Citizens' Issues
Rohtang tunnel excavation, an engineering marvel, set to pick up speed
The excavation of the Rohtang tunnel, one of India's most strategically important infrastructure projects, is likely to pick up speed after missing its February 2015 deadline.
 
Of the 8.8-km horseshoe shaped Rohtang tunnel, an engineering marvel that will ensure all-weather connectivity to landlocked Lahaul Valley from Manali, about 5.2 km has been dug since work commenced in November 2011. Over 600 men and more than a dozen Indian and European engineers have been working day and night to excavate the tunnel, located at altitudes ranging between 3,053 and 3,080 metres on both sides, despite prevailing sub-zero conditions.
 
Engineers finally foresee the end of the loose strata that slowed down its construction for almost three years. A geological surprise in the form of a glacial-fed rivulet that sprung up in 2012 during work in the tunnel below the 3,978-m Rohtang Pass is still posing a challenge because of water seepage and fragile strata. But it has now been largely contained.
 
"We are close to covering the 600-metre highly fragile strata on the south portal (towards Manali) side. As per surveys, a solid rock is coming after 20 metres. The seepage and inflow of the Seri rivulet in the tunnel have been largely controlled," project Chief Engineer Brigadier Manoj Kumar, who is associated with the Border Roads Organisation (BRO), told IANS.
 
The Seri is a tributary of the Beas river and flows down the mountain.
 
Kumar said in an interview that once the hard rock surfaces, the excavation would automatically pick up speed.
 
The project is estimated to be commissioned by 2019, and both ends of the tunnel -- south and north portals -- will meet by July 2017, he added.
 
The Rs.1,495-crore tunnel's foundation stone was laid by Congress president Sonia Gandhi on June 28, 2010, in the picturesque Solang Valley.
 
Official sources told IANS that the delay in tunnel construction will mean a cost overrun of Rs.500-600 crore. The project is being built by the BRO in collaboration with Strabag-Afcons, a 60:40 joint venture between Strabag SE of Austria and India's Afcons Infrastructure Ltd.
 
The north portal of the tunnel that lies towards the Lahaul Valley in Lahaul-Spiti district has already experienced snowfalls.
 
Kumar said work on the north portal would be stopped by mid-November because of the onset of heavy snowfall by then. However, work on the south portal towards Dhundi, 25 km from Manali, will continue during winter.
 
"The highest elevation in the tunnel that lies towards the north portal has been dug successfully. On that side, we encountered geological surprises in the shape of hot water springs and emission of toxic gases.
 
"But they were on a smaller stretch. They raised the temperature inside the tunnel," he added.
 
The south portal is prone to flash floods and snow avalanches.
 
To counter them, the Snow and Avalanche Study Establishment (SASA) has designed several avalanche-control structures, including four snow galleries and eight snow bridges. One gallery has been constructed that was hit by a snow avalanche in February.
 
While a snow gallery would allow the avalanche to pass overhead without affecting the traffic inside, a snow bridge prevents the snow mass from rolling down the slope or break its flow.
 
Once ready, the Rohtang tunnel will be a boon for the cold deserts of Lahaul Valley, where over 20,000 people remain cut off from the rest of India in winter owing to the closure of the Rohtang Pass, a major attraction for both domestic and foreign tourists and located 52 km from Manali.
 
Besides reducing road distance by approximately 46 km and saving travel time of about four hours, the tunnel will open up new vistas of trade and tourism and generate jobs for the locals. The tunnel will provide ample room for two-way traffic and is designed to cater to a maximum vehicular speed of 80 km an hour.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Differentiating between banks entails systemic risks: Moody's
Global credit agency Moody's Investors Service on Monday cautioned the Indian government of significant systemic risks to the banking system if it reduces support to banks or differentiate among them.
 
The rating agency also said the Rs.700 billion capital planned to be injected into government banks over the next four years is insufficient.
 
The credit rating agency seeing gradual improvement in the operating environment for Indian banking system changed its outlook on Indian banking system from negative to stable.
 
The stable outlook is based on Moody's assessment of five drivers: Operating Environment (improving); Asset Risk and Capital (stable); Funding and Liquidity (stable); Profitability and Efficiency (stable); and Government Support (stable).
 
In relation to government support, Moody's says the Indian government will continue to provide a high level of support to the banks.
 
For the public sector banks in particular, Moody's expects that the government will not make any changes that could suggest the possibility of reduced support to or differentiation among the banks, because doing so could entail significant systemic risks.
 
"The stable outlook on India's banking system over the next 12-18 months reflects our expectation that the banks' gradually improving operating environment will result in a slower pace of additions to problem loans, leading to more stable impaired loan ratios," Srikanth Vadlamani, Moody's vice president and senior credit officer, was quoted in a statement issued by the firm.
 
Moody's said deteriorating asset quality was the key driver of Moody's negative outlook on India's banking system since November 2011.
 
"However, the recovery in asset quality will be U-shaped rather than V-shaped, because corporate balance sheets remain highly leveraged," adds Vadlamani who authored the report titled Banking System Outlook -- India: Gradual Improvement in Operating Environment Drives Stable Outlook.'
 
The credit rating agency expects India to record a gross domestic product (GDP) growth of around 7.5 percent in 2015 and 2016.
 
Growth has been supported by low inflation and the gradual implementation of structural reforms.
 
According to Moody's, an accommodative monetary policy should support the growth environment.
 
As for asset risk and capital, Moody's says that asset quality will stabilise.
 
In particular, while the banks' stock of non-performing loans may continue to rise, the pace of new impaired loan formation in the current financial year ending 31 March 2016 will be lower than the levels seen in the past four years.
 
Capital levels, however, are low for public sector (PSU) banks.
 
Such banks exhibit common equity Tier I ratios of only six-ten percent and their coverage of non-performing loans with loan-loss reserves averages 55 percent.
 
Terming the Indian government's decision to inject Rs.700 billion into public sector banks over the next four years as a credit positive, Moody's said the amount is short of overall capital needs of the banks.
 
"Ability to access equity capital markets remains key if the public sector banks have to address their capital shortfall," Moody's said.
 
As for funding and liquidity, these factors are credit strengths for Indian banks because retail deposits are their primary source of funding.
 
Most banks comply comfortably with required liquidity coverage ratios, even though only part of their holdings of government securities is categorised as high-quality liquid assets, the rating agency said.
 
Moody's rates 15 banks in India that together account for around 70 percent of system assets. Four are private-sector banks and the remaining 11 are public sector banks.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Reliance Communications to acquire Sistema Shyam Teleservices
 Industrialist Anil Ambani-led Reliance Communications on Monday announced a definitive agreement for the merger of Sistema Shyam Teleservices into its fold in a unique stock-cum-spectrum fee payment deal, triggering a major consolidation in India's telecom space.
 
"As result of the demerger, Sistema Shyam Teleservices will acquire and hold a 10 percent stake in Reliance Communications. In addition, Reliance Communications will assume the liability to pay the Department of Telecom installments for Sistema Shyam's spectrum, amounting to Rs.392 crore per annum for the next 10 years," the company said in a statement.
 
The deal, which was approved by the two companies here on Monday, also includes the acquisition of the "MTS" brand.
 
Sistema Shyam Teleservices is an arm of Sistema -- a publicly-traded, diversified holding company in Russia and the region that invests in companies across the globe in areas such as telecommunications, high technology, radars and aerospace, banking, retail, mass-media, tourism and healthcare services.
 
For Reliance, the deal means an addition of 9 million customers and around Rs.1,500 crore in annual revenues, apart from the valued telecom airwaves or spectrum in the 800 MHz and 850 MHz band that is ideally suited for 4G services to complement its own unique nationwide footprint of minimum 5 MHz of contiguous spectrum in this band aggregating 148.75 MHz.
 
This will also extend the validity of Reliance Communications spectrum in the 800 MHz and 850 MHz band in eight important circles by a period of 12 years from 2021 till 2033 -- Delhi, Gujarat, Tamil Nadu, Karnataka, Kerala, Kolkata, Uttar Pradesh-West, and West Bengal.
 
The development must also be read against the backdrop of chairman Anil Ambani's recent announcement that his company will partner with elder brother, Mukesh Ambani-controlled Reliance Jio to offer each other's subscribers seamless reciprocal access to three generations of data and voice telephony in the country.
 
Reliance Jio had entered into an agreement with Reliance Communications for sharing the latter's extensive inter-city as well as intra-city infrastructure of nearly 520,000 km of optic fiber pairs, besides some 45,000 towers. The aggregate value of the deal was pegged at Rs.12,000 crore (nearly $6 billion).
 
"The combination of our wireless businesses, through the demerger of Sistema Shyam Teleservices wireless business into RCOM for stock consideration, will generate significant capex (capital expenditure) and opex (operational expenditure) synergies for mutual benefit," said Gurdeep Singh, president and chief executive for consumer business with Reliance Communications, reacting to Monday's deal.
 
"The merger is a milestone event. Despite the numerous challenges the sector faced in recent years, the combination of two leading data service providers is a clear sign of progress for the Indian telecom industry," added Mikhail Shamolin, president and chief executive of Sistema.
 
The closing of the transaction, expected in the second quarter of 2016, is subject to applicable corporate, regulatory and other approvals. Post-closing, minority investors of Sistema Shyam Teleservices will be given an option to exchange their shares with the pro-rata Reliance Communications shares held by the demerged company.
 
Founded by legendary industrialist Dhirubhai Ambani, Reliance Communications is the flagship company of the Reliance Group, led by his younger son Anil Ambani. The Group currently places its net worth in excess $15 billion, cash flows of $1.7 billion and total net profit of over $800 million.
 
Reliance Communications has a customer base of over 118 million -- including 2.6 million individual overseas retail customers, over 39,000 Indian and multinational corporate clients in the large, small and medium enterprises space and over 290 global, regional and domestic carriers.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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