The tariff orders to compensate for rise in the price of Indonesian coal provide relief to Tata Power and Mundra Power
CERC (Central Electricity Regulatory Commission) has notified the long awaited Compensatory Tariff orders on imported coal based Tata Power and Adani Mundra Power projects. The tariff orders have built a consensus among the stakeholders for providing relief to developers against a sharp rise in Indonesian coal prices (due to change in Indonesian regulations) through a mechanism of ‘Compensatory Tariff 1’, which is outside the purview of PPA (power purchase agreement).
‘Compensatory Tariff’ has been adjusted for
(a) net profit earned in mines;
(b) excess revenue earned by third party sale (if project achieves PAF>80%);
(c) 100 bps haircut on RoE (return on equity); and
(d) saving in fuel cost with lower GCV coal without sacrificing operational efficiency.
However, CARE Research believes that there is no meaningful impact of (b) and (d) conditions as plant has operated at 77% PAF YTDFY14 for Tata Power UMPP and usage of lower GCV coal decreases plant efficiency (SHR) and increases auxiliary consumption.
With this landmark judgement, CERC has managed to do a fine balancing act of preserving project viability for developers without disturbing sanctity of PPA and creating a mechanism for optimising DISCOM (distribution companies) power purchase costs, thereby reducing tariff shock to consumers, says CARE.
Overall, there appears to be a slowdown in inflation across all the sectors except the ‘clothing, bedding and footwear’ industry
The downward trend in retail inflation commenced in December 2013 continues for the month of February 2014 as well, taming down the inflation concerns which loomed large over the economy during this fiscal. According to the data released, retail inflation, as measured by the Consumer Price Index (CPI), stands at 8.1% for February 2014 on a year-on-year basis edging lower than the 8.79% it recorded in January 2014. This is the third consecutive month of the downward trend in CPI inflation, which comes as good news following the upward trajectory inflation maintained in the first half of FY14.
The table below shows the movement of retail of inflation over the last three months:
Overall, there appears to be a slowdown in inflation across all the sectors except the ‘clothing, bedding and footwear’ industry, points out CARE Research.
According to CARE Research the continuous rate hikes by the RBI (Reserve Bank of India) and its resolve in taming down inflation finally seems to be reflecting in the retail inflation. Further, the expectation of a lower WPI (Wholesale Price Index) inflation for February is reiterated given the fall in CPI. Although inflation is on the desired path now, it is expected that RBI will maintain interest rates in the policy announcement in April 2014 to ensure that the decline in inflation continues before the monetary policy looks to promote growth.
Devyani Khobragade won dismissal of the indictment against her for visa fraud, with a US judge ruling she had full diplomatic immunity
India on Thursday termed as 'good as far as it goes', the dismissal of visa fraud charges by a US court against senior diplomat Devyani Khobragade. Her arrest and strip-search had triggered a diplomatic row between the two countries.
A spokesperson in the Ministry of External Affairs said, "We have seen the judgement related to the indictment of 9th January. It is good as far as it goes".
He said the lawyers will meet to "examine it carefully before we are able to respond substantially and in more detail".
Khobragade, who was India's deputy consul-general in New York, was arrested on 12th December outside her children's school.
She has won dismissal of the indictment against her for visa fraud, with a US judge ruling she had full diplomatic immunity.
However, prosecutors are not barred from bringing new charges in future.
Reacting to the US court verdict, her father Uttam Khobragade said, "They tried to trap Devyani with a false complaint against her. I thank the Indian government and the Indians for their cooperation and help. She will go back to America with full diplomatic immunity".
US District Judge Shira Scheindlin said in her 14-page order that "it is undisputed" that Khobragade acquired full diplomatic immunity at 5:47 pm on 8th January after the US State Department approved her accreditation as a counselor to India's mission to the United Nations.
While the indictment was returned on 9th January, Khobragade had the immunity till she departed from the US for India on the evening of 9th January and so the prosecutors cannot proceed with the current indictment.