News
Friday, July 05, 2013
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Over 4,500 large dams lack emergency action plan
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PM effect: 11 stalled power projects worth Rs 52,000 cr cleared
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Construction of Mumbai metro corridor approved
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States to get more power in environment clearance
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Baglihar Hydropower Project stuck over funding issues
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4000 km of Highways to be upgraded
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Nepal allows Coastal Projects India to invest in hydropower project
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Gammon India’s corporate debt restructuring cleared
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Builders allege huge racket to procure environmental clearances
Over 4,500 large dams lack emergency action plan
The Hindu Business Line,
July 5, 2013
The Uttarakhand floods have brought to the fore the debate over strength of dams.
Till September 2011, only eight States have prepared EAP for 192 large dams
Even as the Uttarakhand floods bring to the fore the debate over strength of dams, there
are over 4,500 such structures in the country which are operating without an “emergency
action plan” (EAP) rendering huge area and property vulnerable to cascading effects of
dam failure.
The Central Water Commission (CWC), which works under the Water Resources
Ministry, had issued guidelines in May 2006 for development and implementation of the
EAP for large dams in the State.
Till September 2011, only eight States (or merely 4.06 per cent) have prepared EAP for
192 large dams against 4,728 large dams in 29 States.
“Thus, non preparation of EAPs by the project authorities in respect of 96 per cent of
large dams renders huge area and property left vulnerable to cascading affects of dam
failure,” said a note circulated by Parliament’s Public Accounts Committee (PAC) to its
member States.
News
The PAC is currently examining a CAG report on disaster management in the country.
In its performance audit report tabled in Parliament in April this year, the Comptroller
and Auditor General said it has found that despite considerable progress in setting up
institutions and creating funding arrangements, there are critical gaps in the
preparedness level for various disasters.
The PAC note points that the Crisis Management Plan (CMP) of 2009 had identified
CWC as the authority responsible for sending first information regarding flood forecasts.
The Water Resources Ministry prepared its Ministry-level CMP in March 2011 to handle
crises related to flood forecasting and dam failures.
According to the CMP, each State was required to establish a dam safety organisation
(DSO) to address safety issues of large dams in the States.
Only 14 States had set up DSOs till July 2012.
According to International Commission on Large Dams (ICOLD) specifications, a large
dam is classified as one with a maximum height of more than 15 metres from its deepest
foundation to the crest.
A dam between 10 and 15 metres in height from its deepest foundation is also included in
the classification of a large dam provided the length of crest of the dam is not less than
500 metres or capacity of the reservoir formed by the dam is not less than one million
cubic metres.
The CAG report was critical of disaster management in the country. “The NDMA, which
was conceived as the apex planning and supervising body, was found ineffective in its
functioning in most of the core areas.
“It neither had information and control over the progress of work at the state level nor
was it successful in implementation of various projects,” the CAG report said.
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PM effect: 11 stalled power projects worth Rs 52,000 cr cleared
The Hindu Business Line,
July 5, 2013
Were held for want of coal; PM’s Project Monitoring Group looking at 72 more projects
Within days of the Prime Minister calling for speeding up infrastructure projects, 11
power plants worth Rs 52,000 crore have been cleared.
These projects, cleared by the Prime Minister’s Project Monitoring Group, were stalled
for want of coal.
The fuel-supply agreements (FSAs) for the projects, including those promoted by Adani,
GMR, Lanco and Haldia, will be signed by August 31, a senior Government official said.
News
The Project Monitoring Group (PMG), set up in the Cabinet Secretariat, is tasked with
removing the bottlenecks for stalled projects, with an estimated bank funding of Rs 7lakh crore.
CLEARED PROJECTS
“So far two meetings of the Sub-Groups, one with the Ministry of Environment and the
other with the Ministry of Coal, have been held.
“We took up 15 stalled projects referred to us by the Power Ministry and managed to
clear 11,” said Anil Swarup, Additional Secretary and Head, PMG.
The PMG has set up nine Sub-Groups with the Ministries of Environment, Coal,
Railways, Defence, Home Affairs, Petroleum and Natural Gas, Mines and Heavy
Industries to look at problem areas.
The cleared projects — Maruti Clean Coal and Power, TRN Energy, Korba West Power,
DB Power, Jhabua Power, Adani Power Maharashtra, GMR Kamalanga Energy, Lanco
Babandh Power, Talwandi Power, Haldia Energy and Prayagraj Power Generation Co. —
have a total generating capacity of 10,390 MW and involve an investment of Rs 52,349
crore.
Most of these projects had problems relating to availability of coal, while some faced
environmental clearance issues.
The four projects that were not cleared include one by Neyveli Lignite Corporation,
which faces forest clearance issues.
“We have identified the problems in each of the projects and hope to sort these out
soon,” Swarup said.
The PMG has created a Web-based information system for use by private entrepreneurs
to provide details of stuck projects and point out the problem areas.
The information then moves through the ministry concerned to the PMG and is to be
sorted out by all ministries involved.
So far 83 projects have been registered with the PMG and 21 Ministries and Departments
have appointed nodal officials (of Joint Secretary rank) to be part of the process.
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Construction of Mumbai metro corridor approved
Times of India
July 5, 2013
The government has given its approval for the construction of a 33.5km-long metro
corridor in Mumbai which would run from Colaba to Santacruz electronics export
processing zone (SEEPZ) via Bandra.
News
The total completion cost of the project is estimated at Rs 23,136 crore and the line
through its total length of 33.5 km will be underground. The gauge would be standard
gauge, as per the detailed project report (DPR).
The approval for the corridor, which is also known as Mumbai Metro Line-3, was given
at a meeting of the Union Cabinet held yesterday evening.
The project is scheduled to be completed in six years by March 2019 from the date of
start of work in the financial year 2013-14.
An official statement released here said that the cabinet had also approved the
conversion of the existing state level special purpose vehicle (SPV) - Mumbai Metro rail
corporation (MMRC) into a joint venture company of the government of India (GoI) and
government of Maharashtra (GoM), with equity participation on 50:50 basis.
MMRC is the agency which would be implementing the line three metro corridor. The
joint ownership company will continue to be named as MMRC and has been created on a
similar pattern as the Delhi Metro, Bangalore Metro, Chennai Metro and Kochi Metro.
The promoters of MMRC, the Government of India and the Maharashtra government
would nominate five directors each to the board of directors of the SPV, which shall have
10 nominee Directors.
The secretary, ministry of urban development will be the ex-officio Chairman of the
Board, the statement said.
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States to get more power in environment clearance
Hindustan Times
July 5, 2013
In further streamlining of the environment clearance process, the Centre may give more
powers to the state governments to issue environment clearance and exempt more
activities from mandatory public hearing considered a roadblock to quick take-off of the
projects.
The environment ministry’s Environment Impact Assessment (EIA) notification of 2006
had classified projects depending on its capacity or land requirement into category A and
B.
The category A projects are cleared by the environment ministry and category B by the
state governments.
While there is a clarity on environment clearance process for category A projects,
confusion has arisen on category B projects in absence of clarity on which projects
require mandatory public hearing or not.
As per the EIA notification, projects classified as B1 require public consultation and B2
don’t require any environment clearance and public consultation. The notification
however fails to clearly state which projects are B1 and which are B2.
News
The confusion was further compounded by the ministry in May 2012 when it delegated
the powers to issue environment clearance for minor minerals in area of less than 5
hectares to the state governments but did not specify whether they require public
consultation or not.
“We have sought a review of entire categorization of activities listed for approval by the
state government,” an official said, adding that Nagpur based National Environment
Engineering Research Institute has been asked to submit a report.
The expert committee under the chairmanship of director NEERI is said to have
finalized a draft report to enlist category B projects as B1 and B2. Several small scale
projects from mining to construction would fall in the category which does not require
any environment clearance.
The committee has also been asked review classification of projects which the Centre and
the State governments have to examine. Many projects which are considered by the
Central government would be delegated to state governments with additional conditions.
The committee was constituted after different state governments presented before the
Prime Minister’s Office seeking more flexibility in clearing projects and wanted that only
projects of national importance should be considered by the environment ministry.
Maharashtra chief minister Prithviraj Chavan and Gujarat chief minister Narendra Modi
has been seeking powers for the state environment impact assessment authority to clear
all other projects not labeled as national projects.
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Baglihar Hydropower Project stuck over funding issues
Projectsmonitor.com
July 5, 2013
Funding issues remain unresolved for Jammu & Kashmir State Power Development
Corporation’s 450 MW Baglihar hydroelectric project phase-II. State government has
taken up with Planning Commission for grant of Rs 1000 crore for the project to enable
reduction in power tariff from the project from currently estimated Rs. 4.48 per KW to
Rs. 2.99 per KW.
After several deliberations, Planning Commission has suggested the State government to
proposeRs.1000 crore grant as a part of Special Plan Assistance. State government has
indicated that the funds under Special Plan Assistance are limited and reiterated its
request for a special dispensation on lines of Prime Minister’s Reconstruction Plan.
Estimated at a cost of Rs. 2113 crore, Planning Commission had earlier indicated that
source of funds for the project may be identified by the State government through State’s
own resources such as sale of power, borrowing and loan, after which the amount of
grant from the Central government can be considered.
The Planning Commission had stated that another option is sale of equity share. It also
pointed out that the entire power will go to the State.
News
Hence, it is in the interest of the State government to consider all possible options.
However, the State government has not identified any funds from its own resources and
is insisting on the grant from the Central government.
The Central government had also supported the phase-I of the Baglihar hydroelectric
project, along with several other projects in the State.
Baglihar-II hydroelectric power project is a run-of-the-river scheme planned on River
Chenab. The project envisages three units of 150 MW each. The project has been
approved by Central Electricity Authority in December 2010.
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4000 km of Highways to be upgraded
Deccan Chronicle
July 5, 2013
Public works minister Dr H.C. Mahadevappa said the Centre had given in-principle
consent for upgrading 4000 km of state highways to national highways.
Participating in a Meet the press programme, jointly organised by Bangalore Reporters
Guild and Press Club of Bangalore here on Thursday, Dr Mahadevappa said that once the
upgradation of these roads is complete, the state will have direct connectivity with all
neighbouring states.
The 4000 km of roads are part of 23 state highways, including the Chamarajnagar-Bidar
highway. The proposal includes construction of an eight-lane ring road around
Bengaluru to decongest the city and digging a tunnel at Shiradi ghat so that the distance
between Bengaluru and Mangalore is reduced.
One round of talks has been held with the Centre and work is expected to start by the
year end, he said.
The department needs Rs 8,000 crore to upgrade and maintain existing state roads. “We
have sought Rs 4000 crore as budgetary allocation from the chief minister. I am hopeful
the allocation will be made,'' he said.
Dr Mahadevappa said the state was losing revenue due to illegal sand mining. “The subcommittee has recommended sand mining only in permitted areas. At the moment, the
state is getting over Rs 200 crore revenue from these permits. The new policy will plug
the revenue leakage from illegal mining,'' he said.
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Nepal allows Coastal Projects India to invest in hydropower project
IANS
July 5, 2013
Energy-hungry Nepal has cleared the decks for Indian investment in the 44 MW Super
Madi Hydropower Project in Kaski district in the country's western region.
News
The Industrial Promotion Board (IPB), at a meeting chaired by Industry and Finance
Minister Shanker Prasad Koirala, decided to allow Coastal Projects Limited India to
invest in the project.
The project, being developed by Himal Hydro and General Construction Limited, had
sought the government's permission to bring foreign investment for the project,
according to a statement released after the meeting.
Super Madi, which holds a construction licence for electricity generation, is seeking to
bring foreign investment from its Coastal Project Limited India.
According to information posted on Himal Hydro's website, Coastal Projects India has a
majority share holding (82.21 percent) in Nepal Jalabidyut Prabardhan Tatha Bikas Ltd,
which in turn has 78 percent stake in Himal Hydro.
According to the website, it will take four years to complete the project.
The industry ministry, in its press statement, said the total capital of the project is IRs.4
billion (NRs.6.40 billion).
"It was a welcome step to harness investment in Nepal. We need to create more
investment-friendly environment to invite such Indian investment in various economic
and infrastructure-related projects," Chirinjivi Nepal, chief economic adviser to Koirala,
told IANS.
He expressed the confidence that more foreign direct investment will pour into Nepal
once elections are held, pointing out that it is difficult to harness such investment
without political stability.
Various Indian investors and companies are in the fray and are in talks with the
government of Nepal to boost its hydro-potential. To this end, at present, two Indian
companies, GMR and Sutlej, are in talks with the government of Nepal to sign Power
Development Agreements (PDAs) to develop the 900 MW Upper Karnali Hydro Electric
project and Arun-III -- the most promising projects in Nepal which were awarded to
Indian companies through the first ever International Competitive Bidding process.
Besides these two, 30 other Indian companies have obtained survey licence issued by the
government to Indian companies/joint ventures.
Nepal has the hydropower potential to transform it from one of the poorest countries in
the world to one of the most developed, but it has not been able to tap its resources due
to lack of funds, the insurgency and political instability.
While India is the most practical partner for developing and selling power, Nepal has so
far been unable to develop any relationship due to unnecessary politicisation of the
energy sector in Nepal.
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Gammon India’s corporate debt restructuring cleared
MINT
July 5, 2013
News
Creditors have approved a Rs.13,500 crore corporate debt restructuring (CDR) package
for Gammon India Ltd, offering the engineering and construction company a breather
from a crisis brought on by slower economic growth and project delays, but adding to the
growing pile of restructured loans at banks.
The CDR cell, a forum of lenders, has cleared the proposal and the process of loan
restructuring will start soon, said two bankers familiar with the proposal. They declined
to be named because of the sensitive nature of the matter.
Under the terms agreed for the CDR, the loan repayment will be stretched to 10 years
and Gammon India will get a moratorium of two years on servicing it. The interest rate
on the loan amount will be reduced by 1-2 percentage points to 11-12%.
“The loan recast will definitely aid an improvement in the operations of the company.
Banks have approved this case, recognizing that there is a genuine need for the firm to
avail this facility,” said a banker with a state-run bank, one of the creditors of Gammon
India, who also did not want to be named.
Emails sent to officials at Gammon on Wednesday remained unanswered as of press
time.
Gammon India and other infrastructure companies are struggling amid a slump in
economic growth, which fell to a decade-low of 5% in the year ended March, as
companies put new investments on hold. Infrastructure firms have also been battling a
credit crunch amid high borrowing costs that made it difficult for many borrowers to
repay debt.
Delays in securing mandatory government approvals have stalled project execution and
impeded cash flows at several infrastructure firms. In April, according to finance
ministry estimates, about 215 infrastructure projects were stalled, involving a collective
outlay of over Rs.7 trillion.
Shares of Gammon India surged as much as 9.6% in intra-day trading on investor
speculation about the loan recast. They closed up 3.481% at Rs.19.4 on the BSE on a day
the benchmark Sensex gained 1.22% to 19,410.84 points.
In Gammon India’s case, out of the total debt amount, banks have a fund-based exposure
of about Rs.3,500 crore Fund exposure is the loan amount given by the bank to the
company. Non-fund exposure is mainly in the form of performance guarantees or similar
facilities. Leading lenders to the company include ICICI Bank Ltd and Canara Bank Ltd.
Banks will restructure the non-fund exposure of the company to the extent at which the
facility has been used, said one of the officials cited above.
The individual exposure of each bank to Gammon India could not be ascertained as the
banks declined to divulge details.
As of 31 May, Indian banks had loans outstanding of Rs.7.7 trillion to the infrastructure
sector.
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Under CDR, bankers typically extend the repayment period, cut lending rates and
sometimes agree to forego a part of the money that’s owed to them. Banks may also offer
a repayment holiday. A CDR is approved if at least 75% of the banks by value of the loan
and 60% by number agree to proposal.
For the quarter ended 31 March, Gammon India reported a net loss of Rs.124.98 crore,
largely because of some one-off items on its overseas operations, which included
provisions made by the company in connection with investments and advances.
Gammon joins several companies that have recast loans. In the recent past, banks have
restructured the loans of companies including Orchid Chemicals and Pharmaceuticals
Ltd (about Rs.3,000 crore), Hindustan Construction Co. Ltd andSuzlon Energy Ltd.
Analysts said banks are going ahead with loan recasts despite the higher provision they
need to make on such loans, failing which they would need to categorise these loans as
non-performing assets (NPAs), which attract even higher provisions.
“Gammon restructuring was on expected lines. This is a good move for banks also as
otherwise they would be forced to classify this as NPA,” said Hatim Broachwala, an
analyst at Karvy Stock Broking Ltd.
On a cumulative basis, total restructured loans under the CDR mechanism have crossed
Rs.2.29 trillion, or 4.4% of total loans given by Indian banks, as of March. The aggregate
figure for bilateral loan recasts is not available, but bankers said such recasts may nearly
equal the CDR figure. That would take the total restructured assets of the Indian banking
industry to around Rs.4 trillion.
“It (Gammon CDR) seems to be in the ordinary course of things,” said Vaibhav Agrawal,
vice-president, research at Angel Broking Ltd. “There are going to be more such cases at
least in the next 1-2 years. Probably the peak of restructuring is over but things are not
getting any better.”
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Builders allege huge racket to procure environmental clearances
Times of India
July 5, 2013
Over the past decade, builders have complained that procuring environmental clearances
for their projects is one of the biggest rackets.
In private conversations they allege large scale corruption__their building proposals are
not cleared for more than a year and things speed up only when they pay up. One cannot
verify these claims, but the fact remains that the entire procedure has been caught up in
a bureaucratic rigmarole.
When projects do not get environmental clearances for up to two years, costs escalate
manifold and builders ultimately pass on the burden to the hapless flat buyers.
Hence, it should come as a big relief when the the Union ministry of environment and
forests (MoEF) recently decreed that environmental approvals for building and real
estate projects be granted within three-and-a-half months of the plans being submitted
News
to the state bodies responsible for clearing them. All projects involving built-up area of
20,000 square metres or more require green clearance.
The ministry's circular, dated June 19, 2013, says that for the 105-day deadline to be
adhered to, the developer must submit complete information. The committee and
sanctioning authority can reject incomplete proposals after tallying them with a checklist of required documents.
Such documents include an environment impact study, which has details on the project,
likely environment damage and restoration efforts. Data on water sources and
conservation, sewage treatment, solid waste management, traffic and so on must also be
submitted. The ministry must now ensure that its deadline is adhered to strictly and not
remain on paper.
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