The demand for solar installation is growing and is expected to touch 35 GW this year globally, but the supply chain is in the process of virtual collapse. The nascent Indian manufacturing sector with 1000MW in cells and 2000MW in modules cannot compete with state sponsored predatory pricing, thus the Indian manufacturing is on the brink of collapse too.The reasons are attributed to the structural oversupply situation where we have about 200 per cent capacity versus demand in 2013. Eighty per cent of this capacity is located in China and Taiwan. This oversupply has led to a 2-year price decline regime and generated a dumping environment in the last 20 months. The Chinese have dominated this market with 55GW capacity alone and have loans of $44 billion, making them incur consistent losses (as is reflected in their balance sheets).The USA has imposed anti dumping & anti subsidy duty on China from 30 per cent to 250 per cent last year and the EU has imposed duties in June 2013. The duty level in Europe average to 47 per cent but investigation reveals goods are being sold 88 per cent below cost to capture the EU market by China. Consequently China has now 80 pwer cent of the EU market share.The situation is the same in India and the Indian anti dumping duty case is ongoing. Now 17 months from application and almost 7 months from initiation of the case, we can only hope and pray for an early and strong decision as the case is symptomatic. The Indian case also covers Taiwan, Malaysia & USA besides China.The most significant issue for Indian PV is the Policy of domestic content, a key implementation objective under the JNNSM. The local production of cells and modules and then extension of local content to inverters and BOS are part of the objectives of JNNSM under the NAPCC. This was allowed in a phased manner from 2010 to 2013, to culminate to 100 per cent local content irrespective of technology from NSM Phase II, i.e. 2013 to 2017 and beyond.The Solar Energy Industry Advisory Council (SEIAC) was set up under the chairmanship of Shri. Anand Mahindra with a clear mandate to advise options for the Government of India how we can meet our targeted objective of having a local manufacturing base of 4000-5000MW PV in our own country with a view to develop R&D as well as rapidly scale up the deployment of PV in India. India being in the Sunbelt has some of the lowest cost of solar energy harvesting globally and the sunshine is free!The Indian Solar Manufacturers Association (ISMA) is deeply concerned by the recent change in stance by MNRE to allow continuing imports under NSM Phase 2. We fail to understand how we can expand capacity and invite investments from overseas if we have no demand visibility for local existing plants in spite of the fact that India is now one of the fastest solar installation growing countries in the world and expected to be in the top 5 countries this year with an additional 1.5 to 2.0GW installation.We have a capital subsidy under the semiconductor policy called Special Incentive Package (SIPS) that covers PV with a threshold investment of Rs 1,000 crore and 25 per cent capex subsidy administered by the Department of Information & Technology and now we also have a revised SIPS called M-SIPS that continues to extend this facility with a lower investment band clearly indicating Government of India’s interest to expand the manufacturing base.Additionally, the National Manufacturing Policy launched last year clearly highlights Solar PV as a “Strategic industry “.In light of the multiple indications of the Government of India on its favourable view and intent to expand domestic manufacturing, including support from the Planning Commission, the nodal Ministry seems to have an alternative view i.e. to allow continuing imports under the federally supported NSM.With the government showing clear favouritism for cheaply priced dumped goods, it has confirmed its hesitation to comply with the overriding direction of the inter-ministerial view. Perhaps the lobbyists from China have convinced them that the local developers are inefficient and incompetent.With 10,000 crore invested (70 per cent of which is our PSU Bank’s monies), 27,000 employees and over 70 cell and module makers in this country, we risk our utter demise and loss of national assets in light of ambiguity and lack of clear policy with strong domestic content. More than 70 per cent of the cell makers are either in Board for Industrial & Financial Reconstruction or Corporate debt restructuring adding pain for our bankers and risking their loans.The world is watching India from being a visionary pioneer in 2010 with the Domestic Content Requirement mandate and that mandate is now being emulated by over 15 countries globally. Now they see India back tracking on its earlier commitments. The race to the bottom has already raised several quality issues on this 25 year performance product and MNRE deep intent to reduce the cost of solar power is adding fuel to this possible catastrophe.The USA has taken us to the dispute settlement commission on the Domestic Content Requirement issue and Ministry Of Commerce has already filed its official reply saying that the USA contention is invalid. By the way the USA has the same policy in over 6 states in USA and also under the Buy American Act.As a nation we should decide on this strategic and urgent need for solar in India. If you consider the import route as a long-term beneficial method with billions of dollars outlay (NSM 2 is pegged at 114,000 crore, $20 Billion) and dilution of our energy security based on dumping of goods now, so be it , but what about next year or the year after when the market returns to balance and prices and profits go up for those who survived with or without state support? Then you expose yourselves like EU did with Russia for Gas and USA did with Middle East for Oil.Our balance of payments and current account deficit (CAD) issues are indicative enough of what we should do to have a balanced economy and ensure employment and internal self sufficiency but it seems MNRE is only concerned with artificial price that clearly has no were else to go but up. The sooner we recognise the real cost of solar, the better.(S. Venkataramani, CEO, Indo Solar and General Secretary, Indian Solar Manufacturers Association (ISMA))
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Starting June 1 cooking gas (LPG) consumers in 18 districts will get Rs 435 in their bank accounts when they book an LPG cylinder as the government rolls out its ambitious direct benefit transfer programme to cut its fuel subsidy.The scheme was to be rolled out in 20 districts initially but the launch in Mysore in Karnataka and Mandi in Himachal Pradesh has been put off by a month due to assembly and Parliamentary bypolls, official sources said.Oil Minister M Veerappa Moily will launch the scheme in Tumkur in his home state Karnataka on June 1 while Minister of State for Petroleum and Natural Gas Lakshmi Panabaka will simultaneously kickoff the scheme in Hyderabad, the capital of her home state Andhra Pradesh.Sources said after the launch of the scheme, consumers in 18 districts like North Goa and Pondicherry will get Rs 435 in their bank accounts every time they book for an LPG refill.These consumers then will have to buy cooking gas at market price which is double the Rs 410.50 rate for a 14.2-kg bottle in Delhi.The government intends to extend the scheme to rest of the country before end of the year but wants to see results in the 20 districts first. The 20 districts selected have high Aadhaar or unique identification number penetration.While as many as 89 per cent of the LPG consuming population in these districts have Aadhaar number, government will give a three-month grace period to them to procure the UID number and seed it with their bank accounts where cash subsidy has to be transferred.After three months, that is from September 1, only consumers having Aadhaar and banks accounts linked to them will get cash subsidy and the rest will have to buy LPG at market price, they said.The government anticipates a saving of Rs 8,000 to 10,000 crore in LPG subsidy annually after the scheme is rolled out all over the country.(Reuters)
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The government could this week take the unpopular measure of raising gas prices for the first time in three years as it pushes a package of reforms aimed at giving industry a boost, reviving a spluttering economy and boosting LNG imports.With local and national elections looming in the next 12 months, the coalition government is expected to try to minimise voter backlash by hiking gas prices sooner rather than later.Raising prices nearer to world levels could boost investment in the sector, increasing much needed supply in the world's fourth-largest energy user, and make liquefied natural gas (LNG) imports from major producers like Qatar more attractive.Finance Minister P. Chidambaram has listed gas pricing as one of the issues he expects to resolve before the end of June, after ratings agency Fitch urged reforms. Oil Minister M Veerappa Moily has said the government may even act this week."This would be a good time for the government to consider raising the gas prices as investments in the country's oil and gas sector are drying up and private sector players are cautious," Praveen Kumar, an analyst with FACTS Global Energy, said on Tuesday."A price hike is never a popular move among the masses...the government has to bite the bullet and it would be in the government's interest to act sooner than later (just before elections)."Moving now, the government could take advantage of what is shaping up to be a bountiful monsoon that will boost farm output and rural wages to soften the blow for the powerful agricultural lobby. It could package the gas price hike with other reforms and its plans for more cheap food would sweeten the pill.The existing contract which set $4.2 per mmBtu as a benchmark expires on April 1, 2014, with national elections due by May 2014. That formula was set for gas from Reliance Industries' KG basin field and other contracts were raised to match it in May 2010.The new formula, which is likely to use US export prices and Japan's import numbers, may boost prices at least 60 per cent to $6.7 per mmBtu, according to the oil ministry's indicative calculation -- still only about half LNG import costs.Price Hike To Boost LNG ImportsWithout a price increase, India's gas demand will rise to 466 million cubic metres a day (mcmd) in 2016-17 from 286 mcmd, the government calculates, and supply will be only half that."In a country like India, different prices of gas and regulation at downstream level has skewed demand. Every one wants gas at $4.2 (per mmBtu)," said Prabhat Singh, marketing head at GAIL (India) Ltd, India's biggest gas pipelines owner.India wants to double the share of gas in its energy mix, currently 10 per cent, by 2020 and squeeze out expensive diesel and fuel oil. It gets nearly 56 per cent of its energy needs now from coal with oil providing 26 per cent."Any increase will help in increasing the acceptability of imported LNG in the country," said R. K. Garg, finance head at LNG importer Petronet LNG, 50 percent owned by state-run firms.Petronet estimates potential demand at $11-12 per mmbtu -- not just from refineries and transport firms but also kicking in from power plants and fertiliser makers -- could boost LNG imports five times by 2015, from 40 mmscmd in 2012. Even at $16-17 per mmbtu imports could triple.For suppliers of domestic gas, higher prices are key for investment in exploration and to boost existing output."Producers argue that unless they are assured of prices linked to world prices, no investment will take place in this sector," said a planning commission document.Critics say the government is raising prices to favour Reliance, but the company and its partner, energy giant BP, say an increase is needed to support investment in turning around declining production at their KG field.A price of $6-$9/mBtu would make it commercial to develop other discoveries nearby which could boost supplies, said a source privy to Reliance's operations."It will be applicable for everyone ... There will be one price in the country," Moily said last Friday. "I am not playing for any lobby. I am playing for the national lobby."(Reuters)
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In a relief for GMR, the Maldives' anti-graft watchdog is believed to have ruled out any corruption in the leasing of Ibrahim Nasir International Airport here to the Indian infrastructure major by the previous administration.The current Maldivian government had in December last year unilaterally terminated a $500 million contract given to GMR Group to develop and operate Male Airport, a project awarded to the Indian group by the earlier Mohamed Nasheed administration.Local media reports have said the Anti-Corruption Commission's (ACC) 61-page investigation report into the alleged corruption in the leasing of the country's only operational international airport to GMR by the previous administration has declared there was no corruption involved in GMR's bid during the evaluation phase of the deal.According to the probe report, GMR had offered the highest concession fee and scored the highest marks in the bid to develop and operate the airport for 25 years.The report also said concrete records exist to show that a concession agreement was signed between the government, GMR consortium and Maldives Airports Company Limited (MACL) which ruled out any grounds for corruption, the media reports said.ACC further said as the agreement was signed before the amendments to the Financial Act passed by the Parliament was gazetted, there was no grounds to declare it as corruption, the reports added.The current government in Maldives led by Mohamed Waheed had earlier claimed that GMR was misled by the Nasheed administration to signing a legally unsustainable agreement. The project was awarded in mid-2010.A GMR Group spokesperson was quoted as having said that it was in the process of studying the report.The Maldives Airports Company Limited took over operations from GMR on 7 December, after the Singapore Supreme Court ruled that the Maldives government had the authority to expropriate the airport from GMR.Waheed was earlier quoted as having said that from the day of signing, the Maldivian courts and the ACC were receiving complaints and cases against both Nasheeds government and the GMR venture.Arbitration proceedings in the airport contract row between Maldives and GMR Group will commence in the middle of next year though an exact date has not been finalised yet.GMR had previously stated that it would seek USD 800 million as reparation from the Maldivian government. However, the Maldivian government had reiterated its claims that the airport operator agreement with GMR was "void ab initio" (invalid from the outset) and that the government does not have to bear any compensation for the termination.(PTI)
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Larsen & Toubro Ltd is competing for defence contracts worth up to 80 billion rupees that will be awarded in the next few months, M. V. Kotwal, president of the company's heavy engineering department, said on 17 June' 2013. It has bid for four contracts from the Indian coast guard to supply training ships and support vehicles, worth about 40 billion rupees in total. The orders are likely to be finalised in the next six months, Kotwal said. Larsen & Toubro, India's largest engineering and construction company, also plans to bid for two landing platform docks, worth 10 billion to 20 billion rupees each, to be awarded by the Indian government. The government is planning to offer contracts to build four multipurpose landing platform docks, two of which will be given to private-sector firms. A request for proposals for the docks will be finalised in the next few months, Kotwal said. To foster the growth of Indian defence companies, the government has rolled out a new procurement programme seen as favouring domestic firms in a field that has been dominated by state companies and foreign firms, and is looking to partially remove restrictions on foreign companies investing in Indian defence-sector firms. "In the next two years, we can see a clear swing in defence orders given to Indian companies," Kotwal told reporters. Larsen & Toubro has already won a coast guard contract worth more than 16 billion rupees to supply 54 speed boats, at a cost of 300 million to 340 million rupees each. (Reuters)
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Tata Power Co Ltd will avoid large acquisitions and is holding back on new investments until the Indian utility has clarity on a regulatory decision allowing it to raise tariffs, its executive director for finance said on Tuesday.India's electricity regulator in April allowed Tata Power, part of the salt-to-steel Tata conglomerate, to raise tariffs for power from its Mundra plant in the state of Gujarat to compensate for the rising cost of coal from Indonesia.But the decision by the Central Electricity Regulatory Commission (CERC) has yet to be implemented as the company must first sit down with the states to which it supplies electricity to decide on a mutually acceptable increase in price.A similar decision favouring Adani Power Ltd has been hit by a legal challenge and risks being bogged down in a long dispute."Let me put it this way: the financial pressure on us arising out of the Mundra situation is enormous at this point in time," said S. Ramakrishnan in an interview, when asked whether the company had reined back major investment plans to cut debt."And it'll naturally make us sit and review where we are headed until the CERC process reaches its logical conclusion.""We will be very, very cautious and selective in our growth options," he said, adding, "if one is talking of any large acquisition which demands an immediate outlay of large funds we'll definitely not look at it."(Reuters)
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Coal India Ltd, the world's largest coal producer, posted a 35 per cent increase in fourth-quarter 2012-13 net profit, beating market estimates, on the back of higher sales and lower-than-expected wage and fuel costs.The state-run miner said net profit for the January-March quarter rose to Rs 5,414 crore from Rs 4,013 crore a year earlier. Net sales rose 2.5 per cent to Rs 19,905 crore. On average, analysts had forecast net profit of 49.97 billion rupees, according to Thomson Reuters Starmine data. The company's financial year ended on March 31.Coal India Profit Up Ahead Of ExpectationsIt reported employee expenses of Rs 7,470 crore, compared to Rs 9,466 crore a year ago, which included additional provision of about Rs 2300 crore, an official said.Wage increases had forced the company to make a steep provision during the same quarter last year, pushing up costs. However, the wage bill has been spread uniformly in the current fiscal year, officials said, explaining the lower costs.Coal India produces about 80 per cent of India's total coal output, but growth has been stymied for years by delays in environmental and regulatory approvals for mining projects.The miner produced 452 million tonnes of coal in 2012-13, up 4 per cent from a year earlier, but lower than its 464 million tonne target for the year. Shipments rose 5.8 percent for the fourth quarter to 129.95 million tonnes, the company said.Coal India Chairman S Narsing Rao would not speculate on whether the company planned to raise prices, although the issue is politically sensitive in India where hundreds of millions of people live in poverty and there is an election within a year.Last year, its main clients the power companies protested when prices were raised, forcing it to reverse the changes. Coal India prices domestic coal at discounts to international prices of between 45 and 70 percent.Coal India shares have underperformed the BSE Sensex this year over worries about its inability to increase production, but the stock remains an indicator of power demand in Asia's third-largest economy and the company, with a market value of $35.2 billion, is India's fifth-largest.The government is planning to auction a 10 per cent stake in Coal India by August or September, sources told Reuters this month.Coal India shares closed 1.2 per cent higher, ahead of the earnings in a strong Mumbai market.(Reuters)
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Nineteen of 20 states have given a cold shoulder to CBI's request for sanction to start probe into the alleged corruption in the coal blocks allocation done through the joint venture route. CBI sources said Jharkhand is the only state which has given the go ahead to the agency to initiate probe relating to one of the three preliminary enquiries registered by it last year in the coal block allocation scam. The probe in the scam is being closely monitored by the Supreme Court. Based on source information, the agency had registered a preliminary enquiry in September, 2012 to look into alleged irregularities in the allocation of coal blocks to the state governments' mineral corporations and PSUs which have entered into joint ventures with private sector under the Government Dispensation Category from 1993 onwards. Since October last year, the agency is struggling to get the nod of the states for filing regular cases in connection with the probe into joint ventures and repeated reminders have been of no help, the sources said. Besides Jharkhand, the agency has also sent its requests to 19 states including Chhattisgarh, Odisha, Madhya Pradesh, West Bengal seeking their nod for probing the joint venture projects of their public sector undertakings but so far no response has been received from them. The sources said while the permission is not required by the agency where central PSUs are involved, its jurisdiction does not extend to state government undertakings where it cannot proceed without the nod of the government concerned. The sources said its probe in the coal block allocation has met a stumbling block in the absence of state governments' nod to give go ahead with the probe as it cannot register cases against the erring officers and companies. Under the joint venture mechanism, coal blocks are allocated to a state corporation which enters in a joint venture with a private player. The benefit to the corporation is that while it makes virtually no investment, it holds majority stake as sweat equity in the venture. CBI sources said during initial investigations it came to light that several bureaucrats after their retirement from PSUs and other senior government officials joined private companies on hefty pay scales. The agency has also found that companies owned by relatives of influential politicians have entered into joint ventures with the state PSUs to bag these lucrative blocks. Under the present rules, a private company can only get a coal block for captive use wherein the extracted coal has to be consumed in the companies' plant which could be power, cement or steel. Private companies cannot sell it in open market. CBI is probing alleged irregularities in the allocation of 192 coal blocks which were made between 1993 to 2011. The agency has registered three preliminary enquiries in this connection-- related to allocation between 2006-09, allocation between 1993 to 2004 and allocations done to joint ventures. The agency has also registered 12 FIRs related to allocations done between 2006 to 2009 with the latest one being against Jindal Steel and Power Limited, its Director and Congress MP Naveen Jindal and the then Minister of State for Coal Dasari Narayan Rao among others. (PTI)
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