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Railways Looks At Public-Private Partnership, To Outsource Operations At Five Stations

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Indian Infra Hub Staff
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Looking to improve passenger comfort, Indian Railways (IR) has decided to outsource operations at five railway stations to non-state, private players, reports Mint. The pilot project, called Integrated Station Management will see the following stations – Pune Junction, Krantivira Sangolli Rayanna Bengaluru City, Chandigarh, Secundrabad station in Hyderabad, and the Anand Vihar terminal in Delhi – being handed out to private partners for operations, taking the total number of privately operated railway stations in India to six. Habibganj station in Bhopal was handed over last June to the Bhopal-based Bansal Group.

The stations will be handed over to the Indian Railways Station Development Corporation (IRSDC) which will then invite bids from the private sector.

While core operations such as train movement and signalling will be with the railways, other functions such as running stalls, selling platform tickets, display boards, advertising and parking will be handed over to the winning bidder.

Railway officials said that the process of handing over the stations to ISRDC was in progress, following which bids would be called for privatisation. Privatisation of station operations has faced hurdles in the past with the NITI Aayog red-flagging the plans and a lack of interest from the private sector. Owing to poor response, the Railways decided to take up redevelopment of 68 stations on its own recently.

The revenue sharing model is yet to be finalised but railway sources indicated that it would be based on the model followed by the hotel industry.

In his budget speech last month, Finance Minister Arun Jaitley announced the modernisation of 600 railway stations across the country while plans from last year said that ISRDC would take up 130 stations on a public-private partnership (PPP).

Also Read:

India’s First ‘Private’ Railway Station Habibganj To Come Up Near Bhopal

With Poor Response From Private Players, Railways To Revamp 68 Stations On Its Own

With Poor Response From Private Players, Railways To Revamp 68 Stations On Its Own

By
Indian Infra Hub Staff
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After receiving a rather lukewarm response from the private sector, Indian Railways (IR) has decided to redevelop 68 major railway stations on its own under the Engineering, Procurement and Construction (EPC) mode, reports The Economic Times. The Ministry of Railways has directed all zones to start work soon and finish the project within a year.

All stations would feature escalators, newer passenger announcement systems, better waiting rooms, improved platforms, a shopping complex and an entry-exit system similar to that of airports. An official from the ministry said that IR could no longer wait for the private sector to respond and that once complete, the cost of revamping the stations would be recovered by monetising commercial assets. The railways would roughly spend Rs 3.000 to 4,000 crore on the exercise.

Among the stations being redeveloped are Pune Junction, Krantivira Sangolli Rayanna Bengaluru City, Old Delhi Station, Mathura, Ambala, Valsad, Dehradun, Shimla and Varanasi. Apart from this, another set of 10 railway stations is being redeveloped by the National Building Construction Corporation (NBCC) that includes Lucknow Charbagh station.

IR had selected 100 stations for redevelopment of which Surat and Habibganj are already under redevelopment. A total of 80 stations are set to be redeveloped by the time India goes to polls in 2019.

Despite Four Major Exits, Telecom Is Still An Unstable Triopoly, Thanks To Jio

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Indian Infra Hub Staff
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Snapshot
  • Jio will continue to wage a war for more market share by keeping tariffs low. The telecom disruption isn’t over yet, for Jio is not aiming for number three.

The rapid consolidation in the telecom industry, where four major players exited over the last six months (Reliance Communications, Tata Tele, Telenor and Aircel), is not bringing stability to the industry. The remaining field of three big private players (plus one government player) is in a state of unstable equilibrium.

As at the end of December 2017, subscriber data from the Telecom Regulatory Authority of India shows the following rankings: Airtel (290 million subscribers), Vodafone (213 million), Idea (196 million), Reliance Jio (160 million), and BSNL (108 million). Once Vodafone and Idea merge, it will have at least 409 million users, making it number one. But, if we assume that the bulk of the subscribers of Tata Tele and Telenor will migrate to Airtel after the acquisition of these outfits by the latter, Airtel could have 367 million users, making it number two.

Aircel’s 84 million users will be fleeing to the other players following the firm’s decision to file for bankruptcy, but assuming the porting is roughly equal to all the three major players, there will not be much change in the pecking order.

This means Reliance Jio will remain the disrupter. Reason: Mukesh Ambani did not enter the industry to be number three. It will continue to wage a war for market share by keeping tariffs low. In a presentation made to analysts some months ago, the company said that its superior technology and IP (internet protocol)-based network makes it “well-positioned to achieve more than 50 per cent revenue market share”.

One has to wait and see if this is achievable, but the presentation based its assumptions on a few major trends: one, the market is shifting from voice to data, and the data market will be worth Rs 3 lakh crore by 2020-21; some 400 million subscribers can afford to pay Rs 500 a month for digital services; and the Jio network can support 60 per cent of projected demand for data by 2020-21.

Clearly, the market dynamics will change again, as all players shift investments towards data, and 4G VoLTE (voice over long-term evolution). While Jio’s rivals have to make big investments to accommodate this shift in demand towards data, Jio is already there, and is also ready for 5G, when it comes.

Three things will change in future.

First, subscriber numbers will matter less than ARPUs – average revenues per user. Jio may not easily find millions of subscribers willing to pay Rs 500 a month (not yet), but it surely can find 200-300 million willing to pay upto Rs 200 per month in the near future. Its monthly ARPU, according to a report in Business Standard, was Rs 153 in the December 2017 quarter, against Airtel’s Rs 123 and Idea’s Rs 114. If another price war breaks out, these ARPUs could fall. This means the industry will remain unstable in the foreseeable future.

Second, by implication, the market warfare will be about revenue market share. In the December quarter, Jio overtook Idea as number three in terms of revenue market share, reporting revenues of Rs 6,880 crore (versus Idea’s Rs 6,510 crore and Airtel’s Rs 10,750 crore). Of course, once Idea merges with Vodafone, this may not matter, but Jio will remain number three in terms of revenue market share – and a rising share.

Third, the shift to data means all players will have to increase investments in building networks to support data growth. Jio has probably done the bulk of its investments in cable and fibre; it is the others who will have to make greater investments in future. Their balance-sheets will continue to bleed red in the foreseeable future.

The telecom disruption isn’t over yet, for Jio is not aiming for number three.

Jagannathan is Editorial Director, Swarajya. He tweets at @TheJaggi.

The International Solar Alliance: India’s Own ‘OPEC’ Of Future

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Indian Infra Hub Staff
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Snapshot
  • What OPEC did for countries like Saudi Arabia, ISA can do for India. Modi dreamt big on ISA and delivered.The successive Indian governments over the next few decades will now get to decide what leverage India generates out of this platform.

Far from the hustle-bustle of United Nations in New York and Geneva or headquarters of international government organisations in cities like Vienna and Paris, the idea of first India-led treaty-based inter-governmental organisation was talked about in April 2012 in Santanpur, a tiny hamlet in the Charanka village of the Patan district of Gujarat.

Narendra Modi, then chief minister (CM) of Gujarat, was speaking at the site for the Gujarat Solar Park. Inaugurating what was then the largest solar park in the country, Modi had said:

There are different league of nations like OPEC and others. A league should be formed among the nations which get more sun rays. India should play a prominent role into the formation of such a league and step up its R&D to lead those nations.

Modi was already an early proponent of solar power. As the Gujarat CM, he had unveiled a solar power policy in 2009, which aimed to install 500 megawatts (MW) of solar power by the year 2014 in his state. When he inaugurated the Gujarat Solar Park in Charanka in 2012, the state had already achieved an installed capacity of 605 MW, well ahead of the target date.

Little he knew that he would inaugurate the International Solar Alliance (ISA) on Indian soil less than six years later.

The idea of the ISA was first spoken of by Prime Minister (PM) Modi during the India-Africa Summit 2015. Speaking at the plenary, where 54 African nations participated, Modi had said:

Our goal is to make solar energy an integral part of our life and reach it to the most unconnected villages and communities.

When Modi visited the United Kingdom (UK) later in November 2015, he addressed a gathering of the Indian Diaspora at the Wembley Stadium in London. At this forum, he was more vocal about the Indian ambitions – “India can lead”, he said. He spoke about a solar alliance he was trying to cobble up – an alliance of countries which get a lot of sunlight and should come together to act on climate change. He named these countries ‘suryaputra’ or sons of the sun.

On 30 November 2015, Modi and then French president Fracois Hollande unveiled the plan for the ISA during the 2015 United Nations Climate Change Conference held in Paris. All countries which are located between the Tropic of Cancer and the Tropic of Capricorn were invited to join this alliance.

These countries all get 300 days of sunlight on an average, but are at a varying degree of maturity with respect to tapping into solar power. They also do not have any particular collective bargaining capacity against equipment suppliers and energy buyers. Renewable energy policies are at great variance across countries – the ISA hopes to harmonise some of these to ensure collective action on promoting solar power. Finally, the ISA aims to usher in $1 trillion of solar power investments globally by 2030 for massive deployment of solar power at scale topping 1,000 gigwatts (GW) and using efficient, high-productivity technology.

During Hollande’s visit to India in January 2016, he and Modi laid the foundation stone for the ISA headquarters (HQ) in Gurugram district. The ISA HQ will be built adjacent to the National Institute of Solar Energy (NISE) located in the Gwalpahari village. The interim secretariat of the ISA is hosted at the NISE until the HQ is constructed.

India has dedicated five acres of land at this site for the ISA HQ. India has also contributed $27 million to build the ISA campus and has committed to meeting the operational expenditure of this body for the first five years. The Indian Renewable Energy Development Agency (IREDA) and Solar Energy Corporation of India (SECI) also announced contribution of $1 million each to the ISA corpus fund at this launch event.

The framework agreement of the ISA was opened for signatures to the participating countries in November 2016 at the COP22 in Marrakech. Fifteen countries signed this agreement on the first day of COP22, with the summit ending with 19 signatures. The ISA framework agreement required that at least 15 countries ratify this deal, before the ISA could become a full legal entity. The Ministry of External Affairs, government of India, which acts as the depository for the ISA, got its 15th ratification on 6 November 2017.

The ISA then became a legal entity on 6 December 2017, barely two years after it was conceptually launched in Paris. As of March 2018, the ISA had 121 member countries. Of these member countries, 56 countries have signed the membership agreement as of March 2018.

Prime Minister Narendra Modi and the current French President Emmanuel Macron will jointly witness the founding ceremony of the ISA on 11 March 2018. This founding conference will take place at the Cultural Centre of the Rashtrapati Bhavan in New Delhi.

In the formative years, ISA has started working on some interesting initiatives, mostly with Indian involvement and underwriting. The African Development Bank is aiming to achieve universal electricity access and ending hunger and malnutrition by 2025 in the continent. One of the levers to achieve these objectives is to deploy solar irrigation pumps, which run on localised off-grid solar power set ups for the specific purpose of irrigating crops. The ISA is getting involved in some of these projects using the $10 billion concessional line of credit India extended to the African countries during the India-Africa Summit 2015. Up to $2 billion of this credit line can be deployed for distributed, local, off-grid solar power projects.

The ISA has also set the ball rolling on stakeholder consultation on coordinating policies and activities related to four solar energy applications – decentralised rural applications, solar mini-grids for remote areas, solar rooftops and solar-powered mobility. This consultation will enable government agencies and private parties from the member countries to assess market potential, risks and opportunities in the above areas. The member countries will be able to showcase their best practices, technology solutions, ideas to optimise costs, and outlining barriers for solar power adoption. Finally, the member countries will spell out their expectations from the ISA, so that a future plan of action can be created by the alliance.

In its pursuit of creating an installed solar power capacity of 1,000 GW and to attract funding of $1 trillion by 2030, the ISA has signed joint financial partnership declarations with the African Development Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the Green Climate Fund and the New Development Bank.

The ISA has come a long way since its conception in Paris in 2015. There are still hurdles for this India-led body. Barring France, no other developed country has yet joined the alliance. The Paris deal has been actively opposed by the United States, and China has been on the fence. Until a few large countries, which are themselves investing in solar power, help propel the ISA, the alliance will find it difficult to raise resources.

There are other good and bad news for the solar power sector globally. While the multilateral agencies like the World Bank are looking to increase funding of renewable energy programmes, a trade war on solar equipment is looming large. Both the US and China, the largest manufacturers of solar power equipment, have their interests to protect. India has been trying to attract domestic manufacturing of this equipment. Resultantly, the three countries have been at loggerheads in international trade forums as well as bilaterally since the ISA was formed.

The ISA has the potential to change the balance of energy geopolitics from oil to sun. Consequently, it has the potential to reduce the influence of the oil producing countries in how various countries, India included, run their foreign policies as well as domestic social policies. The vision for the ISA is ambitious and a start has been made.

What Organization of the Petroleum Exporting Countries (OPEC) did for countries like Saudi Arabia, ISA can do the same for India. It is a smart investment in simultaneously achieving three objectives – taking the moral lead on climate change, creating a platform for future trade and geopolitics domination in the energy space, and emerging as the leader for the developing world on the key common issue of energy security.

Modi dreamt big on ISA and delivered. The successive Indian governments over the next few decades will now decide what leverage India generates out of this platform.

Aashish Chandorkar writes on public policy, politics, and current affairs. He is based in Pune. He tweets at @c_aashish.

Urban Connectivity Chaos: People Managing Metro, Railway, Bus Stations Are Working In Silos

By
Indian Infra Hub Staff
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Snapshot
  • Connectivity is something that should be considered in the planning stages of a project, not as an afterthought.

If you have ever taken a bus to a railway station and then realised that you had a long way to walk from the bus stop to the station, you already know the travails of unconnected transit networks.

Barring possibly Mumbai, most cities have major problems relating to badly interconnected transit networks and fixing them doesn’t seem to be on any priority list.

The problem lies in the lack of coordination between those who run the various modes of transport. Railway stations come under the Centre’s ambit and metro stations under the state’s, while bus stops are managed by the state or a civic body.

Take, for instance, the Nadaprabhu Kempegowda Metro Station at Majestic in Bengaluru. The station is located under the outstation section of the Kempegowda Bus Station, which is itself situated opposite the Krantivira Sangoli Rayanna Bengaluru City (KSR) station. The bus station is divided into two sections – one for long-distance buses operated by Karnataka State Road Transport Corporation (KSRTC) and one for local buses operated by Bangalore Metropolitan Transport Corporation (BMTC). Both the sections are connected to each other via a foot overbridge and to the railway station by a subway.

However, the metro station is not connected to the railway station directly. Passengers would have to enter the bus station and then reach the existing subway – which is heavily crowded – to reach the station. At the same time, the metro has another station – named City Railway Station – that lies on the other side of the main railway station but is inaccessible to commuters for want of a connecting pathway. As a result, passengers are forced to walk all the way to the second entrance of the railway station and purchase a ticket. Many a passenger has had to pay a fine for trespassing on railway property.

Bengaluru Cantonment station on the upcoming Red Line of the metro rail was originally planned to be under the railway station. However, it was moved to a park 400m away with the BMRCL citing a number of reasons for the move. The purpose of having a station around Cantonment railway station is lost if the metro station is moved further.

Both the metro stations opened in 2016, but connectivity remains a key issue. A bridge connecting the two stations – City Railway metro station and KSR station – is still under construction and is due to open soon. At the Majestic metro station, a skywalk was proposed by BMRCL, but it was finally submitted to South Western Railways (SWR) only in 2017. The SWR set up a temporary ticket counter outside the City Railway metro station in 2016 and has said that a permanent one will come up once the footbridge linking the two stations is completed.

Now compare this with what has happened in Mumbai. The operational line of the Mumbai Metro – Line 1 – intersects with two Indian Railways’ stations on its route, first at Andheri on the Western Railway (WR) line, then at Ghatkopar on the Central Railway (CR) line, where it terminates. Connectivity has never been an issue either, with direct connectivity coming through a footbridge at Andheri. Further, the skywalk, as part of the city’s Station Area Improvement Scheme (SATIS), is part of a larger network that connects a bus station and also other parts in the vicinity. At Ghatkopar, the metro station opens up into a bridge that spans across all platforms of the railway station and, to make things better, there is even a dedicated ticket counter selling suburban railway tickets and several Automatic Ticket Vending Machines (ATVMs) within the metro stations.

In the case of Mumbai, it is important to remember that railway infrastructure is built by Mumbai Rail Vikas Corporation (MRVC), a joint venture between Indian Railways and the government of Maharashtra. Therefore, issues with coordination are fewer and the buck doesn’t get passed around often.

In terms of connectivity to airports, Delhi and Chennai are currently the only two cities whose airports are served by a metro line. Chennai and Kolkata airports have had a railway station adjacent to the airports (Tirusulam and Biman Bandar respectively). In the case of Chennai airport and Tirusulam station – located opposite each other with the Grand Southern Trunk Road (GST Road) separating them – passengers still have to cross the road. The Chennai airport metro station, on the other hand, is located right in front of the terminals. Similarly, Delhi’s Airport Express metro line opens up right outside terminal three with an underground passage connecting it to the terminal. Chennai is set to get a travellator connecting the airport terminals to the metro station.

Now, the question is, why can’t our planners and administration get the basics of connectivity right? More importantly, why wait for the project to open for commercial operations before thinking about drawing connections? Why did BMRCL take so long to approach SWR for a bridge instead of doing it during the construction phase itself?

Interestingly, for Cantonment station, BMRCL seems to have a solution ready: a travellator. Civic authorities have proposed a travellator in Mumbai as well, connecting Kurla station with Lokmanya Tilak Terminus – a major outstation terminal – that lie 1.5km apart, at a cost of Rs 16 crore.

Now, this brings us to two major points:

Underground or Elevated?

This is a commonly debated point: Should a pedestrian connector go up or down? The most common answer is, it should go below the ground because then it would require users to climb less. The reason behind this is that an elevated structure would require to be higher than the clearance for vehicles below it. However, it really depends on the situation at hand. For instance, at KSR station in Bengaluru, the railway station is at the ground level while both the metro stations are underground. Thus, the connector between the two should ideally be underground, or at the ground level. Why force passengers to climb up an additional level and then have them climb two or more levels to go below the ground?

Similarly, at a place like Banashankari metro station that lies across the street from Banashankari bus station – sans a connecting bridge though – it would make sense to have a footbridge across the street because the station is elevated. It is for this reason that New Delhi metro station and New Delhi Airport Express metro station – both located underground – are connected with an underground passage.

Our planners really need to have some foresight and keep these configurations in mind when embarking on a connection between two transit stops.

Automating Movement of People

At any metro or railway station, it is common to see escalators move only in one direction. For the physically impaired, there usually is an elevator, but these are mostly at metro stations.

Connectors between two or more stations need to have ideally an automated people mover like a travellator. While escalators, elevators, and travellators are best avoided in public spaces, they can be installed in areas connecting stations because the ticket-paying commuter is less likely to misuse or damage it. At the same time, ramps need to be provided rather than staircases to enter and exit stations. They will certainly require more land, but they are more accessible.

Our urban planners and authorities need to get their act together and seriously focus on inter-connectivity between transit stations and stops. Till then, the common man will be inconvenienced unnecessarily and getting people to use public transport will be a futile exercise.

Also Read: Reclaiming The Pavement For The Pedestrian: Ten Ways To Implement This

Srikanth’s interests include public transit, urban management and transportation infrastructure.

Centre Launches Association Of Metro Rail Companies ‘I-Metro’, Says Final Touches Being Given To New Metro Legislation

By
Indian Infra Hub Staff
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The Union Ministry of Housing and Urban Affairs (MoHUA) yesterday (8 March) launched I-Metro, an association of metro rail companies in India that will act as a forum for exchange of ideas and innovations, reports IANS. According to Cabinet Secretary P K Sinha, I-Metro aims to get metro operators to share best practices and adoption of latest technology available.

Simultaneously, the Ministry also announced that final touches are being given for a new law to oversee metro rail projects across the country that will replace the existing two laws, reports PTI.. The Metro Railway Act, 2002 currently covers operations while the Metro Railways Act, 1978 covers construction of metro rail projects.

Urban Affairs Secretary D S Mishra said that the new law is required as the existing laws had become antiquated. Due to changes in land acquisition procedures and the public-private partnership model for metro rail, the new law aims address the challenges faced by incumbent legislation. Once completely drafted, the Ministry of Law and Justice will introduce the bill in Parliament.

We have been working on it for the last two years. And. the legislative department (of the Law Ministry) is giving final shape, after which it will go to Cabinet as per the due procedure.
Urban Affairs Secretary D S Mishra
He also added that India presently has 432 km of operational metro lines with another 700 km under-construction across 13 cities with a total of 600 km set to become operational this year.

Centre Launches Association Of Metro Rail Companies ‘I-Metro’, Says Final Touches Being Given To New Metro Legislation

By
Indian Infra Hub Staff
-
0

The Union Ministry of Housing and Urban Affairs (MoHUA) yesterday (8 March) launched I-Metro, an association of metro rail companies in India that will act as a forum for exchange of ideas and innovations, reports IANS. According to Cabinet Secretary P K Sinha, I-Metro aims to get metro operators to share best practices and adoption of latest technology available.

Simultaneously, the Ministry also announced that final touches are being given for a new law to oversee metro rail projects across the country that will replace the existing two laws, reports PTI.. The Metro Railway Act, 2002 currently covers operations while the Metro Railways Act, 1978 covers construction of metro rail projects.

Urban Affairs Secretary D S Mishra said that the new law is required as the existing laws had become antiquated. Due to changes in land acquisition procedures and the public-private partnership model for metro rail, the new law aims address the challenges faced by incumbent legislation. Once completely drafted, the Ministry of Law and Justice will introduce the bill in Parliament.

We have been working on it for the last two years. And. the legislative department (of the Law Ministry) is giving final shape, after which it will go to Cabinet as per the due procedure.
Urban Affairs Secretary D S Mishra
He also added that India presently has 432 km of operational metro lines with another 700 km under-construction across 13 cities with a total of 600 km set to become operational this year.

Making Mining Great Again: Understanding Modi’s Big Bet On Coal Privatisation

By
Indian Infra Hub Staff
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Snapshot
  • Prime Minister Narendra Modi, aided by able deputies, has set the nation up for something big in the energy sector.There has been no better time for private energy companies to deliver. Their time starts now.

Moving to decisively end the 41-year-old monopoly of state-contolled Coal India Ltd, the Union Cabinet yesterday announced its decision to open up the coal sector to commercial mining by private entities. The move is also expected to incentivise domestic mining firms like Essel Mining, Sesa Goa and global giants like Rio Tinto, BHP Billiton and Vale to deploy state of the art technology to increase output from the India ’s huge coal reserves. The entry of global mining behemoths and private capital is set to provide a huge impetus to coal production.

Citing lack of investment, innovation, and interest from the private sector as the primary reasons for the nationalisation of coal blocks in 1973, the Congress today stands as a silent witness to Prime Minister Narendra Modi’s big bet on coal. It is time to make mining great again.

What The ‘Coal’ Is Going On

The Cabinet Committee on Economic Affairs has allowed participation of the private sector in commercial coal mining under the Coal Mines (Special Provisions) Act, 2015. This puts to rest the Coal Mines (Nationalisation) Act of 1973 and can be termed as one of the most ambitious reforms in the realm of coal sector in the last 50 years.

The Coal Mines (Special Provisions) Bill of 2015 was passed by Parliament under the National Democratic Alliance (NDA) government, 15 years after a similiar bill introduced under the leadership of then prime minister Atal Bihari Vajpayee was rejected in the Upper House . One can expect this move to have progressive implications across various sectors, especially when it comes to ease of doing business, investment in environment friendly technologies for mining, employment, labour rights, and transparency in coal block allotment.

The Current State of Coal Production in India

Indispensable to the economy of India and one of the major fuels of growth for the rural economy, coal forms the nucleus of the energy sector in India. With over 75 per cent of the coal produced in India invested in power generation, Coal India Limited (CIL) is bestowed with an important job of ensuring sufficient coal production to overcome deficit, thus reducing the dependence on coal imports.

Clearly, there is no dearth of coal reserves in India with Indian Bureau of Mines estimating gross geological coal resources at 306 billion tonnes, enough to meet the ever-increasing energy requirements of the nation for another century. Feasibility and accessibility still pose a major challenge when it comes to alternate sources of energy, especially renewables. Modi, on many occasions, has stressed on the importance of coal in driving India’s growth, especially for power generation in rural areas, given many of them are witnessing electrification for the first time.

A Brief History of Coal Mines Nationalisation

‘If you cannot control it, nationalise it’, was the belief that dictated major government reforms for most Congress governments. The nationalisation of coking coal mines was no different. Merely four years after the nationalisation of banks in 1969, the Indira Gandhi government came down strongly on the private sector in coal business, blaming them for being overly reliant on the government sector for investments, for not performing according to their potential, and squandering away assets in what the government believed was a futile exercise. Ignorant of the weaknesses of the existing public players in the coal business, the year 1973 marked the complete nationalisation of coal mines (coking coal mines were nationalised in 1971 and non-coking coal mines in 1973).

Plagued by the economic drain during British rule, India’s power generation in 1947 was confined to a few small hydro and high-grade coal-fired thermal power stations. In their pursuit to catch up with the industrial revolution, the government identified coal as the primary source. Alongside the low cost of generation, accessibility, feasibility, and largely unexplored and underused reserves made coal an obvious choice. The Organisation of Petroleum Exporting Countries’ oil embargo of the 1970s added to the woes of the government, thus leaving it with no choice but to have coal under its disposal, using it as a pretext to increase production, improve mining conditions, and plague innovation for almost five decades.

The Coming of CIL

Giving the coal industry the face of a public sector enterprise, the CIL was established in 1975 after the nationalisation process was completed in 1973. Even with the reduced role of private players in the business, subsequent amendments ensured some breathing space for them by allowing participation in certain sectors like power, iron, and steel, and coal gasification – an amalgamation destined to fail.

For the next 45 years, coal production was largely reserved for the CIL, with the enterprise accounting for over 80 per cent of the nation’s total coal production in 2012. Interestingly, the financial fate of this energy enterprise, unlike a few other public enterprises, has been quite strong, given its decision to outsource a majority of its operations. Quoting from the report of a leading daily, CIL had a cash and bank balance that amounted to Rs 52,390 crore after paying a dividend of Rs 18,317.5 crore to the government of India.

Coal Toll: Declining Production and Increasing Import Dependence

Even with the massive operating margins for the CIL, not all was well when it came to production and imports, given the production targets were not being met and the pivoting dependence on imports adding to the fiscal stress. According to the Ministry of Coal, the coal production in 2016 was 391.53 million tonnes against the targeted figure of 433.73 million tonnes. Even though the production registered a growth of 0.6 per cent against the previous year, it fell short of the required estimates.

Aided by other factors like the lack of underground mining technology, weak recovery rates, and growing stagnation in the mining procedures, the coal industry has been in need of privatisation for long now. The absence of any plan to harness coal reserves located beyond the threshold of 150m puts into perspective the imminent supply-demand gap that would have haunted the CIL.

With Prime Minister Modi facilitating rural India’s first tryst with electricity, coal quality would be important for sustained power generation. The lack of quality coal has led to an increasing dependence on imports, increasing by 600 per cent in 2011 from mere 10 million tonnes a decade ago for thermal grade coal alone. Given that the fate of rural India’s growth is directly linked to the quality of electricity supply they are helped with, it was about time the government looked beyond the conventional generators of coal. By opting for private sector involvement in coal mining, the government may have cloaked its vulnerabilities against import risks, geopolitical shocks, and a long-term fiscal stress. Better late than never, as they say.

Conquering History: NDA’s Past Attempts to Do the Unthinkable

In the future, when a chapter in history is dedicated to the inevitable comparison between Vajpayee and Modi, the latter would be credited for doing the unthinkable on coal reforms. Breaking the 45-year-old norm, the NDA government must take pride in achieving what its predecessors were not able to in 2000, when a similar bill was rejected by the Rajya Sabha.

Once rejected, the bill was sent to the Standing Committee on Energy which issued a report in 2001, endorsing the bill. A GoM (Group of Ministers) was set up to further the cause of coal privatisation and curate a policy that could fulfil the objectives of the proposed bill. Unfortunately, with the change in government in 2004, the GoM was done away with, and the idea was lost in one of the many pages of the ‘India Shining’ monologue. In 2009, the United Progressive Alliance (UPA) promised some initiatives along the same lines, but nothing significant was delivered.

The Future of Coal: Challenges, Opportunities, and Renewables

India has come a long way since 1947 when coal was viewed as the sole source of power generation and development. Today, the use of coal is evaluated across numerous parameters, one of the major ones being environmental.

The quality of coal in use has had a negative impact on our natural ecosystem. Infamous for using the worst-quality coal in the world, India must look beyond conventional practices of coal usage and integrate clean technology in its power plants. Compliance norms must not only be on paper alone but should find implementation in power generation. With private players set to take over in the future, understaffing, performance monitoring measures, and adherence to regulations can be managed with greater efficiency. The private groups must up the ante when it comes to organising and running plants, which are not major contributors to pollution, as often witnessed in Delhi, and also sustain the power supply for rural areas. To take a cue from the Prime Minister’s idea of ‘zero-defect, zero-effect’ in agriculture, the opportunity lies with the future players in coal business to run power plants which fuel rural and urban growth with consistent power supply without having an impact on the environment.

Touted as the mother of all economic reforms, this move by the Modi government will act as a catalyst to ensure natural resources are consumed for national, state, and local development in an effective manner. With time, as renewable sources of energy take over, the onus will be on the private companies to reduce their coal dependency, or even do away with it if or when feasible. State governments, which have otherwise been glum due to the goods and services tax (GST), have a reason to rejoice as the monetary returns will be paid to them.

India, as a nation, is at a tipping point, and energy generation, production, transportation, consumption, conservation, and innovation will have a critical role to play in defining the route it takes to become a leading player on the global stage. The ideals behind privatisation should not be the relentless pursuit or ruthless use of coal, but eliminating monopoly, stagnation, and ending the confinement that has gripped the energy sector for our country for almost five decades.

Prime Minister Modi, aided by able deputies, has set the nation up for something big in the energy sector. There has been no better time for private energy companies to deliver. Their time starts now.

Tushar Gupta is a senior sub-editor at Swarajya. He tweets at @tushjain15.

“Innovative Funding” Model Proposed For Bengaluru’s ORR Metro: Does It Mean Further Delays?

By
Indian Infra Hub Staff
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0

Looking to build the Outer Ring Road (ORR) line of Bengaluru’s Namma Metro project, the Bengaluru Metro Rail Corporation Limited (BMRCL) has decided to go in for what it terms as “innovative funding” by asking private information technology (IT) firms along the road to foot the cost of the construction. Of the total projected cost of Rs 4,202 crore, the BMRCL will have to raise at least Rs 1,000 crore in order to start construction, a condition put forth by the Government of Karnataka. This 17-km line, called as Phase 2A, will originate at K.R Puram and will have 13 stations terminating at Central Silk Board thus covering vast swathes of IT corridor and residential areas on the eastern side of the city. It is expected to carry between 3 lakh and 5 lakh passengers a day.

The “innovative financing” method that the state’s cabinet approved means that Metro must demonstrate proof that it has mobilised 450 crore as resources from land leasing and corporate development. In return for helping build stations, IT firms along the corridor get naming rights, advertising rights and the retail space within the station for a period of thirty years.

Last month, the BMRCL signed a Memorandum of Understanding (MoU) with Intel, one of the largest employers along ORR to build a station. It also signed an MoU with the Embassy Group, one of the city’s largest real estate majors, for the same. The Embassy group is linked to State Home Minister K J George and was the only company that bid for the pod taxi system in the city last month.

ORR is among the densest corridors in the IT capital of India . It is dotted with major IT Parks that houses major companies such as Intel, AOL, Cisco and more present. According to a report by international property consultants Cushman & Wakefield, the ORR submarket alone accounted for a whopping 54 per cent of the 12.7 million square feet net absorption of office space during the year 2017, distantly followed by the peripheral east submarket comprising of Whitefield.

In addition to the preponderance of tech giants , major residential complexes and apartments have also sprung up. This consequently makes it the city’s most congested road. ORR also acts as a link road connecting traffic between the Kempegowda International Airport (KIA) and the major IT hubs at Electronics City and Whitefield.

Back in 2015, due to major traffic snarls, IT major Capegemini was considering relocating its campuses either in North Bengaluru or even moving out to Hyderabad, Pune or Chennai. It was reported that traffic snarls along the ORR and in Whitefield cost the industry a whopping Rs 22,000 crore in productivity losses per annum.

The question that comes to mind is, is the BMRCL justified asking private firms to fund the Metro? It has also asked the Centre to finance 10 per cent of the line as well as the upcoming line connecting to the Airport.

As per the new Metro Rail Policy of the union government formulated last August, public-private partnership (PPP) component is mandatory for availing central assistance for new metro projects. “Private participation either for complete provisioning of Metro rail or for some unbundled components (like automatic fare collection, operation and maintenance of services, etc) will form an essential requirement for all Metro rail projects seeking Central financial assistance,” the new policy said.

While this decision surely ushers in huge opportunity for private investments across the country, the decision also has its critics.

Among the critics is ‘Metro Man’ E Sreedharan. He has said that no private company will come forward for construction of Metro rail projects as it is not a profitable investment.

It will never work. Nobody will come forward for construction of Metro rail as it has never been a profitable investment. Private players will look at least 12-15% return while no Metro project has ever yielded an investment return of over 2-3%. It’s the most disastrous and retrograde urban transport policy. The JV model, with funding from the Centre and states, has worked very well so far.

E Sreedharan

He has also criticised that the “policy seems to have been framed by someone sitting in the NITI Aayog with absolutely no experience of how Metro rail is built and operated. As it is, in India, all 12 such projects put together, only 20-25 km of new Metro rail is opened every year. China is galloping way ahead at 300 km being opened every year. We are already at a snail’s pace; now with this policy, everything will come to a standstill”.

So it remains to be seen if the “innovative funding” model will succeed.

However, public-private participation (PPP) in the Metro Rail sector has been in operation in India since 2011. The Delhi Airport Metro Express was a PPP between the Delhi Metro Rail Corporation and Reliance Infrastructure. Similarly, the RapidMetro Gurgaon is entirely owned and operated by Infrastructure Leasing & Financial Services (IL&FS). The first line of the Mumbai Metro and the Hyderabad Metro are owned and operated by a consortium led by Reliance Infrastructure and L&T respectively with the respective state governments having a minority stake.

The question of profitability of these projects is a valid one, but it is too early to say since they have been operational for less than a decade.

Welcome To The Worst Airport In India

By
Indian Infra Hub Staff
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0
Snapshot
  • The Kolkata airport is a microcosm of everything that it wrong with the city itself. Here’s a ground report from one who had to suffer.

Netaji Subhas Chandra Bose would definitely not have approved. A strict disciplinarian and a stickler for order and efficiency, the founder of the Indian National Army (INA) would have been horrified by the prevailing state of affairs at the sprawling swanky airport in Kolkata named after him.

The present integrated terminal (T2) of the airport was inaugurated by former president Pranab Mukherjee on 20 January 2013. The massive steel and glass structure even won accolades and the new terminal was adjudged by the Airport Council International as ‘Best Improved Terminal’ (for Asia-Pacific region) award for the two consecutive years of 2014 and 2015. It’s another matter that the old terminal (T1) was so bad that even repainting its walls – leave apart constructing a glitzy new one – –would have been considered a vast improvement.

But the new terminal always suffered from an intrinsic organic malaise: it’s management lay not with a private operator but the Airports Authority of India (AAI). The heavily unionised and wayward AAI employees are singularly responsible for the present sorry state of the airport that was built at a cost of Rs 2,300 crore. The AAI Employees Union had consistently and successfully resisted moves by the Union Civil Aviation Ministry and the AAI management (which knows the nature of its lower level employees very well) to privatise operations at the airport.

The result (of AAI handling airport operations) is there for all to see. The Netaji Subhas Chandra Bose International Airport is a living testimony to the truth of the adage of not judging a book by its cover. The airport structure looks good and the architecture is distinctive. But many things are rotten inside. The washrooms are in a state of perpetual mess and emanate a foul odour. Leaking faucets, stained walls and overflowing bins are the result of callous staff who know that no matter what they do (or don’t do), their jobs are secure.

The biggest irritant is, however, the acute shortage of baggage trolleys. Most of the ones that are available suffer from major defects and are non-functional. The AAI staff responsible for retrieving trolleys and parking them at their designated bays in the arrival lounge and outside the departure lounge are a notoriously negligent lot who can often be seen lazing around and even sleeping on the seats meant for passengers.

Many efforts to discipline them have failed since they are all members of a union that is affiliated with the ruling Trinamool Congress (their union was affiliated to the Communist Party of India (Marxist) before power equations changed in Bengal). Political protection allows them to be shirkers and the AAI management has been unsuccessful in making them do their work. The employees have, in the past, even gone on flash strikes and held unruly demonstrations inside the airport when disciplinary action had been taken against them, thus severely inconveniencing passengers.

Many areas of the airport wear a shabby look, thanks to a lack of maintenance. Thick layers of dust cake artificial plants at the arrival lounge and the installations in the departure areas. The cleanliness and sparkle of the airports in other major cities is clearly missing here.

Getting the registered baggage after arrival is a major sore point in Kolkata. It takes a minimum of 30 minutes after disembarking from the aircraft to get one’s baggage from the baggage carousel. The minimum waiting period in front of the baggage belt is 20 minutes. In Delhi, Mumbai, Bengaluru, Pune and Chennai, for instance, passengers don’t have to wait for more than a couple of minutes at best to get their baggage; often, their baggage is doing the rounds on the belt even before they step into the arrival lounge.

This again is due to unionised employees. The callousness, lethargy and even criminal negligence of the AAI staff have rubbed off on the contractual employees engaged by the airlines. It is these contractual staff who are responsible for unloading baggage from aircraft, transport them to the terminal and then putting the luggage on the belts. They are slow and negligent and can often be seen lounging around. Whereas offloading of luggage starts immediately after the aircraft reaches the parking bay (and even before the doors of the aircraft are opened for disembarkation) in Delhi, Mumbai, Chennai, Bengaluru and other airports not affected by the scourge of AAI’s unionised and undisciplined employees, in Kolkata, it starts well after passengers start disembarking. Once again, efforts by airlines’ managements to discipline their contractual employees and make them work efficiently like in other airports have been unsuccessful since they draw inspiration from the powerful AAI employees, who encourage them to be wayward and promise them protection.

If first impressions are the lasting impressions, first time visitors to Kolkata landing at this airport would have already formed a poor impression of the city, once known as the second city of the British Raj (after London). The negative impression will only get reinforced after coming out of the arrival lounge. Passengers are greeted with a deafening cacophony of vehicle horns, an unruly traffic and, worst of all, extortionist touts waiting like vultures to pounce on unsuspecting visitors. Ill-clad and foul-mouthed, they encircle passengers they suspect to be non-residents of the city in order to fleece them.

Police are powerless to crack down on them since the touts enjoy the patronage of the ruling political party and are, often, Trinamool activists. Utter chaos, and without any order, prevails on the carriageway outside the arrival lounge. Flying out of, or in to, Kolkata is thus no pleasant experience. And the city suffers because of this.

Jaideep Mazumdar is an associate editor at Swarajya.

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