audit and consulting firm PricewaterhouseCoopers.

“The convoluted policy framework in coal mining sector has resulted in inadequate private sector participation, project implementation and production enhancement,” he added. “The coal producers also find themselves in a predicament in light of difficulty in demand forecasts and hence, may be tentative in investment decisions.”
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Govt should thank the slowdown as it would do atleast something to control the power demand.

Ambani brothers fighting has add more pain to Power sector. both coal and power equipment have to do be imported for atleast another decade.

Its better if govt stops forcing foreign companies to form JVs, instead they should give encouragement by providing sops to build an assembly etc. if Chinese can supply equipment, then so be it. I do not find it as a security problem unless power plant is located in sensitive areas, in those cases, BHEL should be chosen.

no wonder infrastructure companies stocks have high demand. They will continue to be like that untill demand is met.
 

ajay_ijn

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WinWinD opens wind turbine manufacturing facility at Chennai in India
REVE - Regulacin Elica con Vehculos Elctricos -
Chennai: WinWinD Power Energy (P) Ltd., engaged in the design, development and manufacture of wind turbines, opened its manufacturing facility in India at Vengal, 50kms from Chennai.

This facility will assemble and test nacelles hubs and produce rotor blades. Set up at an investment of Rs 375 crores, the facility will initially manufacture utility grade 1MW (WWD-1) wind turbines. The plant, built on 67 acres, has an initial production capacity of 4 Wind Turbine Generators (WTGs) per day (12 blades) and going forward, the company plans to scale up capacity to 8 WTGs (24 blades) per day. It is expected to employ around 1000 people.

This is WinWinD's fourth manufacturing unit and it's first in Asia. WinWinD operates three manufacturing plants in Europe. The wind energy company is also expected to set up a new facility, within the next 2 years, for manufacturing the higher rating multi MW (WWD-3) wind turbines.

"Keeping up with its standards of manufacturing units in Europe, this facility in Vengal, near Chennai is an ultra modern manufacturing unit, which is designed to take care of International Standards norms of safety and quality needs," said Mr. IIkka Hakala, CEO, WinWinD.
Veer Energy to set up 200 MW WTG farms in Gujarat
http://www.myiris.com/newsCentre/storyShow.php?fileR=20090909114422707&dir=2009/09/09&secID=livenews
Veer Energy has proposed to set up wind turbine generator (WTG) farms of 200 MW capacity in the state of Gujarat. The project includes wind farm development, like acquisition of land, foundation work, DP yard and electrical work, install, erect commission of wind turbines.

The company will set up own 200 MW sub station for wind farm. It has successfully launch own sub station at village Chandroli district. Bhachau Khutch for wind farm and wind turbine manufactures like India`s gaint ADAG group company Southern Windfarms.
 

ajay_ijn

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37 power plant proposals on hold for want of gas

37 power plant proposals on hold for want of gas
37 power plant proposals on hold for want of gas :: Samay Live

New Delhi: About 37 applications for gas-based power plants with a total capacity of 35,000 MW are pending with the government, a senior power ministry official said Thursday.
"About 37 applications for gas-based power plants are pending with the government, the primary reason being non-availability of gas," said Power Secretary H.S. Brahma. Brahma said the power ministry has also asked for increase in allocation of gas in the power sector.

"We have asked for 40 mmcd of gas before 2012. If we get that, then we can generate an additional 8,000 MW by 2012," he told reporters on the sidelines of India Electricity 2009 conference organised by Federation of Indian Chambers of Commerce and Industry (FICCI).

According to the 11th Five-Year Plan, the government had set a target of producing about 78,000 MW by 2012. Brahma had earlier said the ministry is confident of producing at least 62,000 MW. With this additional 8,000 MW, the government would be closer to meeting its target, he said.

Earlier in the day, Minister of State for Power Bharatsinh Solanki had said the slow pace of capacity addition in India's power sector can be attributed to project viability, marketing risk and inadequate fuel supplies.

This is coupled with operational inefficiency, with a gap of Rs.500,000 crore in financing of capacity addition projects is a major hurdle to the growth," Solanki said. "In order to achieve financial closure in a time-bound manner, it is suggested to increase the exposure limit of banks and financial institutions for financing power sector companies," Solanki added. "The limit should be increased from 20 percent to 30 percent for individual borrowers and from 50 percent to 70 percent for group borrowers. In addition, it is suggested that ECBs by financial institutions like PFC and REC may be brought under the automatic route."
 

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Myanmar pipelines confirm China's place in Bay of Bengal
Jyoti Malhotra / New Delhi June 29, 2009, 0:25 IST

Come September, and China will begin to lay parallel oil and natural gas pipelines from the Kyaukpyu deep-sea port on Myanmar’s Arakan coast in the Bay of Bengal, all the way up north-east to Kunming in China’s Yunnan province. That will significantly enhance its energy security while also establishing the presence of Chinese ships in India’s eastern backyard.
The 1,100-km-long gas pipeline will tap into key blocks in Myanmar’s energy-rich Shwe gas fields (which are bigger than any gas field in India). The fields have been given on a 30-year lease to a Chinese-led consortium; the irony is that India’s Oil & Natural Gas Commission has a 30 per cent stake in the field.
The pipeline project was inked during the visit to Beijing in mid-June by Myanmar’s second-ranking general, Maung Aye. The pipeline reduces China’s dependence on the narrow Malacca Straits, through which pass 80 per cent of its oil imports of 4 million barrels per day.
The circumvention of its “Malacca dilemma,” a reference to Chinese President Hu Jintao’s statement in November 2003 that “certain major powers” could choke the narrow channel between Malaysia and Indonesia’s Sumatra island in case of a conflict, is a coup on Bejing’s part even as it seeks to secure more energy resources worldwide to feed its growing economy.
When the oil and gas pipelines are completed by 2013, according to China National Petroleum Corporation (CNPC), Chinese tankers will dock at Kyaukpyu port to transport 0.6 million barrels every day from West Asia and Africa. The gas pipeline, meanwhile, will move about 12 billion cubic metres of gas annually to Kunming.
Myanmar has become the centre of Sino-Indian rivalry for energy resources, with Yangon agreeing in 2004-05 that India build a pipeline from its newly discovered A-1 block in the Shwe gas fields, through Bangladesh, to serve India’s north-eastern states. When Dhaka refused India transit permission, PetroChina was waiting to make a counter-offer, and willing to fund the cost of the pipeline.
Indian officials who spoke on condition of anonymity said Delhi was not “overly concerned” by the fact that the Chinese had been able to “score over India”, simply because Myanmar’s generals in the State Peace & Development Council (SPDC) had also allowed Indian companies to expand their footprint on Myanmarese territory.
K Vhome, an expert on Myanmar at the Observer Research Foundation, conceded that while China’s enhanced presence in the Bay of Bengal would “create some uneasiness in India,” the “changing discourse in India-Myanmar relations in the last decade means that the India factor has become important in Myanmar’s relationship with China.” He said Myanmar has embarked upon a “very cautious balancing act, calculated to reduce its overwhelming dependence on China”.
Describing it as Myanmar’s effort to attain “strategic equidistance” between India and China, Indian officials pointed out that Yangon’s generals had allowed Delhi in 2008 to “build, operate and use” the Sittwe port on the Arakan coast in the Bay of Bengal and make the Kaladan river navigable all the way up to the adjoining state of Mizoram.
Delhi’s success with the Kaladan project means it has been able to circumvent Bangladesh’s refusal of access to India’s north-east and establish a presence on the Bay of Bengal.
The officials also pointed out that Yangon, having withdrawn the offer to develop a hydro-electric project on the Tamanthi river because of inordinate delays in New Delhi, had a few weeks ago offered it back to the National Hydroelectric Power Corporation, on the condition that the detailed project report be submitted to Yangon in 12 months.
Meawhile, as China has built a network of roads and railways across the country, plus a base on Myanmar’s southern tip and listening posts on some Myanmarese islands, India too has begun to forge cross-border links.
The India-Myanmar Friendship Road was completed in 2001 from Tamu to Kalewa, via Kalemyo, while two other sections at Rhi-Tidim (where Mizos believe their souls come to rest) and Rhi-Falam across the border from Mizoram are under way.
An optical fibre network has been laid from Mandalay to Yangon and onward to Kolkata, Essar is in the oil business and Tata Motors is planning to sell buses to Myanmar.
Myanmar’s efforts to diversify its relationships also means that Thailand, not China, has become Myanmar’s largest trading partner – and athis includes the export of natural gas.
As for Russia, it has sold fighter aircraft to Myanmar and given assistance to build a nuclear research reactor.
Vhome summed it up when he said, “Myanmar’s relationship with China is a very old one, but at least India is being seen as a counter-weight to China in the region”.


Myanmar pipelines confirm China's place in Bay of Bengal
 

ajay_ijn

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I hope that port project will be a success. GOI will be able achieve far more in longterm with that port connecting North East compared to pipeline to China. By providing an export access to remote isolated north east can have mutiplier effects on the local economy. because we have striained relationship with bangladesh, we are unable to connect to North East to the rest of the world in a better way till now.


The circumvention of its “Malacca dilemma,” a reference to Chinese President Hu Jintao’s statement in November 2003 that “certain major powers” could choke the narrow channel between Malaysia and Indonesia’s Sumatra island in case of a conflict, is a coup on Bejing’s part even as it seeks to secure more energy resources worldwide to feed its growing economy.
as if pipeline in burma will be completely safe in case of a conflict. one doesn't know if China will fight with big powers but burmas internal strife is sure to create more uncertainities about long term energy investments.
 

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India to invest Rs 200,000cr (42 billionUSD aprox)in Metro rail in 10 yrs​

Bangalore: India would invest Rs 2 lakh crore in the Metro rail system in the next 10 years, with eight more cities coming under the mass transport system during this period, Delhi Metro Rail Corp MD E Sreedharan said today. Speaking to reporters on the sidelines of function here, where BEML rolled out India's first standard guage metro cars, he said Rs 80,000 crore had so far either been invested or committed to ongoing metro rail projects. "In all, an investment of Rs 200,000 crore will be made in the country on metro rail in next 10 years," he said. Besides Delhi, Bengaluru, Hyderabad, Mumbai and Chennai, projects will be launched in Pune, Lucknow, Kanpur, Ahmedabad, Ludhiana, Kochi, Indore and Chandigarh, he said.

BEML, Sreedharan said, would henceforth have a greater say in getting metro projects as its R&D centre was coming up here, which would bring down indigenisation costs. Coaches made by BEML would cost Rs 5.5 crore, nearly 10 per cent less than imported ones, he said. "Meanwhile BEML will have a competitor in European metro major Embrair, which is setting up a facility in Baroda soon." On launch of metro project in Kochi in Kerala, he said it was awaiting the Centre's clearance. The state government has cleared it and handed it over to DMRC on a turnkey basis. On Hyderabad metro, he said the state still wanted to go on Build, Operate and Transfer mode involving the private sector. "Metro rail is highly capital intensive and it is difficult to attract private investment as it will not be viable for passengers," he said.

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BEML delivers first standard gauge coaches for Delhi Metro​



Bangalore: Karnataka Chief Minister B.S. Yeddyurappa said here on Friday that the future of urban public transport lay in developing the metro rail network in Indian cities. He was speaking after flagging off the first set of standard gauge coaches manufactured by BEML (Bharat Earth Movers Limited) for the Delhi Metro Rail Corporation (DMRC). Mr. Yeddyurappa said metro rail networks were “a safe and comfortable mode of transport in cities such as Bangalore, which suffer from severe traffic congestion.” Referring to the Value Added Tax concessions extended to BEML by the government, he said, “The measure has yielded rich dividends, resulting in world class infrastructure and manufacturing capability within the State.”

Union Minister of State for Railways K.H. Muniyappa symbolically handed over the first indigenously developed 80-tonne aluminium wagon developed by BEML to the National Aluminium Company Ltd. (NALCO). Union Minister of State for Defence M.M. Pallam Raju said BEML had displayed the capability of diversifying its product range. He pointed out that the company had bagged the contract for supplying 150 coaches for the Bangalore metro project “despite stiff global competition.” DMRC chairman E. Sreedharan said BEML would supply 196 standard gauge coaches for Phase II of the Delhi Metro. This may be followed by “an additional order for about 60 coaches when the Delhi-Faridabad line is ready for operations.”

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Money, a solution to India's infrastructure woes?​

India has a huge infrastructure problem and the solution so far appears to be to throw more money at the problem, without much effort to fix the core issues, says Sunil Jain. A McKinsey analysis suggests India could lose up to around 10 per cent of GDP in the year 2017-18 due to shortage of infrastructure. While this is not a startling result, what is worrying is that the quality of expenditure has gone down with more money being spent. So, in the power sector, actual expenditures have fallen from 75 per cent of those planned in the 9th Plan period to a mere 58 per cent in the 10th one roughly speaking, the 9th Plan was the NDA period and the 10th Plan the UPA's first term.

In Railways, given Lalu Prasad's reputation as an efficient minister, not surprisingly, the efficiency of expenditure rose from 94 per cent in the 9th Plan to 115 per cent in the 10th Plan. In the first two years of the 11th Plan, McKinsey points out, the shortage in projects awarded in the ports and power sector has been around 30 per cent of that planned in the roads sector, just 10-15 per cent of planned projects were awarded. Add to this another problem, that of a financing shortage of around $150-190 billion (that's a third of the total requirements in the 11th Plan period) and India has a huge problem this has not mattered so far as the progress in infrastructure projects has been very slow but will begin to bite once more projects come up.

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OVL, IOC, OIL to invest $5 bn in Iran gas field​

NEW DELHI: ONGC Videsh Ltd and its partners Indian Oil Corp and Oil India Ltd will invest about $5 billion in developing a massive gas field they discovered in offshore Iran. OVL, the lead partner in the three-way joint venture, in April this year submitted a master development plan for the gas discovery in the Farsi offshore block, OIL said in its red herring prospectus for an initial public offering (IPO) scheduled to open on September 7. The discovery, which was subsequently named Farzad-B gas field, has in-place reserves of up to 21.68 trillion cubic feet (Tcf), of which recoverable reserves may be 12.8 Tcf.

"Current estimates for the cost of developing the Farzad-B offshore gas field pursuant to the master development plan submitted by the consortium is about USD 5 billion over a 7-8 year period, which we do not expect would begin during 2009," it said. OVL holds 40 per cent interest in the Farsi offshore block located in the eastern part of the Persian Gulf off the coast of Iran near the Saudi Arabian border and covers an area of 3,500 square kilometres. However, the 2006 oil discovery in the block, which was in the initial estimates thought to contain one billion barrels of reserves, did not have enough reserves for commercial exploitation, OIL, which holds 20 per cent interest in Farsi, said. "The oil discovery was held to be non-commercial."

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Vast Indian oil field starts production in Rajasthan​

BARMER(08/29/2009): Britain’s Cairn Energy on Saturday began pumping crude from a vast oilfield in the Indian desert state of Rajasthan that is set to increase the country’s crude output by 20 per cent. Indian Prime Minister Manmohan Singh told a ceremony inaugurating the field that Cairn’s success showed global investors that “India has a good climate for foreign investment.” “I invite investors from around the world to come and invest in India,” he said from the western Thar Desert, site of the Cairn development. “The government will give all its support,” he promised. Cairn’s field, the country’s largest onland field and the biggest find in over two decades, will increase India’s oil output by 20 per cent once it hits its initial peak production target of 175,000 barrels a day in 2011.

India, which imports at least 70 per cent of its oil needs, has been frantically racing to find new energy sources to fuel its fast-growing economy. Cairn, which has spent two billion dollars so far on developing the field, plans to invest up to 1.3 billion dollars more to increase production. Cairn bought out the field in 2002 from Anglo-Dutch giant Shell, which had concluded it contained no major reserves. Two years later, Edinburgh-based Cairn struck oil. Cairn founder and chairman Bill Gammell said he had never dreamt the find would turn out to be so big. “I knew it had enormous potential but I didn’t envisage the size and scale,” he told the ceremony held in a huge tent under baking sun. “I look forward to many more years of development,” he said. Launch of the oil field kicked off to the thumping background tune of “Jai Ho,” the Oscar-winning theme song from “Slumdog Millionaire.”

Cairn estimates the Barmer field, in which state-run Oil and Natural Gas Corp holds 30 per cent, contains 3.5 billion barrels of crude, of which it is technically feasible to recover at least one billion barrels. Gammell said Cairn’s success in working with the Indian government in developing the field was a “clear signal to the rest of the world that India provides opportunities and support” to foreign investors. He said the five years it took between discovery of the oil and bringing it on stream was a “timescale few countries can match.” Cairn has made 25 oil discoveries in the Barmer region — of which the three biggest are Mangala, Bhagyam and Aishwariya. Petroleum Minister Murli Deora said the field’s output would shave seven per cent off India’s oil import bill. The crude will be trucked to state-run refiners until the completion of a pipeline slated for year end. Deora said India needs to conduct more exploration, adding the Barmer and other recent finds were proof India is “rich in hydrocarbon reserves.” That was in contrast to expert views after India’s independence in 1947 that the country was “hydrocarbon barren,” he said. - AFP

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ajay_ijn

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OVL, IOC, OIL to invest $5 bn in Iran gas field​

NEW DELHI: ONGC Videsh Ltd and its partners Indian Oil Corp and Oil India Ltd will invest about $5 billion in developing a massive gas field they discovered in offshore Iran. OVL, the lead partner in the three-way joint venture, in April this year submitted a master development plan for the gas discovery in the Farsi offshore block, OIL said in its red herring prospectus for an initial public offering (IPO) scheduled to open on September 7. The discovery, which was subsequently named Farzad-B gas field, has in-place reserves of up to 21.68 trillion cubic feet (Tcf), of which recoverable reserves may be 12.8 Tcf.

"Current estimates for the cost of developing the Farzad-B offshore gas field pursuant to the master development plan submitted by the consortium is about USD 5 billion over a 7-8 year period, which we do not expect would begin during 2009," it said. OVL holds 40 per cent interest in the Farsi offshore block located in the eastern part of the Persian Gulf off the coast of Iran near the Saudi Arabian border and covers an area of 3,500 square kilometres. However, the 2006 oil discovery in the block, which was in the initial estimates thought to contain one billion barrels of reserves, did not have enough reserves for commercial exploitation, OIL, which holds 20 per cent interest in Farsi, said. "The oil discovery was held to be non-commercial."

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ONGC would take all the pains in disovering, developed oil block and Iran would just give some compensation and take over all the gas and sell them to whomsoever they like.
 

thakur_ritesh

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ONGC would take all the pains in disovering, developed oil block and Iran would just give some compensation and take over all the gas and sell them to whomsoever they like.
Ajay,

that would clearly depend on the contract that will be signed, and the terms and conditions specified. to begin with the contractors (the 3 oil PSUs) will be allowed to take back a total % of investments that they made in the project, what this % will be will again be case specific and how well these contractors negotiate, and this figure could be in the region of 30-60%, and this recovery will be allowed with out the host country (iran) earning any thing from this project till then. beyond this time period, the royalties will start flowing to the host country (iran), what % of profits will form these royalties will again be dependent on the terms and conditions signed, and here profits will be defined before the break even of the project is reached. with profits being split the contractors regain their invested money, though over a period of time and reach a break even point and beyond this point they make money which in the accounts gets reflected as profits.

the story does not stop there, this additional oil production adds to the over all kitty of the 3 PSUs, their balance sheet shows more revenues and and at the end off the day their profits are increased which again gets reflected in the p/l statement. these figures speak about the viability, sustainability and efficiency of these companies and the projects they have initiated, and when these companies go to a stock exchange issuing their shares, the share value zooms, and along with bottom lines that is what is most important for any company.
 

ajay_ijn

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Money, a solution to India's infrastructure woes?​

India has a huge infrastructure problem and the solution so far appears to be to throw more money at the problem, without much effort to fix the core issues, says Sunil Jain. A McKinsey analysis suggests India could lose up to around 10 per cent of GDP in the year 2017-18 due to shortage of infrastructure. While this is not a startling result, what is worrying is that the quality of expenditure has gone down with more money being spent. So, in the power sector, actual expenditures have fallen from 75 per cent of those planned in the 9th Plan period to a mere 58 per cent in the 10th one roughly speaking, the 9th Plan was the NDA period and the 10th Plan the UPA's first term.

In Railways, given Lalu Prasad's reputation as an efficient minister, not surprisingly, the efficiency of expenditure rose from 94 per cent in the 9th Plan to 115 per cent in the 10th Plan. In the first two years of the 11th Plan, McKinsey points out, the shortage in projects awarded in the ports and power sector has been around 30 per cent of that planned in the roads sector, just 10-15 per cent of planned projects were awarded. Add to this another problem, that of a financing shortage of around $150-190 billion (that's a third of the total requirements in the 11th Plan period) and India has a huge problem this has not mattered so far as the progress in infrastructure projects has been very slow but will begin to bite once more projects come up.

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I guess that would lead to something like dotcom bubble. Infra start ups badly in search for funding unable to get enough debt, would file for IPO for billions of dollars. Infra being the most bullish sector, people in future might be willing put in large amounts without researching.

Infra stocks will sky rocket to never-seen record highs, in hopes that India will never have enough infrastructure and will be of high demand. That would be the peak of Infra-Bubble.

There is also a risk of things leading to subprime/banking crisis if Central Bank is not careful. RBI and Govt would ease lending norms, default norms, foreign inflows, for infrastructure because of shortage of credit. SEBI might even allow easier norms and regulations for derivatives like Swaps, CDOs etc Every other Business man will start an infra company (btw every other group already has an infra co) would want funding because of easy money availaible, but would have high risk of default. weak infra cos would bust, leading banking losses, bailt out, stimulus, recessiom. perfect replica of todays crisis :wink:
 

ajay_ijn

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Ajay,

that would clearly depend on the contract that will be signed, and the terms and conditions specified. to begin with the contractors (the 3 oil PSUs) will be allowed to take back a total % of investments that they made in the project, what this % will be will again be case specific and how well these contractors negotiate, and this figure could be in the region of 30-60%, and this recovery will be allowed with out the host country (iran) earning any thing from this project till then. beyond this time period, the royalties will start flowing to the host country (iran), what % of profits will form these royalties will again be dependent on the terms and conditions signed, and here profits will be defined before the break even of the project is reached. with profits being split the contractors regain their invested money, though over a period of time and reach a break even point and beyond this point they make money which in the accounts gets reflected as profits.

the story does not stop there, this additional oil production adds to the over all kitty of the 3 PSUs, their balance sheet shows more revenues and and at the end off the day their profits are increased which again gets reflected in the p/l statement. these figures speak about the viability, sustainability and efficiency of these companies and the projects they have initiated, and when these companies go to a stock exchange issuing their shares, the share value zooms, and along with bottom lines that is what is most important for any company.
ritesh, ur talking about money. I am talking about the actual gas. i do think govt can earn money in lot more ways but why take so much pain and be so much agressive in buying foreign oil assets.

domain-b.com : OVL consortium to develop 12.8 TCF Farsi gas field in Iran
Under the Iranian rules, project promoters are not allowed to take oil or gas out of the country. OVL had to fund all exploration operations, which would be reimbursed only after ascertaining the commercial viability.

According to the commercial viability report, even in the worst-case scenario of 9.48 TCF production, NIOC would earn a net cash of $71.792 trillion by producing 83 million barrels of condensate and 7.354 trillion cubic feet of gas over 30 years.

In return, OVL would get a 35 per cent rate of return on the investments in exploration and a 15 per cent remuneration fee on development of the discovered gas.
Iran gives no guarantee that even a single unit will be sold to India, all the gas might be even to sold to Pakistan and China. then what is the use of calling it strategic asset.
 

NSG_Blackcats

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India is a developing Economy. So energy is crucial for our development. Some of our members from our neighboring countries want to know where India will get its Oil and Gas from. So I am going to provide some details about recent Gas and Oil finds in India and also foreign Oil and Gas blocks where Indian companies have a stake.

Krishna-Godavari Basin (KD-6) – Reliance Industries​

=> Located in water depths of 400-1800 m and beyond 35 km from the coast line of Andhra Pradesh (Bay of Bengal)

=>The Gas Field covers an area of approximately 7,500 km2. In line with the development of the Gas Field RIL plans to construct an Onshore Gas Terminal. This Onshore Gas Terminal will process the gas to meet the gas sales specifications.

=>Commenced production of crude oil on 17th September 2008. The field is initially producing about 5,000 barrels of crude per day and is expected to reach its peak hydrocarbon production of 5,50,000 BOEPD over the next six to eight quarters.

=>On April 2, 2009, gas production commenced from KG D6 block (D1 / D3 discoveries) in a record time of six and half years, against the world average of 9 - 10 years for similar deepwater facilities. KG D6 is among the five largest deepwater gas projects globally.

=>In a short span of 3 months, total gas production from KG D6 has ramped up to around 30 MMSCMD. This is one of the fastest ramp-ups in gas production among deepwater gas fields worldwide.

=>The KG D6 basin started by producing around 2.5 million standard cubic meters a day (mmscmd) and it is expected that at its peak production it would produce 80 mscmd.

=>The Oil and gas is expected to meet around 1/6 of India's total oil and gas consumption.

=>At present prices it is expected to reduce India's import bill by around 9 Bilion US$ annually during peak production.

=>Govt. is expected to earn around 14 Billion US$ from KG D6 on basis of profit sharing agreement.

Links for more Information

http://www.ril.com/cmshtml/EOI_2006_1.pdf

http://www.ril.com/downloads/pdf/PR21092008.pdf

RIGZONE - Reliance: KG D6 Gas Project Commissioned in Record Time

Hot From The Corporate Oven:Reliance KG D6 Basin To Help India With Energy Security ~ Getting Money Wise
 

NSG_Blackcats

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Rajasthan Barmer Basin in Block RJ-ON-90/1​

=>Mangala is the largest of 25 discoveries made by Cairn in the Barmer Basin in Block RJ-ON-90/1. Production started on 29th August 2009.

=>ONGC has 30% stake in Barmer Basin

=>The Mangala field was discovered in January 2004 - the largest onshore oil discovery in India in more than 20 years.

=>Initial volumes of crude will be produced through the first processing train which has a capacity of 30,000 barrels and production ramp up will continue until all four processing trains, with a total capacity of 2,05,000 bopd, are built and installed by 2011.

=>The MBA fields, once on peak plateau production of 175,000 bopd, will contribute more than 20% of India’s domestic crude production.

=>The Rajasthan resource base has continually grown since the discovery of Mangala in 2004 – a total of 25 discoveries have already been made - the focus being to realise the full potential of the Barmer Basin in the coming years.

=>The total acreage under long term contract is 3,111 km2 spread across the districts of Barmer and Jalore.

=>The Mangala Processing Terminal (MPT) will act as the hub for processing crude oil from all the Rajasthan fields.

=>16,000 workers are currently involved in the construction activities -5,000 on the pipeline and 11,000 on the MPT.

=>The world’s longest heated and insulated crude oil pipeline is being built by Cairn from the MPT to the Gujarat coast – length of 670 kilometres - giving access to more than 75% of India’s refining capacity – the first phase is targeted for completion by the end of 2009.

=>Special heated trucks deployed for evacuation of crude from Mangala Processing Terminal to Gujarat Coast

=>Crude production from the Rajasthan fields will generate revenues of approx Rs. 36,000 crore (US$7.6 billion) in the form of royalties to the State Government of Rajasthan over the life of the project, while the Government of India will earn approximately. Rs. 46,000 crore (US$9.5 billion) as profit petroleum, assuming crude oil prices of US$50 a barrel.

=>Employed highly mobile custom built rapid drilling rigs, with compact lay out, which has resulted in savings in land, infrastructure and drilling costs.

=>Use of latest drilling and completion technology to create high rate production wells with capacity of up to 10,000 barrels of oil per day

=>Cairn, which has spent two billion dollars so far on developing the field, plans to invest up to 1.3 billion dollars more to increase production.

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