Cabinet Committee on Investment has cleared three hydro power projects, which were stuck due to environmental bottlenecks.
According to a Power Ministry official, the three hydel projects -- Tawang (800 MW), Tato (700 MW) and Teesta (520 MW) -- which were awaiting approvals for a long time have been cleared by CCI.
These projects in Arunachal Pradesh (Tawang and Tato) and (Teesta) Sikkim were sent to CCI from the Power Ministry in December, last year.
India’s rising coal imports, increasingly a reason for the country’s wide trade and current account deficits, may be reined in considerably in the next few years, report Raj Kumar Ray and Aftab Ahmed in New Delhi. With the Cabinet Committee on Investment (CCI) approval in hand, the railways is set to complete work on three rail projects by end 2016, helping Coal India and its arms evacuate the black gold from some of their big mines and transport them to industrial hubs. The facility will help increase domestic coal output by 250 million tonnes or nearly 50%.
The three projects — Tori-Shivpur-Kathautia (Hazaribagh) triple line for the North Karanpura Coalfield in Jharkhand, Jharsuguda-Barpalli double line for Ib Valley coalfield in Orissa and Bhupdeopur-Raigur-Mand in Chhattisgarh — were stalled for nearly a decade due to various reasons. With the CCI clearance, work has begun at some of the sites, a senior official told.
“The clearance for these railway lines would be a milestone in terms of efforts to step up domestic production of coal. The rail connectivity has the potential to generate over 250 million tonnes of coal annually, which is almost half of what CIL produces now,” said a coal ministry official, asking not to be named.
India’s domestic coal output, mainly from Coal India, has grown slowly from 431 million tonnes (mt) in 2006-07 to 576 mt last fiscal, while imports more than trebled from 41.5 mt to 138 mt as power plants, steel and other units consumed more fuel to aid growth in Asia’s third-largest economy. Coal imports as a percentage of GDP almost doubled from 0.5% in 2006-07 to 0.9% in 2012-13, and was one of the main reasons along with oil and gold imports for widening the current account deficit.
While many captive coal blocks allotted to private players failed to take off, the pressure has mounted on Coal India to raise output. CIL has often blamed delays in green clearances, land acquisition and lack of rail links from pithead to industrial units as major reason for not being able to scale up its operations.
In this context, the three rail projects will address much of the coal shortage in coming years. The Jharsuguda-Barpalli rail line is essential for transportation of coal from the Ib Valley coalfield of Mahanadi Coalfields with a potential of 90 million tonnes per annum. The North Karanpura Coalfield covers an area of 1,230 square kilometres and has total coal reserves of 13.1 billion tonnes with a potential output of 70 mt annually. The Mand Raigarh Coalfield can supply 100 mt of coal annually once the rail link is built.
The environmental clearance for Jharsuguda-Barpalli was given last month and the project is likely to be completed by June 2016, an official said.
The Rs 2,345-crore Tori-Shivpur-Kathautia project has now got environmental clearance and land acquisition for some stretches is under way. The project is likely to be operational by December 2016.
In the case of the Rs 2,500-crore Bhupdeopur-Raigur-Mand line, the CCI/CCEA has resolved the issue and a special purpose vehicle led by Ircon will be set up by September 2016.
The three railway link projects are a part of the three inter-state rail corridor projects proposed by CIL that are dedicated to coal evacuation in the Naxal-affected areas in Orissa, Chhattisgarh and Jharkhand. CIL’s total investment in these three corridors are of the order of Rs 6,000 crore.
Cabinet Committee on Investment has cleared Reliance Power's Tilaiya ultra mega power project in Jharkhand, sources said.
RPower, according to them, may not have to provide non-forest land to compensate for the loss of forest land acquired for the proposed plant.
Sources said the company's 4,000 MW Tilaiya plant is now expected to be treated on a par with the other public sector projects and therefore would be exempted from providing compensatory afforestation for the loss of forest land.
At present, only central government or public sector undertakings have exemption from the obligation to provide non-forest land.
Tilaiya power plant is to be executed by a Special Purpose Vehicle (SPV), Jharkhand Integrated Power Ltd, which was handed over to Reliance Power in January 2009 by Power Finance Corporation -- the nodal agency for UMPPs.
Tilaiya would be the fourth UMPP to be awarded to a developer. Earlier, two UMPPs bagged by Reliance Power are those of Sasan (Madhya Pradesh) and Krishnapatnam (Andhra Pradesh). Tata Power is operating the Mundra UMPP in Gujarat.
UMPP is a big-size coal-based power plant with at least 4,000 MW capacity and is built at an approximate cost of Rs 25,000 crore.
CCI, headed by Prime Minister Manmohan Singh, aims to fast-track major projects and help boost investor sentiment.
The Cabinet Committee on Investment may decide tomorrow whether Reliance Power's ultra mega power project at Tilaiya in Jharkhand should be exempted from providing non-forest land to compensate for the loss of forest land to be acquired for the project.
At present, only the central government or public sector undertakings are exempted from the obligation to provide non-forest land.
"This issue is expected to be taken up in tomorrow's CCI meeting," sources said.
Reliance Power has won contracts to set up two other ultra mega power projects (UMPPs) - at Sasan in Madhya Pradesh and at Krishnapatnam in Andhra Pradesh.
A UMPP is coal-based power plant with a capacity of about 4,000 MW built at an approximate cost of Rs 20,000 crore.
Source: Business Standard
The Cabinet Committee on Investment (CCI) at its next meeting may take up three hydro power projects that have been held up on account of environmental and forest clearances.
The three hydel projects -- Tawang (800 MW) and Tato (700 MW) and Teesta (520 MW) --have been awaiting environmental clearances for a very long time.
"These projects in Arunachal Pradesh and Sikkim have been sent to CCI from the Power Ministry for clearance," said a source.
The government has put on the fast track projects worth Rs 34,647 crore in petroleum and natural gas and power sectors by approving a number of them and giving directions for urgent clearances to the rest.
The projects in the power sector are worth Rs 26,700 crore while in the petroleum and natural gas sector the ones cleared are to the tune of Rs 7,947 crore.
These projects, held up for want of various clearances, including environmental nod, have now been put on the fast track by the Cabinet Committee on Investment (CCI) chaired by Prime Minister Manmohan Singh, sources said.
The projects cleared in the power sector include the Sagar super thermal power project in West Bengal and Hinduja National Power Corporation Limited project in Visakhapatnam.
About the Sagar power project, the Environment Ministry has been asked to decide the matter regarding environmental and CRZ clearance within two weeks.
With regard to the Hinduja project, the Power Ministry has informed that action for alleged CRZ violations by the project was being taken by the Andhra Pradesh Government.
The Environment Ministry has informed that the alleged violation attracts a penalty of Rs one lakh and the approval can be considered upon filing of the case in court, the sources said.
In this light, the CCI decided that a final decision regarding the CRZ clearance should be taken by the Environment Ministry within one week.
On the Rajwest Pithead Thermal Project in Rajasthan, they said the Environment Ministry has accorded clearance to the Kapurdi lignite mine for 25 per cent capacity enhancement.
The ministries of mines and coal stated that they have no objection to the proposal for approving mine plan.
For the Meenakshi Energy Private Limited project in Andhra Pradesh, the sources said, "The requisite renewal of environment clearance has been accorded by the Environment Ministry."
The petroleum projects cleared by the Cabinet Committee on Investment include IOC's Petroleum, Oil and Lubricants (POL) Tap-off point at Korba in Chhattisgarh.
The project was cleared after requisite environment clearances by the Environment Ministry.
For setting up a new 42-inch pipeline from Chennai to Manali by the Chennai Petrochemicals Corporation Limited, the officials said the Environment Ministry will accord the necessary CRZ clearance in two weeks.
The Environment Ministry has also given requisite environmental clearance to a Hindustan Petroleum Corporation Limited project for setting up a pipeline between Awa and Salawas in Rajasthan.
An Oil and Natural Gas project in Assam has also been accorded clearance by the Environment Ministry along with a Gujarat State Petroleum Corporation project to set up a liquefied natural gas terminal at Mundra in Gujarat.
The fair-trade regulator has approved the proposed merger of two companies jointly owned by French major Alstom and industrial player Kalyani Group, saying the deal will not adversely affect competition.
The transaction involves the absorption of Kalyani Alstom Power into Alstom Bharat Forge Power, which will be the surviving company.
Both entities are jointly controlled by Alstom Power Holdings SA and Bharat Forge Ltd, the flagship firm of the Kalyani Group.
The Competition Commission of India (CCI) said in a December 10 order that "the proposed combination is not likely to have appreciable adverse effect on competition in India."
The regulator observed that after the deal, ultimate control over Alstom Bharat Forge Power would remain jointly with Alstom Power Holdings and Bharat Forge.
Alstom holds a 51 per cent stake in Alstom Bharat Forge Power, a maker of steam turbines and generators, while the rest is with Bharat Forge.
Bharat Forge has a 51 per cent stake in Kalyani Alstom Power, with the remainder held by Alstom. Kalyani Alstom makes heat exchangers and auxiliary equipment for steam turbine generators.
The Commission noted there was "no horizontal overlap" between the business activities of the two companies.
"The products of ABFPL (Alstom Bharat Forge Power Ltd) and KAPL (Kalyani Alstom Power Ltd) would be complementary to each other for the setting up of turbine islands for sub-critical and super-critical technology based power plants," the regulator said.
"However, KAPL has not started any business activity and has also stopped construction of its manufacturing plant and ABFPL has also not supplied any products to KAPL," it added.
Besides, Alstom Bharat Forge Power's manufacturiing plant and ABFPL has also not supplied any products to KAPL," it added.
Besides, Alstom Bharat Forge Power's manufacturing facility is scheduled to start in 2015, the CCI noted.
The boards of both companies approved the merger in October, following which the CCI's clearance was sought.
Emphasizing that good competitive environment helps promote business dynamism, CCI chief Ashok Chawla said the lack of competition is hurting the growth of power sector. The Competition Commission of India (CCI) keeps a tab on unfair trade practices at the marketplace.
Speaking at the Delhi Economics Conclave, the CCI chairman said, the lack of competition is hurting the Indian power sector.
"Worst hurt is power (sector) where capacity shortages have caused constraints to economic growth." Chawla said.
"The control of the infrastructure, that is the electricity wires, by the dominant firm gives rise to access issues," Chawla added.
According to him, there is conflict of interest when content and carriage is with the same entity.
At present, power distribution companies (discoms) supply as well as manage network that provides electricity for residential and commercial purposes.
The government is working on a proposal where a power supplier would not manage the electricity distribution network.
Meanwhile, Chawla said the competition law has primarily three elements - to act against anti-competitive agreements, mergers and acquisitions, and curb abuse of dominant market position by entities.
So far, the commission has received more than 400 matters related to anti-competitive agreements and abuse of dominance.
With regard to M&As, around 150 proposals have been decided so far, he said.
Chawla also laid stress that good corporate governance is critical for ensuring fair competition.
Bad assets set to rise in infra sector in near-term
State-run India Infrastructure Finance Company today said that it expects a rise in non- performing assets in the near-term but health of the key sector is likely to improve going forward.
"We may see the bad assets ratio going up in the short-term, but things will be better than other institutions working in the same space," Executive Director Harsh Kumar Bhanwala told reporters here.
However, if issues plaguing various infra projects are addressed, things on the bad asset front will certainly improve, he said.
The public sector lender engaged in infra financing had a gross non-performing asset base of around 1.1 per cent by the end of first half of this fiscal. The firm, which has a restructured book of around Rs 3,000 crore as of now, has seen addition of Rs 600 crore in this account in the current financial year.
"We may add around Rs 400 crore of restructured book going ahead," Bhanwala said.
Bhanwala, here to participate in a road-show to promote India Infrastructure Finance Co's tax-free bond, said the issue is getting sound response. India Infrastructure Finance Co is presently in the market to raise up to Rs 3,000 crore through bond sale. It has received around Rs 1,850 crore as of now from investors.
Meanwhile, the infra financing firm said the first disbursements from its infra-debt fund would happen by the end of this month.
India Infrastructure Finance Co has disbursed around Rs 4,000 crore of credit by the end of November and has sanctioned around Rs 1,200 crore as of now.
"We are focusing on the refinancing and take out finance business to drive business growth as new sanctions have slowed down," Bhanwala said, adding India Infrastructure Finance Co would be able to maintain 30 per cent growth in loan book in fiscal 14.
Talking about take-out financing, he said the company sees the share from this segment rising from 10 per cent (around Rs 3,000 crore) of the total disbursed loan book size of Rs 30,000 crore to around 11-12 per cent by fiscal 14-end.
Talking about take-out financing, he said the company sees the share from this segment rising from 10 per cent (around Rs 3,000 crore) of the total disbursed loan book size of Rs 30,000 crore to around 11-12 per cent by fiscal 14-end.
India Infrastructure Finance Co said it is awaiting government nod to increase the loan tenure in case of take-out financing, a way of providing finance for longer duration projects.
Meanwhile, India Infrastructure Finance Co today said S B Nayar has taken over the charge of Chairman and Managing Director of the company.
Prior to this, he was managing director of of IFCI, India Infrastructure Finance Co said in a statement.
India Infrastructure Finance Co has disbursed around Rs 4,000 crore of credit by the end of November and has sanctioned around Rs 1,200 cr as of now.
The Competition Commission of India (CCI) has imposed a penalty of Rs.1,773 crore on Coal India Ltd (CIL), the country’s largest coal miner and its subsidiaries (Mahanadi Coalfields Ltd, Western Coalfields Ltd and South Eastern Coalfields Ltd).
A spokesperson for the antitrust regulator said that the state-owned coal miner, the world’s largest, had been found guilty of violating section 4(2) (a) (i) of the Competition Act of 2002, which relates to abuse of a dominant position.
The case against Coal India was registered by the Maharashtra State Power Generation Co. Ltd and Gujarat State Electricity Corp. Ltd, the spokesperson said.
“CCI held that CIL through its subsidiaries operates independently of market forces and enjoys undisputed dominance in the relevant market of production and supply of non-coking coal in India. The commission inter alia also held CIL and its subsidiaries in contravention of the provisions of section 4(2)(a)(i) of the Competition Act, 2002, for imposing unfair/ discriminatory conditions in fuel supply agreements (FSAs) with the power producers for supply of non-coking coal,” a CCI release said.
“Apart from issuing a cease and desist order against CIL and its subsidiaries, CCI directed modification of FSAs in light of the findings and observations recorded in the order. The impugned clauses related to sampling and testing procedure, charging transportation and other expenses for supply of ungraded coal from the buyers, capping compensation for supply of stones, etc.,” the release further added.
Phone calls made on the mobile phones of S. Narsing Rao, chairman of CIL, and a company spokesperson remained unanswered.
“Further, for effecting these modifications in the agreements, CIL was ordered to consult all the stakeholders. CIL was also directed to ensure parity between old and new power producers as well as between private and PSU (public sector unit) power producers, as far as practicable.,” the release said.
The power ministry may refer the issue of gas allocation for Ratnagiri Gas and Power (RGPPL), formerly the Dabhol Power Company, to the Cabinet Committee on Investment to fast-track the process and prevent lenders’ exposure of R8,500 in the project from turning into a non-performing asset.
A source said while an EGoM on March 28 has approved priority gas allocation (along with the fertiliser sector) to the project, the 1,967-MW plant is non-operational since August 1, 2013. “Involvement of a high-level body to resolve the issue quickly may prevent the project from getting bust,” the source said.
The power ministry has already raised the issue of gas allocation for RGPPL with the oil ministry that is understood to have expressed its inability to give additional gas allocation to the project. Considering the seriousness of the issue, an EGoM meting could also be convened.
Faced with a low outputfrom RIL’s KG-D6 block, the EGoM on August 23 capped gas supply to fertiliser units at 31.5 mmscmd and allowed all additional gas available beyond this upto 2015-16 to the power sector. But this exercise would leave only 1.125 mmscmd of gas for power in 2013-14, 3.980 mmscmd in 2014-15 and 6.895 mmscmd in 2015-16, leaving little for priority allocation for RGPPL.
“...the company is finding it difficult to meet its debt service obligations to lenders who have large exposure in RGPPL of about R8,500 crore,” ICICI bank managing director and CEO wrote to power minister Jyotiraditya Scindia flagging off the issue.
“Immediate supply of at least 2.5-3.0 mmscmd to RGPPL from APM sources as an interim measure is needed in order to bring parity with other gas based power plants which are currently operating at around 25-30% PLF. This would ensure that company is able to meet its debt service obligations without default,” she said.
Cabinet Committee on Investment, this week, is likely to take up two power projects worth over Rs 35,000 crore that have been long stalled due to environmental hurdles.
Power Ministry has sought CCI intervention on NHPC's Dibang project and Reliance Power's Tilaiya project.
"CCI may take up these projects in this week's meeting," a source privy to the development said.
The 3,000 MW Dibang hydro project has been stalled for a long time in the absence of environment and forest go-ahead. The estimated cost of the project is over Rs 15,000 crore.
The CCI may decide whether the private power producer Reliance Power's 4,000 MW ultra mega power project at Tilaiya in Jharkhand should be spared from the responsibility of providing non-forest land to compensate for the loss of forest land to be acquired for the project.
At present, only central government or public sector undertakings have exemption from the obligation to provide non-forest land under the Act.
This is Reliance Power's third UMPP. The company is also executing two more UMPPs -- Sasan ( Madhya Pradesh) and Krishnapatnam ( Andhra Pradesh).
UMPP is a big-size coal-based power plant with at least 4,000 MW capacity and is built at an approximate cost of Rs 20,000 crore.
CCI, headed by Prime Minister Manmohan Singh, aims to fast-track major projects and help boost investor sentiment.
Power Minister Jyotiraditya Scindia had earlier said that as many as 94 hydro power projects are languishing due to tardy progress at various levels in granting them clearances.
Once approved, they can generate 37,000 MW electricity. Hydro power contributes 39,623 MW of the total 2,25,793 MW capacity in the country.
