Infratweets: Old habits die hard

Published: November 12, 2014 12:32 AM

The amendment to the Electricity Act 2003 is one of the major initiatives being planned by the government....

With auction of natural resources as the stated policy, why are coal blocks still being reserved for ‘allocation’ to PSUs/statal entities?With auction of natural resources as the stated policy, why are coal blocks still being reserved for ‘allocation’ to PSUs/statal entities?

End of monopoly in sight?: The amendment to the Electricity Act 2003 is one of the major initiatives being planned by the government. In line with the effort to revamp power distribution, the Suresh Prabhu panel has proposed issuing multiple supply licences to applicants by state regulators. Old PPAs (power purchase agreements) are sought to be distributed among the new supply licensees.

Tweet: Suresh Prabhu panel seeks to end the monopoly of discoms by breaking up the existing set-up into a “wire company” and multiple supply cos.

Call for action: A study by ratings agency CARE shines the light on the dismal state of affairs in discoms, particularly in states like UP and Tamil Nadu where losses have reached staggering levels, at R12,450 crore and R20,000 crore, respectively. The lessons that can be learnt from the best performing discoms in Gujarat include having separate feeder lines for agriculture customers.

Tweet: Rating agency CARE identifies UP & Tamil Nadu as having the worst Discoms with Gujarat the best. Discom reform more challenging than Fuels.

PPP models need to be made investor-friendly: India has emerged as one of the largest PPP markets in the world with nearly 900 projects under development. However, as the ultra mega power plant bidding process has shown, streamlining of PPP models is the need of the hour.

Tweet: Socialism via PPP: If you make PPP formats unviable for private sector (as in latest UMPP round) then only PSUs emerge as successful bidders.

Winds of change: The move to reintroduce accelerated depreciation (AD) in wind energy has been welcomed by stakeholders. The removal of AD had been a setback for the sector as investor interest had shifted to solar energy.

Tweet: Restoration of “Accelerated Depreciation” expected to bring back the zing in Wind Energy sector. It should never have been allowed to lapse.

Paving the way for easier land acquisition: The amendment to the Land Acquisition Act is one of the key bills to be taken up in the winter session of Parliament. It is proposed that PPP projects be exempt from the legal stipulation of obtaining consent from 70% of landowning families.

Tweet: Exemption of PPP projects from Land Acq Act’s social impact & consent clauses gathers traction. Can be aligned with Infra & Defence clauses.

The interest rate debate: RBI Governor Raghuram Rajan who has been under much pressure from industry, banks and finance ministry to lower interest rates has found an unlikely ally in CRISIL. The spate of recent actions, including EPC contracts in roads, defence orders and rail and metro projects are expected to kickstart the infrastructure investment cycle.

Tweet: We know! CRISIL Report says cut in interest rates unlikely to boost infra investments as slowdown is largely a consequence of govt policies.

Much-needed fillip For Mumbai’s infra projects: The new Maharashtra government has started its term in office with a bang. Among other projects that await the go-ahead are the inland water transport project, the Worli-Haji Ali Sea Link (WHSL) and the second phase of Metro. These should bring much needed relief to Mumbai’s harried commuters.

Tweet: Finally. Good to hear about MSRDC ready to float RFP for 14.8 km – R6,000 crore Bandra- Versova Sea Link next week.

Brand new coal policy but old habits die hard: While the new government has been keen to introduce fairness in allocation of the fuel and inspire investor confidence, it is at best a half measure as PSUs continue to get special treatment. Meanwhile, the PSU in the centre of all the action, Coal India, continues to function without a chairperson.

Tweets: With auction of natural resources as the stated policy, why are coal blocks still being reserved for ‘allocation’ to PSUs/statal entities?

Why does it take so many months to appoint a Chairman for India’s most critical PSU right now—Coal India?

– Vinayak Chatterjee is Chairman of Feedback Infra
His Twitter handle: @Infra_VinayakCh
A weekly compilation of the author’s tweets— with a brief backgrounder—in the infra space, by Adite Banerjie

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