Companies & Sectors
How to make coal suppliers more accountable

The country has 39 mt of coal in stock at various places. On the other hand, power producers are reeling under fuel shortage with a stock that would last for seven days. It is inconceivable that 39 mt of coal piled up in just one day. Hope the government take necessary action against all those responsibile for this situation


Nearly half of the Indian thermal power plants in the country, which depend upon coal, are reeling under fuel shortage with less than seven days in stock! The first step is to overcome such a dangerous situation by promulgating an ordinance, if necessary, to ensure that all these units have at least 15 days inventory, so that there is no shut down leading to a power crisis.


Set against this unfortunate hand to mouth existence, Power Minister, Piyush Goyal has just discovered that 39 million tonnes (mt) of coal are in our stocks, at various places, but not moved to or delivered to the power generating consumers! This would mean, most regrettably, that at various coordination points, nobody was doing his/ her bar chart right, to ensure that goods are on the "move" so as to reach point of consumption.


When monsoon begins, with India Meteorological Department (IMD)'s projections, everyone concerned ought to know the way wind blows and what type of rains can one expect in a given territory. And be prepared for it. It is also the time, when power generators plan shut downs for over hauling of their thermal plants, as power needs are lower at this point of time.


Take the case of Andhra Pradesh Power Generation Corp (AP GenCo). They have announced shutdown of several of its thermal power plants in the state, as hydel power generation increases during the monsoon. AP GenCo will take up overhauling of a 500 MW and 2 x 210 MW plants at Dr Narla Tatarao Power Station in Vijayawada and another 210 MW at Rayalasemma Thermal power station. Generally, 15 to 30 days are needed for this overhaul and the Southern Regional Power Centre and the Central Electricity Authority has been notified with the shutdown schedule. In case of AP Genco, they expect to overhaul all their units by end of December each year, so as to render hassle-free service during summer.


Reverting back to India's main coal supplier, Coal India Ltd (CIL), against the target of 35.80 mt, CIL has achieved only 33.1 mt. Likewise, during the first four months of this fiscal, CIL production was only 141.34 mt against the output target of 148.43 mt. And the off-take during April-July was a target of 171.43 mt while only 157.59 mt was achieved. Power Minister, as also the power generators, needs to know what caused them to fail in this manner. Discussions and debates in the past have revealed the bottle-necks in the clearing of coal from pit heads, non-availability of rakes, or delays in getting them in time. Besides, the exclusive corridors for transporting the precious coal to points of consumption have not been made ready.


The National Democratic Alliance (NDA) government has been proposing to develop inland waterways to overcome the communication bottlenecks in railway transportation, as the originally planned "dedicated" corridors are not yet ready and fully functional. Inland waterways, if planned and developed, would greatly reduce the strain and dependence on railways. Already, barges have begun supplying imported coal to the Farakka Super Thermal Plant in the absence of land based transport alternative. Inland waterway transportation would be cheaper and definitely congestion free.


From the press reports, it appears that the NDA will endeavour to give a decisive push to make Ganges-Hooghly waterway navigable for freight movement by vying for a Word Bank loan upto $1 billion (about Rs6,000 crore) and for which the Inland Waterway Authority will be having discussions with them. The government plans to have a few barrages on the Ganga from Allahabad to Haldia to facilitate movement of larger vessels.


As a matter of interest relating to inland waterway utilisation, China has already 15,000 kms of navigable waterways and hopes to add 5,000 kms more in the next decade. On the contrary, India has not made much headway in this direction. However, it plans to spend Rs1 lakh crore on the development of waterways of which Rs20,000 crore are expected to be financed by the government itself, while the rest may come from borrowing or from public sector.


Such developments will take time to achieve. However, what is of immediate importance is to have top priority consultations amongst the Ministry of Coal, Power, Railways and the Coal India officials, duly and actually represented by the CMDs of the seven subsidiary coal mining companies to know the ground situation to move the coal piling up everywhere. Information from CIL could be "doctored" and need not necessarily be as per the ground situation as experienced by the shipping mining unit.


It is inconceivable that 39 mt of coal did not pile up in just one day. This backlog must have been going on for months and it is truly a shame that all the concerned officials did not take adequate steps to overcome the impasse, and let it grow in size to this level. They need to answer why they let this grow into a big balloon.


All the officials concerned in all these Ministries are to be held ACCOUNTABLE and those who did not do their job need to be given a golden handshake at the worst. No government can tolerate this sloppy work that hurts the nation. Railways must make the rakes available and ensure speedy movement of the coal cargo on a priority basis.


No excuses. CIL needs to deliver the goods.


(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)




2 years ago

No doubt,the ground stock of coal of CIL is to the tune of 39 mt in different mines.But power producers are reeling under fuel shortage not due to weakness of Coal India but due to the reasons well known to all Indian citizens.The main reasons are delay in land acquisition, MOEF clearance and more over transport bottleneck due to poor rail infrastructure.The promulgation an ordinance for having at least 15 days coal inventory inventory at power plants will not serve the purpose and will increase import and out go of forex leading to increase in current account deficit unless until, domestic coal production is increased. Coal India Ltd (CIL), during the first four months of this fiscal, has produced 141.34 mt against the output target of 148.43 mt. This non-achievement of target in summer season was due to conditions imposed by local authority of coalfields in Odisha regarding time of operation of work due to scorchinhg heat and the production schedule suffered. Also problems created by localites particularly in Hensmul village of Talcher coalfield and closure of mines for some days also caused less production there. This loss of production will certainly be made up when production peaks after November after monsoon is over.The stock can be cleared if railways provide rakes at the rate of 221/day while average availability is 180- 190 racks/day in the past.Three rail corridors in command area of MCL, CCL and SECL will solve the transport bottleneck but making these operation will take at least 5 years from now. The proposed development of inland waterways to overcome the communication bottlenecks will not hep Indian coal producers in moving coal as mines are not located in coastal belts. Only imported coals can be transported to Farraka(WB) Bhagalpur, Mizaffarpur, Barh and others in Bihar and UP.

Dinesh Kumar Jain

2 years ago

(1) Reliability in transportation of coal from production area to Sidings of CIL,

(2) Accurate loading in the rakes as per the loading norms of Indian Railways i.e. Permissible Carrying Capacity (PCC) of the Box-N & Box-NHL wagons is required to decrease the piling of coal. Most of the coal rakes dispatched from the Sidings of CIL are Under loaded.

(3) The poor loading performance and over stay of the rakes at the "Sidings" of the CIL against the stipulated time recommended by Indian Railways.

(4) Intentional rakes detention at the Sidings of the Coal Company due to "Over Loading" in few boxes beyond tolerance loading norms of the Indian Railways.

(5) The "Sidings" of CIL have been completely hijacked by the contractors of the Coal Company & the Liaison agents of the Coal Consumers.

(6) Poor unloading performance or overstay or Release of coal rakes inside the Sidings of the power plants is also main reason for rakes (empty) crisis.

Dinesh Kumar Jain
Bilaspur (CG)

jaideep shirali

2 years ago

One aspect that needs to be looked into is the smuggling of coal from various Govt coalfields by a corrupt administration. For example, passing off 5 truckloads as one truckload, etc. This could have been a reason why the coal mafia prospered and maybe prospers even now. It seems ridiculous that we supposedly have huge coal reserves, but are importing costly coal. The NDA Govt has a task on its hands in putting the coal sector back on its feet and making it efficient. Coal India and its subsidiaries need to be more accountable to the nation. The task would have to start with making systems transparent and efficient, not opaque methods that spawn multiple Coalgates.

Leaked documents show spyware used to snoop on US computers

Software created by the controversial UK based Gamma Group International was used to spy on computers that appear to be located in the US


Software created by the controversial U.K. based Gamma Group International was used to spy on computers that appear to be located in the United States, the U.K., Germany, Russia, Iran and Bahrain, according to a leaked trove of documents analyzed by ProPublica.

It's not clear whether the surveillance was conducted by governments or private entities. Customer email addresses in the collection appeared to belong to a German surveillance company, an independent consultant in Dubai, the Bosnian and Hungarian Intelligence services, a Dutch law enforcement officer and the Qatari government.

The leaked files — which were posted online by hackers — are the latest in a series of revelations about how state actors including repressive regimes have used Gamma's software to spy on dissidents, journalists and activist groups.

The documents, leaked last Saturday, could not be readily verified, but experts told ProPublica they believed them to be genuine. "I think it's highly unlikely that it's a fake," said Morgan Marquis-Bore, a security researcher who while at The Citizen Lab at the University of Toronto had analyzed Gamma Group's software and who authored an article about the leak on Thursday.

The documents confirm many details that have already been reported about Gamma, such as that its tools were used to spy on Bahraini activists. Some documents in the trove contain metadata tied to e-mail addresses of several Gamma employees. Bill Marczak, another Gamma Group expert at the Citizen Lab, said that several dates in the documents correspond to publicly known events — such as the day that a particular Bahraini activist was hacked.

Gamma has not commented publicly on the authenticity of the documents. A phone number listed on a Gamma Group website was disconnected. Gamma Group did not respond to email requests for comment.

The leaked files contain more 40 gigabytes of confidential technical material including software code, internal memos, strategy reports and user guides on how to use Gamma Group software suite called FinFisher. FinFisher enables customers to monitor secure web traffic, Skype calls, webcams, and personal files. It is installed as malware on targets' computers and cell phones.

A price list included in the trove lists a license of the software at almost $4 million.
The documents reveal that Gamma uses technology from a French company called Vupen Security that sells so-called computer 'exploits.'

Exploits include techniques called "zero days," for "popular software like Microsoft Office, Internet Explorer, Adobe Acrobat Reader, and many more."Zero days are exploits that have not yet been detected by the software maker and therefore are not blocked.

Vupen has said publicly that it only sells its exploits to governments, but Gamma may have no such scruples. "Gamma is an independent company that is not bound to any country, governmental organisation, etc.," says one file in the Gamma Group's material.


At least one Gamma customer listed in the materials is a private security company.
Vupen didn't respond to a request for comment.

Many of Gamma's product brochures have previously been published by the Wall Street Journal and Wikileaks, but the latest trove shows how the products are getting more sophisticated.

In one document, engineers at Gamma tested a product called FinSpy, which inserts malware onto a user's machine, and found that it could not be blocked by most antivirus software.

Documents also reveal that Gamma had been working to bypass encryption tools including a mobile phone encryption app, Silent Circle, and were able to bypass the protection given by hard-drive encryption products TrueCrypt and Microsoft's Bitlocker.

Mike Janke the CEO of Silent Circle said in an email "We have serious doubts about if they were going to be successful" in circumventing the phone software, and that they were working on bulletproofing their app.

Microsoft did not respond to a request for comment.

The documents also describe a "country-wide" surveillance product called FinFly ISP which promises customers the ability to intercept internet traffic and masquerade as ordinary websites in order to install malware on a target's computer.

The most recent date-stamp found in the documents is August 2nd, which coincides with the first tweet by a parody Twitter account, @GammaGroupPR, which first announced the hack, and may be run by the hacker or hackers responsible for the leak.

On Reddit, a user called PhineasFisher claimed responsibility for the leak. "Two years ago their software was found being widely used by governments in the middle east, especially Bahrain, to hack and spy on the computers and phones of journalists and dissidents," the user wrote. The name on the @GammaGroupPR Twitter account is also "Phineas Fisher."

GammaGroup, the surveillance company whose documents were released, is no stranger to the spotlight. The security firm F-Secure first reported the purchase of FinFisher software by the Egyptian State Security agency in 2011. In 2012, Bloomberg News and The Citizen Lab showed how the company's malware was used to target activists in Bahrain.

In 2013, the software company Mozilla sent a cease-and-desist letter to the company after a report by The Citizen Lab showed that a spyware-infected version of the Firefox browser manufactured by Gamma was being used to spy on Malaysian activists.

Senior reporter Julia Angwin and Jonathan Stray, special to ProPublica, contributed to this report.



SEBI clears setting up of REITs, InvITs, finally!

To help attract greater foreign and domestic investments into real estate and infrastructure, market regulator SEBI has cleared final guidelines for creation and listing of trusts, REITs and InvITs for these key sectors


Market regulator Securities and Exchange Board of India (SEBI) on Sunday approved setting up of the much awaited real estate investment trusts (REITs) that permits real estate funds, to invest in completed and revenue generating real estate. This move will provide a new source of funding for cash-strapped real estate industry.


SEBI said that the new norms would help entities with at least Rs2 lakh investment to earn from completed real estate projects. The new norms for REITs, as also for Infrastructure Investment Trusts (InvITs), were cleared by SEBI board on Sunday, while final notifications would be issued soon to make the norms effective in a month or two.


A REIT is a pooled investment entity registered with SEBI, just like a mutual fund with investment primarily in real estate of completed and revenue-generating properties. The rental received from these properties will be distributed among investors as dividend. Real estate is a big ticket investment with a huge chuck of money getting locked in buying a property. The advantage of REIT is availability of exposure to real estate with a smaller ticket size as well as diversification of investment by REIT. On 10 October 2013, SEBI issued a draft Real Estate Investment Trusts (REITs) Regulations, 2013.


Here are the main features of SEBI approved REIT Regulations...


a. REITs shall be set up as a trust and registered with SEBI. It shall have parties such as Trustee, Sponsor(s) and Manager.


b. The trustee of a REIT shall be a SEBI registered debenture trustee who is not an associate of the Sponsor/manager.


c. REIT shall invest in commercial real estate assets, either directly or through SPVs. In such SPVs a REIT shall hold or proposes to hold controlling interest and not less than 50% of the equity share capital or interest. Further, such SPVs shall hold not less than 80% of its assets directly in properties and shall not invest in other SPVs.


d. Once registered, the REIT shall raise funds through an initial offer. Subsequent raising of funds may be through follow-on offer, rights issue, qualified institutional placement, etc. The minimum subscription size for units of REIT shall be Rs2 lakh. The units offered to the public in initial offer shall not be less than 25% of the number of units of the REIT on post-issue basis.


e. Units of REITs shall be mandatorily listed on a recognised Stock Exchange and REIT shall make continuous disclosures in terms of the listing agreement. Trading lot for such units shall be Rs1 lakh.

f. For coming out with an initial offer, the value of the assets owned/ proposed to be owned by REIT shall be of value not less than Rs500 crore. Further, minimum issue size for initial offer shall be Rs250 crore.

g. The Trustee shall generally have an overseeing role in the activity of the REIT. The manager shall assume operational responsibilities pertaining to the REIT. Responsibilities of the parties involved are enumerated in the Regulations.

h. A REIT may have multiple sponsors, not more than three, subject to each holding at least 5% of the units of the REIT. Such sponsors shall collectively hold not less than 25% of the units of the REIT for a period of not less than three years from the date of listing. After three years, the sponsors, collectively, shall hold minimum 15% of the units of REIT, throughout the life of the REIT.

i. Not less than 80% of the value of the REIT assets shall be in completed and revenue generating properties. Not more than 20% of the value of REIT assets shall be invested in following :


i. developmental properties,

ii. mortgage backed securities,

iii. listed/ unlisted debt of companies/body corporates in real estate sector,

iv. equity shares of companies listed on a recognized stock exchange in India which derive not less than 75% of their operating income from Real Estate activity,

v. government securities,

vi. money market instruments or Cash equivalents.


However investments in developmental properties shall be restricted to 10% of the value of the REIT assets

j. A REIT shall invest in at least two projects with not more than 60% of value of assets invested in one project. Detailed investment conditions are provided in the Regulations.

k. REIT shall distribute not less than 90% of the net distributable cash flows, subject to applicable laws, to its investors, at least on a half yearly basis.

l. REIT, through a valuer, shall undertake full valuation on a yearly basis and updation of the same on a half yearly basis and declare NAV within 15 days from the date of such valuation/updation.

m. The borrowings and deferred payments of the REIT at a consolidated level shall not exceed 49% of the value of the REIT assets. In case such borrowings/ deferred payments exceed 25%, approval from unit holders and credit rating shall be required.

n. Detailed provisions for related party transactions. valuation of assets, disclosure requirements, rights of unit holders, etc. are provided in the Regulations. However, for any issue requiring unit holders’ approval, voting by a person who is a related party in such transaction as well as its associates shall not be considered.


Here are the main features of SEBI approved InvIT Regulations...


a. Infrastructure is as defined by Ministry of Finance vide its notification dated 7 October 2013 and shall include any amendments/additions made thereof.

b. InvITs shall be set up as a trust and registered with SEBI. It shall have parties such as Trustee, Sponsor(s), Investment Manager and Project Manager.

c. The trustee of an InvIT shall be a SEBI registered debenture trustee who is not an associate of the Sponsor/Manager.

d. InvITs shall invest in infrastructure projects, either directly or through SPV. In case of PPP projects, such investments shall only be through SPV.

e. An InvIT shall hold or propose to hold controlling interest and more than 50% of the equity share capital or interest in the underlying SPV, except where the same is not possible because of a regulatory requirement/ requirement emanating from the concession agreement. In such cases sponsor shall enter into an agreement with the InvIT, to ensure that no decision taken by the sponsor, including voting decisions with respect to the SPV, are against the interest of the InvIT/ its unit holders.

f. Sponsor(s) of an InvIT shall, collectively, hold not less than 25% of the total units of the InvIT on post issue basis for a period of at least three years, except for the cases where a regulatory requirement/concession agreement requires the sponsor to hold a certain minimum percent in the underlying SPV. In such cases the consolidated value of such sponsor holding in the underlying SPV and in the InvIT shall not be less than the value of 25% of the value of units of InvIT on post-issue basis.

g. The proposed holding of an InvIT in the underlying assets shall be not less than Rs500 crore and the offer size of the InvIT shall not be less then Rs250 crore at the time of initial offer of units.

h. The aggregate consolidated borrowing of the InvIT and the underlying SPVs shall never exceed 49% of the value of InvIT assets. Further, for any borrowing exceeding 25% of the value of InvIT assets, credit rating and unit holders' approval is required.

i. An InvIT which proposes to invest at least 80% of the value of the assets in the completed and revenue generating Infrastructure assets, shall :


i. raise funds only through public issue of units.

ii. have a minimum 25% public float and at least 20 investors.

iii. have minimum subscription size and trading lot of Rs ten lakhs and Rs five lakhs respectively.

iv. distribute not less than 90% of the net distributable cash flows, subject to applicable laws, to the investors, atleast on a half yearly basis.

v. through a valuer, undertake a full valuation on a yearly basis and updation of the same on a half yearly basis and declare NAV within 15 days from the date of such valuation/updation.

j. A publicly offered InvIT may invest the remaining 20% in under construction infrastructure projects and other permissible investments, as defined in the regulations. However, the investments in under construction infrastructure projects shall not be more than 10% of the value of the assets.

k. An InvIT which proposes to invest more than 10% of the value of their assets in under construction infrastructure projects shall :

i. raise funds only through private placement from Qualified Institutional Buyers and body corporates.


ii. have minimum investment and trading lot of Rs. 1 crore.

iii. have minimum of 5 investors with each holding not more than 25% of the units

iv. distribute not less than 90% of the net distributable cash flows, subject to applicable laws, to the investors, atleast on a yearly basis

v. undertake full valuation on yearly basis and declare NAV within 15 days from the date of such valuation.

l. Conditions for InvITs investing in under construction projects


i. For PPP project(s)

i.a. has achieved completion of at least 50% of the construction of the infrastructure project as certified by an independent engineer; or

i.b. has expended not less than 50% of the total capital cost set forth in the financial package of the relevant project agreement.

ii. For Non-PPP project(s), the Infrastructure Project has received all the requisite approvals and certifications for commencing construction of the project;

m. Listing shall be mandatory for both publicly offered and privately placed InvITs and InvIT shall make continuous disclosures in terms of the listing agreement.

n. Detailed provisions for related party transactions. valuation of assets, disclosure requirements, rights of unit holders, etc. are provided in the Regulations. However, for any issue requiring unit holders approval, the voting by any person who is a related party in such transaction as well as its associates shall not be considered.




2 years ago

It would be interesting to see the returns/dividends from REITs. Considering a rental yield of 10% on commercial property - and if 90% is paid out - returns will be on par with debt. Not inflation beating as in equity.

Also one needs to think of the tax on dividends. The tax man may consider the dividend as rental income and hence tax as per your slab. It may also consider it as equal as dividend on debt fund and hence pay the dividend distribution tax.

Among other points I can think now is how will redemptions be handled? Sell the mall/office in a day or two?


sivaraman anant narayan

In Reply to pravsemilo 2 years ago

REIT investments are dubious. There are already a few such investment avenues in the market like Milestone, ICICI ventures etc. The average rental yield from such investments in commercial space has been around 5-7%, varying from qtr to qtr, pre-tax. Besides on redemption many are at a loss depending on when the investment cycle started in the market. i understand that in the case of ICICI the investors have taken them to court. The REIT is worse than savings bank rate!


In Reply to pravsemilo 2 years ago

Who gets 10% rental yields on commercial property?


In Reply to Nilesh KAMERKAR 2 years ago

I am an eternal real estate bear. I didn't have a number on the yield so did a google search and found

They quoted a range of 7-10%. To puncture the air out of real estate enthusiasts I chose 10%. Even choosing a 10% number doesn't give a good enough return.


2 years ago

The introduction of REIT helps monetize commercial and income generating real estate in India.The investors invest in REIT in a similar manner as a mutual fund and the regulations are similar to mutual funds.A regular dividend is paid on a monthly basis to the investors.

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