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Infratweets: Plug & play not working

Power Ministry considers setting up of new mega power projects at sites of old units that have outlived their useful lives.

Core sector growth shows worrying declining trend from high of 6.6% in 2009-10 to low of 3.5% in 2014-15.
Core sector growth shows worrying declining trend from high of 6.6% in 2009-10 to low of 3.5% in 2014-15.

Core sector decelerates: In March 2015, the combined index of eight core industries—coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity—was 0.1% lower compared with the index of March 2014. The growth rate for 2014-15 was 3.5%, which is 20% lower than the 4.2% growth in the preceding year and lowest in the past five years.

Tweet: Core sector growth shows worrying declining trend from high of 6.6% in 2009-10 to low of 3.5% in 2014-15.

Taking Railways back on track: The Parliamentary Standing Committee for the Railways has, in its latest report on the demand for grants (2015-16), put forth a set of reasons contributing to the ongoing financial crisis in the Railways and suggested measures to overcome the situation.

Tweet: Parliamentary Standing Committee for the Railways makes two noteworthy suggestions (1) temporary halt in dividend payment (2) refund of social service obligation.

Expert services as important as supplies: While humanitarian aid and supplies are important, for restoring normalcy in Nepal, India has also sent 10 teams totalling 450 personnel and rescue dogs from the National Disaster Response Force, 18 medical teams consisting 360 people and 12 engineering teams of about 60 people to Nepal.

Tweet: Good to see that along with ‘supplies’, India has sent relevant technical teams to Nepal for medical assistance, disaster relief and power restoration.

Opposition stalls realty Bill: Rahul Gandhi is leading the charge against the real estate Bill, citing the govt has diluted provisions beneficial to home buyers. These include the clause that mandated 70% of the funds earmarked for a project that could not be diverted have now been reduced to 50%.

Tweet: Even the forward-looking, beneficial Real Estate (Regulation & Development) Bill could not be cleared in Rajya Sabha due to ‘lack of consensus’.

‘Plug & play’ clearly not working yet: Owing to alleged inordinate delays in land acquisition, Reliance Power terminated the contract for the Tilaiya UMPP in Jharkhand. The firm had, in August 2009, won rights to set up a 3,960 MW power plant at Hazaribagh in Jharkhand but apparently could not start work as the land was not available even after five years.

Tweets: UMPPs were supposed to herald a new era of ‘plug & play’ where bids came packaged with all clearances. Tilaiya UMPP pull-out shows otherwise.

Sensible strategy—Power Ministry considers setting up of new mega power projects at sites of old units that have outlived their useful lives.

Professionalising afforestation: The Compensatory Afforestation Fund Bill—approved by the Cabinet—will create an ‘appropriate institutional mechanism’, replacing the ad hoc Compensatory Afforestation Management and Planning Authority, created on the directions of the Supreme Court, in 2004.

Tweet: Cabinet gives approval to Compensatory Afforestation Fund Bill ~
seeks to systematise adhoc manner in which funds collected are now utilised.

Banks versus stressed promoters: To revive infra projects that are stuck and unable to service loans, the govt has asked banks to take ownership control of such assets. The banks have, however, expressed their inability to take control till promoters bring in more equity. Operating an infra project in India is itself a challenging task and banks are hesitant to step into the activity.

Tweet: Banks hesitant to ‘take ownership control’ of stressed assets by converting debt to equity, as desired by Govt. Tough ‘operating’ projects!

—Vinayak Chatterjee is Chairman of Feedback Infra
His Twitter handle: @Infra_VinayakCh

A weekly selection of the author’s tweets—with a brief backgrounder—in the infra space, by Vikram Jethwani

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