Infrastructure and Energy Sector

[Nagraj]

Infrastructure in India :

ONE recent evening in Mumbai a tangerine Lamborghini could be seen taxiing past a sign prohibiting bullock carts, wheeling left and then letting rip on the Sea Link toll-bridge, one of the city's few bits of decent infrastructure. For three miles all the driver's Michael Schumacher fantasies must have came true. But by the fourth he drove off the bridge back into reality: roads whose surfaces often wash away during the monsoon and whose repair is said to be in the hands of mafias. The supercar returned to rickshaw speed.

For the past half decade India's infrastructure industry has enjoyed a Sea Link moment; a blast of growth when one could imagine that the private sector could deliver all the new roads, bridges, power stations and airports that the country needs so badly. The government says the boom will continue. Over the next five years it predicts that infrastructure investment will reach a new high relative to GDP, with some $1 trillion spent, half of it by the private sector. The trouble with this rosy prediction is that the balance-sheets of many Indian infrastructure firms are as potholed as the roads they resurface.
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The backdrop is a slowing economy—growth has dipped below 7%—and a deep ditch of debt at infrastructure firms (which typically build, own or operate projects, or do a combination of the three, sometimes in partnership with the state). Government decision-making has slowed, partly due to drift at the top and because officials are scared of being accused of graft.

All this has led to a "triple whammy" of distress, says Vinayak Chatterjee of Feedback Infra, a consultancy and engineering firm. First, new business has all but ground to a halt. Larsen & Toubro, one of the biggest infrastructure and engineering firms, saw a 2% quarter-on-quarter rise in its domestic order book at its last set of results. This is much less than it is used to.

Money pits

Second, cash flows are under strain. Firms get paid when they begin a project and when they reach milestones towards finishing it. Banks and investors are reluctant to hand over more funds. Finally there are worries about long-term profits. During the boom, firms bid recklessly for contracts (including an extension to the Sea Link bridge, won by the Reliance Group, run by Anil Ambani). With high interest rates and inflation a number of these deals may turn out to be duds. Some completed projects, including Delhi's new airport, are losing money.

The warning lights are flashing. But figuring out exactly what is going on is not easy. The industry is fond of financial engineering that has a whiff of subprime about it. Individual projects—for example an airport, power plant or stretch of road—are typically put in special-purpose vehicles which issue non-recourse debt. Infrastructure firms, which are often listed, have several kinds of links to these vehicles. In their accounts they may consolidate them on their balance-sheet, or, if they do not control them, treat them as investments. The result is dauntingly complex. Taking six big infrastructure firms' disclosures in their annual reports, it is possible to find no fewer than 531 subsidiaries, joint ventures or associated entities.

It gets more fiddly. Firms may lend money to projects they own no stake in and to contractors. They invite in minority investors at multiple levels in their holding structures, including private-equity funds that may use debt to finance their purchases. And overlaying all this is sloppy disclosure and a habit of focusing on firms' "stand-alone" accounts. Roughly speaking, these try to capture the core business, pretty much as defined by the managers, rather than the "consolidated" accounts which try to include all subsidiaries and investments, warts and all, and which are the accounting benchmark globally.

Those consolidated figures are at least published annually (and more frequently by some noble firms) and are the best guide to what is going on. Take 70 or so listed infrastructure firms from the BSE-500 index, broadly defined to include power, telecoms, construction and asset owners, and the effects of the boom are plain to see. Leverage has risen dramatically (see chart). Just over half of these firms had ratios of net debt to gross operating profits (or "EBITDA") of over three times last financial year, and/or have net debts in excess of their current market value, two rules of thumb to identify knackered balance-sheets. Thanks to heavy investment, the 70-odd firms were cashflow-negative (defined as EBITDA less capital expenditure) to the tune of $12 billion. Assuming a 12% interest rate, their accounting operating profits last year only just exceeded their interest costs.

Exclude state-owned and telecoms firms and leverage is worse (see table). From public disclosures it is impossible to work out the liquidity position of these firms, but it is likely that most will have to refinance existing credit lines in today's far less forgiving world, a process not helped by high local rates and a weak rupee.

It looks like a mess. Shareholders have taken a beating, with the market value of those 70-odd stocks having fallen by some two-fifths since March 2011. India's banks may be next in line for a thrashing. The Reserve Bank of India (RBI), the regulator, reckons they have 13% of their loan book in infrastructure (vaguely reassuringly, the RBI's implied absolute debt figure roughly matches the $130 billion of gross debt of the 70 listed firms). Thus far non-performing loans are low—so low it suggests banks are fibbing. But the RBI is probably right that a rickety infrastructure sector does not endanger the banking system.

What it does endanger is India's growth prospects. Those new airports, roads and bridges are essential. And the country does not need financial zombies, slashing their investment in order to shore up dodgy balance-sheets.

Some reckon the solution is to develop a bond market, so that more debt can be raised. But while a more sophisticated capital market might mean more funds available and might even reduce the amount of financial engineering going on, it is not the solution to today's predicament.

Instead, two things need to happen. The government needs to unsnarl stalled projects. And infrastructure firms need to raise lots more equity—not debt. That might dilute the stakes which are held by some of the magnates who control these businesses, but would be a fair price to pay to resuscitate the balance-sheet of a vital industry. Even on selfish grounds it makes sense, hastening the day when an honest Indian oligarch can at last put the pedal to metal in his supercar for more than three miles in a row.

 

[Nagraj]

Infrastructure in India: Infrastruggles | The Economist

One of India's most important industries has a knackered balance-sheet

 

[Ray]

Na rowey mera dil,

Kahin rohne se taqdeer badalte?

 

[zinax]

hiii

Nyc piece of information and good discussions.. well you can access such kind of updated news also at infrawindow.com.. i really find the site useful to me...

 

[nitesh]

We are heading for a bigger mess

Power crisis: 60,000-MW plans run on empty - Indian Express

Across the power sector, alarm bells are ringing, threatening to short-circuit the already unravelling growth story. Manufacturing has pulled down to its lowest in three years, export growth is petering out, while rising input costs and a significant fall in capacity utilisation across sectors have stymied hiring and investment outlook further.

At least five states have declared power holidays and another eight have load-shedding plans lined up.

An all-pervasive fuel shortage threatens to derail upcoming projects and has already spooked private sector project developers and investors. Add to this a distribution sector that is haemorrhaging cash, a widening demand-supply gap, a flagging reforms agenda, and missed generation capacity addition targets.

Result: An estimated 12,000 MW of existing capacity and 48,000 MW (fresh capacity) face the prospect of running on empty. Reflecting the seriousness of the situation, at least five crisis management meetings have been convened in the past couple of months, three of them by the Prime Minister's Office. Each ended with broadly the same conclusion — that while a long-term solution to the power sector mess needs to be found, the villain of the piece for now is Coal India. The state-owned miner has been singled out for some harsh treatment, primarily on the charge that the virtually stagnant coal output over the last couple of years has precipitated the impending fuel crisis.

On the whole, a slew of superficial quick-fix measures have been tried out over the last decade. But governments, both at the centre and the states, have been interested in merely kicking the can down the road. There is now serious talk of another bailout for the power sector, including a clean-up of the balance sheets of power utilities by writing off cumulative losses, with an announcement to this effect likely in the budget this week.

Ironically, less than a decade ago, in 2003, two key interventions aimed at stemming the rot in the sector were announced with much fanfare. One, the losses of state electricity boards (SEBs) were taken over through RBI-guaranteed bonds as a "one-time" financial clean-up exercise. Plus, the landmark Electricity Act 2003 simultaneously heralded a booster dose of fresh reforms, including the unbundling of distribution utilities, limited "open access" to consumers, state power regulators and a platform for independent tariff fixation.

"But the sector is back in mess, probably in a much worse position that it was 10 years ago," a representative of the Association of Power Producers, a lobby group that represents an upcoming project portfolio of around 120,000 MW and has Tata Power, Reliance Power, Essar, Jindal Power, GMR, GVK and Adani among its members, said. A view echoed by Edelweiss, which, in a recent wrap-up on the sector, attributed "serious business risks" for power developers, cascading down to their lenders.

The biggest worry is fuel shortage that's worsening by the day and threatens to derail the new-found enthusiasm among private developers to set up generation projects. The key reason is that Coal India Ltd (CIL) has simply not been digging fast enough to meet burgeoning demand. Result: over the last three years, an estimated 12,000 MW of coal-fired capacity, most of it in the state and private sectors, has come up without bankable fuel supply assurances. And another 48,000 MW of fresh capacity slated to come up over the next three years (till March 2015) faces an uncertain future in the wake of shaky coal supplies.

Following an intervention by the PMO earlier this year, Coal India was directed to convert all preliminary fuel supply pacts inked with thermal project developers into firm and legally-binding fuel supply agreements (FSAs) and ensure sufficient fuel supplies, even if it is forced to import coal. The move, according to the PMO, would provide fuel supply certainty to projects totalling 50,000 MW in cumulative thermal capacity. But power companies say that they are not getting their quota of supplies and even that which comes is of indifferent quality.

At last count, as of March 5, 10 of the country's key power stations running on domestic coal were grappling to maintain normal operations with a day's coal or less, and over a third of the 89 major coal-fired stations were straddled with critical fuel stocks of less than a week. And it's not even summer yet.

Analysts believe that even if pushed to the limit, CIL will not be able to meet fresh supply commitments. A former Union power secretary, who is now working with the industry, said that to meet future demand, CIL will have to ramp up output by at least 6 per cent annually over the next five to seven years, up from the current 3 per cent growth — which is "next to impossible".

Says Anish De, CEO-Asia at consulting firm Mercados EMI: "Just from domestic coal, the supply commitments are way too steep. Even if CIL were to pull up its socks, imports would be needed to bridge the gap in the short-term... From a country perspective, we need to look beyond CIL."

On the ground too, there is cautious optimism on how much difference the PMO's intervention can make in terms of a fuel boost at the station level. Nothing captures this better than Farakka (West Bengal) or Kahalgaon (Bihar), where two of NTPC Ltd's super-thermal stations figure prominently in the list of projects with critical coal stocks, despite sitting right in the heart of the coal-mining hub.

Even new projects, like the two mega thermal plants coming up right opposite each other near Jhajjar (Haryana), exemplify the struggles faced by upcoming projects to maintain operations with less than adequate fuel.

While domestic coal production is undoubtedly in a mess, the issue of running power plants on imported coal, the only fallback option, is proving to be an entirely different challenge altogether, as is being experienced by two of the country's largest projects coming up in the country's western outpost, Mundra in Gujarat's Kutch region.

The Indian Express visited some of these project sites to get a sense of the fuel threat on the ground.

 

[nitesh]

more on this mess:

From Jhajjar to Farakka, new to old, fuel shortage hits 130 power units - Indian Express

There are two aspects of the widening gap between demand of coal for power plants and its supply. The first is the sharp increase in project commissioning in the past three years of the current Plan period. The second is the near stagnant coal production.

"With the power sector growing at 8 per cent, and coal output at less than 3 per cent, a blackout was simply inevitable," an executive with a private power firm, whose three projects are badly affected due to want of fuel, said.

Back-of-the-envelope calculations show that against a projected requirement of 742 million tonnes of thermal coal by the end of the Twelfth Plan (April 2012-March 2017), only 527 million tonnes of domestic coal is likely to be available. This translates into a shortfall of 215 million tonnes or 29 per cent of the total requirement by 2017. Among those most worried are private players, who are slated to set up nearly 60 per cent of the capacity coming up in the Twelfth Plan period.

Here are four major plants on the power map of India affected by the shortfall. They typify the struggle for coal that 51 running thermal units are grappling with, and another 80 upcoming ones are staring at, across the country:

* Indira Gandhi Super Thermal Power Project, Mahatma Gandhi Thermal Power Project

Jharli, a 35-km, partially bone-rattling ride from the heart of dusty Jhajjar town, looks like just another sleepy outpost in Haryana's eastern periphery. With a significant difference — it is the site of two mega power projects, pitched right opposite each other on a narrow state road, that are in various stages of commissioning. Both are big, based on domestic coal, but facing an equally massive coal shortage.

The 1,500 MW Indira Gandhi Super Thermal Power Project is being executed by joint venture firm Aravali Power, floated by NTPC Ltd, Haryana and Delhi. It was to get coal linkage of 6.94 million tonnes per annum (mtpa) allocated from Mahanadi Coalfields Ltd, a Coal India Ltd subsidiary. "We are getting about half that amount," said an NTPC official. "Of that, half of what comes in is just sand, stones and boulders. The irony is that the consignment, much of it just waste, is transported over 1,500 km, for which the consumer will be billed."

Bang opposite, the 1,320 MW Mahatma Gandhi Thermal Power Project, which was bagged through competitive bidding by CLP Power India in July 2008, was promised coal linkage of 5.21 mtpa from CCL, another Coal India arm. Power from this project was to be made available from January 2012. Till a couple of weeks back, the developers were still in the process of aggregating coal for testing, to maintain at least seven days' continuous operations.

* Farakka Super Thermal Station, Kahalgaon Super Thermal Station

Two projects that were perennially short on coal through whole of last year were NTPC Ltd's 2,340 MW Kahalgaon station in Bihar and the 2,100 MW Farakka station in West Bengal. The irony is that while Kahalgaon is located right on the pithead (at the coal mine itself, so that there is no need to transfer the coal to the plant), Farakka is not too far. And both are among stations that form the backbone of the eastern region's generation sector.

While the Farakka station has infrastucture in place to operate at over 90 per cent plant load factor, the utility is mostly operating at only 70 per cent because of the short supply of coal. The shortfall in domestic supplies is being made up by imports, which, in turn, jacks up tariffs.

The problem here is that most coal reserves in the east are located in Maoist-infested areas. A senior government official says that the entire coal mining value chain in the eastern region is ridden with trade unionism and gangs who pilfer coal, especially from easy targets that include public sector firms or smaller private power producers.

The head of a mid-sized state-owned generation firm has repeatedly been complaining about local Coal India employees colluding with middlemen to siphon off his fuel. "The coal mafia is strong and there is absolutely no guarantee that coal will reach the designated consumer, despite assurances from Kolkata (where Coal India is headquartered) or New Delhi," the official says.

With the coal crisis showing little sign of a resolution, despite the Prime Minister's intervention, utilities across the country have been instructed to make design changes in all future coal-fired projects to enable higher imported coal blending. However, running power plants on imported coal involves an entirely different challenge.

 

[davidwarner]

Great info on the Energy sector thanks friends

 

[Son of Govinda]

In India, an Inflation Dilemma: Higher-Than-Expected Rise

India Inflation Poses Dilemma for Central Bank - WSJ.com

NEW DELHI—Inflation in India rose above expectations in April, making life difficult for the nation's central bank as it tries to revive an economy facing increased stagflation risks.

The Reserve Bank of India last month cut its policy rate for the first time in three years to boost sagging growth. But inflation has remained stubbornly high, raising concerns the economy may be facing a nightmare scenario of slowing growth and rising prices.

On Monday, the government said the benchmark wholesale price index rose 7.23% in April from a year earlier. That was above 6.89% growth in March and significantly higher than economists' expectation of a 6.67% rise. In such a scenario, the central bank may not have much room for further rate cuts despite calls from business for cheaper borrowing costs to spur growth.

"With India looking rather stagflationary at present, the RBI faces somewhat of a dilemma—does it ease policy further on the basis that economic growth is very weak and core inflation soft or keep rates unchanged as it worries about headline inflationary pressures?" said Robert Prior-Wandesforde, an economist at Credit Suisse.

Inflation has eased from a high of 10% in September last year, helped by the central bank's tight monetary policy for much of the past three years. That pushed the central bank last month to cut its key rate by 0.5 percentage point to 8%. But inflationary pressure has remained a risk due to a number of factors. The government's large fiscal deficit—due to big fuel subsidies and welfare spending—has caused jitters among investors. A growing trade deficit, pushed up by the high cost of oil imports, has further unnerved investors.

Traditionally, India has used the wholesale-price index—which measures bulk sales between corporations—to gauge inflationary pressures, because it has a larger and more-representative basket of commodities than the consumer price index, which included obsolete items such as typewriters and didn't collect data from all regions of India.

But the wholesale-price index doesn't include services, which today account for about half the country's economic output. The government has introduced a new, more-accurate CPI, which planners hope will give monetary policy makers a more accurate representation of consumption trends and a better sense of inflation across the economy. The new CPI is ultimately intended to replace the WPI as the main gauge for inflation, but it will take a few years before there are enough historical data on this new series to make it the benchmark.

Meanwhile, foreign-capital flows into India have slowed amid concerns over the government's failure to carry out changes intended to make it easier for foreign investors to put money here.

The inflation data sent further shivers through markets Monday. The rupee sank to a near-five-month low of 53.91 to the U.S. dollar. A weaker rupee adds to inflationary pressures by pushing up the costs of imported goods. The benchmark 2021 bond fell to 101.51 rupees from an intraday high of 101.73 rupees before the data, while the Bombay Stock Exchange's Sensitive Index fell 0.5% to close at 16215.84.

C. Rangarajan, chairman of the prime minister's Economic Advisory Council, on Monday rejected the suggestion that India was heading into a stagflationary cycle, saying the economy would expand slightly more than 7% in the fiscal year that began April 1. This will be quicker than India's 6.9% growth last fiscal year, the weakest pace in three years.

Still, he acknowledged that inflation remains a concern and would limit the central bank's room to maneuver this year.

There were some bright spots in Monday's data. Despite a pickup in headline inflation, officials pointed to a slowdown in price rises in the manufacturing sector—a proxy for measuring price pressures excluding volatile food and fuel prices. This is known as core inflation.

Finance Minister Pranab Mukherjee said Monday he was comforted that manufacturing inflation, which accounts for two-thirds of the basket of goods used to calculate prices, has declined steadily from more than 8% in November to 5.1% in April.

Some economists say the reduction in core inflation might give the central bank confidence to cut rates by more than a percentage point during the rest of this year. Others say food and fuel inflation will limit the cuts.

The Reserve Bank of India next reviews monetary policy on June 18. The central bank will have May inflation and April industrial output data to study before then.

The "upside surprise in headline inflation is an issue, but not a game changer for the RBI," Barclays Capital said in a research note. "If we see more softening in core prices, the headroom for the RBI to support growth more is likely to expand, especially after the recent weak production numbers."

Data released last week showed India's industrial output in March contracted 3.5% from a year earlier, reflecting the sharp slowdown in economic activity.

 

[LalTopi]

Coal India - David or Goliath?

Is Coal India the victim of a predatory British hedge fund? Or will this (small fund) finally force efficiency on this giant?


UK hedge fund's India tussle puts unfair bilateral trade in spotlight | Global development | guardian.co.uk


The threat by a UK-based hedge fund to sue Coal India, one of the world's largest coalmine operators, has thrown into sharp relief the crucial question of whether the terms of trade and investment are skewed in favour of rich countries and multinational companies.

The Children's Investment Fund (TCI), a British hedge fund run by Christopher Hohn, is a minority shareholder in Coal India after acquiring a 1.01% stake when the Indian government sold off 10% of the shares in 2010 to raise cash.

Some of the shares ended up in the hands of hedge fund managers, and the Indian government now faces the prospect of a legal fight with TCI, which gives a portion of its profits to a charity, the Children's Investment Fund Foundation, for helping children in Africa and India. The fund announced in April it had instructed lawyers; it is threatening legal action unless Coal India makes changes that it claims would benefit not just the shareholders, but also the Indian people.

The nub of TCI's argument is that Coal India be allowed to sell fuel at market prices, not government set rates, which are about 70% to 80% lower than prices the company has been able to get in limited auctions. The fund also wants the company, which has 549 billion rupees (about $10.5bn) in cash, to increase its dividend substantially.

In a statement issued in April, TCI said it initially received a polite hearing, but that Coal India then "backed away from any kind of meaningful or substantive dialogue with TCI or any other minority shareholder. It will not now discuss any kind of plan to improve management and governance."

The statement continued: "TCI believes that a number of government directives are not in the public benefit and should not be followed by CIL (Coal India), because they destroy the profitability and value of the people of India's stake in CIL. Moreover, short-term exploitation of CIL's assets will cause untold damage to the Indian economy."

For its part, the Indian government argues it has to take a view of the big picture, which means providing inexpensive coal to power companies, steel mills and other businesses vital for the economy. India suffers from widespread power cuts, as demand exceeds supply; ensuring consistent power is a government priority.

TCI says it plans to take Coal India, its independent directors, and the government of India to court under the provisions of the UK-India bilateral investment treaty, rather than through the Indian courts. The move has angered trade activists.

"What this case really illustrates is how far global trade and investment rules have gone in increasing the power and influence of companies," said Ruth Bergan, co-ordinator for the Trade Justice Movement. "Under bilateral investment treaties, companies have been given the right to sue states, not in national courts, whether in host or home countries, but in international arbitration centres, based at the International Chamber of Commerce, the World Bank, and a handful of other often highly secretive centres."

Bergan reflects the wider concerns among activists that the odds are stacked against poor countries in such fora as the UN, which has drawn up a global compact for businesses so they "adhere to internationally accepted standards".

Friends of the Earth, La Via Campesina and other civil society groups have called on the UN, in the runup to the Rio+20 UN summit on sustainable development, to distance itself from corporate interests.

"Increasingly we see UN policies that do not necessarily serve the public interest, but rather support the commercial interests of certain companies or business sectors," they said. "The upcoming Earth summit in Rio in June should be seized as the opportunity to stop this trend, terminate dubious partnerships between the UN and businesses, and end the privileged access that has been granted to the corporate sector and consequently the excessive influence it is able to wield over important multilateral processes and decisions."

Civil society groups criticise the global compact for lacking any accountability mechanism. They say the global compact only expels companies if they do not report on human rights violations, not for perpetrating these violations. Civil society groups habitually suspect the worst of corporations, whereas developing country governments adopt a more pragmatic attitude on the basis that foreign investment brings jobs, even if the pay leaves much to be desired in some export processing zones (as the Guardian's John Vidal pointed out in a recent piece from Bangladesh).

As for the legal tussle between the Children's Investment Fund – who declined an invitation to comment – and Coal India, this will be held by civil society as a further example of how the terms of trade and investment are weighed in the favour powerful financial interests. Even impartial observers question the fund's decision to use provisions of the UK-India bilateral investment treaty rather than the Indian courts.

"There is a case for such legal disputes to be settled outside the country," said Salil Tripathi, director of policy at the Institute for Human Rights and Business, "but ideally that should be a last resort. It would be far better to try the case in India and exhaust the local systems first, rather than use a panel that may not have detailed knowledge of the economic policy or on-the-ground reality of the country."

 

[LurkerBaba]

Bihar has become the first state in the country to respond to the Central Vigilance Commission's recommendation to sign an integrity pact with Transparency International, a watchdog against corruption, to ensure fair play in tendering, bidding and implementation of major projects.

The Bihar State Road Development Corporation (BSRDC) will be the first state PSU to sign the pact this month. Only 44 Central PSUs have till now signed the pact.


With BSRDC signing the agreement, the proposed Rs 2,400-crore Ganga Path — a 20-km road along the river at Patna on the lines of Mumbai's Marine Drive — will be the first mega project coming under the scanner of TI. The project is now at the bidding stage.

Confirming Bihar's decision, TI Executive Director, India, Anupama Jha told The Indian Express that though TI mainly worked as a watchdog on a company's procurement, which includes technical competence and credibility of bidding companies, the main job was to "deal with complaints of favouritism". "We always have to ensure that we get involved much before the beginning of a project so that a system does not pre-decide on any company or consultant," she added.

BSRDC managing director Pratyay Amrit said having a pact with TI "would only get us the best in the business".

Pact facts

Integrity pact is a formal agreement between a government authority/private buyers and the bidders for contracts and it establishes rights and obligations between parties

In case of proven default, TI can cancel the MoU, and the name of the company in question may be posted on its website as a defaulter. Implementation of the pact is reviewed annually

Integrity pact was developed during 1990s by Transparency International to help governments, businesses and civil society, which are prepared to fight corruption in the field of public contracting

On May 18, 2009, CVC laid down guidelines for the adoption of integrity pact for all PSUs. On June 16, 2009, Department of Personnel and Training issued a circular to chief secretaries of all states to adopt the pact in state PSUs

Bihar road corporation first state PSU to sign integrity pact with Transparency International - Indian Express

 

[Zebra]

Gujarat okays Rs 4000 crore Nargol port construction
Himanshu Darji, ET Bureau Jul 10, 2012, 04.00PM IST

AHMEDABAD: Gujarat government has given a go-ahead to construction of the proposed port at Nargol, 120 km south of Surat. A consortium of Cargo Motors Limited and Israel Ports Company (IPC) will develop the port at an investment of Rs 4,000 crore, a state government official said.

"The Gujarat government has recently okayed the GMB bid given to the consortium. Now the work of this greenfield port will take off," said a senior official of the department of Road, Ports and Transport.

Gujarat okays Rs 4000 crore Nargol port construction - Economic Times

 

[Zebra]

Cargo Motors, Israel Ports win Nargol port bid

Maulik Pathak , Posted: Tue, Jan 17 2012. 12:47 AM IST

Cargo Motors, Israel Ports win Nargol port bid - Corporate News - livemint.com

 

[Raj30]

Delays in infrastructure projects cost Rs 52,446 crore - The Economic Times

NEW DELHI: Delays in execution of mega infrastructure projects has seen a massive Rs 52,446 crore jump in their original cost estimates.

The cost escalation has gone up by 36 per cent from Rs 1,45,271 crore to Rs 1,97,716 crore as on May 31, 2012, official figures state.

The cost overrun pertains to 28 power projects, 36 railway projects and 84 schemes of Ministry of Road Transport and Highways (MoRTH).

The maximum cost overrun pertains to Railways where "the total original cost of 36 projects was reported by the authorities at Rs 25,089 crore, which is now anticipated as Rs 62,483 crore," it said.

The delayed projects include Udhampur-Srinagar-Baramulla rail line in Jammu & Kashmir where the project cost escalated by a massive 700 per cent to Rs 17,500 crore with time overrun calculated at 201 months. It was originally approved in March, 1995.

Likewise, Jiribam to Imphal rail project in North-East, approved in April 2003, saw its cost increasing 510 per cent increase to Rs 3,716 crore.

As far as power projects are concerned, "the total original cost of 28 projects was Rs 86,681.8 crore and the anticipated cost of completion is Rs 99,654 crore, implying a cost overrun of Rs 12,972.3 crore," the figures state.

Besides, MoRTH saw cost of its 84 road projects going up by Rs 2,078 crore to Rs 35,578 crore which included many projects in North Eastern areas besides those delayed due to late green clearances.

When contacted, a senior MoRTH official said many of the projects stuck for grant of forest clearances were likely to be expedited now as Ministry of Forest and Environment (MoEF) has cleared as many as 80 files pertaining to highways projects.

Road Transport Minister C P Joshi recently took up the matter of forest clearances for the projects with the MoEF minister Jayanthi Natarajan.

Meanwhile, Prime Minister Manmohan Singh earlier this month announced relaxation of norms for transfer of government land to any other entity to remove bottlenecks and speed up public-private partnership (PPP) projects.

 

[cloud_9]

GAIL in 20-year pact to buy LNG from Russia's Gazprom

In what could be seen as another milestone in GAIL India Ltd's race to secure gas supplies, the state-run company has signed an agreement with Russian energy giant Gazprom to buy 2.5 million tonnes per annum of gas for 20 years beginning 2018-19.

The company has "signed a legally binding 20-year liquefied natural gas (LNG) sales and purchase agreement with Gazprom Marketing and Trading Singapore, a wholly-owned subsidiary of Gazprom Marketing and Trading," GAIL said in a press statement here.

LNG will come from Gazprom's Shtokman production facilities, which have 130 trillion cubic feet of in place reserves. "Under the contract, LNG will be sustainably priced with an oil-indexed formula and delivered to Dahej (Gujarat), Dabhol (Maharashtra) and Kochi (Kerala) terminals in India," GAIL said without sharing price details.

Shtokman field, one of the world's largest natural gas fields, lies in the Russian sector of the Barents Sea.

According to B C Tripathi, chairman and managing director of GAIL, the long-term LNG supply agreement with Gazprom, which holds the world's largest gas reserves, is another milestone in the Indian–Russian energy cooperation.

In August this year, GAIL had signed a contract with French energy giant GDF Suez to import 800,000 tonnes of LNG from 2013 to 2014. GAIL has been expanding its global presence to secure gas supplies. It had earlier signed a 20-year sales and purchase agreement with Sabine Pass Liquefaction LLC, a unit of the US-based Cheniere EnergyPartners, for supply of 3.5 million tonnes per year of LNG beginning 2017.

It has also executed a gas sales purchase agreement with Turkmengaz of Turkmenistan for buying 38 million standard cubic meters per day of gas for 30 years through the Turkmenistan-Afghanistan-Pakistan-India pipeline.

FinMin set to activate infra funding mechanism

NEW DELHI, OCT 1: The Finance Ministry is all set to take the draft tripartite agreement for the infrastructure debt funding mechanism to the Cabinet. The Cabinet approval will pave the way for operationalising the mechanism.

Finance Minister P. Chidambaram said, "The infrastructure debt funds note will go before the Cabinet shortly and we will announce that after it is approved." The proposal for such a fund was announced in the 2011-12 Budget. Such a fund aims to attract big-ticket investments for large infrastructure projects.

Earlier, a senior Finance Ministry official said the model agreement is the key to operationalising the funding mechanism. This will provide arrangement between the borrowers, the lenders and the proposed Infra Debt Fund (IDF). Once this agreement is in place, the IDF will take over a part or the whole of credit given. This will release funds for the banks and the financial institutions so that they can lend to others.

According to Government norms, the IDF can be set up either as a trust or as a company. In the former case, it would normally be a mutual fund (MF) and in the latter, an NBFC. In the form of a Non-Banking Finance Company, the IDF would raise resources through issue of either rupee or dollar denominated bonds of minimum five-year maturity.

The investors would primarily be domestic and off-shore institutional investors, especially insurance and pension funds that have long-term horizon.

A mutual fund IDF would be regulated by SEBI, while an NBFC IDF would be regulated by the RBI. The market regulator, SEBI, has already issued detailed guidelines for creating a mutual fund IDF.

Such a mechanism is intended to assist infrastructure projects get sustainable and cost-effective, long-term financing. Though banks have traditionally been supplying credit, they are unable to provide long-term funding given their asset-liability mismatch. Moreover, banks are also near their exposure limits for the infrastructure sector.

It is expected that IDFs through innovative means of credit enhancement will provide long-term low-cost debt for infrastructure projects by tapping insurance and pension funds that have hitherto played a comparatively limited role in infrastructure financing.

 

[NSG_Blackcats]

FUTURE under progress

Rails from France, coaches from Brazil, tunnelling expertise from China, labour from eastern India — all to give Chennai a world-class public transport system (expected to be operational by 2014)

 

[ambadas]

Re: 123 agreement trees planted by manmohan singhji fruit will reap when?

Namaste all indians,

When will the Tree will give fruits planted by dear mr. manmohan singh in form of 123 nuclear agreement,

The actual purpose of 123 nuclear deal was to gain nuclear know-how so that it can be used mainly for power gernetation which is our major concern for shortaage & power cuts.

when 123 agreement was put in parliment lots of resistence is given by some parties, some parties are agree with it, some are disagree but finally manmohan sir win the match & 123 agreement get signed, that tree was planted before 3-4 years ago, but i was waiting for its fruits when will we use that nuclear technology for producing more power with less expence.

Please guide me...

 

[blank_quest]

Re: 123 agreement trees planted by manmohan singhji fruit will reap when?

Namaste all indians,

When will the Tree will give fruits planted by dear mr. manmohan singh in form of 123 nuclear agreement,

The actual purpose of 123 nuclear deal was to gain nuclear know-how so that it can be used mainly for power gernetation which is our major concern for shortaage & power cuts.

when 123 agreement was put in parliment lots of resistence is given by some parties, some parties are agree with it, some are disagree but finally manmohan sir win the match & 123 agreement get signed, that tree was planted before 3-4 years ago, but i was waiting for its fruits when will we use that nuclear technology for producing more power with less expence.

Please guide me...

 

[ant80]

Another NYTimes Article: What If"¦Mumbai Gets Hit by a Storm Like Sandy?

As the New York metropolitan region reels in the aftermath of Hurricane Sandy, those outside the area may wonder how their own cities would fare in such a disaster.

What if a storm on the scale of Sandy took place in another teeming metropolis surrounded by water – like, say, Mumbai?

First, some basic stats: Mumbai has 13 million residents to New York's 8.2 million and is twice as densely populated, at 53,600 people per square mile, compared to New York's 27,243 per square mile.

Mumbai was once an archipelago of seven islands that is now bound together by land reclaimed from the sea, and the city is surrounded by water on three sides. While heavy rainfall inundates the city each monsoon, submerging parts of the city and leaving commuters stranded, urban planners and architects say Mumbai is completely unequipped to deal with sudden flooding like the kind that accompanied Hurricane Sandy.

cont...

 

[Tolaha]

The Hindu : States / Tamil Nadu : Tamil Nadu to blame for power crisis, Centre tells SC

The Centre on Thursday informed the Supreme Court that Tamil Nadu has to be blamed for the power crisis it is facing as it had not strengthened the grid for receiving surplus power.

Attorney General G.E. Vahanvati, appearing for the Centre told a three-Judge Bench of Chief Justice Altamas Kabir and Justices S.S. Nijjar and J. Chelameswar that as far as the power surrendered by the NCT Delhi was concerned, in 2011 the Centre had tried to allocate Tamil Nadu additional power. For this year, he said, according to the Union Power Ministry every grid had certain capacity. The southern grid did not have the capacity to receive the available surplus power.

Mr. Vahanvati said, "The Tamil Nadu government had not strengthened enough the grid and the State itself is responsible for the power crisis. Eight States are demanding a share in the surrendered power and we will distribute it in a manner that each grid can withstand."

Senior counsel Mukul Rohatgi, senior counsel Ranjit Kumar and Additional Advocate General Subramonium Prasad wanted the court to issue a direction to the Centre to keep aside the surrendered power, as otherwise the whole suit filed by Tamil Nadu would become infructuous.

The AG replied that the surplus power could not be stored.

CJI told counsel for Tamil Nadu, "We are not experts in deciding the matter. We need technical details from an expert body."

In a brief order, the Bench said, "Issue notice. On behalf of the Union of India, there are certain difficulties expressed in providing power straightway. With regard to the capacity of the southern grid to take the load of excess power to be provided to Tamil Nadu, the Attorney General is requested to file an affidavit indicating the reasons for which the prayer of Tamil Nadu cannot be considered to a certain extent."

In the meantime, the Bench said since it concerned technical position, the Central Electricity Authority should examine and submit a report to the court. The Bench directed the matter to be listed for further hearing on November 29.

In its application filed in the suit, Tamil Nadu sought a direction to restrain the Centre from re-allocating the entire power surrendered by the National Capital Territory (NCT) of Delhi, viz 230 MW of round-the-clock power and 1491 MW power (available between midnight and 6 am) to any other State.

The State said, "It is the right of Tamil Nadu to demand for the surrendered power to meet the extreme power shortage faced by the State. Only the Union of India is empowered to reallocate the surrendered power along with the transmission corridor which it has failed to do so."

It further said, "In the year 2012-13, due to the failure of South-West monsoon the State is facing acute shortage of power. The people of Tamil Nadu are reeling under massive power cuts, going up to 12 hours every day.

It said, "Tamil Nadu apprehends that the Central government will re-allocate the surrendered power to the other States, which are not as stressed as Tamil Nadu is, and thereby deprive the State of Tamil Nadu of its justified demand of re-allocation of the entire power surrendered by the NCT of Delhi."

Delhi surrenders 230 MW of power. TN files a suit demanding that this power not be allocated to other states as it is in a severe power distress. Centre in its defense says that TN distribution network can not handle any more power!

 

[Tolaha]

‘TN caused own power shortage’ - Indian Express

The Centre on Thursday opposed a plea by the Tamil Nadu government to supply surplus power surrendered by Delhi to them, saying the southern state was responsible for this crisis. Pointing out Tamil Nadu's failure to strengthen its grid to absorb additional power, Attorney General G E Vahanvati said that the southern grid lacked the required capacity to receive surplus power and hence, the state should not have submitted such a plea.

"The state is itself responsible for this crisis. There cannot be any other argument when the grid has not been strengthened enough to absorb surplus power. Moreover, the suit is filed on completely superficial grounds and it appears that the state does not understand the arrangements the government has," Vahanvati told a Bench led by Chief Justice Altamas Kabir.