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Over the past decades (Census 2011)), Uttarakhand has witnessed rapid urbanisation, with a growth of about 42 per cent in urban population. The rate of growth is substantially higher than the national average of 32 [...]
The Insolvency and Bankruptcy Code [IBC], 2016, has captured the imagination of corporate India, the banking sector and professionals alike. [...]
The Insolvency and Bankruptcy Code [IBC], 2016, has captured the imagination of corporate India, the banking sector and professionals alike. The pink newspapers carry significant coverage of all the IBC cases, demonstrating the importance of the code at a time when non-performaing assets (NPAs) of banks are reaching unimaginable proportions.
In a bid to modernise the railway sector, Indian Railways (IR) has recently turned towards enhancing the role of public-private partnerships (PPPs) through the introduction of encouraging policies and initiatives
In a bid to modernise the railway sector, Indian Railways (IR) has recently turned towards enhancing the role of public-private partnerships (PPPs) through the introduction of encouraging policies and initiatives. Although the experience with PPPs has been mixed so far, IR is continuing to tap new areas for private participation. A case in point is the recently launched Station Redevelopment Programme, which involves the redevelopment of 23 stations on a PPP basis. Besides, other areas identified for PPP infrastructure include dedicated freight corridors, solar power projects for railways, levitation-based train systems, private freight terminals and catering services, among others.
Experience so far
PPPs in the sector have been quite limited so far, owing to the inherent nature of projects, in that they are highly capital intensive and have long gestation periods that pose serious risk to investors. Further, the case-by-case approach adopted by the Ministry of Railways (MoR) towards the finalisation of concession agreements have been time-consuming and costly, rendering the projects unattractive.
For instance, after its launch in February 2018, Phase I of the Station Redevelopment Programme witnessed a lukewarm response from private players. Policy uncertainty, operational issues and lack of clarity were some of the issues that were identified. The MoR has now decided to bring about some changes such as an increase in the lease period from 45 to 99 years; permission to developers to give multiple subleases rather than just one; the introduction of a new single-stage, single-parameter bid process as opposed to the Swiss Challenge bidding process; and the provision of detailed project reports by IR to private players to implement projects on a turnkey basis.
Another segment that was opened to private investment in 2015 was freight terminals. As of April 2017, 94 proposals had been received, of which 47 terminals were notified and declared functional. Besides, the participation of private players as container train operators (CTOs) has also been significant. While rakes are owned by the CTOs, IR hauls the rakes and claims haulage charges. So far, 18 public and private companies have been licensed to run container trains on the IR network.
The MoR has further allowed private participation in the establishment and operations of computerised passenger reservation system-cum unreserved ticketing system terminals at centres called Yatri Ticket Suvidha Kendras (YTSKs). As of July 2017, 188 YTSKs were operationalised.
A key deterrent to private participation has been IR’s inability to effectively identify projects and estimate earnings to ascertain the viability gap funding for projects. Another
lacuna is that the sector lacks an independent regulator, responsible for ensuring a level playing field for various stakeholders.
Upcoming investment opportunities
As per India Infrastructure Research, an ambitious pipeline of projects entailing a total investment of over Rs 4.65 trillion has been envisaged through PPPs, of which dedicated freight corridors (DFCs) account for the largest share in investment at about 76 per cent, followed by the Station Redevelopment Programme at 21 per cent.
With respect to DFCs, three new corridors have been planned for implementation on a PPP basis. These are the 2,328 km East-West Corridor at an estimated cost of $22.1 billion, the 2,327 km North-South Corridor at an estimated cost of $22.9 billion, and the 1,114 km East Coast Corridor at an estimated cost of $10.25 billion. Currently, the feasibility studies for these are under way.
Further, around Rs 875 billion worth of opportunities in station redevelopment and commercial development around stations has been anticipated under IR’s Station Redevelopment Programme. This estimate does not take into account the 12 stations that are currently under various stages of implementation. Also, around 1 GW of solar power capacity has been planned for creation on a PPP basis by 2021.
Meanwhile, IR has floated an expression of interest for designing, building, commissioning, operating and maintaining a levitation-based train system on a PPP basis. The new Catering Policy, 2017, has also mandated that the Indian Railway Catering and Tourism Corporation (IRCTC) unbundle catering services on trains and set up new kitchens on a PPP basis, while upgrading the existing ones. IRCTC has further been mandated to set up Rail Neer packaged drinking water plants, for which the PPP route has been identified as one of the modes of implementation.
The road ahead
To ensure that the sector is attractive to private players, the MoR is currently in the process of constituting a rail development authority, which will play a key role in ensuring a level playing field and securing the interest of various stakeholders. Further, to provide an enabling environment, the MoR has set up a Transformation Cell aimed at implementing 55 strategic initiatives, including those related to PPPs. However, several issues will need to be addressed going forward, including those related to unattractive concession agreements and uneven risk distribution, which have in most cases worked against developers.
For more information on PPP infrastructure, visit Indian Infrastructure Magazine https://indianinfrastructure.com/
The governments of India and Morocco have signed several agreements for bilateral cooperation in the road transport, marine and water sectors. With regard to the road sector, a cooperation framework agreement was signed between the Institute of Training in Engines and Road Maintenance of Morocco and the Indian Academy of Highway Engineers.
The Smart Cities Mission (SCM) aims to provide efficient urban mobility and public transport options in the 99 cities that have been selected under the mission.
The Smart Cities Mission (SCM) aims to provide efficient urban mobility and public transport options in the 99 cities that have been selected under the mission. To this end, a number of smart mobility solutions such as public bicycle sharing (PBS), smart parking systems, smart cards, etc. are being developed in these cities.
A PBS system is basically a system that promotes bicycle riding in the city to reduce traffic congestion and provide last-mile connectivity from key locations such as bus rapid transit (BRT) and metro rail stops/stations, as well as other important places in the city centre. A number of cities such as Mysuru, Bhopal, Pune and Jaipur have already launched their PBS systems and those such as the twin cities of Hubballi-Dharwad are planning to launch their systems soon.
Rationale for PBS systems
Under the PBS system, bicycles are made available to individuals for shared use on a short-term basis. Thus, commuters are able to borrow a bike from a designated bicycle docking station and return it to another docking station within a specified period of time, which is generally between 30 and 120 minutes. Most PBS systems offer a subscription option, which makes renting a bicycle fairly inexpensive. Under the PBS system, each bike can be booked using an app or by paying directly at the docking stations itself and can be used by several users each day. In many systems, smartphone mapping apps show nearby stations with available bikes and open docks. Many cities globally also have dedicated cycling tracks which ensures the safety of the rider from other vehicular traffic.
Bike sharing also contributes to a cleaner environment. It provides an environmentally friendly form of transportation to the public, and this can reduce pollution that vehicles otherwise used would have produced. It also saves fuel that other forms of transport would have needed. Further, it provides an affordable option for tourists who visit these cities. They can take short trips using these bikes. PBS projects are also expected to contribute to a reduction in demand for vehicular parking leading to higher land availability for other purposes.
Select smart cities implementing
PBS projects
Bicycle sharing, which began in Europe in 1965, was revolutionised after the year 2000 with the introduction of information technology. Globally, over 600 cities already provide bicycles as a commuting option. CitiBike, New York city’s bicycle sharing system is one of the largest such systems in the world.
A few Indian cities have also launched these systems.
Bhopal
Bhopal is the capital of Madhya Pradesh and is a major hub of economic activity. Due to a large number of people shifting to the city in search of opportunities, there has been an increase in vehicular traffic within the city. As a result of this, the city needs to sustainably manage the increasing transport requirement of both its resident as well as floating population.
To overcome these challenges, in 2017, Bhopal introduced a PBS system, as a safer, more economical, healthier, and eco-friendly mode of transport. The project provides first- and last-mile connectivity to and from the BRT system in the city. A few key features of the project are:
12 km of dedicated bicycle tracks have been constructed.
There are 50 docking stations at suitable locations in the city where bicycles are placed and from where one can hire them.
500 GPS-enabled bicycles have been imported from Germany.
A PBS mobile app has been created where users can register themselves, choose a suitable bicycle-sharing plan and pay for it.
For those who do not have access to mobile apps, direct registration is available. One can hire a bicycle for an hour or half an hour by making direct on-site payments.
The docking stations have been strategically located near the city’s BRT system. The tracks have been developed along the Bhopal BRT corridor and have been marked in red to highlight the area designated only for cyclists. This will help ensure that the cyclists are safe while riding. In the long term, the tracks are planned to be extended along the full 24 km BRT stretch from Misrod to Bairagarh in the city outskirts.
The Bhopal PBS has three membership schemes. The subscription provides options of a yearly pass, a quarterly pass and a monthly pass. The service is free for members for the first 30 minutes, and from then on they receive a 50 per cent discount on the fares. The fare is calculated on a progressive basis, and starts from Rs 10 for the first 30 minutes and then increases gradually in slots of 30 minutes.
The project has been developed at a cost of Rs 70 million, Rs 30 million of which has come from SCM funds and the balance has been invested by the private sector.
Pune
The PBS system in Pune is called the Pune Cycle Plan. It was developed in 2016 to help make Pune a cycle-friendly city. Under the plan, users can hire a cycle from any docking station, located at convenient places in the city, use it to go anywhere they want to, and return it to a docking station located near their destination. Such stations are located near popular destinations, BRT areas, train stations, etc.
Members can get themselves registered by using a smart card linked to the PBS system, a mobile app developed for PBS, a credit card or any other form of identification. Under Phase I of the plan, Pune will have over 300 km of cycle tracks with over 3,000 cycles and 250 docking stations. A pilot run for the project was conducted in December 2017 at Aundh and at Savitribai Phule Pune University.
Mysuru
Mysuru was the first smart city to launch the PBS system in June 2017. The system, called Trin Trin, has 48 cycle docking stations spread across the city. The project will make 450 cycles available for use by the public. A central control centre has been set up for controlling and monitoring the system along with a website and a mobile app for enquiries and registration. The system can be accessed using a smart card which costs Rs 350. The facility is free for the first hour for members, after which the charges are increased in a graded manner.
The system has seen massive acceptance in Mysuru. Of the total public transport users, 30 per cent have shifted from motorised modes to the PBS system. More than 7,000 members had registered for the system till November 2017. To promote the use of the system, four cycling events were organised in the city in February and March 2017.
Jaipur
The Jaipur PBS system, called Cyclo, was launched in December 2017. The city has initially started the service at two locations, Jawahar Circle and Ramniwas Bagh. It is planned to be extended to 20 locations across the city in a phased manner. The cycles are available from the two docking stations between 6.30 a.m. and 7 p.m. Forty cycles have been made available to begin with, and the users will have to pay a fee of Rs 10 per hour for using them.
The first project for bicycle sharing has been developed at a cost Rs 30 million. Greenolution has been awarded the operations and maintenance contract for five years. The second bicycle sharing project, on a dock less concept, was inaugurated in February 2018. This is being implemented with Zoomcar, the self drive car rental firm. The bike rental facility is spread across 30 locations in the city area where approximately 300 bicycles are available.
Issues and challenges
PBS is a major step in enhancing smart mobility in cities. However, the system has its own share of issues and challenges. One of the biggest challenges seen globally is to get the bikes where they need to be at all times. Some docking stations run empty while others fill up, not only frustrating users, but causing a system imbalance quickly and repeatedly.
Another issue is changing the mindset of residents who are not accustomed to this mode of transport. Introducing them to bicycling is a challenge for city administrations. Another issue which has been seen in some Chinese PBS systems is the difficulty in recovering prepaid deposits by consumers from smart cards issued by the PBS system. Some consumer protection groups in China have filed complaints against PBS operators for the same.
Conclusion
The growing urban population and the associated rising vehicular traffic necessitates the introduction of smart mobility solutions such as PBS to better plan for future mobility challenges. Not only will this enable a reduction in vehicular congestion, but also contribute to a cleaner environment and improved health conditions for people in these cities.
To read more information on smart cities, visit Indian Infrastructure Magazine https://indianinfrastructure.com/
The fledgling market for real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) has seen many regulatory changes in recent months. Despite the Securities and Exchange Board of India’s (SEBI) continuous efforts towards making [...]
The instrument is capable of breaking the vicious circle of infrastructure development. The vicious circle starts with infrastructure developers, with under-capitalised balance sheets, taking the debt-to-equity route to fund their equity investments. In addition, they borrow from various sources to finance their projects. The interest cost in the debt-equity structure, which starts accruing even while the project is under construction and has no revenue stream, starts hitting the profit and loss account and takes a toll on earnings, further worsening the balance sheet. In this context, InvITs can play an important role in creating a “virtuous cycle” of infrastructure development. The cash flow from the InvIT deleverages the balance sheet and also releases growth capital. This growth capital helps improve the project rating, which in turn, facilitates the securing of cheaper funds. This leads to higher profitability and helps the developer in undertaking new projects, which could further potentially get injected into the InvIT.
An understanding of InvITs has evolved over time, particularly among domestic investors who are gradually getting acquainted with the product. In the current scenario, investors are more cautious as they are waiting for the instrument to develop a track record, so as to assess its historical performance.
The lower-than-offer price trading of the listed InvITs is attributable mainly to three reasons. First, the product is new and is at a nascent stage. Second, the liquidity of the instrument on the exchanges is relatively low, which raises questions about its price discovery. Hence, there should be a market-making mechanism. Third, and most importantly, education and awareness about the investment vehicle are still inadequate. Also, the two listed InvITs were grossly “mis-sold” in the market, with the participation of institutional investors turning out to be lower than desired. SEBI does not allow sponsors to disclose yields from InvITs in the prospectus. Due to this, some investors, particularly retail investors, are facing problems in calculating the yields (adjusted for depreciation, etc.). Thus, the market regulator needs to proactively work on the documentation for InvITs. Further, only sophisticated investors – those that have a good understanding of the product – should be allowed to participate in InvITs.
A far more useful metric for InvITs is the net asset value (NAV), which is assessed every six months. This gives a better picture of the value at which InvITs should be trading. Laying too much emphasis on the unit price of an InvIT on the bourses will render a distorted value.
On the regulatory front, the regulations for InvITs are robust. That said, regulators have been cautious in formulating guidelines for the product given its complex structure. In order to enhance its appeal, some of the guidelines need to be tweaked. First, the high retail lot size for tapping the primary market is hampering public participation in the product. This needs to be ratcheted down for higher volume of trading and, in turn, better price discovery. Second, the leverage in such structures is capped at 49 per cent, which is too low for operational infrastructure assets. Therefore, raising the leverage to more conventional levels of 70-75 per cent will increase equity returns.
To read the full story on infrastructure finance, visit Indian Infrastructure Magazine https://indianinfrastructure.com/2018/03/06/a-disappointing-start/
With constrained airport capacity, the country is facing challenges in handling the steadily rising air traffic. As the country’s passenger traffic is projected to cross the 150 million mark in 2018-19, there is a pressing [...]
With constrained airport capacity, the country is facing challenges in handling the steadily rising air traffic. As the country’s passenger traffic is projected to cross the 150 million mark in 2018-19, there is a pressing need to create additional capacity at Indian airports. At present, most metro airports are at the risk of saturation and many of the smaller airports are also operating beyond their design capacity. In this regard, the Airports Authority of India (AAI) is taking steps to augment the existing infrastructure and develop greenfield airports.
India Infrastructure Research provides a detailed account of the top airport projects which are either completed, under construction or in the pipeline…
Key completed projects
A total of seven key airport infrastructure projects have been tracked, which were completed in the past one year. Among these is a terminal building at the existing Vijayawada airport in Andhra Pradesh. It was inaugurated on January 12, 2017 and has been built at an estimated cost of Rs 1.62 billion. In March 2017, a new international terminal (T3) was commissioned at the Cochin international airport. This modern terminal has been built at an investment of around Rs 10 billion and has the capacity to handle about 4,000 incoming and outgoing passengers during peak hours. Later, in September 2017, AAI commissioned a terminal building and apron at Belagavi airport in Karnataka at a cost of Rs 1.2 billion.
Two greenfield airports have also been commissioned – one at Shirdi, Maharashtra and the other at Kishangarh, Rajasthan. Shirdi airport (developed at an investment of around Rs 3.5 billion) was inaugurated on October 1, 2017, while the airport at Kishangarh (developed at a cost of Rs 1.35 billion) was inaugurated on October 11, 2017.
To read more about projects under implementation, visit Indian Infrastructure Magazine https://indianinfrastructure.com/2018/02/02/upscaling-infrastructure/
Indian Infrastructure magazine is targeted at the very top decision makers and financial managers in infrastructure sectors. The sectors covered include power, telecom, roads & bridges, construction, oil & gas, ports & shipping, aviation, railways, urban infrastructure and infrastructure finance. The magazine provides news, information and analysis of latest developments related to policy, projects and investments in these sectors in India. It is published monthly. To read Indian Infrastructure Magazine, visit https://indianinfrastructure.com/
The cabinet has given its approval to the cooperation agreement between India and Morocco’s national railway operator ONCF to develop […]
The cabinet has given its approval to the cooperation agreement between India and Morocco’s national railway operator ONCF to develop a long-term partnership in areas such as training and staff development, expert missions, exchange of experience and personnel, and mutual technical assistance, including exchange of railway experts.
For more stories addressing key issues in the railway sector, visit https://indianinfrastructure.com/
The European Investment Bank (EIB) and private sector lender YES Bank have floated a $400 million (Rs 25.62 billion) co-financing programme for the construction of solar power plants and wind farms across India. YES Bank [...]
The European Investment Bank (EIB) and private sector lender YES Bank have floated a $400 million (Rs 25.62 billion) co-financing programme for the construction of solar power plants and wind farms across India. YES Bank will manage the programme, which will be supported by a 15-year $200 million loan (Rs 12.81 billion) by EIB, along with financing from YES Bank, project promoters and other financial institutions. The fund will focus on investing in large-scale utility projects in India and a few projects have already been identified in Rajasthan, Telangana, Maharashtra and Karnataka. With its current investment, the bank is on track towards achieving its commitment of financing 5,000 MW of renewable energy. Besides this, YES Bank is also looking at financing developers in the electric vehicles segment.
For more information on energy sector, visit Indian Infrastructure Magazine https://indianinfrastructure.com/
Get the latest news on smart cities from everywhere in India on https://indianinfrastructure.com/ Explore this section to keep yourself updated about the latest developments in India on smart cities.
India Infrastructure Research tracked a total of 568 ongoing infrastructure projects across seven sectors – power, railways, water supply and sanitation, urban rail, airports, roads and ports. These projects are worth at least Rs 17.21 trillion. In terms of project cost, power projects at 31 per cent have the maximum share (Rs 5.4 trillion) which has been allocated for the execution of 73 projects. The railway sector (273 projects) has the second highest share of investment at 30 per cent (Rs 5.1 trillion).
Brownfield versus greenfield projects
With respect to the type of projects across the sectors under consideration, 56 per cent are brownfield expansion projects and the remaining 44 per cent are greenfield projects. In absolute numbers, the railway sector has 112 ongoing greenfield capacity additions, followed by the power sector with 53 ongoing greenfield projects. In the port sector, 36 greenfield projects are being developed. In the airport sector too several greenfield airport projects are being developed due to capacity being saturated at existing airports.
Sector-wise status
According to an analysis of ongoing power projects, about 63,592 MW of generation capacity will be added in the coming years. Of this, 8,866 MW will be added through large hydropower plants, while 54,726 MW of capacity will be added through thermal power projects (TPPs). In railways, 111 projects (worth Rs 1.87 trillion) involve 15,616 km of new line construction,
followed by 108 line doubling projects (Rs 1.54 trillion) for 16,661 km of rail network. Other projects being developed in the sector involve gauge conversion, electrification and station redevelopment. In the port sector, 76 ongoing projects have been tracked. These projects include the development of cargo berths and container terminals, among other projects, at an investment of Rs 2.16 trillion. The urban rail sector has 57 monorail and metro rail projects. Once completed these are expected to add a length of 635.55 km to the urban rail network at an investment of Rs 1.92 trillion.
In the road sector, about 3,337 km length is being developed under 58 projects with an investment of Rs 1 trillion. In the water supply and sanitation sector, 20 ongoing projects have been tracked, entailing an investment of Rs 1 trillion. Segment-wise, 11 projects pertain to the expansion of water supply capacity, seven projects involve the setting up of additional sewerage treatment capacity and two projects involve the laying of stormwater drains. Overall, these projects are expected to create over 3,500 million litres per day of capacity and around 1,359 km of pipelines.
The aviation sector, another key sector, has about 11 projects under construction. These projects are being developed at an investment of Rs 517 billion.
Further, with respect to the road sector, 26 projects involving 423 km of four-laning works are ongoing, followed by 22 projects for developing 419 km of flyovers.
The cabinet has given its approval to the cooperation agreement between India and Morocco’s national railway operator ONCF to develop a long-term partnership in areas such as training and staff development, expert missions, exchange of experience and personnel, and mutual technical assistance, including exchange of railway experts.
For more stories addressing key issues in the railway sector, visit https://indianinfrastructure.com/
Bharti Infratel and Indus Towers, two of the leading telecom sector companies, are planning to merge their businesses to form a single tower company. The merged entity will have 240,000 towers. Earlier, Bharti Infratel was planning to acquire a controlling stake in Indus Towers and make the latter a subsidiary. According to the earlier plan, Bharti Infratel was to acquire the stake that it did not own in Indus Towers in an all-cash transaction and later sell the combined business to external investors. The decision to merge the two tower companies comes in the wake of Bharti Airtel’s announcement that it would list its Africa business to raise money. The new arrangement will also give freedom to each of the stakeholders of the merged tower entity to sell their stakes at their convenience.
To read more information on telecom sector, visit Indian Infrastructure magazine https://indianinfrastructure.com/
Indian Infrastructure magazine is targeted at the very top decision makers and financial managers in infrastructure sectors. The sectors covered include power, telecom, roads & bridges, construction, oil & gas, ports & shipping, aviation, railways, urban infrastructure and infrastructure finance. The magazine provides news, information and analysis of latest developments related to policy, projects and investments in these sectors in India. It is published monthly. To read Indian Infrastructure Magazine, visit https://indianinfrastructure.com/
Airports to Sunports: Solar power helps cut costs and carbon emissions in aviation sector
India’s pursuit of clean and green energy uptake has spread across all infrastructure sectors including railways, aviation and educational institutions as the country strives to achieve its Intended Nationally Determined Contributions through the installation of 100 GW of solar power capacity by 2022. The government is actively promoting innovative distributed solar generation installations in spaces such as lakes, ponds, canal tops, railway coaches, stations and airports. In this respect, airports hold significant potential for solar power generation due to the availability of large, flat and shadow-free areas such as rooftops of terminals and hangars, car parks and buffer land around runways. The solar power generated on airport premises can complement the massive power requirement of the terminals, leading to reduced electricity bills, especially through net metering. Moreover, the increase in air-conditioning load coincides with the highest generation during peak summer months, thereby compensating for the spurt in power demand. The aviation industry, which is highly carbon intensive and heavily dependent on oil and gas for flight operations, can look to reduce its carbon footprint and contribute to the achievement of the country’s clean energy targets by embracing solar power technology. The low gestation period, limited infrastructure requirement and shorter period for return on investment (four to five years) are some of the other factors that make a strong case for solar power generation at airports.
The aviation sector, which is highly carbon intensive and heavily dependent on oil and gas for flight operations, can look to reduce its carbon footprint and contribute to the achievement of the country’s clean energy targets by embracing solar power technology. The low gestation period, limited infrastructure requirement and shorter period for return on investment (four to five years) are some of the other factors that make a strong case for solar power generation at airports.
In July 2016, the Airports Authority of India (AAI) announced plans to expand its installed solar power capacity to about 150 MW, with 50 MW targeted to be deployed in Phase I (by 2016). To this end, AAI signed an MoU with the Solar Energy Corporation of India for installing solar power capacity at AAI-operated airports. At the time of the announcement, about 5.4 MW of solar capacity was already under operation at 16 airports across the country and 30 MW was in the pipeline. According to the Ministry of New and Renewable Energy, a total capacity of 12.6 MW was installed at 29 AAI-operated airports as of March 2017. Meanwhile, airports developed in partnership with AAI, such as the Indira Gandhi International Airport (IGIA) (operated by Delhi International Airport Limited [DIAL]) and Cochin International Airport (operated by Cochin International Airport Limited [CIAL]) have also been expanding their solar power portfolio.
To read more about the key solar power developments at Indian airports, visit Indian Infrastructure magazine https://indianinfrastructure.com/2018/03/06/airports-to-sunports/
Powering Ahead: Key projects in the power sector
India Infrastructure Research identified 489 major power projects (each with an investment of over Rs 10 billion) in the country, aggregating an investment of almost Rs 32.5 trillion. About 88 per cent of this will be invested in generation projects and the remaining in transmission and distribution (T&D) projects. The generation projects being considered will add over 440 GW to the installed capacity, while the transmission projects will add over 50,000 ckt. km to line length. Of the total investment value, about 42 per cent is accounted for by projects which are proposed for development by private sector players. With respect to the stage of development, 32 per cent of the projects are under construction and about 40 per cent are announced. At present, 18 per cent of the projects are currently stalled due to various issues such as delays in environmental clearances, financial constraints, delay in award of works, etc.
A look at the key projects in the sector…
Completed projects
Since January 2017, 15 coal-based power projects have been completed at an aggregate investment of Rs 550 billion. Some of the key projects are four units of the Nashik thermal power plant (TPP) (1,080 MW) being developed by RattanIndia Power Limited, the 660 MW Prayagraj TPP by Jaiprakash Power Ventures Limited and the 660 MW SGPL power project by Semborp Gayatri Power Limited in the private sector; the 800 MW unit of the Kudgi super thermal power plant (STPP), the 660 MW Solapur TPP and the 660 MW Mauda STPP by NTPC Limited; and the 660 MW Chhabra TPP by the Rajasthan Rajya Vidyut Utpadan Nigam and the 800 MW Yermarus TPP by Karnataka Power Corporation Limited in the state sector. Of the total investment, almost 50 per cent has been made by private players and 38 per cent by the central sector (mainly by NTPC).
In the hydropower segment, 2017 witnessed the commissioning of the 1,200 MW Teesta hydroelectric project (HEP) which entailed an investment of over Rs 110 billion. It is one of the largest hydropower plants in the country. Another key project commissioned during the year was a 800 MW unit of the Parbati HEP, Stage II, with an investment of about Rs 78 billion. Meanwhile, nuclear-based capacity witnessed an addition of 1,000 MW with the commissioning of the 1,000 MW Unit 2 of the Kudankulam nuclear power plant.
In the transmission segment, about 21,000 ckt. km of lines have been completed and over 92,000 MVA of transformer capacity has been added. The largest project completed was the 3,200 ckt. km Western Region-Northern Region high-voltage, direct current interconnector for independent power producer projects in Chhattisgarh, implemented by Powergrid Corporation of India Limited (Powergrid). A national grid improvement project, it involved an investment of Rs 95 billion. Following this, was the 765 KV Wardha-Hyderabad transmission line project with an investment of about Rs 36 billion.
Under-construction projects
According to India Infrastructure Research, 156 major power projects are under implementation at an investment of Rs 8.55 trillion. These projects will add 63.6 GW to generation capacity and about 33,480 ckt. km to transmission line length. Segment-wise, 57 TPPs are being constructed at an investment of Rs 4,659 billion, 83 T&D projects at Rs 3,146 billion (includes investment by the government under programmes like the Deen Dayal Upadhyaya Gram Jyoti Yojana and the Integrated Power Development Scheme, and 16 HEPs at Rs 748 billion.
In terms of ownership, public sector units account for over 75 per cent of the investments in projects under development, the private sector accounts for over 20 per cent and public-private partnerships for about 3 per cent. The projects under implementation comprise 119 greenfield and 37 brownfield projects, aggregating an investment of Rs 6,770 billion and Rs 1,784 billion respectively.
The key coal-based power projects under construction are the 4,000 MW Yadadri power plant in Telangana (Telangana State Power Generation Corporation Limited [TSGENCO]), the 3,600 MW KSK Mahanadi TPP near Akaltara in Chhattisgarh (KSK Mahanadi Power Company Limited) and three plants with a capacity of 1,980 MW each – the Nabinagar coal-based TPP and the Barh STPP Stage I in Bihar and the North Karanpura (Pakri Barwadih) project in Jharkhand (NTPC).
In the hydro segment, some of the large projects under construction are the 1,856 MW Sawalkote HEP in Jammu & Kashmir, the 1,750 MW Demwe (Lower) HEP in Arunachal Pradesh and a 800 MW unit of the Parbati HEP, Stage II, in Himachal Pradesh. Nuclear Power Corporation of India Limited (NPCIL) is constructing the 1,400 MW Units 7 and 8 of the Rajasthan Atomic Power Station and two units of 700 MW each of the Kakrapar Atomic Power Station.
In transmission, Powergrid is engaged in the construction of the Rs 165.2 billion Green Energy Corridor and Grid Strengthening Project and the North East/Northern Western Interconnector I Project with an investment of over Rs 100 billion.
Other major projects
Among the awarded projects, most are in the hydropower segment. A total of 20 projects with a total cost of over 1,000 billion and a capacity of 14 GW have been awarded across states. Most of these projects were awarded several years ago but have failed to make much progress, primarily due to delays in the grant of environmental and technical clearances as well as opposition from local populations. The largest of these is the 2,700 MW Lower Siang hydropower project which was awarded to Jaiprakash Power Ventures Limited in 2006. Meanwhile, there are five major transmission projects aggregating an investment of Rs 150 billion which have been awarded and are yet to begin construction.
In the thermal power segment, 10 projects with an aggregate capacity of 14.3 GW have been approved at a total investment of about Rs 960 billion. These include the 1,600 MW Sundergarh TPP in Odisha, the 1,600 MW Padubidri project, Phase II, in Karnataka and the 1,320 MW Khurja STPP in Uttar Pradesh, each with a cost of over 100 billion.
Further, about 91 projects with an estimated investment of over Rs 5.5 trillion are currently stalled across segments. Some of the big-ticket projects among these are the ultra-mega power projects, the 10,000 MW Upper Siang HEP in Arunachal Pradesh, and the 3,200 MW Katni coal-based TPP in Madhya Pradesh.
Meanwhile, there is a significant pipeline of announced projects. According to India Infrastructure Research, power companies have announced/proposed the development of around 200 major projects entailing an investment of Rs 15.3 trillion. These include 149 TPPs aggregating a capacity of 230 GW (at an expected investment of Rs 13,732 billion), 33 HEPs of 17.5 GW (Rs 1,420 billion), and seven transmission projects (Rs 195 billion). Some of the biggest announced projects are the 2,880 MW Dibang multi-purpose HEP in Arunachal Pradesh, the 3,960 MW Saurashtra STPP in Gujarat and the Trans-Grid 2.0 project in Kerala.
Conclusion
The power sector has been growing at a tremendous pace. Capacity addition in the past has been driven by the strong push through government policies and growth in demand for electricity. Going forward, additions in coal-based power are expected to slow down with an increased focus on renewable energy. Meanwhile, a number of transmission projects are being undertaken in order to integrate the increasing renewable power capacity. With respect to the nuclear power segment which has remained mostly stagnant, the cabinet has approved the construction of 10 units of indigenous reactors of 700 MW each, and this is expected to provide a major boost to the segment.
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