JNPT plans overseas foray

The container port is looking for a global footprint; it will also spend Rs500 crore on green initiatives

Major container port, Jawaharlal Nehru Port Trust (JNPT), plans to foray overseas as a port and container terminal operator, subject to government approval, a senior JNPT official has said, reports PTI.

“We plan to expand our operations abroad as a port and terminal operator, subject to government approval,” the official said, on strict conditions of anonymity.

JNPT was evaluating opportunities in southern Africa and Latin America, he said. The port has already held discussions with several parties, including Italian and Canadian entities, to evaluate the feasibility of jointly setting up a green-field port, he said.
JNPT will provide the necessary technical skills to establish and run an overseas port facility in the initial stages for which it would earn a royalty and other fees. At a later stage, it may invest in these ventures, he said.

The plan for evaluating foreign opportunities is subject to necessary approvals from the shipping ministry. The opportunity to expand overseas would enable the port to acquire a global footprint.

Besides, the port has also undertaken initiatives to become country's first ‘green port’.

“We have undertaken initiatives to become the country's first green port. The Rs500-crore initiative involves setting up wind and solar power units, usage of CNG vehicles in the port area, water harvesting and forestation, among others,” the official said.
 

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Merchant power tariffs witness a short-term hike

Rise may be short-lived, but prices may stay high till June this year. Companies like JSW Energy, Jindal Steel & Power and Adani Power are likely to benefit

After six months of sluggish performance, merchant power tariffs are on a rise again. From a low of around Rs2 per unit in December 2009, merchant power rates have reached a decent level of around Rs7 to Rs8 per unit in April 2010. Analysts say that this short-term rise in merchant power tariffs would be beneficial for JSW Energy, Jindal Steel & Power Ltd (JSPL) and also Adani Power Ltd to some extent.

As per Indian Energy Exchange data, merchant power rates touched a high of Rs8.50 per unit on Tuesday. As on 1 April 2010, power tariffs had touched a high of Rs5 per unit, moving towards Rs8 per unit on Wednesday.

Moneylife had earlier reported in December 2009 on how merchant power tariffs had crashed to unbelievable levels of Rs2 to Rs5 in December 2009. Power tariffs had fallen from a high of Rs12 to Rs14 per unit in June 2009. However, tariffs have been on a downturn since September. They were quoted in the range of Rs6 to Rs8 by the end of September and the beginning of October 2009. In November, they fell to Rs2 to Rs4 per unit, with power traded during non-peak hours falling to below Rs2 in mid-December 2009.

Merchant power tariffs as on 1 January 2010 were at a high of Rs3 per unit, moving towards Rs5 per unit in February and March 2010. With the onset of summer, analysts expect the rise in merchant power prices to continue upto June 2010, and they are expected to again fall thereafter.

During the course of this short-term rise in merchant power tariffs, JSPL and JSW Energy are likely to benefit most from the rise. Analysts point out that Adani Power Ltd may also profit to a certain extent. JSW Power and JSPL have sufficient on-stream merchant power capacities to trade during this peak season.

“The companies that will benefit from the immediate increase in high power tariffs are JSPL and JSW Energy as they have capacities on the ground. If we look at a year-end average, the power tariffs would stabilise at around Rs4 to Rs5 per unit for the next couple of years. However, it can also surprise us on the upside. If this happens, it would be beneficial to all companies in the power sector,” said a research analyst who has requested anonymity.

“The power tariffs will remain high till June 2010. In the long term, they will be in the band of a low of Rs3 per unit to a high of Rs6 per unit,” added another analyst who also requested anonymity.

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Finance ministry may seek Cabinet nod for Coal India divestment

The ministry of finance may seek the Union Cabinet’s approval for the proposed 10% stake sale in State-owned Coal India Ltd (CIL) by the end of this month, a senior coal ministry official said here today, reports PTI.

“The proposal is with the department of disinvestment under the finance ministry. They will place it before the Cabinet for approval maybe by the end of this month,” additional coal secretary Alok Perti told reporters on the sidelines of the ‘India Energy Congress 2010’.

The government expects to mop up Rs12,000 crore from disinvestment in the country’s largest coal producer, which would be part of its efforts to raise about Rs40,000 crore through stake sale in 2010-11.

The government at present holds 100% equity in CIL and is likely to sell 63.13 crore shares in the IPO.

“The IPO is targeted in August,” Mr Perti added. Out of the proposed 10% stake sale, 9% of the government's equity could be channelized towards the IPO and rest is proposed to be given to its nearly 4 lakh employees.

On the appointment of a regulator for the coal sector to oversee mining activities, proposed auctioning of blocks and coal pricing, Mr Perti said that the government is seeking views from different ministries on the subject and could seek Cabinet nod for the appointment next month.

“We have circulated cabinet notes (for a coal regulator) to different ministries—particularly the law ministry. It could be taken up by the Cabinet by the middle of May,” he said.

Coal minister Sriprakash Jaiswal had said in February that the sector would get a regulator by mid-March, after the government introduced the subject in Parliament during the Union Budget 2010.

Mr Perti further said that India may move to a mechanism of linking coal prices to its gross calorific value from the present system of pricing the fuel based on its ash content. The more the ash content the less would be the price and vice-versa.

“We are evaluating such a move. No timeframe could be given at present,” he said.

Gross Calorific Value system would link the prices to the amount of heat generated by burning a kilo of coal and not on the ash content, which is a global practice. Asked if the proposed international mechanism could lead to an increase in coal prices, Mr Perti said, “No, it will not lead to an increase in prices. But, of course, the gap in prices between the highest grade and the lowest grade would be reduced.”
 

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