Highways set for major action: With significant backroom work being done at both ministry and NHAI levels, it appears that we can look forward to reaching the magical 30 km per day number for road construction as has been announced by the transport minister.
Tweet: With a combination of EPC & Hybrid Annuity, Gadkari is methodically and surely bringing the sizzle back again to the Highways Sector.
NITI Aayog’s turnaround plan for energy sector: Major attempts, including the R10,000-crore Montek bonds in 2002 and the R2 lakh crore FRP (Fiscal Restructuring Package) in 2012, have been made to get discoms back on track. Now it is NITI Aayog’s turn to attempt to put discoms on the road to financial sustainability.
Tweet: NITI Aayog says it will work with States to put bankrupt state Discoms on a turnaround path as part of its Energy Blueprint. Good luck!
Bullet train project—speeding towards high costs: The cost of the prestigious Bullet train project has jumped from the earlier estimated R62,000 crore to R1 lakh crore. The Railways believes that the project’s “economic rate of return” would be upwards of 11% by virtue of man-hours saved as a result of improved connectivity between the two major cities.
Tweet: Japanese interim estimate of Ahd Mumbai Bullet Train at R1 lac cr. Financial rate of return = 3%. But economic rate of return at least 14%.
Railways to take the e-auction route: To overcome bureaucratic red tape, Indian Railways is planning to e-auction 100 PPP contracts to private players for converting railway stations into world-class transit facilities.
Tweet: After Coal Auctions, e-auctions are now the flavour of the season. Rlys to now “E-Auction” 100 stations for redevelopment.
Stalled projects cause for worry: In view of the rise of gross NPAs of public sector banks, the finance ministry has called a meeting with top public sector bank executives to deliberate on steps needed to remove barriers to implementation of major infrastructure projects.
Tweet: Fin Min worried on movement of ‘stalled projects.’ Gross NPAs of public sector banks ^ to 5.3% in Sept 2014 compared to 4.7% as of March ’14.
Steel story—a grim scenario: Indian steel companies are struggling in the wake of a huge drop in global steel prices and increased imports.
Tweet: Tough times for Indian steel ~ 3% demand ^, 28% drop in global prices & dumping by China leading to imports rising by 71% last year.
Power mix—bundling thermal and renewable: The government is attempting to push through its very ambitious solar target by bundling solar power with the output of new generating plants. Similar suggestions have also been made in the past for hydro and wind power.
Tweet: Good forward-looking Policy: Developers of new coal-based power plants will have to bundle in renewables of 10% of capacity.
India to become largest importer of thermal coal: As China cuts down on coal use, India is set to become the world’s largest importer of thermal coal. Currently, India imports 150 million tonnes (mt) accounting for about 16% of the seaborne trade of 915 mt.
Tweet: India is expected to dominate world coal markets by becoming the single largest importer of power-plant coal by 2017—overtaking China.
Rapid rise in power generation growth: Electricity generation reached an all-time high of 1 trillion units this year with coal-based power stations recording an annual growth of 12.1%.
Tweet: Power generation in 2014-15 ^ 8.4% just a little ahead of GDP growth. Focus rightfully shifting now to Trans bottlenecks & Distribtn losses.
—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 Adite Banerjie