Solar cells anti-dumping duty off – A right move by government

The high solar insolation has been cited as an ideal situation for India to promote solar energy as an alternative source of power. Keeping the potential of solar energy in India, the Jawaharlal Nehru National Solar Mission launched in January 2010 with a target of adding 20,000 MW of grid-connected solar capacity by 2022. Within two years, the country crossed the 1000 MW mark. This encouraged the government to take up large size solar projects. The country’s current installed solar capacity is 2,600 MW.

When the capacity addition was going on at a steady phase, the then ruling UPA government recommended imposing a restrictive duty in the range of $0.11-0.81 per watt on solar cells imported from the US, China, Malaysia and Chinese Taipei. The measure was suggested to protect the Indian manufacturers of solar equipment.

However, the proposal came under severe attack from project promoters as the additional duty led to increase in input cost which in turn increased the project cost. Some of them even threatened abandoning of their on going projects.

Bowing to the requests of project promoters, the new NDA government put off the anti-dumping duty levied on solar cells in August 2014. The pace of project execution is expected to accelerate following the removal of the extra-duty.

Project Investment

As of August 2014, there were 336 solar power projects worth Rs 55,700 crore under various stages of implementation. As per ProjectsToday, in terms of number of solar power projects, Telangana, Rajasthan, Gujarat, Maharashtra and Andhra Pradesh are the top five states.

Top 10 States
State	Projects
Telangana	62
Rajasthan	42
Gujarat	31
Maharashtra	30
Andhra Pradesh	25
Madhya Pradesh	25
Tamil Nadu	18
Karnataka	14
Odisha	13
Chhattisgarh	11

Solar power sector in India is dominated by private developers. The private sector is investing around Rs.36,900 crore close to 2/3 of the total investment planned in the sector. Government owned companies are investing around Rs. 18,700 crore.

Among the companies, BHEL, Birla Urja, Rajasthan Sun Technique, Santhiram Ren-energy and Welspun are the large investors.

Top 10 Solar Power Projects
Company	Projects	Rs Crore
Santhiram Ren-energy Pvt. Ltd.	Solar Photovoltaic Power (Nandyal)	6,000
Bharat Heavy Electricals Ltd.	Solar Photovoltaic Power (Jaipur)	6,000
New & Renewable Energy Dept, MP	Ultra Mega Solar Power (Gurh)	4,000
Rajasthan Sun Technique Energy Pvt. Ltd.	Concentrated Solar Power (Dhursar)	2,117
West Bengal Renewable Energy Devp. Agency	Solar Power (Purulia)	1,700
Welspun Energy Ltd.	Solar Power (Raipur)	1,000
Birla Urja Ltd.	Solar Photovoltaic Power (Cuddapah)	1,000
Welspun Energy Ltd.	Solar Power (Anantapur)	950
Raasi Green Earth Energy Pvt. Ltd.	Solar Energy Park (Paramakudi)	920
Azure Power Pvt. Ltd.	Solar Photovoltaic Power (Uttar Pradesh)	800

The latest measure by the NDA government is a step in the right direction and help the nation in fulfilling the National Action Plan on Climate Change (NAPCC) recommendation of achieving a minimum share of renewable energy of around 15 per cent by 2020.

Some signs of Projex revival in the First Quarter of FY15

The maiden budget of the Narendra Modi led NDA government, was not a path breaking one as expected by many. However, the budget has chalked out a number of ambitious projects in the infrastructure arena. Further, the finance minister indicated the new government’s intentions to work closely with the private sector especially in executing high ticket projects like developing mega cities, launching fast and bullet trains, cleaning of Ganga, etc.

Earlier, presenting the Railways Budget for 2014-15, the railway minister stated that cost and time overruns are the bane of railway projects. Of the 676 projects worth Rs. 1,57,883 crore proposed in the last 30 years, only 317 projects have been completed. The balance 359 will require around `1,82,000 crore for their successful execution. We are sure that many of these projects are not economically viable.

Since both the finance minister and the railway minister are looking for private participation on large scale, the successful implementation of the proposed infra projects is highly dependent on the Modi government’s ability to rope in private investment.

Fresh Investment

Month	Total Projex		Private Projex
	Projects	Rs Crore	Projects	Rs Crore
14-Apr	311	23,638	219	14,206
14-May	412	16,552	226	10,182
14-Jun	478	57,367	218	18,488

roject investment figures available for the first three months of FY15 indicate signs of revival in projex activities in June 2014. Compared to April and May the month of June saw more number of new projects and a sharp jump in the aggregate project outlay. Though bulk of the increase came from the public sector, private investment too jumped up from Rs.10,182 crore in May 2014 to Rs.18,488 crore in June 2014.

The announcement of Rs 20,000 crore Wadala-Thane-Kasarvadavali Metro rail project boosted the overall fresh investment of June 2014. The month saw announcements of 478 startups, of which 237 projects whose project cost was available at the time of announcement would bring in fresh investment of Rs 57,367 crore.

Nivea India, MTDC, West Bengal Renewable Energy Development Agency, were some of the project promoters who announced their projects plans during the month.

The mining sector, marred with scams and delays, also saw some signs of revival with the announcement of five coal mine development project by Coal India subsidiaries. Of the five projects, the largest one with an investment of Rs 1,094 crore was proposed by Central Coalfields. The company intends to expand its Piparwar open cast coal mining capacity from 10 million tpa to 12.5 million tpa in Jharkhand.

Project Tendering

During the last quarter (Jan-March 2014) of FY14, the average number of project tenders issued by various authorities hovered at around 3,000. The month long process of general election and state elections in AP, Orissa, etc. led to a sharp fall in project tenders in April 2014.

Though the downfall was covered in the month of May 2014 with floatation of 2,780 tenders worth Rs 66,601 crore, the same tempo could not be maintained in June 2014.

The month of June saw 1,941 project tenders worth Rs 16,733 crore being floated. The notable tender was floated by NHAI. It invited RFQs for four-laning of Solapur-Bijapur section of NH-13 on DBFOT basis under NHDP Phase III. The highway is being built at a cost Rs 1,405.42 crore.

Month	Tenders	Rs Crore
Apr-14	1,146	30,231
May-14	2,780	66,601
Jun-14	1,941	27,366

Roadways, Power Distribution and Railways sectors saw sizable numbers of project tenders being floated in June 2014. Lucknow Metro Rail Corporation, Dedicated Freight Corridor Corporation of India were the active players.

Project Contracts

In June 2014, Indian companies bagged 95 project contracts worth Rs. 8,505.72 crore were bagged by 63 companies across various sectors. This included 14 overseas contracts.

The largest contract of the month worth Rs 1,230 crore was bagged by Crompton Greaves, along with the other consortium partners, Fabricom and Lemants from Van Oord for setting up offshore wind power project Gemini, in the Netherlands.

The second largest contract valued at Rs 967 crore was bagged by Larsen & Toubro for construction of residential towers in Bangalore.

 

Financial Closures, Highways, Metro and Power projects in the list

 Though the financial year 2013-14 was not a very conducive year from the point of view of projex, nevertheless the year saw promoters of some high ticket projects managing to convince project financiers to fund their projects. Nearly 13 mega projects achieved financial closure in the twelve months ended March 2014.

 The list of successful projects included eight highway projects and two metro projects. The 13 projects which achieved financial closure will bring in a total investment of Rs 54,346 crore. Further, of the 13 projects, eight are under execution.

 The Ahmedabad – Gandhinagar Metro Rail Project was the oldest one of the 13 projects announced way back in October 2003. After the initial hiccups, the project gained momentum when the state government decided to put the project on fast track on receipt of the DPR from DMRC in October 2010.

The project which should have been completed at a cost of Rs 3,200 crore (original estimate) is now expected to cost Rs 21,000 crore. The financial closure achieved in August 2013 is for the first phase costing Rs 4,700 crore. As per the current project schedule the metro is expected to be fully operational by 2021.

Kochi Metro Rail project was proposed by the state government in 2006 but got the central government’s nod only in January 2009. The delay in implementation has already jacked up the project cost from Rs 3,048 crore to Rs 5,200 crore. This is certain to move up further by the time the project is completely commissioned.

The DPR for the 27 km long metro project is prepared by DMRC and Larsen & Toubro and Era Infra Engineering Ltd. are the two main contractors executing the project.

Though the NHAI failed to meet its target of awarding around 9,000 km of highways in the fiscal 2013-14, some of its already awarded projects managed to rope in financiers and achieve financial closures. The NHAI sponsored projects which reported financial closures in FY14 are:

• Sidhi-Singrauli road upgradation project, implemented by Gammon Infrastructure at a cost of Rs 1,096 crore
• Khed-Sinnar road upgradation project, implemented by IL&FS Transportation Networks at a cost Rs 2,015 crore and
• Walayar-Vadakkancherry NH-7 road project, executed by KNR Constructions at a cost Rs 790 crore.

The financial year 2013-14 was not a productive year for private power developers. Not many projects took off during the twelve months period. Among the few who reported progress, Jindal Power was one. The company which is setting up a 4X600 MW power project at Tamnar in Raigarh district of Chhattisgarh reported completion of first two units.

Financial Closure FY14
Project	Promoter	Rs Crore	Fin Closure Mth
Paper Boards (Tiruchirapalli)	TNPL	1,500	Feb-14
Solapur-Yedishi Road	NHAI	1,500	Dec-13
Goa/ Karnataka Border – Kundapur Road	IRB West Coast Tollway Pvt. Ltd.	2,639	Dec-13
Kochi Metro Rail  Phase I	Kochi Metro Rail Ltd.	5,200	Nov-13
Khed-Sinnar Road	NHAI	2,015	Nov-13
Barwa Adda-Panagarh Road	Barwa Adda Expressway Ltd.	2,434	Nov-13
Mohania-Ara Road	Bihar State Road Development Corpn. Ltd.	1,200	Sep-13
Ahmedabad-Gandhinagar Metro Rail Phase I	Metro Link Express for Gandhinagar Ahmedabad Co. Ltd.	10,000	Aug-13
Tamnar Expansion Power  – Phase I	Jindal Power Ltd.	7,740	Jul-13
Sidhi-Singrauli Road	Madhya Pradesh Road Development Corpn. Ltd.	1,096	May-13
Walayar-Vadakkancherry Road	NHAI	790	May-13
Bikaner-Suratgarh Road	PWD, Rajasthan	510	May-13
Holi Bajoli Hydel Power	Himachal Pradesh State Electricity Board	1,050	Apr-13

Jindal Power tied up with nine banks led by State Bank of India for a loan of Rs 5,418 crore to finance its 2 units in July 2013. The first unit of 600 MW was commissioned in March 2014 and the second unit with similar capacity was synchronized in February 2014. The entire power plant is expected to operate at its full capacity of 2400 MW in the last quarter of 2015.

The project details of the above mentioned projects were drawn from projectstoday.com

Vizhinjam Port to pose stiff competition to Colombo Port

Vizhinjam international deepwater multipurpose seaport is one of the beneficiaries of the UPA government’s recent drive to clear the stuck infrastructure projects. The international seaport has now been granted environmental and CRZ clearance.

The Kerala government proposes to develop the port as a mega container trans-shipment port under the PPP mode. While the BOT operator will be responsible for building the port infrastructure, the state has taken up the onus of developing the breakwaters and approach channel and ensure road and rail connectivity.

The project spread across 450 ha will be developed in three phases. Phase I consists of 800 mtr. container terminal, 300 mtr. cruise cum multipurpose terminal, 500 mtr. navy berth, 120 mtr. coast guard berth, 100 mtr. port craft berth and 500 mtr. fish landing berth. Phase II will add 400 mtr. container terminal. The same will be extended by another 800 mtr. in Phase III. The project cost of Phase I is estimated at Rs 5,187 crore.

With world over trend to increase the size and capacity of the carriers, the Vizhinjam port, with deeper berths and approach channel up to 20 mtr. is expected to give a stiff competition to the Colombo port in Sri Lanka.

With, Vizhinjam International Seaport Ltd. (VISL) determined to complete the bidding process by April, 2014, the action at the ground levels is expected to start in the second quarter of the current year.