The week's pick of Vinayak Chatterjee's TWEETS.
Defence Deals Cleared
The Defence Acquisition Council has cleared much-delayed defence contracts. This comes close on the heels of the Cabinet decision to raise FDI in the defence sector to 49%, subject to the condition that Indian owners exercise management control. The move is aimed at reducing imports and indigenizing defence production.
Tweet | Getting the mojo back: Rs 80,000 crs Defence orders & imminent Rs 60,000 crs EPC Road contracts expected to get Engg/Constr sector buzzing.
Powering Up The Gencos
In the wake of the gas price revision, the government plans to pool imported and domestic fuel prices. Floundering power stations can expect a bailout package needed to crank up their electricity production and provide a boost to the economy.
Tweet | Pooling of dom & imp coal + gas – now under consideration by Govt. Industry had suggested this to UPA 5 years ago. If only they had listened.
Electricity Act Gets A Facelift
Changes are aimed at introducing separate licences for the wire business and supply of power thus paving the way for open access for large customers.
Tweet | Proposed changes in Electricity Act in right direction – open access, carriage & content, provider of Last Resort & realistic tariff setting.
Balancing Act Needed
The Uttarakhand flood disaster prompted the Supreme Court to direct the ministry of environmental affairs (MOEF) not to grant further clearances for hydroelectric projects in the state.
Tweet | Middle ground required: Environmentalists want 24 hydel projects dropped in Uttarakhand. State Govt keen as they drive growth.
Solar Power – The Game Changer
The government plan to give clean energy a boost hinges on developing large solar power installations along the lines of ultra mega thermal projects. Bloomberg has predicted that by 2020 solar energy will beat coal on costs without subsidies. This would translate into renewable energy share of electricity production of 45% by 2030.
Tweet | Govt targets the most ambitious energy initiative ever in the history of India. 100,000 MW of Solar Power in 5 yrs. All policies to converge. US firm FirstSolar bids lowest at Rs 5.35/unit in Andhra Pradesh tender. Who would have thought solar would get so competitive so quickly?
Solar power modules costing looking similar to computer chips cost history. In 3 years, prices of solar modules have come down by 85%.
Tackling The Fiscal Deficit
The government has announced austerity measures to bring down fiscal deficit to 4.1% of GDP for the current fiscal. It has also declared a series of measures to increase efficiency of govt functioning such as punctuality and strict accountability for time bound implementation of projects with the PMO itself monitoring activities.
Tweet | Govt’s austerity drive welcome. Even more welcome is the productivity drive. Input-Output Ratio & Plant Load Factor require dramatic rise.
Some Cheer For Realty Sector
Lowering of the minimum built up area and capital requirement as well as easy exit norms are expected to attract foreign investment in the construction sector. While the embattled large Indian players in the realty market are unlikely to immediately reap the benefits, the emphasis on encouraging smaller projects and affordable housing would be a boon for the realty market.
Tweet | Sunlight thru the clouds: Easier FDI in Constrn comes thru amidst battered realty stocks, petulant Realty Funds & Regulatory aggression.
Sensible: To FDI in constrn, Developers may be freed from restrictions on size, min capitalisation & exit if they do 30% affordable housing.
India’s First Fully Wi-Fi Enabled Railway Station
Indian Railways is beginning to show signs of a technology leap. Biodegradable toilets and a slew of safety measures are some of the other initiatives that the Railways is putting in place across its nationwide network of stations.
Tweet | IT Capital shows the way: Bangalore City Rly Station becomes the first station to be fully wi-fi enabled. Now for the balance 7171 stations!
Reaching For The Skies
The aviation sector is poised for huge growth. Under the Greenfield Airport Policy, the government is focusing on building 100 no-frills airports to improve air connectivity with under-served regions in the country.
Tweet | 86% of air traffic from 6 metro airports and 12 other cities. Clear need to broad base connectivity, which govt is rightfully pushing for.
Troubled Times For Indian Railways
The decline in passenger growth has sent alarm bells ringing. Indian Railways faces a tough situation given its huge capacity constraints. In contrast, road transport has geared up to offer passengers efficient, affordable and comfortable travel options. Further, as the middle class shifts to low cost airlines, railways will have to deal with declining revenues in the future.
Tweet | Capacity saturation point reached: For 1st time in history, Indian Rlys likely to see flat or declining passenger volumes in fiscal 14-15.
Poor Show On The Ganga Cleanup Front
The Supreme Court has ordered the National Green Tribunal to shut down industries that release untreated effluents into the Ganga. Besides, there are 74 towns and cities situated along the banks of the river that need to modernize their archaic waste disposal systems.
Tweet | Executive failure: Supreme Court slams Central & State Pollution Control Boards for their callous failure to prevent effluents into Ganga.
The ambitious Sagar Mala project, a maritime infra-cum-policy initiative which envisages setting up of a string of ports for coastal and international shipping, is going in for innovative funding sources.
Tweet | Shipping Ministry wants to mimic petrol-diesel cess used to fund highway devpt. Wants a cess on sea-cargo to fund port devpt.
Not a bad idea.
Coal Regulator Bill On The Anvil
The new government seems intent to give more teeth to the regulator and actually make it a neutral and effective watchdog of the challenged coal sector.
Tweet | Progressive: Coal Regulator Bill in winter session of Parliament. Unlike UPA , Govt is likely to hand over ‘pricing decision’ to Regulator.
– 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.