Eight core industries for Dec 2017
The eight core industries comprise 40.27 per cent of the weight of items included in the Index of Industrial Production (IIP). The combined Index of Eight Core Industries stands at 129.1 in December, 2017, which was 4 per cent higher as compared to the index of December, 2016. Its cumulative growth during April to December, 2017-18 was 4.0 per cent.
The eight core sectors comprise of domestic production of coal, crude oil, natural gas, petroleum refinery products, fertilizers, steel, cement and electricity generation.
The emerging picture suggests:
Cement production during December 2017 picked up on account of anticipated demand and pick-up in the construction sector following higher spending by government for the period December 17- March 2018.
Coal production has subdued due to lower visibility for demand in the coming quarters from the power sector and clearing of coal pitheads.
Production of crude oil is likely to pick up on the back of higher prices, if sustained.
Favourable acreage policies and impetus given for increasing the consumption of natural gas is aiding for the rise in production of natural gas.
Fertilizers production and imports have been lower so far. The future course of rabi crop would have a bearing on its prospects for the rest of the year. Imports to decrease over the coming months as we are moving towards import substitution of urea.
Usage of refinery petroleum products is to increase in the coming months, indicating a rise in production.
Demand for cement industry is expected to improve during Q4 FY18. Government's new schemes- for development of ports under 'Sagarmala' and nation-wide road-network development under 'Bharatmala, are expected to aid growth in cement consumption.
Coal production slowed down on the back of expected lower demand from thermal power plants for the December 2017 û March 2018 period.
India's crude oil consumption basket comprises of 15 per cent of the crude oil which is produced domestically, and the rest of the 85 per cent is imported. The country wants to reduce import dependency of oil by 10 per cent by 2022.
Crude oil production has declined due to poor performance of fields under the production sharing contract. Since the past few months production of crude oil from the fields belonging to ONGC and Oil India seemed to have picked up where as production of oil from private upstream companies has declined (these are the fields under the Product Sharing Contract).
Domestic production of natural gas seems to have commenced on a positive note for the current financial year as there has been a 4 per cent rise from the domestic production comparing to the corresponding period last year. Reason for the increase in production could be attributed to the favorable policies which are adapted to enhance domestic exploration and production of oil and natural gas and due to the aim of reducing import dependency by 10 per cent by 2022.
Production of Refinery products includes, LPG, Naphtha, MS-III, MS- IV, MS others, ATF, SKO, HSD-III, HSD- IV, HSD others, LDO, Lubes, FO, LSHS, Bitumen, RPC/Petcoke and a few more. India is a net exporter of petroleum refinery products.
Fertilizer production has been subdued since this the start of this financial year. Urea dominates about 60 per cent of the overall fertilizer production.
In the financial year 2017-18, steel production increased on a y-o-y basis for the ninth month ended December 2017. However, the y-o-y growth reported by the industry in December 2017 is slower compared to that reported by the industry in November 2017. The output grew by 2.6 per cent y-o-y to 8.89 million tonnes during the month.
Issue of disruption in power generation due to coal shortage has been addressed with power plants across the country reporting enough coal stock for power generation.
Demand from the regions has been steady, i.e., North, South and East.
Dehradun airport up for expansion
The Uttarakhand Government has decided to expand Dehradun (also known as Jolly Grant) airport of Dehradun, where the number of passengers is expected to double in the next few years. The Trivendra Singh Rawat government will construct a new terminal building with state-of-the-art facility, parking lots for planes, longer air-strip and multi-level parking for cars.
The state authorities have started talks with the Airports Authority of India (AAI) and civil aviation officers for the expansion project. The hill state's government will also acquire forest and farm land adjoining to the airport.
Additional chief secretary Om Prakash told, 'Recently, 15 cities of Uttarakhand have been included under Ude Desh Ka Aam Nagrik (UDAN) scheme. Besides, Uttarakhand is turning out to be a major centre for yoga, wellness, adventure sports and tourism. In the last few years, the number of passengers at the Dehradun airport has gone up to 10 lakh.' He also pointed out that the state authorities think that the number of footfall at the airport will double in the next three to four years.
The senior state official said that the aim of the government was to provide better facilities to the passengers. On being asked about the advantages of the airport expansion, Prakash said, 'More flights would land at the airport, people will get late night or early morning flights and there will be facility to park five planes inside the airport premises. Better facilities and regular taxi service will make the trip a memorable one for the visitors.'
Prakash added that during the expansion work, the state civil aviation guest house, office and hangar may to be shifted to another location. He, however, ruled out the possibility of international flights landing at Dehradun even after the expansion. 'International flights need a bigger runway, we will be eying that later,' said the ACS.
Meanwhile, inspired by Prime Minister Narendra Modi's seaplane ride on Sabarmati River in Mehsana district of Gujarat, Uttarakhand Government too has planned to use the aircraft on Tehri lake. A team of private operators is scheduled to visit the lake, where the sea plane would be tested in their presence.
'There are several factors which have to be kept in mind like the location from where the sea plane would fly from, then the safety in landing at the Tehri lake and the possibilities of success of the project. A team of private operators will be coming in February to check all these factors and thereafter the fate of the project will be decided,'ACS Om Prakash said.
Nine-step guideline for urban projects
The state housing and urban development department has prepared a rigorous nine-step guideline for timely execution of planned urban infrastructure projects, including road, drain, and street light, under the government's Unnati scheme.
The department guideline contains nine para¡meters - planning, permissible sector, selection of executing agencies, sanction of the works, release of funds, utilisation of funds, transfer of asset after completion, citizen information board and monitoring and evaluation - that would be taken into consideration while executing the projects.
As part of the arrangement, the respective District Urban Development Agency will monitor the project execution while the state's 112 urban local bodies, including the Bhubaneswar Municipal Corporation, would work under it. The District Urban Development Agency will evaluate the merits of proposed projects submitted by the urban local bodies before signing off or rejecting those.
'The Unnati scheme is meant to develop the state's urban infrastructure. We have already identified the sectors for utilising Unnati funds. We have also allotted more funds to the municipal wards under the scheme. We felt that the guideline was needed to ensure an error and corruption free practice,' said a department official.
The respective District Urban Development Agency will prepare a list and a project report for different works in consultation with the civic bodies and other stakeholders. It will then select the executing agency, keeping in view its track record and other expertise. Once the work is sanctioned, it will release the funds.
The department has also directed the agency officials to keep a registry of project records that would contain details of date-wise funds sanction, release and utilisation. Besides, a public information board will also be put up at the project site with required information to ensure greater transparency. The government launched the scheme last August to ensure 100 per cent coverage of all roads with LED bulbs, complete piped water supply to households and conversion of earthen roads to bituminous or concrete roads.
Improvement of social infrastructure, including construction or renovation of natural water bodies, parks, vending zones, community centres and crematoria are also included in the scheme. 'We have been identifying the works to be taken up under the scheme,' said Bhubaneswar mayor Ananta Narayan Jena.
'We have asked our councilors and officials to look into the areas that require improvement and we will utilise the funds incurred from the Unnati scheme. We will analyse and scrutinise the list according to rules in a transparent manner,' he said.
Hyundai to pump in $1 billion in India
South Korean auto major Hyundai plans to invest over Rs 6,300 crore in India in the next three years on new products, development of powertrain and setting up of a new office building. The company, which operates here through its wholly-owned arm Hyundai Motor India Ltd (HMIL), plans to launch an electric vehicle next year and is also gearing up for the possible comeback of its popular model Santro around Diwali this year. HMIL has lined up nine products to be introduced between 2018 and 2020.
'Our total investment till 2020 will be over $1 billion,' HMIL Managing Director and CEO YK Koo told. He further said, 'The investments will be on nine new products to be launched between this year and 2020, powertrain development and setting up of our new office building in Gurugram,' he said.
Elaborating on the new products to be introduced, he said, 'Two will be completely new models, one will be an electric vehicle, two facelifts and four will be full model changes of existing products.' Commenting on the company's foray into EV, Koo said, 'Our first EV in India will be launched next year. At the moment we are yet to finalise whether it will be the Ioniq EV sedan or the full electric version of SUV Kona.'
Currently, the company is doing a market study on customer preference which would help in deciding which model to launch. In the meantime, he said the company is awaiting clarity from the government in the form of an EV policy so that it can plan the road ahead keeping in view the 2030 target of 40 per cent of all personal vehicles being EVs.
'We will import our first EV as CKD (completely knocked down) units and assemble at our Chennai plant. Later on, depending on market response, we will consider manufacturing here in India but that will take time,' Koo said.
J&K to get funds for development of Smart Cities
Jammu and Kashmir Government has yet not received funds from the Union Housing and Urban Development Ministry for development of Jammu and Srinagar as smart cities. Moreover, neither Project Management Consultancy nor Key Managerial Personnel have been engaged till date despite the fact that they have a key role to play in giving practical shape to the projects.
Both Jammu and Srinagar, the twin rotational capital cities of State made it to the list of 30 smart cities announced by the Union Ministry of Housing and Urban Development on June 23, 2017. Srinagar figured at No.10 and Jammu at No. 21 in the list of 30 Smart Cities, which were selected through competition from out of a total of 45 cities which contested in the third round.
Following announcement, the State Government vide Order No. 1081-GAD dated August 21, 2017 ordered creation of Special Purpose Vehicles (SPVs)-Jammu Smart City Limited and Srinagar Smart City Limited, which were subsequently registered as Limited Companies under Companies Act.
Thereafter, the charge of Chief Executive Officers (CEOs) for Srinagar Smart City Limited and Jammu Smart City Limited was assigned to Chief Executive Officer J&K Economic Reconstruction Agency (ERA) and Commissioner, Jammu Municipal Corporation respectively.
However, the Chief Executive Officers have failed to engage the Project Management Consultancy (PMC) despite the fact that PMC has to play an important role in giving practical shape to the project proposals. Even Key Managerial Personnel and other support staff as per the approved structure have not been engaged by the CEOs of Jammu Smart City Limited and Srinagar Smart City Limited.
'Expression of Interest for engagement of PMC has been floated but due to poor response its last date was extended up to January 25, 2018', said Deputy Chief Minister Dr Nirmal Singh, who is also Minister Incharge Housing and Urban Development Department in a written reply to the question of National Conference MLA from Nagrota Devender Singh Rana, adding 'the Special Purpose Vehicles have issued advertisement for engagement of Key Managerial Personnel'.
All eyes on Smart City Kochi
Putting behind a tumultuous year Smart City-Kochi, the IT special economic zone at Kakkanad, went through a tumultuous phase in 2017. The construction of the second IT building measuring 7 lakh sq ft is yet to be completed.
The SEZ is an 84:16 joint venture between Dubai Holding and the Kerala government. The Dubai Holding's stake was held by TECOM Investments. The year gone by saw TECOM Investment being removed and the stake transferred first to Smart City-Dubai and later Dubai Holding. The restructuring in Smart City-Kochi saw Baju George moving out as its MD, and Manoj Nair appointed its Chief Operating Officer (COO).
Smart City-Kochi also settled its dispute with its project management consultant Synergy Property Development Services which affected its work in 2017. Now everyone is keenly looking into the budget to see what is in store for Kochi's
The Kochi Metro has submitted a request to the state government for a budgetary allocation of Rs 370 crore. The funds are mainly for meeting the expenses for widening the Vyttila-Petta stretch, the reconstruction of Chambakkara bridge, the preparatory works for the extension of the project to Kakkanad and for the Water Metro project. An amount of nearly Rs 80 crore is required for meeting the tax requirements and subordinate debts.
The Water Metro project envisages the development of 16 routes, connecting 38 jetties across 10 islands and spans a total route network of 76 km. As many as 78 modern fuel-efficient boats will be procured under the project. The first set of boats are expected to be rolled out in 2019 and hence, KMRL is expecting a reasonable allocation in this year's budget.
ADB to the rescue!
The Asian Development Bank (ADB) has now come forward to extent assistance for the construction of rural roads in the state under the Prime Minister Grameen Sadak Yojna (PMGSY). The ADB and the Centre signed a $250 million loan deal to finance 6,254 km of all weather rural roads in Orissa, Assam, Chhattisgarh, Madhya Pradesh and West Bengal under the Prime Minister's Rural Roads Program.
The programme is aimed at improving rural connectivity, facilitating safer and more efficient access to livelihood and socio-economic opportunities for rural communities through improvements to 12,000 km of rural roads.
Kenichi Yokoyama, Country Director of ADB's India Resident Mission
who signed the agreement for ADB, said the investment will support the government's drive for innovative approaches to reduce costs, conserve non-renewable natural resources, and promote the use of waste in rural road construction. He said that road maintenance will be ensured through a 5-year post-construction maintenance clause in civil work contracts.
The investment programme builds on the $800 million ADB-financed first Rural Connectivity Investment Program of 2012 that added about 9,000 km of all weather rural roads in the same states.
'In view of increased rainfall and storm surges in project states, the road designs will take into account climate risks with measures like greater elevation of road embankments, slope protection, and better drainage in flood-prone areas. Women were extensively consulted during the project design and will gain key benefits, including improved access to healthcare, livelihoods and schooling,' a release from the Centre said.
Bharatmala project set to get garland of funds
A report suggested that the Ministry of Road Transport & Highways (MoRTH) could see a substantial increase in fund allocation in the Budget as the government looks to begin implementation of its ambitious Bharatmala project. Even in Union Budget FY2017-18, MoRTH saw a 12 per cent rise in allocation to Rs 64,900 crore. In the upcoming Union Budget to be tabled in Parliament on February 1, the Ministry has sought an additional Rs 25,000 crore, that is a total allocation of around Rs 90,000 crore.
Over the years, the private investment in the road sector has reduced and the projects are largely being publicly funded. Once the government completes the road works, the highways would be monetised by being given out to the private players for maintenance, operation and toll collection on toll-operate-transfer (TOT) basis on an upfront payment.
In October last year, the Union Cabinet had approved road building programme to be implemented over the next five years at a capital expenditure of Rs 6.92 lakh crore for 83,677 km of roads. This programme includes biggest highway development project-Bharatmala, which entails an expenditure of INR 5.35 lakh crore for 34,800 km of highways and will be rolled out starting this year. Thus, there is a need for an increased budgetary allocation and spend.
CARE Ratings on the upcoming Budget said that 'Infrastructure is expected to be one of the key areas of focus of budget 2018-19. We expect about 10 per cent increase in budgetary allocation to various ministries in the infrastructure sector. This includes railways, roads, ports, rural development and shipping.'
An eco-friendly Chennai Port!
Chennai Port is developing a green belt on 31 acres inside the port to reduce the carbon footprint besides ensuring ambient air quality parameters to make the port a clean and green one, according to the port Chairman P Raveendran.
Raveendran, unveiling his plans to convert the port into a clean and green port, told that he plans to implement the Green Belt scheme in a systematic way.
'Saplings will be provided along the roads and cargo stack areas in addition to traffic islands, medians and lawns,' he said. He also said that IIT-Madras and environmental experts have conducted an Emission Inventory and Source Apportionment study in the vicinity of the port and adjoining areas. 'Now a dispersion model is being finalised to ascertain the contribution of cargo handling in Chennai Port to the ambient air quality in the residential neighbourhood,' he said.
Raveendran also said an environment monitoring cell manned by a professional environmental expert and trained engineers is being set up for data generation and management.
'We have also commissioned the Continuous On line Ambient Air Quality Monitoring (CAAQM) stations, which were mandated as per the recommendations of Technical Sub-Committee of the Empowered Committee to monitor Ambient Air Quality levels at the port as part of the measure to enable dust-free handling of cargo at the port, last month,' he said.He said the continuous ambient air quality monitoring is focused on key ambient air quality parameters such as particulate matter, oxides of nitrogen, sulphur dioxide and carbon monoxide.
He said three CAAQM stations are located inside the port. These include Marshalling Yard area at the south, Central Berth Area and Gate No 2a. These locations were identified to be sampling locations after discussion with Tamil Nadu Pollution Control Board, he said.The data collected at each CAAQM station are fed into the Central Data Server Station at Environment Cell. From the server, the ambient air quality levels at port is streamed live through electronic display boards installed at four locations - Gate no.10, near administrative office complex, Gate no.5 and Gate no.1.
He said the ambient air quality levels recorded since December 2017 has remained well below the permissible value prescribed as per National Ambient Air Quality Standards (NAAQS) as compared to ambient air quality parameters at Chennai Port from December 1, 2017 to January 28, 2018.
Airtel, RJio to invest Rs 74k cr on infra
Bharti Airtel and Reliance Jio have committed to invest Rs 74,000 crore by the next fiscal year to upgrade and expand their infrastructure and address the issue of call drops.
'Bharti Airtel said that it has invested Rs. 16,000 crore on infrastructure and will be spending another Rs 24,000 crore. Reliance Jio has said it will invest Rs 50,000 crore in installing one lakh towers in the coming fiscal year, Aruna Sundararajan, Secretary, Department of Telecom (DoT)', told after a meeting with the operators.
Idea Cellular and Vodafone India have also committed to increasing mobile towers, she said after meeting senior officials from all the operators.
'We have asked them to take special measures to install mobile towers. All the telcos have said that call drops per se have been more or less stable and there has been a distinct improvement post December,' said Sundararajan.
She said the operators told her that significant investments have already been made and infrastructure added. Having said that, the telcos had also raised issues such as non-availability of sites for mobile towers, among other problems, she said.
During the meeting, she said the telcos presented their analysis of call drops, which showed that they had stabilised but problems such as fading of voice calls have increased due to various issues, including some mobile phones not complying with certification norms. They also raised the issue of illegal repeaters being installed in networks, creating interference and affecting call quality, to which Sundararajan said the vigilance arm of the DoT would look into issues of non-compliance.
MoD approves DPR preparation for new airport in Pune
The Indian Ministry of Defence (MoD) has approved the preparation of a detailed project report (DPR) of the proposed international airport at Pune city in the Purandar region. The MoD has granted conditional clearance to the Maharashtra Airport Development Company (MADC) to execute the greenfield international airport project. It is estimated to cost $1.56 billion.
As per the terms of the clearance, all civil scheduled or non-scheduled flights must be moved to new Purandar Aerodrome following the project's operation. The new airport is intended to address restricted flight movements in the city due to the operation of the Pune Civil Airport from the Indian Air Force (IAF) airbase at Lohegaon.
Initially, the IAF was concerned that the location and alignment of the proposed airport's runway would affect the functionality of its Lohegaon base, which is home to the nation's Sukhoi fleet. The agency wanted the new runway to be exactly parallel to the runway of the Lohegaon airport. German firm Dorsch is responsible for the preparation of the DPR and development of the new airport.
Dorsch executive was quoted by Press Trust India as saying: 'The work was slow as necessary permissions from the defence ministry were pending. The permissions have been received a couple of days back and now the company can complete its DPR. The primary estimated cost of the airport is $2.19 billion. Once the report is completed, we will come to know the actual cost.'
Land for the airport is expected to span more 2,400 acres. The acquisition of the land is estimated to cost $313 million.