<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[LOFTY GOALS: The 11th five-year plan envisages creating a power capacity of 78,000 MW
(Pic by Amit Verma)
India’s dream of creating 78,000 MW of power capacity under the 11th five year plan (2007-2011) has been hit by the financial crunch, with several projects unable to achieve financial closure. Of the 78,000 MW, about 39,000 MW is to come from the central sector; another 30,000 MW from state utilities and around 10,700 MW from the private sector. Besides external commercial borrowings and other instruments, these were to be funded by equipment suppliers’ credit.
Banking sources, however, said that after the financial meltdown, banks no longer have the “risk appetite” to fund projects — especially those planned on a non- recourse basis, which are (in any case) devoid of the parent’s balance sheet support.
Power ministry officials acknowledge that the current financial crisis will hamper power companies’ ability (more so for the private sector) to raise debt funds from banks — domestic and international — thereby delaying financial closures of projects.
In his statement on the financial crisis in Parliament on 20 October, Prime Minister Manmohan Singh said: “External commercial borrowings, which are used by the corporate sector, have dried up, as have international suppliers’ credits.”
The latter includes vendor credit raised by the equipment supplier that will supply equipment to the power companies. If that has “dried up” as the PM says, banks will not lend to companies that planned on vendor credit. And even for companies that have not planned for such credit, raising capital is going to be difficult under the current scenario, sources said.
AVIATION
Pros And Cons
India’s new aviation regulator will need to address some basic issues
DOUBLE AGENT: Till now, the
Airports Authority of India was
doubling up as regulator and
operator of airports
(Pic by Satheesh Nair)
India will finally have a regulator for airports with the cabinet approving the Airports Economic Regulatory Authority of India (AERA) bill.
AERA will maintain a competitive and level-playing field for services provided and fees charged by airports. The Airports Authority of India, which oversaw the working of airports till now, was doubling up as operator and regulator. With the number of private airports increasing, it may not have been possible for it to carry on.
AERA will also establish an Appellate Tribunal. Like regulators in other sectors, AERA lacks the power and reach for ‘inter-disciplinary’ regulation. “There is a need for a comprehensive approach; currently it is lacking since the regulator has come in only where public and private companies are involved,” says Gurvinder P.S. Arora, senior manager at KPMG.
Lack of inter-disciplinary regulation could be a major obstacle in speedy adjudication and disputes would continue to end in long legal battles in courts, defeating the rationale for setting up the regulator — a critical element in an economy that has embarked on a reforms path. “This aspect would, hopefully, get addressed when stakeholders make a point,” says Arora.
M. Rajendran
GLOBAL NEWS
(Bloomberg)
Thailand, host of the 14 annual ASEAN summit in December, has changed the venue from Bangkok to a smaller town called Chiang Mai. Since August, anti-government protesters have occupied Prime Minister Somchai Wongsawat’s office. The government’s move is seen as a strategic step to save itself from embarrassment during the ASEAN summit.
COUNTING LOSSES: A Pakistani villager makes his way through the debris of his house damaged by earthquake at Ziarat in southwestern Pakistan. A strong tremour of magnitude 6.4 struck in the wee hours on 29 October 2008, killing at least 150, injuring scores more and leaving 15,000 homeless, according to official figures. (AP)
WILDLIFE PROTECTION
Online Footprints
Though the sale of a tiger skin on Baazee.com went largely unnoticed in 2002, the Wildlife Crime Control Bureau (WCCB) has responded swiftly to the 26 August seizure of endangered birds, which were being illegally sold through the internet by a Meerut-based trader.
The WCCB has announced the creation of a Web-patrolling unit. New Delhi-based Wildlife Trust of India (WTI) tracked the online activities of the trader and nabbed him at point of sale. The trader used networking sites such as Orkut to meet potential customers from the Middle-East and Europe, and then closed deals via email. “Until now, these seizures have been a result of chance detections and represent a minuscule fraction of the vast scope the internet provides for illegal trade,” says Ashok Kumar, vice-chairman of WTI.
India has been a major source for illegal wildlife trade; such initiatives by the WCCB could play a significant role in safeguarding India’s wilds.
Manashwi
INFRASTRUCTURE
New Window
Why there is a need for a separate window for infrastructure investment
(Pic by Tribhuwan Sharma)
The biggest casualty of the global credit crunch could be India’s infrastructure sector. India needs a mammoth $475 billion in infrastructure investments. Although bankers say many projects are onstream, the increasing class of risk-averse investors may turn choosy in the short- to medium-term. “Some projects may even have to find ways to refinance,” says Harish Engineer, executive director at HDFC Bank.
According to Sachin Mathur, head of Crisil Research, there are equal challenges from issues related to policy, financing and project execution. “On the funding side, there is cost escalation and tighter resources,” he says. While investors favour ports, airports or urban infrastructure are considered riskier. The government may have to push for a separate policy and funding window for infrastructure projects.
Sreevalsan Menon
US ECONOMY
No More Lobbying
(Bloomberg)
Companies that have received billions in handouts from the US government are accused of lobbying against new regulations aimed at preventing another crisis. Insurance giant AIG, which previously received a $120-billion bailout, has been forced to suspend all its lobbying after it was found to be pushing to relax new rules to prevent mortgage fraud. Now, a new Bill seeking to bar firms receiving bailout money from lobbying is being introduced in Congress.
A Nasa space probe has discovered a new category of minerals spread across large regions of Mars. The discovery suggests that water played a crucial role in shaping the Martian landscape.
Astronomy
Advantage India
(AP)
Scientists at the US’S National Aeronautics and Space Administration (Nasa) are looking out after long-standing budget shortfalls. A 2014 manned moon mission had to be “decelerated” and more projects are expected to follow suit.
M. Annadurai, director of India’s moon mission Chandrayaan, recently said that after Chandrayaan-1’s successful launch, he received e-mails from some scientists of Nasa and other foreign space agencies asking about job openings.
Foreign scientists will have enough to do should they find employment at ISRO, which plans at least two more high-level missions — a lunar lander called Chandrayaan II in 2010 and an indigenous manned space mission in 2014. Hence, it is no wonder US presidential candidate Barack Obama said that Chandrayaan’s success means the US must strive harder to lead in space — and to retain its people.
Pierre Mario Fitter
SPORTS
Odd Spins
Before long, IPL’s success formula will be replicated by other countries
RED ALERT: Greed and arrogance
could damage the prospects of IPL
(ABP)
The cricket world is fast descending into chaos following the discovery of the Twenty20 gold by the Indian Premier League (IPL). Greed and arrogance have set in motion conflicts that could damage IPL.
Already the relations of IPL’s owner, Board of Control for Cricket in India (BCCI) with Sri Lanka Cricket (SLC), have soured over the alleged payment offered by BCCI to SLC to guarantee availability of SLC players for IPL.
BCCI’s standoff with the England and Wales Cricket Board (ECB) — which is planning its own English Premier League from June 2010 — over availability of players is threatening to push the two leagues into head-on rivalry for international stars and global television revenues.
Cricket Australia and the United Cricket Board of South Africa (CBSA) are trying to dig a goldmine of their own by roping in New Zealand as the third partner in a Southern Hemisphere Twenty20 League that will begin in October 2011.
It may be a matter of time before West Indies, Pakistan and Sri Lanka will demand their pound of flesh for renting players to these leagues.
All these ‘premier leagues’ will clearly crowd out bilateral international matches and the International Cricket Council (ICC) may be forced to curtail this travelling circus where international players could end up representing several teams in several countries in the same year.
Feroz Ahmed
(Businessworld Issue 4-10 November 2008)