1. Land costs spiral, fiscal deficit to electric vehicles, here is what made the new in infrastructure sector

Land costs spiral, fiscal deficit to electric vehicles, here is what made the new in infrastructure sector

Land acquisition costs have risen from Rs 0.9 crore/hectare in FY14 to Rs 2.05 crore in FY16, with the sharpest rise in Maharashtra, Punjab and Haryana. For 22 states, the compensation paid for land acquisition has risen from Rs 9,027 crore in FY15 to Rs 19,600 crore in FY17.

By: | Published: November 15, 2017 6:03 AM
IAF short of aircraft, IAF, aircraft, Tejas, US F-16, fighter jet deal, jet deal, fighter jet, Gripen fighter jet, Gripen fighter jet deal Land acquisition costs have risen from Rs 0.9 crore/hectare in FY14 to Rs 2.05 crore in FY16, with the sharpest rise in Maharashtra, Punjab and Haryana. (Image: Reuters)

IndExp article notes that post new Land Act, land cost for highways now = civil cost as against being 10% of total project cost a decade ago
Land costs spiral for infra:
Land acquisition costs have risen from Rs 0.9 crore/hectare in FY14 to Rs 2.05 crore in FY16, with the sharpest rise in Maharashtra, Punjab and Haryana. For 22 states, the compensation paid for land acquisition has risen from Rs 9,027 crore in FY15 to Rs 19,600 crore in FY17.

Maharashtra embraces Hybrid Annuity Model for its own state road network development. Set to open bids worth a whopping Rs 30,000 cr as per FE
Fat HAM gains for Maharashtra: The state recently tweaked its HAM rules. It will now provide 60% of the funding, instead of 40% envisaged under the original model. Also, private investment can be recovered in 10 years instead of 15, and contracts will be for shorter road lengths to include small contractors.

Cos in traditional power sector all scouting for projects abroad. Latest is PowerGrid’s keen interest for EPC jobs in Africa/Brazil/SE Asia
PowerGrid looking at EPC contracts abroad: 
PowerGrid will bid for 2-3 transmission packages in Brazil on an EPC basis by December-end. It is also in talks with Southeast Asian nations and those in the neighbourhood (Myanmar and Sri Lanka) for similar opportunities.

Protecting d fiscal deficit ~ more and more public expenditure in Infra thru PSU/market route. Now PowerGrid to raise Rs 3000 cr Masala Bonds
Masala bonds to power transmission: 
PowerGrid is likely to come out with the rupee-denominated bonds by the end of this fiscal. It has a capex target of Rs 25,000 crore for FY18; has already raised Rs 6,100 crore through bonds.

AAI profit = Rs 3116 cr in FY17. Clear earning from ‘revenue share’ of Delhi & Mumbai Airports was Rs 3200crs. Still no enthusiasm for PPP?!
Airport PPP must take off: 
Attempts to privatise terminal management at the Jaipur and Ahmedabad airports didn’t enthuse the private sector as airport land development was not included. Now, AAI is looking at raising Rs 5,000 crore of the Rs 20,000 crore needed to upgrade airport capacity through bonds.

L&T, weather-cock of Indian infra, says order book growth for this fiscal will be flat. Reflective of current realities. PPP revival must
L&T’s dull order forecast: 
The infra bellwether cut its FY18 order flow guidance to zero, from 12% at the beginning of the fiscal. From project delays to banks becoming wary of lending for infra projects, several factors have made L&T lower its forecast. PPP, in such a scenario, should be some salve.

Cement at 28% GST: Clearly inconsistent when GST on steel, concrete and wood is at 18%.
GST becomes taxing for cement:
Despite the mounting infrastructure requirement, including for realising the ‘housing for all’ vision, roads network expansion and airports and port development, cement remains clubbed with demerit and luxury goods, attracting the top GST rate of 28%.

Leapfrogging: Electric vehicles to move to next level of non-cable charging – through INDUCTION. Will greatly simplify charging stations
Wireless charging for EVs: 
US-based firms are working on developing wireless charging. Copper wire coiled around a piece of ferrite is embedded in a pad that is buried in the road. When a vehicle with a receptor coil parks above the device, AC is fed into the pad to induce a similar current in the receptor. This electricity is converted into DC which charges the vehicle’s battery.

A weekly collection of the author’s tweets—with a brief backgrounder—by Sarthak Ray

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