New Delhi Highlighting its inability to support increasing number of metro projects, the Centre has asked state governments to follow the models of Karnataka and Delhi for financing capital-intensive Metro rail projects by levying cess on residential and commercial developments, and increasing house tax. It has also urged them to set up state-level urban transport funds with such levies to finance the projects.

The Centre says its unable to support the increasing number of metro systems through the Budget and therefore wants the states to develop their own funding sources to part-finance such capital-intensive systems.

New Delhi Power companies may soon be allowed to produce bank guarantee for duty-free import of equipment based on the provisional mega power certificate issued by the finance ministry.

Currently, developers furnish a fixed deposit receipt (FDR) of an amount equivalent to the duty on equipment import for getting tax relief. However, companies feel the current practice locks in a large sum of money that could, otherwise, be used for projects, especially at time when it is difficult to mobilise cheaper credit.

New Delhi The government is set to consider a proposal for a complete ban on private-public joint ventures (JVs) for developing mineral blocks allocated to state-run corporations and public sector

New Delhi Notwithstanding the CAG stance favouring the auction route for allocation of natural resources, power companies such as NTPC, Tata Power, Rpower and Jindal Power might get another set of captive coal blocks without having to go through the bidding process.

The new rule on coal block auctions finalised by the coal ministry proposes to carve out a portion of the country’s coal reserves for the power sector that would be offered to companies through state-run corporations. Those companies that have been awarded a power project on the basis of tariff-based competitive bidding would be eligible for this exclusive allocation, official sources said.

New Delhi Keen to stay clear of the minefield of scandals and lawsuits, the Union mines ministry has asked the attorney general (AG) whether mining lease applications can be disposed of under the first-come-first-served (FCFS) policy, until upcoming legislation makes auction mandatory.

The ministry's concern is that granting mineral concessions through FCFS policy might attract strictures from the Supreme Court and run afoul of the Comptroller and Auditor General of India's stated position on the matter.Over 400 pending mining lease/licence execution cases are waiting for the ministry's no-objection certificate, before states can process the lease.

New Delhi The power ministry has written to the Cabinet Committee on Infrastructure to mandate a uniform 50% risk weight to bank loans for state-owned Power Finance Corporation (PFC) and Rural Electrification Corporation (REC), a move which could lead to banks doubling their exposure to these companies if it finds favour with the Reserve Bank of India (RBI).

The power ministry has proposed a uniform risk weight of 50% for these two infrastructure financing companies (IFCs). At present, banks assign low risk weight only to top-rated IFCs, while others attract 100% risk weight.

New Delhi A regulatory panel has allowed Reliance Industries to carry out surveys on 12 satellite fields in the deep water D6 block in the east coast, subject to the condition that this expense would become eligible for recovery only if a subsequent field development plan is approved by the authorities.

The management committee overseeing the performance of the D6 block in the Krishna Godavari basin decided last Friday that RIL could make investments in geophysical and geo-technical surveys and other studies in the R series fields (D34) at its own cost. The RIL-BP-NIKO consortium has to bear the risk involved in making this investment.

New Delhi In what can be seen as a clear rebuff to the recent leaked CAG draft report, the coal ministry has expressed its helplessness in giving the exact cost of production of coal from different blocks in the country.

It has cited the presence of several variable factors, which makes estimating the cost difficult even for various mines in the same area.

New Delhi The government proposes to offer deallocated captive coal blocks of private sector companies to Coal India in a bid to accelerate coal production. This would enable the PSU to meet all its fuel commitments to the power sector. The coal ministry, which has so far cancelled allocation of 26 captive coal blocks, is considering to offer bulk of these blocks to CIL so that it can commence production quickly.

New Delhi All public-private partnership (PPP) projects in the power transmission sector, including intra-state transmission networks, will now qualify for government grants under the viability-gap funding (VGF) scheme, making them attractive to private sector investors.

The VGF scheme, finalised by the finance ministry few years back to promote investment in the infrastructure sector, involves central assistance in the form of grant for capital expenditure up to 20% of the project cost, while the state government — being one of the owners — could also provide a matching grant with a ceiling of another 20% of the project cost.

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