1. From UDAN, Hyderabad Metro to Smart City Mission, here are top issues in infrastructure space this week

From UDAN, Hyderabad Metro to Smart City Mission, here are top issues in infrastructure space this week

The UDAN regional air connectivity initiative is throwing up a bunch of outcomes ~ a burst of demand for smaller aircraft, sudden appreciation of land values around new airports, creation of service sector jobs & increasing tourism potential

By: | Published: December 6, 2017 4:11 AM
UDAN, Hyderabad Metro, Smart City Mission, infrastructure  The UDAN regional air connectivity initiative is throwing up a bunch of outcomes ~ a burst of demand for smaller aircraft, sudden appreciation of land values around new airports, creation of service sector jobs & increasing tourism potential (IE image)

Smart Policy: The UDAN regional air connectivity initiative is throwing up a bunch of outcomes ~ a burst of demand for smaller aircraft, sudden appreciation of land values around new airports, creation of service sector jobs & increasing tourism potential

  • UDAN wings for civil aviation
    A Franco-Italian company has received an order for 50 aircraft from an Indian carrier. Airlines are also looking to add personnel, from pilots to in-flight crew and ground staff.

Spat between Karnataka Power Regulator & State Govt on Renewables got resolved. Ultimately, the Govt had to throw the rule book—Section 108 of Electricity Act, to direct Regulator to approve renewable tariffs bid earlier at higher rates. Precedent for other states now

  • Karnataka upholds PPA sanctity
    KERC’s order affected 599MW of PPAs. Section 108 of the Electricity Act allows the state govt to issue directions to the power regulator in consideration of public interest.

National Green Tribunal get exasperated about Centre & States ding-donging on coastal zone regulations & comes down heavily on EnvMin, States & UTs demanding that Coastal Zone Mngmnt Plan be submitted latest by April 30, 2018. Stiff penalties on concerned officers otherwise

  • No coasting along on CZMPs
    It has affixed a `5 lakh penalty for delay, to be be extracted from salaries of defaulting officers. The environment ministry has been asked to report default by states to the panel.

Sensible: In spite of L&T having successfully implemented Phase 1 of Hyderabad Metro braving many vicissitudes, it appears that Phase 2 is unlikely to go the PPP route. Govt of Telengana has started scouting for Overseas Devpt Assistance including JICA

  • Hyderbad Metro phase 2 to be state-funded?
    Project cost for phase 1 overshot estimate by Rs 2,500-3,000cr, thanks to bifurcation of erstwhile Andhra Pradesh & attendant challenges. Six metro projects in India are supported by JICA.

Uttar Pradesh grappling with its challenged power sector with grim determination. After major moves to stop electricity thefts, goes ahead with bold 57% hike in tariff for rural metered consumers. Meter installation mandatory too. 70 lac unmetered consumers in rural areas

  • UP powers through tariff correction
    Electricity will become 63-67% costlier for rural unmetered consumers, 8.5% costlier for urban domestic consumers and 10% more expensive for urban commercial users.

Clear push for off-Budget funding: FinMin allows LIC to invest Rs 1.5 lac crs in Rly Bonds waiving off restrictive clauses of such investment by LIC. Between Asset Recycling and off-Budget sources, public expenditure in infra has to have less and less dependence on Budget

  • Green signal for LIC investment in Rlys
    Since this would take LIC exposure to over 25% of the Indian Railway Finance Corp, IRDAI had asked for sovereign guarantee for these bonds. But finance ministry said these bonds can be treated as approved security for investment.

The positivism in Q2 GDP growth numbers is largely attributed to public expenditure in infra sectors. One would have expected discernible pickup in cement production. But cement production continues to remain flat & actually declined by 2.7% in October. Perplexing

  • Weak demand behind poor cement show
    Weak cement demand because of slowing real estate activity and effects of GST affected offtake. Analysts expect matters to get better only by the January-March (2018) quarter.

It will be tough to get SmartCity initiatives off d ground if the culture of ‘user pay charges’ is not inculcated in urban centres. Janaagraha data is worrying. Only Punjab, Goa & Andhra have ULBs that are able to themselves collect more than half their revenue expenditure

  • ULBs must do more on ‘user pays’
    Ranchi chose three private agencies to collect property taxes and, as a result, its property tax collections went up from Rs 6.1 crore in FY15 to Rs 28.9 crore in FY18. Using modern methods like satellite imaging could also help boost collections.

 

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