Adani Power project in MP may hit green roadblock

The company wanted to tap water from an adjacent tiger reserve for its proposed 1,320MW coal-based thermal power plant

In fresh trouble for Adani Power (APL), environment minister Jairam Ramesh has indicated that his ministry would not approve the company's proposal for drawing water from the Pench tiger reserve for its project in Madhya Pradesh.

“Though the company (APL) is yet to approach us for environment clearance, we are clear that we will not allow diversion of water from the protected areas for any commercial use,” Mr Ramesh said on the sidelines of a function, reports PTI.

He, however, said that the matter would be decided only when it comes for consideration at the meeting of the National Board of Wildlife, a body under the environment ministry which gives the ‘green’ nod to projects.

The project pertains to the 1320-MW coal-based thermal power plant proposed by APL, in proximity to the Pench tiger reserve in Chhindawara district, Madhya Pradesh.

Mr Ramesh said that the ministry had last year rejected a similar case proposed by Ambuja Cement, which wanted to tap water from the Majthal Wildlife Sanctuary in Himachal Pradesh for the expansion of its plant.

Rejecting the proposal, the ministry had pointed that using water from sanctuaries for commercial purposes amounts to violation of Section 29 of the Wildlife (Protection) Act, 1972.

This is not the first time that an Adani project has hit a roadblock over a green nod. A few months back, the environment ministry had rejected the company’s coal-mining proposal in Tadoba region in Maharashtra, citing threat to tigers in the adjacent Tadoba Andheri tiger reserve.


DHFL plans to float housing finance subsidiary with IFC

The proposed joint venture is expected to focus on low-cost housing projects

Mortgage lender Dewan Housing Finance plans to float a housing finance subsidiary targeting the low-income segment in a joint venture partnership with International Finance Corporation (IFC).

The joint venture, in which Dewan Housing will have around 80% stake, is expected to become operational in the next few months. Both companies are likely to jointly announce the venture in the next few days, reports PTI.

“DHFL will have a majority holding in the company. The equity holding of IFC in the JV will be 20%. The idea of floating the JV is to focus on the low-income segment, where we see a great potential to explore,” Dewan Housing’s CMD Kapil Wadhawan told reporters.

The proposed company, which will focus more on States where low-income population is more, plans to disburse loans up to Rs5 lakh and would target those whose monthly income is as low as even Rs3,500-Rs4,000, Mr Wadhawan said.

DHFL is currently in the process of applying for the required regulatory clearance from the National Housing Bank, he said.

Recently, Kerala-based Muthoot Pappachan Group had announced its plans to set up a home-loan subsidiary in the affordable housing segment and is expected to seek the necessary regulatory clearance for the project soon.

Presently, DHFL has a total asset-base of around Rs10,000 crore and a customer base of Rs1,75,000 crore. In FY10, the company disbursed Rs3,500 crore worth of loans and has targeted to take this number to Rs5,000 crore in FY11, Mr Wadhawan said.

DHFL expects to take its total asset-base to Rs25,000 crore by 2013 from Rs 10,000 crore at present, he said.

The mortgage lender also has plans to apply for a banking license when the Reserve Bank of India announces its guidelines in this regard, he said.

“We will stake a claim for a banking license. This is just a natural progression for us (to enter the commercial banking space),” Mr Wadhawan said.

With a view to fund its expansion plans, DHFL plans to raise around Rs 5,000 crore of capital in the current fiscal. Out of this, the company plans to raise Rs 500 crore equity in the next few weeks, he said. The rest of the amount will be raised as debt through various instruments.

Mr Wadhawan added that a likely rise in the RBI’s key rates is expected to put an upward pressure on interest rates in the industry in the near future.


Steel prices are shooting up, but no government intervention expected

The current rise in steel prices has increased expectations of a re-telecast of the steel opera which played out in 2008, when the steel ministry intervened to cap steel prices. However, no such intervention is likely—at least in the short term—as the government is in a ‘wait-and-watch’ mode

With steel prices skyrocketing in domestic and international markets, the attention is now on the steel ministry. However, the government is not likely to intervene, at least in the short term.

“Right now, we are watching the situation. However, we cannot give any legal diktat on an upper limit for steel prices. The only option available is that we can start a dialogue with the parties involved. However, we have not started any such process as yet,” said Atul Chaturvedi, joint secretary, steel ministry, when Moneylife questioned him on the government’s stance on rising steel prices.

However, research firm Enam Securities feels that the government may intervene. It said in a note, “We believe (that) the government could intervene to cap steel prices and tax iron-ore exports to combat inflation, as they did in 2008.”

The note further stated that steel prices have gone up by Rs4,000 per tonne over the past 15 days and another hike of Rs3,000 per tonne would be required to neutralise the cost impact for non-integrated producers.

Mr Chaturvedi also added that the government is now watching the situation. Even in the future, if the Centre does take a stance, it can only hold a dialogue and no legal diktats could be passed, he said. 


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