The most enduring media image of the fall of the rich emirate of Dubai is the rows upon rows of cars abandoned at the airport by fleeing expatriate employees who had lost their jobs and had no money to settle their dues. But Dubai, used to pomp and glitter, does not like to admit it is facing a meltdown. How can one explain that Nakheel, one of the emirate's largest realty developers, spent $20 million in fireworks and pageantry for the opening of its $1.5 billion resort Atlantis in December last; and then sacked 500 employees a few days later because it could not pay their salaries? Among the worst hit in Dubai's deceleration that started around October 2008 has been the realty industry. Investors from West Asia, the Far East, the US and India flooded the booming economy which they thought was secure because of the never ending rise of oil prices. A construction boom that kicked off about a decade ago became a frenetic tide by the first quarter of 2008. By the end of the year, about 42 million sq. ft of commercial construction was in the pipeline — more than any other city in the world; and prices had shot up 40-45 per cent in just the first quarter of the year. Post-Lehman Brothers fall, meltdown began to hurt, and Dubai was in the centre of the mess. Oil prices tanked, and the easy liquidity that financed these real estate projects evaporated. Amlak, the largest home financier in the UAE, announced it was suspending new loans. The first quarter of 2009 saw residential property prices plummet 40 per cent and unfinished skyscrapers dotted the skyline.By the first quarter of 2009, prices had fallen to 2007 levels. At the Dubai International Financial Center (DIFC) prices crashed to Dirham 2,000-2,300 (Rs 26,680-30,700) per sq. ft from the peak July 2008 levels of Dirham 4,500 (Rs 60,000). The Jumeirah Lake Towers (JLT), a clutch of 77 upscale residential and commercial towers, saw prices fall to Dirham 700 per sq. ft from Dirham 1,700 (Rs 22,600) — a decline of over 60 per cent. In the posh Jumeirah Palms, capital value of property declined to Dirham 800-900 per sq. ft from the peak of Dirham 1,800 per sq. ft. Dubai realtors also said the promise of a three-year visa along with a property purchase in Dubai, brought in thousands of foreign investors keen on setting up business in the Emirates. However, this proved to be a chimera and developers could not provide the visas, triggering a flight of foreign money.Dubai-India Synergy StumblesIn the boom days, the property markets of India and West Asia — Dubai in particular — saw a lot of osmosis. Indians living in Dubai, investors from India and Indians in other markets made a beeline for picking up a piece of the action. Among the Indian developers that attempted to cash in on the investor money flowing in was the Niranjan Hiranandani-promoted Hircon International that launched in true Dubai style a 90-storey tower — the 23 Marina — in 2007. Other Indian developers in the Dubai market included HDIL's subsidiary Dheeraj East Coast, Seth Developers, the Mumbai-based Mayfair and Evershine groups and Bangalore's Sobha Developers. The investment flow was the other way too. Several Dubai-based developers queued up to invest in India's property boom. Emaar Properties, Dubai's leading developer, joined hands with India's MGF Developments in 2005 to form the joint venture Emaar-MGF Land. The company is a major contractor for the Commonwealth Games construction in Delhi and has launched a slew of residential and hospitality projects. ETA Star launched its first residential project Jasmine Court in Chennai and claimed it had 5 million sq. ft under development in India. The Nakheel Group announced projects in Bangalore, while another big Dubai player Damac Properties said in 2007 that it planned to invest around $5 billion (Rs 19,700 crore) in India over the next three years. var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } Many of these projects have been either withdrawn or have slowed down. Ironically, among the first to suffer the stockmarket slide was Emaar-MGF Land, whose mega IPO in February 2008 expected to net Rs 6,500 crore, had to be withdrawn due to lack of subscriptions. The Nakheel Group's 50:50 JV with DLF for the development of the Rs 60,000-crore Bidadi Knowledge City has been shelved. Similarly, ETA Star's Sriperumbudur township development slated for launch in 2008 and four other Tamil Nadu projects projected to together cost nearly Rs 15,000 crore have been put on the backburner. So has its IT Park in Bangalore. Hiranandani's 23 Marina in Dubai that has gone up 60 floors so far has been luckier. "I don't know if we were luckier or smarter, but we completed sales before the slowdown started. We expect to give occupation by June 2010," Hiranandani says. The luxury residential property was sold in the Dirham 800-1,200-per-sq-ft range (Rs 10,000-15,000 per sq. ft), but prices had thereafter fallen in resales. Hircon's second project in Dubai, announced in 2007, has however been withdrawn, he added.Looking To RecoverAmong the steps the Dubai government mooted was the merger of two loss-making mortgage lenders, Amlak and Tamweel, with the two government-owned banks to create a new $2.7-billion Emirates Development Bank. However, the merger of the two housing finance groups that once controlled more than half of Dubai's mortgage market, has run into trouble eroding investor confidence further. The future of the lenders was thrown into doubt last week when the UAE Federal National Council, the government's advisory body, failed to agree on a law governing Emirates Development Bank.Administratively, the Dubai government has appointed Mohamed Alabbar, chairman of Emaar Properties, as director general of the Department of Economic Development, and has given more teeth to the Real Estate Regulatory Authority to ensure completion of projects. A recent Standard Chartered survey said "considering the number and success of recent bond issues both by corporate and sovereigns," the Dubai market was showing the first signs of revival. However, even after the 40 per cent fall from peak in mid-2008, the bank's analyst Phillppe Dauba-Pantanacce warned that prices were still too high and would need to come down further. Says Venkateshwaran Ramadoss, senior research analyst of the Kuwait Financial Center: "We cannot foresee a short-supply scenario to cause a remarkable recovery. The increased supply will lead to further contraction in prices and rentals — in the range of 15-25 per cent." As more ‘for sale' signs go up across Dubai expat residential enclaves like Jumeirah, Umm Suquiem and Safa, the heady days of Dubai as a property investment hub are clearly over.gurbir dot singh at abp dot in var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') }
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The oil ministry has withdrawn a note it had circulated to the members of a ministerial panel opposing hike in price of gas produced by Reliance Industries, as the Rangarajan Committee is examining pricing of the fuel. In a surprise move, the ministry had on October 10 moved a note to the Empowered Group of Ministers (EGoM) opposing a hike in price of RIL’s KG-D6 gas before April 2014 even though the company itself was not seeking a revision before that date.“Yes, the note to EGoM has been withdrawn,” a top ministry official said. This was done in view of panel haded by Prime Minister’s Economic Advisory Council Chairman C. Rangarajan being asked to suggest “structure and elements of the guidelines for determining the basis or formula for the price of domestically produced gas, and for monitoring actual price fixation.”Prime Minister had appointed the six-member panel to essentially look at the design of future contracts for exploration of of oil and gas. It had also been tasked to suggest pricing of natural gas.Meanwhile, on 8 November, CAG had asked oil ministry not to approve any of Reliance Industries' investment plans for the flagging KG-D6 gas field unless the company gives it unfettered access to audit its spendings. In a strongly worded letter, Comptroller and Auditor General of India (CAG) referred to media reports about the ministry giving nod to RIL's annual capex for KG-D6 that have been pending for past three years, to advise the ministry not to approve any investment except those of "emergent nature"."It is well within the knowledge of the Ministry that any increase in capital expenditure is likely to have significant adverse impact on government's financial interests," CAG wrote to Oil Secretary on November 9. Rise In Subsidy Burden FearedSources said the ministry had in the October 10 note to EGoM members argued that a higher price of KG-D6 gas would result in $6.3 billion rise in subsidy burden.RIL, it said, would get an additional $4.1 billion revenue if the rates are hiked from current $4.2 per million British thermal unit to import parity rates of $14.2-14.51 per mmBtu. The government on the other hand would get only $0.5 billion at current year production level of around 25 million standard cubic metres per day.Sources said the ministry stated that a $10 rise in gas price would result in increase in subsidy paid on fertiliser and power by $6.3 billion.The ministry, however, in the note did not state that RIL had modified its January request for a price revision to clearly state it is seeking rate revision only from April 1, 2014 when the current price is due to expire.RIL first in June and then again on September 6 reiterated its demand for a price at par with the rate India is paying for import of liquefied natural gas (LNG) from April 1, 2014 when the current five-year period of $4.2 price expires.It wants to price KG-D6 gas at 12.67 per cent of JCC, or Japan Customs-Cleared crude, plus $0.26 per mmBtu. At $110 per barrel oil price, gas will cost $14.23 per mmBtu.Sources said the company has also proposed to price gas it plans to produce from coal seams, called coal-bed methane (CBM), from Sohagpur blocks in Madhya Pradesh according to the same formula. Its CBM pricing formula as well as Essar Oil’s demand for $4.2 per mmBtu price of CBM from its Raniganj block in West Bengal had been referred Rangarajan for review. The EGoM had in 2007 fixed $4.2 per mmBtu price of KG-D6 gas for first five years of production. RIL began KG—D6 gas production in April 2009.The formula proposed by RIL for sale of gas from April 1, 2014 is the same at which Petronet LNG Ltd, the nation’s largest liquefied natural gas importer, buys 7.5 million tonnes per annum (30 million standard cubic metres per day) of LNG from RasGas of Qatar. RIL Pitches For Market-driven Price For Natural GasPitching for market-driven prices for natural gas, Reliance Industries has said it has found very large gas reserves that need a price of more than $10 per million British thermal unit to be developed and produced. In a 18-page submission to the C Rangarajan Committee, which is examining terms of future contracts for exploration of oil and gas as well as basis for gas pricing, RIL said only market related prices can provide an incentive to help produce the vast domestic resources that either concentrated in small pools or are located in technologically challenging ultra deep sea. "RIL (and partner) BP have around 5.5 Trillion cubic feet of discovered gas resources which would require large amount of risk capital to be invested. Most of these discoveries would require price of more than $10 per million British thermal unit to be developed and produced," it said.It currently gets paid $4.2 per mmBtu for the gas produced from its KG-D6 fields in Bay of Bengal. This rate is lower than what Cairn India gets in the neighbouring Ravva Satellite field in the same basin and UK's BG Group-operated Panna/Mukta and Tapti fields in western offshore. KG-D6 output has slipped drastically due to a host of problems and the company is arguing that restoring production would need higher investments.RIL, which has been seeking a rate equivalent to import parity price for KG-D6 gas from April 2014, said the signed contracts for its and other fields gives government powers to approve but does "not entitle the government to fix the price of gas." "There is no finding or observation in the Judgement of the Supreme Court which entitles the government to arbitrarily or unilaterally fix the price of gas and require the contractor to sell gas at a price which is not the market price of natural gas in the country," it said. The Apex Court, the May 2010 judgement in RIL's gas dispute with Reliance Natural Resources Ltd, "requires the Government to revise the price if the price at which the contractor sells the gas under a formula is not the market price of gas in the country.""We trust that the committee will make recommendations...which stipulates that all gas produced by the contractor will be sold at an arm's length market price," RIL wrote.The company wanted the existing arrangement of profit sharing between explorers and the government to continue.The six-member panel headed by the Prime Minister's Economic Advisory Council chairman may be veering around to the idea of changing the present system where firms like RIL are allowed to recover all their investment first before sharing profit with the government, thereby giving incentive to keep raising spending to delay government profit.(Agencies)
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Here's an interesting fact. countries with well-endowed fossil fuels such as Nigeria (37 billion barrels of oil reserves) and Iran (150.31 billion barrels) are developing renewable energy at a faster pace than India. "We do not want to be dependent on a single source of energy howsoever large it is today," says Adeola Elri, senior scientific officer, renewable energy department, Energy Commission of Nigeria.Both Nigeria and Iran have set a target of 10 per cent of their energy demand being met by renewable energy in the next five years, up from the present 3 and 7 per cent, respectively. In India, renewable energy accounts for nearly 11 per cent of total grid-installed capacity, but contributes just over 4 per cent of that to the total electricity generation mix. The reason: the per unit cost of renewable energy runs very high.As a consequence, enhancing use of renewable energy is hard, particularly through decentralised distribution grids. "Access to capital, technology development, innovation and strategies are not keeping pace with global development," says V. Subramanian, former secretary at new and renewable energy ministry (MNRE).Oddly enough, nearly $3.1 billion has been invested by the private sector in renewable energy till 2009, according to a Ernst & Young report, which ranked India the fourth most attractive destination for investment in renewable energy behind the US, China and Germany. One reason for the disinterest is purely economic. "Traditionally, alternatives have been explored when cost of an existing product is beyond the reach of people," says Farooq Abdullah, minister for new and renewable energy. That is both realistic and pragmatic.The other is regulatory policy. Given high costs, renewable energy generation needs well-targeted fiscal incentives: that implies some mix of tax benefits and subsidies. So far, existing policy has failed to generate private sector excitement. Which begs the question: are policy objectives aligned with the interests of those who could build the required generating capacity?Analysts say incentives do not appear to be aimed at promoting the use of renewable energy. For instance, they have failed to reduce the cost of consumer durables using renewable energy that can be used by masses of people. Instead, the government has imposed directives on distribution companies. The stipulation that power distributors should procure 5 per cent of total energy demand from renewable sources is a diktat, not a market-based mechanism. Then, companies in the renewable energy business could well use the tax write-offs without adding to enlarging the market meaningfully. "There is a need for serious players to promote renewable energy, who can tap the benefits offered by government," says Vinayak Mavinkurve, group head, project finance and principal investments at IDFC.Progress will continue to be slow, said leaders from more than 85 countries participating at the Delhi International Renewable Energy Conference, 2010, if political leadership views renewable energy as an alternative source of energy rather than as the main energy source for the present and the future."It is imperative that India looks at other alternatives within renewable sources seriously for its energy security," says Edward Norrena, sector practice lead (environment and infrastructure) at global business opportunities bureau in foreign affairs and international trade, Canada. "It can exploit its vast coast line and huge biomass and not just focus on wind and solar alone." MNRE should be the facilitator and not the regulator of a few renewable sources of energy. But is anyone listening? var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } (This story was published in Businessworld Issue Dated 08-11-2010)
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Amidst a row over CAG audit of Reliance Industries' KG-D6 gas field spendings, Petroleum Minister M Veerappa Moily on 5 October' 2012 said audit is a contractual obligation and the company will abide by it. "I have already gone on record to say that it is a contractual relationship between the government and the respective contracting parties... Audit (of spending on oil and gas fields) is part of this (contractual obligation)," he told reporters here. RIL had on Saturday stated that it had never contested the government's right to get spendings on the flagging KG-D6 gas fields audited by the Comptroller and Auditor General of India (CAG) but added that the consent must not lead to a performance audit of a private firm. "Let us not get into immediate on this. Allow them (RIL) to make a business," Moily said. "They (RIL) will abide by that (contractual obligations). We need not create problems for either for them (RIL) or for the government and CAG." The row over CAG's second round of audit of KG-D6 field erupted after the Petroleum Ministry last week postponed a kick-off or 'Entry Conference' called to commence the scrutiny of spendings in 2008-09 to 2011-12. The meeting was called-off due to differences over the nature and scope of audit to be conducted by CAG, with RIL saying it was open to a financial audit but not a performance scrutiny wherein complex technical decisions like hiring of a particular technology may come in for questioning. In a Saturday evening statement, RIL said it "has at no time contested the government's right to conduct an audit by any agency, including the CAG, as provided in Section 1.9 of the Accounting Procedure of the Production Sharing Contract". RIL said it "appreciates" CAG's reported statement that it does not conduct performance audit of private firms. (PTI)
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After Lodha Group's dream run in acquiring land in Mumbai, it is now Indiabulls' turn. Following Lodhas' big-ticket acquisition of a 6-acre government plot for Rs 4,050 crore, the next round of bidding for two National Textile Corporation (NTC) mills — Poddar Mills and Bharat Textile Mills, both in central Mumbai — went Indiabulls' way. Land in Mumbai is not only astronomically expensive; it is also a scarce commodity. The rancour between builders that often spills over into court rooms is, therefore, no surprise.Indiabulls Real Estate had bid hard for the two mills. In the case of the July-end auction for the 2.4-acre Poddar Mills, Indiabulls came through with the highest bid of Rs 475 crore. A week later, Indiabulls repeated the feat with a Rs 1,505-crore clinching bid for the 8.4-acre Bharat Textile Mills. Pipped in the race was Lodha, which had stopped at Rs 1,503 crore.The squabbling started soon after. The Lodhas alleged that the tender terms had been violated. After the auction, NTC took over 45 days to confirm the sale. This, Lodhas claim, was to "promote the interests of Indiabulls". Lodhas also alleged that Indiabulls began pre-launch sales in the two mills even before the payment had been made. "Much higher bids would have been received had it been known that moneys could be raised through sale of units," says a Lodha official. The pitch was further queered by the Lodhas, offering NTC an additional Rs 100 crore for the mill.Indiabulls Financial Services' CEO Gagan Banga has a different story. He says there was a time lag as NTC had to seek clearance for the sale from the Board of Industrial and Financial Restructuring (BIFR). He admits his company had been taking bookings at Rs 18,000-23,000 per sq. ft, but claims pre-launch sales had been permitted by NTC in this case as well as in the past. "We have furnished a bank guarantee for the whole sum on 22 September. The entire cash is with ICICI Bank. There is no question of payment not having been made," says Banga. Lodha challenged the NTC decision to award Bharat Textile to Indiabulls before the BIFR, but lost. "Once earnest money deposit is returned and accepted by the appellant, no further bidding shall be legally acceptable by NTC," BIFR ruled. The company has now appealed to the Appellate Authority for Industrial and Financial Restructuring (AAIFR) and a decision is awaited.In the case of another central Mumbai NTC mill, the Finlay Mills, the shoe is on the other foot. In this case, two rounds of auctions came a cropper in December 2008 and March 2009. The recession period saw few takers. Finally in August 2009, Lodha was the highest bidder at Rs 657 crore; but that was far below the revised reserve price of Rs 710 crore. Negotiations followed and Lodhas upped their offer to Rs 710 crore. NTC did not accept the revised offer as it felt it could do better later, but BIFR passed a confirming order in favour of Lodha.Indiabulls, which was an initial bidder for the mill at Rs 500 crore, has pointed out that they should also be allowed to revise their bid. Indiabulls is now offering Rs 100 crore more than Lodha. "We are not in court over Finlays, but NTC has gone to AAIFR to get the best price," says Banga.Interestingly, Indiabulls has focused on Mumbai's defunct NTC mills since they come with a clean title. But so have the Lodhas. In a city that is already over-developed, the only source of land is by redeveloping old buildings or buying defunct industries. Even this source has now dried up; but for whatever remains, the fight will be sharp and bitter. var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } (This story was published in Businessworld Issue Dated 15-11-2010)
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Reliance Power reported a 2.1 per cent rise in quarterly net profit, beating expectations thanks to higher generation capacity and said new power units would start production in the next few weeks to add yet more capacity despite a scarcity of fuel at other plants. India's power companies are struggling to source fuel as domestic coal production stagnates and gas production remains below expectations. The fuel shortage has forced other power plants to run below capacity because fuel supply is tied to specific plants. Earlier this year, India suffered one of the world's worst power blackouts, affecting about half of the country's 1.2 billion population. Reliance Power, controlled by billionaire Anil Ambani, reported a net profit on Monday of Rs 240 crore for the second quarter ended September 30, compared with Rs 235 crore a year ago. Net sales more than doubled to 10.79 billion rupees, it said. Analysts on average had expected a net profit of Rs 210 crore according to Thomson Reuters I/B/E/S. The company said its fuel costs more than doubled to Rs 637 crore and finance expenses jumped 82.7 per cent to 1.37 billion rupees. Reliance Power generated 1,655 million kilowatt-hours, up 65 per cent from the previous year in the quarter from its Rosa plant in Uttar Pradesh, the company said. The first unit at its 3,960 megawatt (MW) Sasan power project and the second unit at Butibori project should be commissioned in the next few weeks, the company said. Two of Reliance Power's projects totalling 6,400 MW have been stalled due to scarcity of cheap fuel and it faces the risk of losing one of those due to a legal wrangle with four state governments. The company also ran into trouble in August when the country's federal auditor said it unduly benefited from a government decision allowing the power producer to use surplus coal from its captive block for another project it was not meant for. Shares of the company, valued by the market at about $5 billion, were flat at Rs 97.35 by 2:40 p.m. when the Mumbai market was down 0.28 per cent.(Reuters)
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A 120-km drive from Dehradun through the bumpy, hilly terrain of Uttarakhand is a picture postcard site. It is the confluence of the Bhagirathi and Bhilangana rivers in Tehri district; its waters are green as jade, flanked by green hills and blue skies. But right across the conflux is a sharp contrast. It is the 1,000 MW Tehri Dam, the first phase of the Tehri Hydro Power Complex. The other two phases include the 400-MW Koteshwar project and a 1,000-MW pump storage plant. The state government began constructing the dam in 1972, but scarcity of funds turned it into a joint venture with the Centre, with assistance from Russia (then USSR; 1,000 million roubles). The dam opened in 2006, but not before massive protests. Environmental activist Sunderlal Bahuguna led the anti-Tehri agitation on grounds that the dam would endanger mountains and the livelihoods of the local people. Activists as well as many of the affected say rehabilitation was marred by corruption. The purpose of the project is also questioned. The dam, among other uses, is meant to supply 162 million gallons of water a day to 4 million people in Delhi and 108 million gallons to 3 million in UP. Locals are miffed. Tehri still faces power cuts up to 8.5 hours a day. Hydro power makes up 19 per cent of India’s energy portfolio; second after thermal at 67 per centTehri is now part of a larger debate on hydro power in Uttarakhand — ‘hydro as a panacea to power woes’ versus ‘hydro as a curse’. The state has an installed capacity of 3,165 MW — including state, central and private sector projects; it has the ambition to take this to over 12,000 MW from micro to large hydro projects. Of operational projects, the biggest is the 1,000-MW Tehri dam, owned by the Tehri Hydro Development Corporation. The Hydro MathBetween 1 October and 9 October 2012, the state had a gross energy availability of 177 million units; the demand was at 211 million units. Load shedding was about 10 million units. In all, it overdrew about 15 million units. In 2011-12, the energy deficit was about 3 per cent; peak deficit was 0.7 per cent. This is expected to rise to over 24 per cent and 5 per cent, respectively, in 2012-13. Uttarakhand — like Himachal Pradesh, Jammu & Kashmir and Arunachal Pradesh — is a hydro-rich state; its potential is estimated at about 25,000 MW. Hydro power makes up 19 per cent of India’s energy portfolio; second after thermal (67 per cent). Hydro generation is about 39,291 MW (our installed capacity and generation share is among the top 10 countries). The estimated potential at 60 per cent plant load factor (PLF) is 84,000 MW. Avdhash Kaushal, a 76-year-old activist with over 40 years in social work, steers the pro-hydro movement. He even fought and won against uncontrolled limestone mining in Uttar Pradesh in 1988. His NGO — Rural Litigation and Entitlement Kendra — looks into the rights and development of tribals. In June, he led a group of impassioned women from villages in Mori district to Delhi to sensitise the press and policymakers of their ‘powerless’ plight. The only light, as demonstrated, was with flints. But they have mobile phones and refrigerators — gifts from politicians who promise power before polls, only to renege each time. To charge phones, they have to travel to neighbouring Himachal Pradesh. They have given up their lands for building hydro projects only to find progress stalled. (BW Pics By Bivash Banerjee) Kaushal’s logic is that Uttarakhand was created for development of the hills. With abundant hydro power resources, there is no reason why 1,220 villages should remain un-electrified, why industries should suffer losses of Rs 70-80 crore a day due to power cuts. “Each year, the state spends Rs 750 crore to buy 150 MW of power, but it is not enough to meet the needs.” Interestingly, the Uttarakhand Jal Vidyut Nigam (UJNVL) fully owns only the 304-MW Maneri Bhali Phase II. It gets 12 per cent free power from other projects and buys the rest. “The free energy from Vishnuprayag and the share from central stations in 2011-12 have been about 240 MU and 4,130 MU. Power purchased during 2011-12 was around 1,051 MU at an average rate of Rs 4.41 a unit,” says B.C.K. Mishra, director of operations at UJNVL. The total power purchased by the state in 2011-12 (via open tender) was for about Rs 465 crore. However, the plans have hit rough weather. And it has little to do with science or people. Enter 80-year-old Swami Gyanswaroop Sanand — formerly G.D. Agarwal, an alumnus of IIT (Rourkee) and University of California, Berkeley. He aims to stop projects that interfere with the flow of the Ganges. His ‘Save Ganga’ mission began in June 2008; he became a sanyasi in July 2011; Eventually, his fast-unto-death broke the state and central governments’ resolve. break-page-break Three projects, the 380-MW Bhairon Ghati, 480-MW Pala Maneri and 600-MW Lohari Nagpala, on the Bhagirathi were shut down; others on the Alaknanda and Bhagirathi hang on a balance. The final decision on Lohari Nagpala was taken in 2010 by a panel led by Pranab Mukherjee, then finance minister. Jairam Ramesh, a panel member, was quoted as saying the decision was taken “out of respect for sentiments of faith and culture as well as technical questions raised about the impact of the dams”. Gently Down The StreamUttarakhand has over 100 projects on the Ganga and tributaries: 42 projects including the 2,400-MW Tehri complex in the Bhagirathi valley; 33 projects in the Alaknanda Basin. Most are run-of-the-river projects — using the river’s flow to generate power. Proponents say that such projects — like the 90-MW Tiloth and 304-MW Maneri Bhali Phase II — do not alter the river’s course or water level. Water pumped from the Phase I dam through a 15-km stretch of tunnels inside mountains is used to generate electricity in Tiloth power house. The water then runs into the Phase II reservoir, then to Tehri and so on. The engineers conducting the tour insist every gallon used is pumped back out. But the view outside Phase II dam shows the stretch of river outside the dam is visibly lesser than what comes into it. Activists refute the claims of the pro-hydro lobby. Vimal Bhai of Matu Jan Sangathan is one. Sitting in his apartment in east Delhi, the Gandhian laments the politics behind hydro projects. He feels it is a means of corruption; exploits people and the nature. Even a 2012 report by the Wildlife Institute of India for the environment ministry says such projects are “a major threat” to the fish stock in the Ganges (‘Assessment of Cumulative Impacts of Hydro-electric Projects on Aquatic and Terrestrial Biodiversity in Alaknanda and Bhagirathi Basins in Uttarakhand’). Not everyone is in agreement though. “Such misleading reports may further strengthen vested interest of certain agencies... in stalling the hydro power development of the state,” wrote Nagendra Prasad Todaria and Sabyasachi Dasgupta, professors at Hemwati Nandan Bahuguna Garhwal University, in a letter to the Prime Minister. The engineers, however, do admit the impact on marine life. “It comes down to what is more important, power or environment. The cost to protect both is expensive,” says one. This blame game is common. Each side claims the other is, say, working under foreign funding. Neither has proof; both are quick to deny wrongdoings. Truth is, hydro as a source of clean power is still debated. It displaces people; affects livelihoods. Tunnels need to be built inside mountains; lands are submerged. Rehabilitation is a headache. Shailendra Bhatt, a Tehri resident, says he got only Rs 20,000 for his 1,000 sq. mt land in Chham. He spent Rs 3.5-4 lakh for the new 200 sq. mt shop-cum-residence. Former Chham resident, Pooran Rana says his family was moved to Patri, Haridwar, to live in dormitories built by the government. Basic facilities were missing; the community is now building a school for themselves. Rana spent his own money to build home on land his father owned in the same area. Is there an alternative for Uttarakhand? “We have tried to get a coal block allotted to us,” says former chief minister of Uttarakhand B.C. Khanduri. But in vain. Pollution levels also dissuade. Khanduri in December 2011 inaugurated the Kashipur gas project. The Haridwar gas-based plant is the second; GAIL and UJVNL signed an MoU in June 2011. But gas availability has played foul. As far as renewables go, Mishra says UJVNL plans to add 250 MW of solar power through panels mounted on canals; like Gujarat did in Narmada. Khanduri says, “Tehri dam is too big and not commercially viable,” adding that projects under 25 MW (said to be more eco- friendly) are rational. Uttarakhand has 118 MW under evaluation and 53 MW under construction. The aggregated capacity for small hydro projects in the state is 1,400 MW. Solar and small hydro projects can, however, only play a complementary role. Private enterprises are not keen on small hydro projects; the returns are small. These can fall prey to floods too. Three such projects in the Assi Ganga valley were washed away during flash floods in August. Incidentally, locals blame dams for the destruction. A hotel owner in Uttarkashi says shoddy construction work and poor waste disposal worsened flood and landslides. The discontent is echoed by some in Dehradun; hydro power is destroying the state. The terrain near the Maneri Bhali I and II projects still bear the scars. The projects were also hit. Rana says generators gave up under the assault and they could not open dams and release the water. Locals bought diesel to help start the projects’ generators. But Uttarakhand has few options. Sushil Kumar Rastogi, a former general manager with UJVNL, is a votary of hydro. He, though, admits to imperfections. Both he and Khanduri concur that overuse of river water is a major concern. “Private companies want minimum cost for maximum gains,” explains Rastogi. “The problem is not with hydro. It is with implementation. You must have an agency to monitor projects.” Right now, Uttarakhand is stuck in a socio-economic, politico-religious Catch-22; and the river does not flow as usual. yashodhara(dot)dasgupta(at)abp(dot)in (This story was published in Businessworld Issue Dated 12-11-2012)
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A high-profile tax dispute between the Indian government and British telecoms operator Vodafone Group has made it unlikely that India will sign a foreign investment protection treaty with Canada during a visit this week by Prime Minister Stephen Harper, Canada's top diplomat in India said on 4 November. Canadian High Commissioner Stewart Beck also signaled an important disagreement with India in negotiations aimed at opening up Canadian exports of uranium to India.There had been media speculation in both countries that Harper's 4-9 November visit to India might yield a final agreement on foreign investment protection or on nuclear supplies or both, but this will now likely not happen this week. "I imagine we'll have agreements perhaps in the next year," Beck told reporters traveling with Harper.The Indian government is putting on hold all its negotiations with other countries on foreign investment protection agreements after Vodafone threatened the Indian government with arbitration proceedings under one that already exists between the Netherlands and India. "They are taking a look at all their agreements before they finalize any one in particular," Beck said. "I would say this is going to take more time (than this week)," he said.(Reuters)
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