Infrastructure and Energy Quarterly (April, 2015)

i.e.
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Vollume III: Issue IV
April/May, 2015
Infrastructure and Energy Quarterly
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Mumbai
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New Delhi
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Pune
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i.e.
Infrastructure and Energy Quarterly
Practice Areas
Infrastructure, Energy
and Project Finance
About DSK Legal
Banking and Finance
DSK Legal, a full service law firm, was established in
Mumbai in April, 2001. In the last decade DSK Legal has
expanded rapidly, and currently has offices in Mumbai,
Delhi and Pune.
Corporate & Commercial
Real Estate
Transaction Support
Employment
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DSK Legal offers legal services to a host of both
transnational and domestic clients in a range of fields
including Corporate and Commercial laws, Energy and
Infrastructure, Project Finance, Banking and Finance,
Telecommunications, Real Estate, Capital Markets,
Employment Laws, Insurance, Intellectual Property,
Information Technology, Commercial Litigation and
Arbitration, etc.
DSK Legal is organized to focus on industry groupings,
rather than solely on traditional legal competencies. Our
Infrastructure, Energy and Project Finance practice
comprise of a team with significant specialist experience in
handling all aspects of structuring, negotiating,
documenting and implementing complex infrastructure
and energy transactions.
Our infrastructure, energy and project finance practice
team is known for its responsiveness and incisive analysis,
combined with its legal and commercial know-how and
ability to apply specialized knowledge in transaction
support, project financing, strategising litigations and
dispute resolution.
For more information about DSK Legal please visit our
website http://www.dsklegal.com
Tax
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Contents
Foreword
ARTICLE
ENGINEERING , PROCUREMENT
AND C ONSTRUCTION :
CONTEMPORARY C HALLENGES
IN EPC ARRANGEMENTS
…4
SHORT NOTES
AUGMENTING
GRID
CONNECTED SOLAR POWER
CAPACITY IN INDIA
…8
THE MINES AND MINERALS
(DEVELOPMENT
AND
REGULATION)
(AMENDMENT) ACT, 2015
… 11
OTHER REGULATORY UPDATES
… 14
We take great pleasure in bringing you this April edition of
i.e. - Infrastructure and Energy Quarterly’.
Engineering, procurement and construction arrangement is
one of the most important aspect of project development
for infrastructure and energy projects. The success of any
infrastructure and/or energy project is largely dependent
on the implementation and completion of the engineering,
procurement
and
construction
of
the
project
infrastructure. In this April issue of Infrastructure and
Energy Quarterly, we have highlighted some of the key
challenges faced by the project developers and contractors
involved in EPC arrangements.
India has been aiming to augment the clean energy
production in the country and for the purpose has been
taking various steps. The first phase of India’s National
Solar Mission (2010 – 2013) was highly successful and
added a total of 1685 MW grid-connected solar power
generation capacity in India. To further augment the
generation of solar power in India, the Government is
implementing a scheme for setting up of 15,000 MW gridconnected solar PV power projects in India under the
National Solar Mission. In this edition we have highlighted
the key aspects of this ambitious scheme. The January
edition of Infrastructure and Energy Quarterly featured a
write-up on the Mines and Minerals (Development and
Regulation) Amendment Ordinance, 2015. However, now
the Mines and Minerals (Development and Regulation)
(Amendment) Act, 2015 has been duly enacted. In this
April edition, we have highlighted the key aspects of the
Mines and Minerals (Development and Regulation)
(Amendment) Act, 2015. As usual, we have also covered
host of regulatory changes brought in the Infrastructure
and Energy sector during the last quarter.
We hope you enjoy reading this edition of ‘i.e.’ and we
would be glad to receive your comments and feedback on
the same at the following e-mail ids:
[email protected] or
[email protected]
Image Source:
Cover photo and Images on Pages 4, 8
and 11: Wikimedia Commons
Infrastructure, Energy and Project Finance Team
DSK Legal
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Engineering, Procurement and Construction:
Contemporary Challenges in Engineering, Procurement and Construction
Arrangements
Engineering, Procurement and Construction
(EPC) forms the soul of project
development across various sectors, which
is critical for sustaining the robust growth
of the Indian economy. The success of any
project is directly dependent on the
successful implementation and completion
of EPC. EPC contracts are the tool to
achieve this purpose. In this article it is our
endeavor to highlight some of the
challenges involved in an EPC arrangement
from the perspective of the
developer and the contractor.
project
The two critical components of project
development are time & cost. The parties
would always seek to avoid delay in project
completion and cost overrun.
The roles and responsibilities of the project
developer and the contractor are agreed to
in this context (i.e. cost and time) having
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due regard to the risks involved in a
specific project. Thus, principally, the EPC
contract is all about efficient risk
management by the project developer and
the contractor.
Regulatory/Policy Risks; and (c) Other
Risks.
Financial Risks
Interest Rate and Exchange Rate
Risk management involves the following
aspects:
a)
Identification of risk – It is imperative
to identify the risks under various
categories that are associated with
the specific project including by way
of reference to and extensive analysis
of the pre-feasibility and feasibility
study/ies conducted for the said
project.
b)
Risk analysis – Determination of the
nature of risk and its likely impact to
enable the parties to decide on the
party that is best suited to take the
risk.
c)
Risk allocation – Risk is allocated to
create an efficient environment for the
parties involved in the project such
that the party who gains the
maximum for taking the risk or is in
the best position to manage the risk,
will take the said risk.
d)
Managing the Risk- Upon the risk
being allocated to a party the said
party has the ability to manage the
risk appropriately by sharing the risk
or the consequences of the risk with a
third party.
Types of Risks
For the sake of brevity, we have
categorized the contemporary risks that we
intend to deal with in this article under the
following heads: (a) Financial Risks; (b)
Every project requires huge capital
investment, bulk of which is raised in the
form of debt where the interest rate has
been spiraling up. According to recent
market trends, many projects are being
funded by way of external debt in foreign
currency. Such external debts come at
floating interest rate being benchmarked to
the LIBOR, an acceptable benchmark under
the ECB Regulations prescribed by the
Reserve Bank of India. Further, the
unprecedented change in exchange rate,
more particularly the rising value of the
United States Dollar against the Indian
Rupee, has adversely impacted costs of
such borrowing. The profitability of any
project is impacted to a large extent by
these factors. The commonly accepted
method to address the interest rate and
exchange rate fluctuation is entering into of
hedging contracts by the party taking the
risk on price of the project.
Inflation Rate
Another major financial risk is the rate of
inflation which has a huge impact on the
commercial dynamics of the project as it
affects the pricing of the material inputs for
the project. The rate of inflation in past few
years has been growing in unwarranted
manner. By way of illustration, the price of
cement which is an essential raw material
for most projects has risen sharply in past
few years.
The different formulae linked with various
indices are prescribed under the Model EPC
Agreement for determination of price
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adjustment. However, it is essential to
ascertain whether these formulae are close
to the contractor’s procurement model as
prices may differ from region to region.
Further, the indices used for benchmark
prices may not be realistic thereby creating
serious risks.
Regulatory/Policy Risks
The recent decision of the Supreme Court
whereby the coal blocks allocations made
since 1993 were cancelled has created a
sense of fear amongst project developers
that the project, after being awarded, could
still be affected by the courts based on
factors to which the contractor may not be
privy. It is seen that such risks are not
specifically identified and allocated in the
EPC Agreements as these are project risks
inherent to the role of the project
developer. However, the implication of
such risk does not remain confined to the
project developer but has trickling effect on
others including the contractor. These risks
could be mitigated by the contractor inter
alia by way of consequential loss insurance
policy being obtained by the contractor or
by seeking a security from the project
developer. But for the project developer,
the only practical risk mitigation remedy
seems to be obtaining consequential loss
insurance policy. Thus, it is important to
assess if cancellation of the grant of the
project of the impact on a project due to a
court order/regulatory action can be
insured under consequential loss insurance
policy and the cost of premium for such
policies as it has direct impact on the profit
margin of the project developer.
As
far
as
environmental
clearances/consents are concerned it is
always advisable to ensure that the project
has received such clearances/consents
before the commencement of EPC work.
Further, in an EPC contract, the
responsibility to obtain local permits and
clearances are sought to be shifted to the
contractor. The process for obtaining local
permits
and
clearances
may
be
cumbersome and may delay the project.
EPC contractors should factor this risk and
seek suitable protection by way of
adjustment of time and price.
Another important policy risk is uncertainty
with regards to fiscal incentives offered by
the Government (Central, State and local).
Many projects across different sectors
enjoy various fiscal incentives pertaining to
income tax, excise duties, custom duties,
stamp duties etc. These are fiscal policies
of the Government and are subject to
change in future on account of the social,
economic and political conditions prevailing
at the relevant time. Withdrawal of such
incentives has bearing on the cost of
development of the project. Therefore, the
price for the project should factor all
incentives that can be categorically
identified and variation in these incentives
should be allowed as factor for price
adjustment.
Other Risks
There has been a rising trend of
consortium bidding. Consortium bidding
was considered beneficial from taxation
point of view as supply of capital goods by
foreign bidder to the owner, being import
of equipment was not considered to give
rise to payment of income tax by foreign
supplier under Income-Tax Act, 1961.
However, Income Tax Act applies to
income derived by an association of
persons in India. Recent rulings on the
subject suggest that such consortium will
be treated as an association of persons and
therefore, income from offshore supply
becomes taxable in India. The Authority for
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Advance Rulings (AAR) in its ruling in
‘Alstom Transport SA’ on June 7, 2012
applying the ‘look at’ approach of Supreme
Court in Vodafone case, held that a
contract for design, manufacture, supply,
installation, testing and commissioning of
signaling/train control and communications
systems is a composite contract and
income from offshore supply was taxable in
India, even though property in such goods
was transferred outside India. Earlier in the
case of ‘Linde AG’ on March 20, 2012 in
case of consortium bidding, AAR had
reached a similar conclusion based on facts
of that case. Therefore, it is imperative
that due care is exercised in structuring the
EPC contracts in case of consortium
bidding, taking the potential tax exposures
into consideration.
Further, while it is common to have
mediation mechanism being resorted to
before invoking arbitration, creation of
multi-layered
structure
for
dispute
resolution in pre-arbitration stage may
cause
substantial
delay.
Further,
institutional arbitration is expected to
scores better than leaving appointment of
arbitrator to the discretion of parties under
an ad-hoc mechanism. Qualification of
arbitrator and their integrity is essential for
an efficient and fair adjudication. Selection
of arbitrator in an ad-hoc manner may
adversely affect this process. Therefore,
parties should consider opting for
institutional arbitration wherein arbitrators
are to be selected from a panel of
arbitrators.
Conclusion
Different governing laws and jurisdictions
in different contracts for same project may
pose unnecessary risks for a project. For
example, in case of consortium bidding, the
consortium
partners
enter
into
a
consortium agreement to govern their
inter-se relationship. If the consortium
agreement is governed by laws of a foreign
country and EPC contract is governed by
Indian laws, this may cause serious
problem
as
to
interpretation
of
responsibilities
of
partners
and
enforcement of contract.
In view of the above, it is important to
upfront identify and suitably address all the
risks so identified in relation to a specific
project with prudent risk management and
appropriately worded contracts. It is in this
context one may note that the disputes in
relation to EPC contracts currently pending
are reported to involve Rs. 1 Lakh Crores.
___________
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Augmenting Grid Connected Solar Power
Capacity in India:
Scheme for addition of 15,000 MW Grid Connected Solar PV Power Capacity
under the National Solar Mission
The first phase of India’s National Solar
Mission (2010 – 2013) had set a target of
adding 1100 MW grid-connected solar
power generation capacity. However, a
total of 1685 MW grid-connected solar
power generation capacity was added
during this time under various schemes in
India. To further augment and tap solar
power in India, the Government of India
had laid down a scheme for setting up of
15,000 MW grid-connected solar PV power
projects in India under the National Solar
Mission.
The Ministry of New and Renewable Energy
(Grid Solar Power Division) vide its
Notification dated March 5, 2015 has
notified the assent of the President of India
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for the implementation of the scheme
(Scheme) for setting up of 15,000 MW of
grid connected solar photovoltaic power
plants (Project) under the National Solar
Mission (Solar Mission). The aforesaid grid
connected solar photovoltaic power plants
are proposed to be set up under the Solar
Mission through project developers from
the private and/ or public sector over a
period of 5 (five) years from the financial
year 2014-15 to 2018-19 and the National
Thermal Power Corporation Limited and the
NTPC Vidyut Vyapar Nigam Limited shall be
implementing agency for the Scheme.
The Scheme proposes to achieve the said
capacity augmentation in 3 (three)
tranches as under:
(1)
Tranche I (2014-15 to 2016-17):
3000 MW under mechanism of
bundling with unallocated coal
based thermal power and fixed
levellised tariffs;
(2)
Tranche II (2015-16 to 2017-18):
5,000 MW with some support from
the Government to be decided
after getting some experience
while implementing Tranche – I;
and
(3)
Tranche III (2016-17 to 2018-19):
Balance 7,000 MW without any
financial
support
from
the
Government.
Tranche I of the Project, which will
comprise of Batch II of Phase II of National
Solar Mission, is envisaged to augment
3,000 MW solar photovoltaic power
capacity to the national solar grid. Tranche
I of the Project is proposed to be based on
bundling of solar power with unallocated
thermal power in the ratio 2:1. The 1,500
MW of unallocated thermal power which
shall be required for this purpose has
already been made available by the
Ministry of Power. The solar power projects
under Tranche I shall be developed by
private and/or public companies selected
through international competitive ebidding. Under Tranche I, the solar power
plants shall have a minimum capacity of 10
MW.
Out of the total 3,000 MW capacity under
Tranche I, 1,000 MW capacity solar power
projects shall be developed in the State of
Andhra Pradesh, where land has already
been identified for the purpose of setting
up of a solar park.
While the Ministry of New and Renewable
Energy’s Notification dated March 5, 2015
sets out the mechanism to be adopted for
the setting up of solar power projects
under Tranche I, the mechanism for the
Tranche II and Tranche III of the Scheme
has not been devised yet. The Ministry of
New and Renewable Energy proposes to
devise suitable mechanisms for the
Tranche II and Tranche III of the Scheme,
in which minimum support will be provided
to the project developers by the
Government, after gaining experience from
the implementation of the Tranche I of the
Scheme.
Other aspects of the Scheme:
(1)
Like the previous projects under
the National Solar Mission, the
Projects to be developed under the
Scheme shall have certain portion
of the total capacity earmarked to
be set up using Domestic Content
Requirement (DCR).
(2)
The DCR shall be technology
agnostic and shall be applied to
both crystalline silicon technology
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and thin film SPV cells/ modules
technology.
(3)
State nodal agencies appointed for
the purpose shall be responsible
for: (a) grid connectivity; (b) land
acquisition; (c) water availability;
(d) monitoring of progress of
projects; (e) commissioning; and
(f) related activities.
Ensuring bankability of the Power Purchase
Agreements (PPAs): A payment security
mechanism/ working capital fund has been
proposed to be set up with a total
estimated corpus of Rs. 2,300 Crore for
ensuring 3 (three) month’s payment for the
bundled capacity of 4,500 MW (3,000 MW
solar power capacity together with 1,500
MW coal based thermal power). The
aforesaid fund shall ensure the bankability
of the PPAs which shall be entered into for
the Projects under the Scheme.
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The Mines and Minerals (Development
and Regulation) (Amendment) Act, 2015
Removing discretion in grant of mineral concessions and making auction the
sole method for allotment
The Mines and Minerals (Development and
Regulation) (Amendment) Act, 2015
(MMDR Act, 2015) which amends certain
key provisions of the Mines and Minerals
(Development and Regulation) Act, 1957
(MMDR Act, 1957) has finally been passed
by both the houses of the Parliament.
Amending the MMDR Act, 1957 was
imperative in light of the various problems
which the mining industry was facing and
in light of the Supreme Court of India’s
judgment dated September 24, 2014 in the
matter of Manohar Lal Sharma v. The
Principle Secretary and Ors. To address
and resolve the issue the Government of
India had already taken the ordinance
route and had passed the Mines and
Minerals (Development and Regulation)
Amendment Ordinance, 2015 on January
12, 2015. Now with the MMDR Act, 2015
being passed, the mining industry should
be regularized and the much required
transparency in the allotment process of
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the mining concessions will be brought
about.
(3)
The pendency of applications for
renewals of the mining concessions
granted under the MMDR Act, 1957
had greatly affected the mining
industries and its output. The
MMDR Act, 2015 addressed this
issue under Section 8A(5) and
Section 8A(6) by extending the
tenure of all: (1) mining (captive)
concessions granted under the
MMDR Act, 1957 up to March 31,
2030 or until the completion of the
period of renewal already granted,
whichever is later; and (2) mining
(non-captive) concessions granted
under the MMDR Act, 1957 up to
March 31, 2020 or until the
completion of the period of
renewal
already
granted,
whichever is later.
(4)
The MMDR Act, 2015 requires the
setting up of a District Mineral
Foundation (DMF) in every district
where mining activities are carried
out. This provision has been
included in the MMDR Act, 2015 for
safeguarding the interests of the
people affected in the areas on
account of the mining activities.
The MMDR Act, 2015 also requires
the State Governments, while
framing the rules for giving effect
to the DMF, to conform to the
provisions
of
Panchayats
(Extensions to Scheduled Areas)
Act, 1996, Scheduled Tribes and
Other Traditional Forest Dwellers
(Recognition of Forest Rights) Act,
2006 and the provisions of the
Fifth and Sixth Schedules of the
Constitution of India.
(5)
In order to address the inadequacy
of mining explorations, the MMDR
The key changes brought about by way of
the amendments in the MMDR Act, 2015
are as under:
(1)
(2)
One of the key purposes of the
MMDR Act, 2015 was removal of
discretion from the process of
allotment
of
the
mining
concessions. The MMDR Act, 2015
has addressed the issue and it
stipulates
that
all
mineral
concessions are to be granted only
by way of auctions. This shall not
only remove discretion from the
process of grant of mining
concessions but will also make the
entire process more transparent,
which should attract more private
players in the mining industry and
will eventually augment the growth
of the capital intensive mining and
minerals sector.
The tenure of
the
mining
concessions to be granted under
the MMDR Act, 2015 has been
increased from 30 (thirty) years to
50 (fifty) years. However, the
MMDR Act, 2015 prohibits any
renewal of the mining concessions
granted under the MMDR Act, 2015
after the said tenure of 50 (fifty)
years. Under the MMDR Act, 1957,
the mining concessions were
granted for an initial tenure of 30
(thirty) years after the expiry of
which the concessions were further
renewable. Therefore, under the
MMDR Act, 2015 after the expiry of
the term of 50 (fifty) years, there
shall be no renewal of any mining
concession and the same shall be
put up for auction.
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Act, 2015 has proposed to
establish
a
National
Mineral
Exploration Trust (NMET), a
dedicated fund for undertaking
mining exploration projects. The
NMET is envisaged to be created
out of contributions received from
the mining lease holders.
(6)
Under the MMDR Act, 1957, the
State
Governments
were
mandatorily required to obtain
prior approval of the Central
Government before grant of any
mineral concessions with respect to
the 10 (ten) minerals listed under
Part C of the First Schedule of the
MMDR Act, 1957 which included
iron ore, manganese, bauxite,
copper, gold, etc. However, the
MMDR Act, 2015 has removed this
requirement of prior approval from
the
Central
Government.
Therefore, under the MMDR Act,
2015 now the State Governments
shall not be required to obtain a
prior approval from the Central
Government for granting the
mining concessions.
(7)
In order to curb the ever
increasing problem of illegal
mining, the MMDR Act, 2015 has
made the provisions pertaining to
offenses and punishments more
stringent. All offences under the
MMDR Act, 2015 shall be subject to
a maximum punishment of 5 years’
imprisonment or fine of Rs. 5 Lakhs
per
hectare. The
State
Governments are also empowered
under the MMDR Act, 2015 to set
up special courts for speedy trial of
offences under the MMDR Act,
2015.
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OTHER REGULATORY UPDATES
SCHEMES FOR CARGO TRANSPORTATION
The Ministry of Shipping has proposed to
initiate a scheme, viz., Scheme for
Incentivizing Modal Shift of Cargo (Cargo
Transportation Scheme), for providing
certain
monetary
incentives
for
transporting certain identified commodities,
containerized cargo and automobiles
through coastal shipping/ inland waterways
routes. The Cargo Transportation Scheme
will not only decongest the roadways/
highways and railroads, through which the
cargos are generally transported, but will
also minimize the environmental impacts of
such road and rail transportation. The
Cargo Transportation Scheme has been
proposed to be implemented initially during
the period from April 1, 2015 up to March
31, 2017.
The Cargo Transportation Scheme can be
availed by any transporter, if the identified
categories of cargo are transported
through coastal shipping or inland
waterway routes or both. However, for
availing the benefits under the Cargo
Transportation Scheme, the identified
cargos must be transported in vessels with
Indian flag, river sea vessels or barges and
the coastal shipping or inland waterway
routes through which the such cargo is
transported must pass through at least one
major port, designated non-major port or
Inland Waterways Authority of India
terminal/jetty at the point of loading or
discharge. The Cargo Transportation
Scheme is proposed to be implemented
using the Port Community System and such
transporters who are eligible for grant of
the
incentives
under
the
Cargo
Transportation Scheme must register under
the Port Community System with the
Indian Ports Association.
ONLINE APPROVAL/ LICENSING SYSTEM
FOR TRANSPORTATION OF ATOMIC
WASTES
The Atomic Energy Regulatory Board has,
with effect from February 28, 2015,
implemented the web-based approval/
licensing system – eLORA (e-Licensing of
Radiation
Applications)
for
granting
approval/ license for transportation, export
and disposal of atomic wastes. The online
process will not only simplify and fast tract
the licensing process but will also make the
process more transparent.
NUCLEAR REGULATORY INFRASTRUCTURE
OF INDIA
The Integrated Regulatory Review Service
Mission of International Atomic Energy
Agency (IAEA) reviewed the regulatory
framework in place in India with respect to
nuclear safety, during March 16, 2015 to
March 27, 2015. The review was focused
on Atomic Energy Regulatory Board’s
(AERB) regulatory frameworks with respect
to nuclear power plants and projects and
was carried out by comparison with IAEA
safety standards, which are recognized as
international benchmark for atomic safety.
The review mission acknowledged that
AERB continues to strengthen its regulatory
frameworks regularly for regulating nuclear
safety, by reinforcing the safety measures
of existing nuclear facilities, monitoring
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ageing and decommissioning old facilities,
and also by overseeing the construction,
commissioning and operation of new
nuclear power plants. However, the
mission also identified certain areas which
require improvements, such as: policy for
radioactive waste management, regulatory
independence of AERB, enhancing routine
inspections at nuclear power plants. IAEA
shall be submitting its final report to the
Government of India later this quarter.
BOOSTING MARITIME INFRASTRUCTURE
IN INDO-SRI LANKA REGION
In order to counter China’s inexorable
reach over the Indian Ocean, and to
strategically strengthen its presence in the
Indian Ocean region, the Government of
India has proposed to substantially invest
and develop the maritime infrastructure in
the island state of Sri Lanka.
It has been proposed to restart the ferry
services between India and Sri Lanka. The
Government of India has also proposed
that Indian and Sri Lankan companies
should work together for developing oil
tank facilities in Trincomalee for refueling
ships at the port and in order to make
Trincomalee a regional petroleum hub.
It is pertinent to note that by way of
investing in and developing Sri Lanka’s
maritime infrastructure and regional
connectivity,
India
is
strategically
strengthening its own security aspects.
CONNECTING INDIAN SKIES
In order to boost the air transport
infrastructure in India, the Airports
Authority of India (AAI) has undertaken the
construction of five small airports during
2014-2015, located at Hubli and Belgaum
in Karnataka, Kishangarh in Rajasthan,
Jharsuguda in Odisha and Tezu in
Arunachal Pradesh.
A Task Force has also been constituted for
identifying certain other locations where
such small airports should be developed,
based on broad criteria viz., minimum
population of 10 lakhs, tourism potential,
commercial viability, details of the flight
movements in past, social obligations etc.
The Government of India proposes to
develop these small airports in the Tier-II
and Tier-III cities with private participation.
AUGMENTING ENERGY EFFICIENCY
THERMAL POWER PLANTS
IN
In order to boost energy efficiency and
reduce fuel consumption by thermal power
plants the Government of India has
identified 144 thermal power plants under
the Perform, Achieve and Trade (PAT)
Scheme of the Ministry of Power which is
being implemented by the Bureau of
Energy Efficiency.
In order to give the necessary impetus for
boosting the energy efficiency and for
improving
the
demand
supply
management, various steps are being
taken by the Government of India, viz. (i)
advanced planning with respect to power
generation projects to be taken up during
the 12th Five Year Plan in detail and
perspective planning with respect to power
generation projects to be taken up during
the 13th Five Year Plan; (ii) projects which
are in the execution stage are monitored at
the highest level for resolving bottlenecks
with respect to the project and for ensuring
that the projects are timely commissioned.
In addition to the aforesaid, the following
steps are also being adopted with respect
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15
i.e.
Infrastructure and Energy Quarterly
to the designing and operation of power
plants:
the port premises for the purpose of
making th port a green port.
(1)
INDIA TO BENEFIT
ROUTE PROJECTS
Renovation and modernization and
life extension of existing thermal
power stations are being done for
improving the performance of the
power plant.
(2)
The Central Electricity Authority
has
notified
the
Technical
Standards for Construction of
Electric Plants and Electric Lines
Regulations, 2010 which sets out
the requisite energy efficiency
criteria to be complied with.
(3)
Old and inefficient thermal power
plants are being closed down in a
phased
manner.
Supercritical technology is being
adopted
for
enhancing
the
efficiency of coal fired thermal
power generation and for reducing
the coal consumption required for
the power generation.
PROPOSED SCHEME FOR PROVIDING
INCENTIVES FOR MAKING THE MAJOR
PORTS GREEN PORTS
The Ministry of Shipping has approved of a
new incentive scheme (Scheme) on March
10, 2015 for the purpose of giving the
necessary impetus to the major ports to
become green ports. Green ports shall be
such major ports which set up green
projects within the port area, viz., waste
water
treatment,
renewable
energy
generation, using of bio-diesel and
provision of shore power.
The Scheme proposes that the Government
of India shall provide each of the major
port a financial grant of up to Rs.25 Crore
for undertaking these green projects within
FROM
THE
SILK
The Silk Road Project which is being
undertaken by China comprises of a Silk
Road and a Maritime Silk Route. Although
the main intent of the Silk Road is to
connect China with Europe through Central
Asia, the Silk Road also connects
Bangladesh, China, India and Myanmar
(BCIM) and the Pakistan-China Economic
Corridor through the Pakistan occupied
Kashmir. In addition, the Maritime Silk
Route (MSR) proposes to connect China's
ports with the ports in Vietnam, Malaysia,
Indonesia, India, Sri Lanka, Greece and
Kenya.
Therefore it is evident that the US$ 40
Billion Silk Road Project not only connects
India with rest of Asia but the project will
also boost trade and commerce between
India and the other connected neighboring
countries. However, although India is
participating in the BCIM segment of the
Silk Road, India shall not be participating in
the Maritime Silk Route project on account
of India’s strategic concerns over China’s
dominion over the Indian Ocean.
GUIDELINES
FOR
PPP
IN
INFRASTRUCTURE PROJECTS AMENDED
FOR PROVIDING ADDITIONAL FINANCIAL
SUPPORT
The Cabinet Committee on Economic
Affairs has, at its meeting held on March
31, 2015, approved the amendment in the
definition of a ‘Private Sector Company’ in
the guidelines for providing financial
support to public private partnerships in
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16
i.e.
Infrastructure and Energy Quarterly
the infrastructure sector under the Viability
Gap Funding Scheme (VGF Scheme).
The definition of ‘Public Sector Company’
has been approved to be amended in order
to remove any ambiguity in the
interpretation of the term and for the
purpose of aligning the definition with the
definition of a ‘Government Company’ as
defined under Section 2(45) of the
Companies Act, 2013.
Company’ being amended. The amended
definition of a ‘Private Sector Company’
under the PPP guidelines shall include a
company which is not a ‘Government
Company’, where Government Company is
defined under Section 2(45) of the
Companies Act, 2013.
Further, approval has also been accorded
for the definition of ‘Private Sector
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Infrastructure and Energy Quarterly
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