PSE Insights: Manufacturing

PSE
Vol 1 • No 4 • July 2015
insights
CEO SPEAK
Cmde K Subramaniam
Chairman & Managing Director
Cochin Shipyard Ltd
SECTOR IN FOCUS
Mr. T. Suvarna Raju
Chairman and Managing Director
Hindustan Aeronautics Ltd (HAL)
COVER STORY
Manufacturing –
The Growth Engine For Future
MANUFACTURING

Contents
3 Message from the
CII Director General
5 Chairman’s Message
6 CEO Speak – Cochin Shipyard to Become a Major
Builder of Aircraft Carriers
Cmde K Subramaniam
Chairman & Managing Director Cochin Shipyard Ltd
8 Sector in Focus: Manufacturing
HAL on Massive Expansion Mode,
Aims at Significant Global Presence
10 Manufacturing – The growth engine for future
38 Investments
40 Results
41 CSR Initiatives
42 Overseas
Operations
48 Appointments
13 Events
14 Policy & Impact
21 Tie-Ups, Procurement & Contracts
25 Project Updates
28 Operation Highlights
31 Export & Import
32 M&A
33 Marketing & Trade
35 Bottom Line Strategy
50 Stock-Talk
PSEUpdates

2 | PSE insights | JULY 2015
Heralding a new era of Indo
– Belarus friendship, H.E. Mr.
Pranab Mukherjee, Hon’ble President
of India and H.E. Mr. Alexander
Lukashenko, Hon’ble President
of Belarus, jointly dedicated the
Bharat Heavy Electricals Limited
(BHEL) supplied 126 MW Grodno-II
Combined Heat and Power (CHP)
Plant to the Republic of Belarus and
its citizens, on 4th of June 2015 at a
grand ceremony in Minsk, Belarus.
The programme was attended by H.E.
Mr Andrei Kobyakov, Hon’ble Prime
Minister of Belarus, Ministers and H.E.
Mr. Manoj Bharti, India’s Ambassador
to the Republic of Belarus, besides
various other dignitaries and senior
officials of Government of Republic of
Belarus and key media persons from
both countries.
A dedication stone, with the details of
the plant and manufacturer inscribed
in golden letters, was unveiled at the
Grodno CHP-2 during the ceremony
to commemorate the dedication of
the Grodno CHP-2 to the Republic of
Belarus and its citizens.
The Grodno-II Combined Heat and
Power Plant is the largest power plant
set up by BHEL in the CIS region and
has emerged to be a testimony of
Indo-Belarus collaboration. This plant
has achieved better performance in
all aspects – whether it be output,
fuel consumption, emissions, etc.
BHEL has supplied the state-of-the
art Frame 9E design gas turbine
along with matching generator, heat
recovery steam generator and control
systems for this plant.
BHEL’s performance in the Grodno
CHP-2 has been appreciated by the
customer RUE“Belenergo”, which
consequently placed the largest
order for capital spares (in CIS region)
worth Rs. 22 crore on BHEL.
Hon’ble President of Belarus
appreciated BHEL services during
the project and welcomed the
company’s efforts for future projects
in his kind words,“... Indian and
Belarusian specialists maintain
productive cooperation in the
renovation of Grodno CHP plant No.
2. If they work as productively in the
future as they do now, you will have
no concerns about the projects in
Belarus, we will always support such
projects. They mean high quality,
reliability and excellent results. We
welcome such projects in the center
of Europe. We will always support
them...”
Mr B.P.Rao, CMD, BHEL signed a
Memorandum of Understanding
(MoU) with RUE“Belenergo”, the
central state owned public utility
of Belarus, for setting up Combined
Heat and Power plants in Belarus.
A Testimony to Indo-Belarus Friendship –
BHEL Supplied Co-Gen Power Plant in Belarus

JULY 2015 | PSE insights | 3
Public Sector Enterprises (PSEs) are emerging as lead players in the seminal‘Make in India’initiative that is targeted
at transforming the manufacturing sector of the country. Having contributed to building the base of the Indian
manufacturing sector in the past, the long experience and capabilities accumulated by PSEs will be greatly relevant to
success of the initiative. This edition of PSE Insights elaborates on the role of PSEs in manufacturing, their potential and the
opportunities for partnerships arising under Make in India.
The Make in India mission has emphasized a multi-pronged strategy to harness manufacturing capabilities, leveraging
ease of doing business, industrial corridors and infrastructure, intellectual property and R&D, skill development and FDI.
25 sectors have been identified as growth engines, including manufacturing, services, and infrastructure to be converged
for industrial development. In many of these sectors, PSEs enjoy a strong presence and can emerge as the core of a new
growth trajectory.
Additionally, many companies from both the private and public sectors are now operating as global players. The‘Make-in-
India’campaign has boosted the spirit of these enterprises to excel in their respective areas of operation and sharpen their
competitive edge. With new avenues of opportunity opening up and global aspirations gaining pace, PSEs are moving in
new directions.
India’s leading PSEs such as Hindustan Aeronautics Limited (HAL) and Cochin Shipyard Limited (CSL) are fast emerging
as enterprises of global standard. HAL has already emerged into the high-profile top‘Global 100’defence manufacturers’
list, occupying 34th rank in annual sales. The company is contributing substantially to the‘Make-in-India’programme and
leading the country’s defence exports. HAL aims to become a significant global player in the aerospace industry. CSL, the
country’s first aircraft-carrier builder, now plans to construct more such vessels for the Indian Navy as well as overseas naval
establishments. CSL is also undertaking dry docking and ship repair works and has ambitious plans to expand as a world
class shipyard. PSEs like HAL and CSL make India proud.
In fact, a good number of India’s PSEs are performing at their peak levels and expanding to meet future business needs
and challenges. A number of them bring out internationally competitive products and services. Companies such as BHEL,
SAIL, HAL and CSL have set new benchmarks in production practices, manufacturing excellence and R&D spheres. For
example, BHEL’s scale of operation is emerging as a key competitive advantage, with power plant equipment capacity of
20,000 MW per annum and capacity to manufacture 75 locomotive units among others. The engineering and technology
company is spending around 2.5 per cent of its turnover on research and development.
CII is working closely with PSEs in a number of areas to expand and strengthen the partnership of public and private
sectors. We are excited about the possibilities for enhanced synergies under Make in India, and look forward to a strong,
competitive and global manufacturing sector taking shape in the country.
Chandrajit Banerjee
Director General
Confederation of Indian Industry
Message from
CII Director General

On the occasion of International Yoga Day on June 21, 2015, special Yoga
sessions & discourses were organized by CII offices across India.
The photograph below is of a special yoga session organized by CII
Eastern Region at the Suresh Neotia Centre of Excellence for Leadership
at Salt Lake in Kolkata. Trainers from ISHA Foundation explained through
both live demonstrations and video clippings how a few minutes of yoga
exercises a day can make a world of difference in the way people feel,
work, and achieve. About 130 participants showed up and joined the
yoga session.
The aim of the programme was to help people integrate body and mind,
reduce stress, experience happiness and enhance productivity in all
spheres of life, said Rear Admiral (Retired) A K Verma, Chairman, CII Eastern
Region and Chairman & Managing Director, GRSE, in his introductory
speech.
“Yoga embodies unity of mind and body; thought and action; restraint
and fulfillment; harmony between man and nature; a holistic approach to
health and well-being. It is not about mere exercise of body and muscles
but to discover the sense of oneness with yourself, the world and nature,”
he said.
CII joins the first
International Yoga Day celebration

Dear Colleagues,
Indian economy’s return to
higher growth path in 2014-15 is
encouraging news for all and will
further provide the much needed
boost for revival of investment
cycle. The contributions of the
manufacturing, agriculture and core
sectors will hold the key to higher
GDP growth in the coming years. IIP
data in the recent months suggest an
improvement in industrial activity this
year in comparison to 2014.
PSEs are ready to play their roles
to expand the economy that will
espouse the cause of inclusive
growth. From energy, power
equipment, steel and non-ferrous
metals, engineering, heavy
equipment, electronic products to
defence, aircraft and shipbuilding,
PSEs are at the helm of almost the
entire gamut of manufacturing.
In the last five years, large CPSEs
performed extremely well in the face
of protracted constraints, internal
and external. Around two-third of
the CPSEs signing MoUs with the
government had secured‘excellent’
to‘very good’ratings indicating
their healthy performance. CPSEs
continued to be a major source of
revenue by way of payment of direct
and indirect taxes to the government,
apart from sharing nearly 10 per
cent of the country’s export income.
Thus, they play an integral role in the
country’s economic development
and enhance self-reliance in goods
and services, apart from contributing
to price stability.
From the
Chairman’s Desk
The turnover and net profit of CPSEs
have increased at 14.2 percent
and 7.2 percent CAGR respectively
during 2009-10 to 2013-14. Post
liberalization and with increased
globalization in the recent times,
PSEs are facing stiff competition.
Of late, net profit to turnover ratio
is witnessing a declining trend
indicating competition from imports
and pressure on the bottom line.
To enhance the scale of operations,
CPSEs have been expanding in
other geographies and exploring
untapped areas. However, a higher
local demand and domestic growth
rate will mean a bigger participation
of PSEs in all key sectors of
economy. According to projections
by several global consultants, the
manufacturing sector is expected
to grow six-fold by 2025 to USD 1
trillion creating a large number of
jobs, pushing domestic income and
expenditure leading to sustained
higher growth.
PSEs have to gear up to leverage on
the opportunities presented by the
Government’s‘Make in India’initiative
to their full potential. PSEs have to
focus on development of technology
to further extend their scope of
manufacturing to highly challenging
areas to emerge as major exporters of
goods and services. The current issue
provides a flavor of how our PSEs are
meeting such demands and making
modern engineering craft a strong
trajectory for the Indian economy.
B Prasada Rao, Chairman, CII Council on Public Sector Enterprises and CMD, BHEL

Cmde K Subramaniam
Cochin Shipyard Ltd
CEO SPEAK
Cochin Shipyard Limited (CSL) was originally designed
to build vessels for merchant marine upto 75,000 DWT
Panamax Type. However, the Company is now banking
substantially on orders from defence and Coast Guard.
What changed the operational strategy?
It is true that Cochin Shipyard was designed to build steel
intensive ships, viz bulk carriers and tankers upto aframax
size. As you would be aware the global recession of 2008
has impacted the shipping industry including shipbuilding.
There has been an oversupply of vessels in the market and
freight rates have moved sharply downwards. The shipyard
has responded with agility to the requirements of the
market place to garner remunerative orders. In the past six
years, the Shipyard has built and exported 34 high quality,
high end, high technology Offshore Support Vessels to
international clients. The recession in the shipbuilding
market has forced us to look at the defence sector also. It
would not be correct to say that CSL is banking only on
orders from the defence sector. The fact of the matter is
that CSL has built up a repertoire of skills required to build
various classes of ships, both commercial and defence. The
strategy is to look at remunerative value added products
and respond with agility to garner these orders.
What is the Company’s experience to design and build
aircraft carrier for Indian Navy? Is the Shipyard gearing
itself up to become a major builder of aircraft carriers
for both Indian Navy and transnational naval forces
outside India in future?
CSL has been entrusted with the onerous responsibility
of building the first indigenous aircraft carrier for the
Indian Navy. The design of the aircraft carrier has been
developed by the Indian Navy and this is a completely
indigenous design. The Shipyard has worked with a lot of
commitment to rise to the challenges posed in building the
first aircraft carrier. The inherent talent and strength of CSL
in designing commercial vessels, the advanced processes
of shipbuilding technology of an experienced shipyard
and most importantly the people’s skills along with eco
system for quality shipbuilding are the reasons why CSL
has been able to progress the construction of the aircraft
carrier. There have been a huge number of challenges in
building the first aircraft carrier, but all of them have been
resolved in-house by the inherent innovation, ingenuity
and commitment of the designers and workers of CSL. It
is quite clear that CSL is positioning itself as a major builder
of aircraft carrier. The skill sets nurtured and developed in
building the first aircraft carrier have given the Shipyard a
huge advantage in building carriers for both Indian Navy as
well as for transnational naval forces which we could meet
with due approval of Govt of India.
The Shipyard has also been doing well in shiprepair
though its turnover from such work dropped by almost
30% in 2013-14. How was the performance last year?
The Shipyard has assiduously nurtured the ship repair
business for the last 40 years and has emerged as a reputed
ship repair yard in the country. In my view, the success of
CSL is due to the fact that it is an integrated yard for both
shipbuilding and ship repair. The cyclicity of shipbuilding
could be offset to an extent by the steady and regular ship
repair business. The drop in ship repair turnover in 2013-
14 was due to occupancy of the repair dock by the aircraft
carrier which has now been undocked. We are confident
of improving the ship repair performance this year. In our
view, there is inadequate ship repair capacity in the country.
As part of its growth strategy the yard is setting up of
additional ship repair facilities in the leased land in Cochin
PortTrust area. It is expected that this facility will be ready in
the next three years time.
Cochin Shipyard to Become
a Major Builder of Aircraft
Carriers

Although the Company is in operation for over four
decades, its growth was negligible until five years ago.
What were the reasons?
The growth of the Shipyard is an interesting study in itself.
Waybackintheearly1980s,shipbuildingwasregulatedwith
the price of ships being arrived at based on negotiations
and the Government approved a fair price. It is pertinent to
mention that in the initial years, the Shipyard as a PSE was
subjected to the permit raj system till 1991, by which time
the Shipyard was in the red. A debt restructuring plan in
1992-94 put the shipyard back on the rails and the yard has
posted profits since then. However, it was the agility and
business acumen of the top management which took some
extremelybolddecisionsin2003-04thatledthisspectacular
growth of the Shipyard. While CSL retained the processes
and meticulous approach of a typical PSE, we also looked at
shipbuilding with a business focus. CSL is perhaps the only
Shipyard in the country to have successfully tied up with
a private shipyard and jointly built ships which was a win-
win partnership for both. Similarly, the yard’s decision to
enter offshore supply vessel market in 2006, which required
a lot of re-engineering process within the Shipyard, was
another major factor which has contributed towards this
tremendous growth in the last five years. Further the move
towards the defence shipbuilding has also contributed to
this growth.
What are the company’s future plans to expand its
shipbuilding and repair yard capacities and outputs?
The Company has ambitious plans for expansion and as a
shipyard which has been successfully delivering very high
quality commercial ships and efficiently building defence
vessels, it is probably in the best position to expand its
market share. Cochin Shipyard, as mentioned earlier, is
pursuing an expansion plan to increase ship repair capacity
by putting up ship repair facility in Cochin Port Trust area.
CSL has also plans to build a larger dry dock within the
premises to cater to the large ship segment such as LNG
vessels, new generation aircraft carriers, repair of jack up
rigs, etc. These plans would fructify in the next three to
five years and would add capacity and capability to ensure
momentum of growth.
Does the Company see itself as a major international
player in the industry competing with global giants in
future?
Yes.The company is looking at emerging as an international
player in the industry and towards this end, it is evaluating
a proposal to setup a green field shipyard at a new location
in Gujarat. The Shipyard is looking at increasing its product
mix and investing in research and development. These are
the long term plans which will finally enable CSL to be an
internationally competitive global player.
Cochin Shipyard has been doing a good work in the
CSR field. What’s the feedback from the community it
serves?
CSL is proud of its commitment to serve the society
by undertaking CSR projects both in the immediate
neighbourhood as well as within the state of Kerala. The
Shipyard has done commendable work in the education
and health sectors. The Shipyard has a special focus on
programmes targeting disadvantaged sections of the
society as also geographically backward areas. The feed-
back on CSL initiatives in the field of CSR has been extremely
positive and the yard has earned a very good reputation as
a peoples friendly public sector undertaking in Kerala.

SECTOR IN FOCUS – MANUFACTURING
Hindustan Aeronautics Limited (HAL) has pioneered
the manufacturing of military and civil aircraft in
India and stands as Asia’s premier aeronautical
complex today. What is the way forward and what
are HAL’s current programs?

HAL has been the mainstay of the Indian Defence for
over seven decades and its expertise today encompasses
design, production, repair, overhaul and upgrade of
aircraft, helicopters, aero engines, avionics, aero systems,
launch vehicles, satellite structures and Unmanned Aerial
Vehicles(UAV).HALhasmadesterlingcontributionsinthe
field of aeronautics and aerospace and its indigenization
programs date back to the early fifties. Over the years,
HAL has been successful in producing various types of
aircraft and helicopters and has grown into a company
with 20 production Divisions and 10 R&D centres. HAL’s
current programs are aimed at boosting the nation’s
defence requirements through indigenization efforts and
widening the export base.
Responding to India’s future requirements, HAL has
conceptualized the indigenous development of a
Basic Turbo-prop Trainer (HTT-40) and is working on
development of Light Utility Helicopter (LUH). HAL’s latest
indigenous product Light Combat Helicopter (LCH) has
completed rigorous hot and cold weather flight trials
recently and is expected to receive Initial Operational
Clearance and enter Series Production by end 2015. I am
happy to inform you that thanks to HAL, India happens to
be among the six countries in the world that designed a
combat helicopter.
It is important to note that HAL today provides one stop
solution for all the design needs of Aircraft & Helicopters
in airframes, airframe systems, avionics mission & combat
systems using advanced Design tools.
Also, HAL is determined to achieve its vision of becoming
a significant global player in the aerospace industry.
HAL’s thrust on co-development and co-production of
aircraft, engines and equipment with leading global
aerospace companies will not only meet India’s defence
requirements but will also increase the level of exports
of aerospace products. HAL currently exports its products
and services to more than 20 countries.
Regarding Research & Development strategy, HAL has
set up an R&D corpus earmarking 10% of its operational
profit after tax for technology development efforts. The
Company continues to focus on increasing its portfolio
of products including aero engines. The latest being a 25
kN turbofan engine suitable for trainer aircraft and a 1200
kW turbo shaft engine primarily for use on helicopters.
As part of R&D policy, a society has also been registered
for formation of Corporate Meta-university for industry
focused research relating to aeronautical sector in all
disciplines and inter-disciplinary areas of technologies.

HAL on Massive Expansion
Mode, Aims at Significant
Global Presence
Mr. T. Suvarna Raju
Hindustan Aeronautics Limited (HAL)

What are the initiatives taken by HAL to realize
government’s‘Make in India’drive?

HAL has been one of the pioneers in meeting India’s
defence needs and ‘Make in India’ concept has been its
strength all along. HAL is committed to becoming self-
reliant in aircraft production and maintenance in the
strategic interest of the nation and has taken several
initiatives aligning with government’s‘Make in India’drive.
Indigenization is crucial to manufacturing in India and
HAL has been successful in indigenizing over 2000
components. In addition, a total of 111 technology
projects have been identified in the areas of design,
manufacture,avionicsandmaterialtosupportindigenous
development and initiatives are being taken to develop
advanced aerospace materials in the country.
HAL has so far designed and developed 15 types of
Aircraft /Helicopters and has mastered the rotary wing
technology. Advanced Light Helicopter (ALH) Dhruv has
already proven its worth in India and other countries.
HAL’s current indigenous development/production
programs include Light Combat Aircraft (LCA),
Intermediate Jet Trainer (IJT), Hindustan Turboprop
Trainer (HTT)-40, Advanced Light Helicopter (ALH-
Weapon System Integration), Light Combat Helicopter
(LCH), Light Utility Helicopter (LUH), Fixed and Rotary
Wing UAV, Advanced 25kN Aero Engine and Mission
Computer (MC) etc.
To further propel indigenization efforts and boost private-
public partnership, HAL is keen on developing Micro
Small and Medium Enterprises (MSMEs) to sustain global
competitiveness. With a vendor base of about 2500, HAL
is outsourcing its manufacturing activities to the Indian
private industries and 25% of the total standard man
hours are outsourced.
HAL is well poised to meet the future requirements of the
country and emerge as a global player with capabilities
in design, development, repair and upgrade of aircraft,
helicopters, aero engines and aero systems.

On the HR front, what are the initiatives taken up by
HAL to become a globally competitive organisation?

HAL has chalked out plans and strategies to launch
itself into the distinguished league of global companies
in the aerospace arena. Human Resources has been
identified as one of the thrust areas. HAL’s belief is that
“people are key differentiators for sustained success”. The
objectives are to ensure availability of right people to
meet the organizational goals; continuous improvement
in knowledge, skills and competence (managerial,
behavioural and technical); development of core
competence in high-tech areas; promote a culture of
achievement & excellence with emphasis on integrity,
credibility and quality; maintain a motivated workforce
through empowerment of individuals and teams; ensure
organizationallearning;andplayaroledirectlytoenhance
productivity, profitability and improve the quality of
work life.
HAL is focused on getting the best of its workforce
through various measures:
• Attheentrylevel,HALhasputinplaceInductionTraining
for Management Trainees (MT) / Design Trainees (DT)
intended to bridge the gap between the academics
and Industry. The 52-week structured training consists
of one semester at IITs and other reputed Institutes
to strengthen the technical skills and orientation
towards Aeronautics.The training also focuses on Basic
Management.
• For mid-career level employees, opportunity is provided
to acquire latest and advanced technology in the
field of Aeronautics and to implement the same on
projects. HAL has a tie-up with Cranfield University
UK to sponsor Executives for acquiring M. Sc in Aero
Dynamics, Aerospace Vehicle Design, Material Science,
Thermal Power, Manufacturing etc. During the past five
years, more than 100 executives have been sponsored
for this programme.
• In addition, HAL has been sponsoring Officers to
reputed Institutions in India for higher studies in the
field of Technology and Management, in a structured
manner. In the Technical and Design Disciplines,
Officers have been sponsored to various IITs and in
the field of Management to IMI - New Delhi, XIME -
Bangalore, MDI – Gurgaon etc. We recently introduced
a scheme for Sponsorship for MS, M Sc (Engg.) and Ph.
D Programme at Indian Institute of Science, Bangalore
and IIT Kharagpur, Kanpur, Madras, Delhi and Mumbai.
• Succession Planning is identified as a thrust area
to ensure continuous and timely supply of high
performance individuals, who will occupy leadership
rolesasidentifiedbyHAL.Themajorinitiativeslaunched
by the Company in this direction include outlining a
one year comprehensive Leadership Development
Programme (Sanghshaptak) in consultation with
IIM-Ahmedabad and revamping of Assessment &
Development Centres for the Senior Executives with
KPMG Advisory Service Pvt. Ltd. Also, customized
Competency Development Programmes (CDPs) have
been developed in collaboration with IIM Ahmedabad
for Business Excellence; IIM Bangalore for Operational
Excellence and IIM Calcutta for Leadership Excellence,
to bridge the competency gaps identified by way of
Assessment Centres.

COVER STORY
Manufacturing
–The growth engine for future

Revival of economy through investment driven growth
of industry and infrastructure sectors is the top most
priority before the government. Today’s evolving world-
order rests on the pillars of globalization and technological
advancement, offering a huge opportunity for the growth
of industry. The emerging paradigm of manufacturing is
based on productivity-adjusted labour, rationalisation in
consumption of natural gas and electricity, not merely on
the perceptions of high-cost or low-cost economies. In
this context, improvement in efficiency and technological
advancement are the two most important prime-movers to
achieve competitiveness in manufacturing.
Manufacturing in India today
Today,Indianmanufacturingsectorisatacrossroad.Despite
being a major growth sector for the Indian economy, the
share of manufacturing is stagnating at around the 15%
of GDP for almost three decades now and it is indeed low
when compared to around 33 percent in China, 28 per cent
in South Korea, 25 per cent in Indonesia and around 20 per
cent in Japan, Malaysia and Germany. With share of non-
agricultural sectors growing faster than the performance
of the agricultural sector, there seems to be an aberration
in India’s structural transformation as India jumped directly
from an agrarian to a service driven economy leapfrogging
the intermediate manufacturing stage.
Country has experienced economic boom on the back of
servicesledgrowthwhilelowagriculturegrowth,lowquality
employment, rural-urban divide, continues to plague the
well-being of masses.Today, manufacturing sector employs
30% of the non-agricultural workforce with approximately
15% share in GDP while the agriculture contributes only
18% of GDP with a working population support of around
60%. This re-enforces the fact that domestic manufacturing
has to play a pivotal role in achieving consistent, more
inclusive, and sustainable growth.
Reaping demographic advantage
India is one of the best countries in the world poised
to take the manufacturing revolution to the next stage.
India has a strong advantage of being a nation with the
youngest population. With increasing population, the
working age people over the next decade is expected to
be approximately 900 million which works out to around
65% of India’s population in the age bracket of 18-59 years
by 2026. It is an imperative to focus on building a strong
and skilled workforce, as such an opportunity rarely comes
in the life of a nation and we as a nation should reap this
opportunity of“demographic dividend”in its entirety or else
we will lose the advantage if the situation does not change
in the next ten years.
Realising‘Make In India’
Make in India’initiative, aims to catapult Indian Industry into
a new phase of growth trajectory by providing one of the
best platforms to strengthen domestic manufacturing to
earn global recognition for the Indian economy and also
place India on the world map as a manufacturing hub.
The success of this initiative will depend on how we spur
up our level of operations with additional efforts in terms
of better technology and enhanced skill meeting global
quality standards while indigenizing technology intensive
manufacturing and not just acting as a hub for assembly of
manufactured components.
The Make in India’ campaign has the capability to lead to
more localisation by leveraging the incipient strength
of “Reverse Engineering” enshrined in various sectors of
entire domestic manufacturing value chain. This needs to
be cultivated and developed by providing an ecosystem
conducive to low-cost and high-quality products.
With impetus on developing industrial corridors and smart
cities, the government aims to ensure holistic development
ofthenation.Thecorridorswouldfurtherassistinintegrating,
monitoring and developing a conducive environment
for the industrial development and will promote advance
practices in manufacturing. In a bid to reap advantage of
the initiatives taken by the Government, the manufacturing
sectorneedstotransformitselfemphasizingonmaintaining
superior quality while keeping price at a competitive level.
Appropriate quality standards are needed if the country has
to emerge as a destination for global manufacturing. Prime
Minister’s call for‘zero defect and zero effect’manufacturing
to produce quality products without any adverse impact on
the environment very well recognises shape of the things
to come in future. The government plans to introduce
quality standards for automobile, food processing, electrical
machinery, garments and textiles products among others
to drive exports of quality products. A policy ecosystem is
required to render necessary flexibility to PSEs to address
conflicting priorities enabling collaborative working with
private sector. In the context of foreign collaboration,
sharing business with collaborators on mutual benefit and
to the holistic benefit for the country in terms of technology
acquisition, skill development should be the hallmark.
Fostering innovation for Value added manufacturing
The shifting paradigm of global manufacturing led by lower
energy cost and improved technology is putting traditional
low cost counties under stress as manufacturing bases are
returning to US, UK, Germany and Mexico bringing supply
chain closer to demand centre. An enabling innovation

ecosystem needs to be created to unlock the potential of
domestic manufacturers for higher value creation. Today,
Value Added by the manufacturing sector in India is less
than half that of China (30-35%). Even smaller countries (in
terms of GDP and population) like South Korea and Brazil
have larger manufacturing imprint than India. Today, Indian
manufacturers face a daunting task in terms of transforming
to a competing manufacturing centre and have to realize
that not spending on innovation would be akin to unilateral
disarmament in wartime. In the increasingly globalized
manufacturing context, customer-oriented manufacturing
is one of the promising approaches to improve product and
service quality with competitiveness. This is an imperative,
in particular, for the small and medium-sized enterprises
(SMEs).
Climate change is going to be one of the foremost factors
havingahugeimpactintermsoftechnologyinterventionon
the manufacturing industry worldwide. With the stringent
emissions controls and an earnest need to develop “Green
Technology”, technology ‘depth’ is required which seeks to
increase value addition and enhance competitiveness. As
Indian manufacturers, we need to enhance our R&D spend
from a paltry 0.8% of GDP vis-à-vis 1.5% spent by Chinese
and 3.5% by South Korea so that we are not left behind in
developing emerging technologies necessary for adding
higher value in manufacturing.
The pace of commercialization of R&D is a weakness of
Indian manufacturing calling for confidence and capacity
building with right policies and robust competence in
place. Other emerging areas like additive manufacturing;
factory of future with intelligent decision support models,
enveloping ambience of intelligence with sustainable and
reconfigurable systems to equip our manufacturing units to
catertoemergingkindofmarketdemandarealsonecessary
for enduring existence. Skill developments for adapting the
best practices with improvements and modifications, Six
sigma, lean engineering, reconfigurable manufacturing
etc need to be emphasised to enhance capacity and
competitiveness. The approaches need to be designed
to reduce time to market innovative products. Towards
this improving capabilities for information collection and
analyzing data, knowledge and patterns with advanced
computing are crucial for manufacturing growth.
The necessary focus areas for value added manufacturing
consists of (a) bridging skill gap by investing in skill
development not only for the new entrants but also for
the existing workforce in order to enhance productivity.
(b) Creating an eco-system for innovation driven research,
development and deployment to match the global peers
(c) Supporting the SME sector in acquiring technology
and improving efficiency as the sector often acts as supply
chain partner of OEMs and large industries (d) Streamlining
the accessibility to abundant raw material and natural
resources of the country.
Conclusion
In fine, India has to stand up to the global challenges of
climate change, resource scarcity and social inequities by
leveraging technology and innovation in its manufacturing
capabilities for developing products and providing services
in an environmentally sustainable and socially responsible
manner. The necessary pieces of manufacturing jigsaw
need to be put together before global supply chain gets
fully re-defined to reap the benefits of “Make in India”
platform and overtakes domestic industry.
The author of the article is Mr Kaushik Acharya, General Manager, BHEL

(L - R) Mr. N K Verma, MD, OVL, Mr. Vimal Wakhlu, CMD , TCIL, Ms. Nita Karmakar, Director, CII,
Mr. B Prasada Rao, Chairman, CII PSE Council and CMD, BHEL and Ms. Ratika Jain, Executive Director-
Manufacturing, CII.
The CII PSE Council, which is a forum
of Chairmen and Managing Directors
of the Public Sector Enterprises
chaired by Mr. B Prasada Rao,
Chairman and Managing Director,
BHEL, met on 21st July in Delhi for its
first meeting for the year 2014-15.
The following points were discussed:
• Need for the Public Sector
Enterprises to get due recognition
for their CSR oriented activities and
hence CPSEs to be encouraged
to apply for the CII Sustainability
Award.
• Swachh Bharat initiative taken by
CPSEs including building toilets
across the country.
• Discussion on the Public
Procurement Bill and its implication
for the CPSEs.
CII Council on Public Sector Enterprises
EVENTS
CII PSE SUBCOMMITTEE ON
CSR & SD
The CII CPSE Subcommittee on CSR
and SD, chaired by Mr. Vimal Wakhlu,
Chairman and Managing Director,
TCIL met on 21st July in Delhi to
discuss upon their various that would
be taken in the year 2014-2015.The
members discussed on their targets
of building toilets across the country.
Everyone would be completing their
targets except for those which are in
flooded areas.
The members also deliberated on the
CII CSR Summit which will focus on
sharing of experiences by both Public
and Private Sector being planned in
the month of September 2015.
• A presentation was made by Mr.
M L Shanmukh, Chairman, CII
Subgroup on Director (HR) on
issues of the present Pay Revision
and its solution for the next Pay
Revision for the CPSEs
• A Presentation on Exemptions,
Modification and Adaptations to
Companies Act 2013 was made
by Mr. Rudra Pandey, Partner,
Shardul Amarchand Mangaldas
& Co. Members were presented
the issues yet to be exempted
by MOCA for CPSEs and their
implication.
Mr. Vimal Wakhlu , Chairman, CII Subcommittee on CSR & Sustainable Development and CMD, TCIL.
(L-R) : Mr. Rabindra Singh, Director (Personnel), NMDC, Ms. Veena Swarup, Director (HR), EIL ,
Mr. Rajesh Goel, CMD, Hindustan Prefab and Ms. Anita Dhar Kaul, GGM, RITES.

Policy & Impact
PSE DEFENCE FIRMS GET
ACCOUNTING EXEMPTION
The government has exempted its
defence companies from segment
account reporting so that these
entities don’t have to reveal sensitive
information in their books.
Segment reporting pertains to a
company’s financial information
with regard to the different products
and services it produces and the
geographical areas it operates in.
“For government companies engaged
in producing defence equipment,
the provisions of section 186 (loans
and investments by companies) and
accounting standard 17 (segment
reporting) shall not be applicable,”
said a senior official.
Besides, these companies have also
been exempted from complying
with section 186 of the Companies
Act, 2013, which prohibits a
company from making investments
through more than two layers of
subsidiaries and requires unanimous
board approval for giving any loan,
guarantee or security.
Many government defence
companies have more than two layers
of subsidiaries.
The decisions come at a time when
the government wants to increase
domestic defence production by
both public sector and private
companies. Currently, India is the
second-largest importer of defence
equipment.
The government has raised the
foreign direct investment (FDI) cap on
defence companies from 26 per cent
to 49 per cent. FDI beyond 49 per
cent is also allowed in state-of-the art
defence manufacturing, albeit with
riders.
“Keeping in view the nature of
business and the sensitive nature
of the disclosure, it is considered
prudent not to disclose the
information required by accounting
standard 17 regarding segment
reporting. Such non-disclosure does
not have any financial effect on the
accounts of the company,”HAL said in
its annual report.
Segment account reporting is only a
disclosure standard and doesn’t affect
the recognition or measurement
of any component in financial
statements.
Though no such exemptions have
been given to private companies
engaged in defence equipment
manufacturing, it is unlikely to
disrupt the level playing field, as
such exemptions do not have a
bearing on the manner in which the
performance of such companies are
depicted.
SHIPPING MINISTRY LOOKING
FOR ALTERNATIVES TO PORT
CORPORATISATION: GADKARI
Shipping Minister Nitin Gadkari
on June 5 said attempts were
being made to find alternatives
to corporatisation, which was
opposed by port employees, for
upgrading infrastructure and
services, as announced in Budget
2015-16.“Finance Minister Arun
Jaitley had told us (in the Budget)
about the Companies Act, but we are
looking at other alternatives beyond
the Companies Act to modernise
and develop the ports,”Gadkari
told reporters at a Mumbai Port
Trust event.“Finance Minister Arun
Jaitley had said major ports would
be encouraged to come under the
Companies Act for better functioning.
Gadkari said his Ministry was
discussing and seeking guidance
from the Finance Ministry on the
alternatives. He did not elaborate.
“Basic concept for ports is
development and modernisation. We
don’t want to privatise ports, nor do
we want to give any equity to private
people. We want to modernise,
protect the interest of labour, protect
the interest of ports and, at the same
time, improve the services of the
ports to improve business and do
good profits.”
Speaking to reporters after
inaugurating an oil spill response
facility for the Mumbai harbour,
Gadkari said the 12 major ports
would be investing Rs 1,000 crore
to set up clean power facilities and
reduce reliance on grid power.
“The government has sanctioned
a 150-MW plan for green power for
ports,”he said, adding generating
funds would not be difficult. On the
occasion of the World Environment
Day, Gadkari also highlighted the
need to use recycled water and
reiterated his plans to have green
smart cities at each port, at an
estimated Rs 3,000-4,000 crore a city.
“Port water will be recycled. Port
waste will be turned into biogas.
Vehicles will run on biofuel. Solar
energy and wind power will be
generated at ports. These cities will be
pollution-free and aim at being green
smart cities,”Gadkari said.
The 12 major ports together have an
estimated 264,000 acres, and these
are being mapped through satellites.
Gadkari also said the government
had no plans to sell land to builders
and private developers. These smart
cities would be built according to
PSE NEWS UPDATE

international standards and would
have wide roads, green energy,
advanced townships and greenery.
The major ports in the country
- Kandla, Mumbai, Jawaharlal
Nehru Port Trust, Marmugao, New
Managlore, Cochin, Chennai, V O
Chidambarnar,Visakhapatnam,
Paradip and Kolkata (including Haldia)
- handle approximately 61 per cent of
cargo traffic.
INDIA SCRAPS DUTY BENEFITS
FOR DEFENCE PSEs TO WOO
PRIVATE COMPANIES
The government has withdrawn a
critical preference given to state-run
companies and government entities
that manufacture defence goods, a
measure that will help attract private
capital to the sector and boost job
creation by creating a level playing
field.
The government has issued a
notification to withdraw the excise
and customs duty exemptions
enjoyed by the Ordnance Factory
Board and public sector units in
defence sector.
“This will provide a level playing
field ... by taking away the strategic
advantage with PSEs for quoting
lower rates in open bids,”a Commerce
and Industry Ministry statement said
on Monday.
The move addresses a key demand
of private sector and foreign original
equipment manufacturers (OEMs)
such as Boeing, Airbus, Lockheed
Martin and BAE Systems, which are
actively exploring the scope of future
investments in India, the statement
said.
It will also send a definitive message
to foreign OEMs that India is open to
business for defence manufacturing,
the notification said.
Foreign firms tying up Indian private
players have long complained that
the excise and customs exemption
gives an unfair cost advantage to
state-run enterprises.
It is partly due to this preference that
foreign firms preferred to tie up with
a public sector unit for a Defence
Ministry contract even when it was
more feasible to involve a private
partner that could deliver faster and
would be more efficient.
The withdrawal of exemption will
open up possibilities for smaller
Indian private players who can be sub
suppliers and contractors for larger
military contracts.
“This is a welcome move to put the
Indian private sector and PSEs at
par. However, the MoD (Ministry of
Defence) also needs to consider the
advantage that foreign companies
enjoy as it does not have to pay any
import levies for equipment it brings
in,”said Ankur Gupta of EY India. The
Indian aerospace and defence market
is among the most attractive globally
as the country is the highest importer
of defence items in the world, the
Ministry stated.
The government has systematically
opened up the sector for private
investment by raising the cap on
foreign direct investment to 49%
and rationalising certain conditions.
Almost 60 per cent items required
for industrial licence have now been
dereserved.
GOVERNMENT MULLS COMMON
COAL TRADING PLATFORM
FOR COAL INDIA AND PRIVATE
COMPANIES
The government is working on a
common coal trading platform for
Coal India and private companies
which are likely to be offered lucrative
blocks with prior clearances for
commercial mining.
The electronic platform is likely to be
an extension of the spot sale practice
of Coal India called‘e-auction’where
all the coal mined in the country,
excluding from captive blocks, will be
traded, a senior government official
told ET.
State-run Coal India sold around
11% of its output through e-auction
at a market-driven price in January-
March. The government has decided
to auction the company’s future coal
supply to unregulated sectors such
as steel, cement and captive power
plants.
The proposed platform could trade
Coal India’s auctioned supplies, the
PSE’s uncontracted output, imported
coal and the output of private
companies from coal mines that will
be auctioned for commercial use.
“A common electronic platform will
ensure transparent trading, while
letting the government record and
monitor every single transaction,”
another Coal Ministry official said.

The NDA government is working
towards auctioning coal blocks for
commercial use after enactment of
Coal Mines Special Provisions Act
that provides for opening the sector
to Indian and foreign private firms,
ending Coal India’s monopoly. Prior to
this, Indian companies with end-use
plants were permitted to mine coal
for captive purposes.
COAL MINISTRYTO RESERVE COAL
FOR AUCTION TO UNREGULATED
SECTORS
The Coal Ministry will reserve coal for
auction to unregulated sectors such
as steel and cement from Coal India’s
additional production every year so
that there isn’t any desperate bidding
by private firms in the upcoming
auction of coal supply contracts.
As per a draft model circulated for
stakeholders’comments by the Coal
Ministry, separate bidding will be held
for cement, iron and steel, aluminium
and fertiliser plants.
As per the proposed mechanism, Coal
India will invite bids from companies
for supplying a fixed quantity of coal
at a floor price. Once bids are received,
the state-run miner will increase the
floor price till the demand and supply
reach the same level.
The proposed methodology is
among three options proposed by SBI
Capital Markets that was appointed
as the consultant for advising on
auctions of Coal India’s contracts. The
methodology is being used to derive
a market-driven price for the coal
contracts against the current system
of awarding the agreements based
on decisions of an interministerial
screening committee.
OIL MINISTRY TO READY
ROAD MAP FOR SECTOR’S
INFRASTRUCTURE
With India’s demand for petroleum
products poised to grow at more than
3% annually and the country expected
to see average annual GDP growth
of 8-8.5% over the next several years,
the Oil Ministry has decided to roll out
a road map for development of the
sector’s infrastructure. This will include
decadal plans to meet demand till
2050.
This would be for the first time,
Petroleum Minister Dharmendra
Pradhan said, that his Ministry has
proposed a“long-term strategy
similar to developed nations”to
create infrastructure related to
transportation, marketing and
production of petroleum products to
be able to adequately meet demand
till 2050.
The‘Vision Document 2050’, would
strategise the demand for petroleum
products and infrastructure in the
country for the next three decades.
One of the focus areas would be to
cut costs.
India, the fourth-largest energy
consumer in the world after the US,
China and Russia and accounting for
4.4% of global energy consumption,
would see highest oil demand
between 2013 and 2040, said
International Energy Agency’s World
Energy Outlook 2014. The country
is expected to see its demand for
petroleum products grow at a
compounded annual growth rate of
3.5%.
Moreover, with a positive outlook
from the government’s end to ramp
up investment in infrastructure,
including roads and railways, sales of
both passenger and utility vehicles
are expected to grow at 6-8% in the
current fiscal.
NEW POLICY LIKELY TO OPEN
PETROL PUMPS
With increased private participation
in retail sector appearing imminent,
the Ministry of petroleum is
contemplating to offer petrol pumps
on“self investment models”without
any outlay assistance from oil
marketing companies.
Under this new scheme, investments,
maintenance and running costs
will be done by dealer while the
Oil marketing companies (OMCs) –
IOCL, HPCL and BPCL – will mentor
successful bidders on facility and
equipments required, engineering
and list of vendors to fetch fuel, said
Ministry sources. Besides, the OMCs
will decide fuel and other product
prices offered at outlets to ensure that
customers are not taken for a ride.
Till now OMCs are operating more
than 50000 retail outlets all over the
country under different categories
– company-owned and company
operated (COCO), company-owned
and dealer operated (CODO) and
dealer-owned and dealer operated
(DODO).
PSE NEWS UPDATE

The Ministry is mulling to add another
category in giving out retail outlets
to individuals and“legal entity”by
relaxing rules in the existing dealer
selection policy. This scheme will have
a provision for multiple dealerships
– which is an indication of opening
up of the retail sector for private
companies.
NATURAL GAS OUTPUT TO RISE
50% BY 2018-19
India’s natural gas output is likely to
rise by 50 per cent to 146.87 Million
Standard Cubic Meters per Day
(mmscmd) by 2018-19 on account of
higher production from ONGC fields,
Oil Ministry has said.
In its annual report, the Ministry has
said domestic gas production will rise
from 98.15 mmscmd in 2014-15 to
99.87 mmscmd in the current fiscal.
In 2016-17, the output will climb to
112.95 mmscmd and finally to 146.87
mmscmd in 2018-19. Bulk of the
incremental output will come from
state-owned Oil and Natural Gas Corp
(ONGC) which will see production rise
to 65.75 mmsmd in 2014-15 to 96.38
mmscmd.
ONGC production will include 4.66
mmscmd from New Exploration
Licensing Policy (NELP) block KG-
DWN-98/2 or KG-D5 in 2017-18 and
12.05 mmsmcd in 2018-19.
State-owned Oil India Ltd will see gas
production rise from 7.78 mmscmd last
fiscal to 10.96 mmscmd in four years.
The Ministry said output from fields
operated by private firms like Reliance
Industries is projected to rise from
24.62 mmscmd in 2014-15 to 39.53
mmscmd in 2018-19.
Demand, on the other hand, is
projected to increase by nearly 30
per cent to 523 mmscmd in 2018-19
from 405 mmscmd in 2014-15. Gas
demand is expected to climb 10
per cent in the current fiscal to 446
mmscmd.
India is world’s fourth largest
energy consumer with oil and gas
constituting about 37.24 per cent
of primary energy consumption.
“The world average primary energy
consumption growth rate (CAGR) for
2000-2013 has been 2.41 per cent, as
compared to Asia Pacific’s rate of 5.39
per cent and India’s rate of 5.52 per
cent,”the report said.
GREEN SIGNAL LIKELY FOR 42
STALLED PROJECTS WORTH Rs
1.15 LAKH CRORE
The Narendra Modi government
is gearing on the pedal to revive
the investment climate, facilitating
clearances for 42 stalled projects
worth Rs 1.15 lakh crore since it
presented the Budget for 2015-16.
In the previous nine months about
50 pending investment plans worth
Rs 1.45 lakh crore were granted
green signals through the Project
Monitoring Group (PMG) in the
cabinet secretariat. Highway projects
account for half of the 42 projects
whose pending clearances have been
resolved by the PMG in the three
months since the Budget.
Ten power generation and
transmission projects with
investments over Rs 72,000 crore have
also got the green signal.
Three oil and gas projects have also
got the nod, including Shell’s Rs 5,000
crore re-gasification plant in Kakinada.
Railway projects worth Rs 5,500 crore,
including the Patna Ganga Rail-Road
Bridge and a new 180 km rail line to
evacuate coal from Chhattisgarh’s
hinterland, are also now set for
implementation with all outstanding
nods secured.
Aditya Birla group firm Hindalco has
also secured permissions for a Rs
13,200 crore aluminium smelter plant
in Odisha’s Sambalpur district.
The PMG, set up by the UPA
in January 2013 to help stuck
investments, had cleared 155 projects
worth Rs 5.5 lakh crore in its first 16
months. Since the NDA came to
power in May last year, 91 projects
worth Rs 2.6 lakh crore have been put
back on track.
NO CENTRAL HELP TO DEBT-
RIDDEN STATE-RUN POWER
DISCOMS: PIYUSH GOYAL
The government has ruled out the
possibility of a central package
for debt-ridden staterun power
distribution companies, and has
insisted that it’s time that they get
their act together. The combined debt
of all distribution companies was
around Rs 2 lakh crore as on March
last year, and despite most discoms
raising tariff, they haven’t really
managed to cut losses significantly.
They are, in fact, depending on loans
for even taking care of operational
expenses.
In the past, the central government
had introduced‘restructuring
packages’for discoms – the most
recent being 2013. What discoms
need to do is, set efficiency right,
eliminate corruption in the system,
reduce losses, cut transmission and
distribution losses. I need to handhold
them and put on my investment
banking hat to help them sort things
out,”Minister of Power, Coal and
Renewable Energy Piyush Goyal said.
The Minister added that the‘onesize-
fits-all’principle doesn’t work here.
“We have started dialogue with state
governments last year. The central
government, state governments and
outside experts are working together
for a 24x7 electricity plan by 2019 for
each state,”he said.
No state had signed new power
purchase agreements since 2013,

and many continue to opt for load
shedding rather than buy power,
forcing the industry and commercial
outfits to depend on expensive power
from diesel generator sets. India has a
total installed capacity of 90,000 MW
of diesel generator sets, providing
power at upwards of Rs 20 a unit.
“We will eliminate consumption of
electricity through diesel generator
sets. This requires a lot of distribution
capacity augmentation and
improving transmission network.
We are also looking at changing the
existing transmission lines in parts
to double capacity,”Goyal said. The
Ministry plans to bid out contracts
worth Rs 1 lakh crore over the next
6-8 months to scale up transmission
infrastructure.
The recent coal mine auction and
bids for gas have given the sector
some relief and visibility to increase
generation. In the year ended March,
India added 22,566 MW of new
generation capacity, its highest ever
in a year. But these projects were
those which had been stranded or
stuck and thus delayed.
CENTRE PADS UP TO RAISE
RS 1-LAKH CR FOR PORTS &
INFRASTRUCTURE
Union Ministry of Shipping has chalked
out a plan to raise Rs 1-lakh crore to
develop ports, build ships and improve
inland waterways.The amount would
be raised in the dollar equivalent at an
interest of three per cent.
Gadkari said his Ministry is planning
to set up Ports Infrastructure
Development Finance Corporation to
fund ports and shipping infrastructure
in dollars. Inland waterways, ports
and shipping are on the top of
the agenda. The Centre is keen to
modernise large ports.
The Ministry has already taken
decisions to develop six ports,
including Rs 12,000 crore deep-water
Sagar port in West Bengal, Colachel in
Tamil Nadu, Rs 6,000 crore Vadhavan
port in Maharashtra, and Rs 1,200
crore Haldia dock 2. These ports
would be developed with 20 meter
draft. The handling capacity will be
more and the ports do not have to
annually spend money on dredging.
A port with 20 meter draft will also
help increase revenues. At present,
JNPT has to spend Rs 400 crore
annually on dredging.
GOVT PROPOSES TRIBUNAL FOR
PUBLIC CONTRACTS
To streamline the institutional
mechanism for resolution of disputes
arising from public contracts,
including public-private-partnership
projects, the government on June 18
released a draft Bill to set up a tribunal
for public contracts.
The Bill provides for the tribunal
to deal with disputes in the public
contracts exceeding Rs 5 crore. It
would deal with disputes relating
to execution of contract, specific
performance of the terms of the
contract, termination, cancellation,
repudiation and claims for damages
for breach of contract.
The tribunal has to conduct day-to-
day hearings and give final order
within 180 days from the date of
the application. Similarly, an arbitral
tribunal would be required to
announce its arbitral award within
120 days of referring the dispute to it.
The tribunal’s order will be binding on
all parties and can be challenged only
in the Supreme Court.
The Bill is part of the government’s
initiative to unclog stalled projects
that were holding back investments
worth several trillion rupees
and discouraging investors. The
government has envisaged $1 trillion
investment in infrastructure in five
years through FY17.
Acknowledging that disputes in
public contracts are costly and takes
a long process to resolve, Finance
Minister Arun Jaitley had proposed
the Bill in the Budget. According to
the draft Bill, the government would
constitute the tribunal for public
contracts with principal seat in
New Delhi and benches in Chennai,
Kolkata and Mumbai.
PSE NEWS UPDATE

GOVERNMENT PLANS TO RAISE
NFL’S NANGAL UNIT CAPACITY BY
1.3 MT
The Fertiliser Ministry plans to increase
the capacity of National Fertilizer
Limited’s (NFL) plant at Nangal in
Punjab by 13 lakh tonnes (LT).
At present, NFL’s Nangal unit has an
installed capacity of 4.785 lakh tonnes
(LT)
“Government wants to produce more
fertilisers in the country and reduce
import dependence. The Ministry of
Chemicals and Fertilisers is working
on the Prime Minister’s‘Make in India’
mantra and in this regard several
old and sick units are being revived,”
Minister of Chemicals and Fertilisers
Ananth Kumar said.
Besides reviving old units, new units
are also being set up, he added.
NFL has a total annual installed
capacity of 35.68 lakh tonnes and is
the second largest producer of urea in
the country.
GOVERNMENT EASES DEPOSIT-
TAKING, MANAGERIAL PAY
NORMS FOR FIRMS
Ushering in an easier set of
regulations, the government has
relaxed deposit-taking norms for
private companies and exempted the
Public Sector entities from managerial
remuneration restrictions.
The changes, which also include
relaxations for related party
transactions entered into by the
private companies under the
Companies Act, 2013, are part of
the government’s efforts to further
improve the ease of doing business in
the country.
The Corporate Affairs Ministry said
it has notified the changes that
broadly include easier compliance
requirements for private, government
and charitable companies.
Private firms can now provide a
shorter period for offering securities
to existing shareholders, approve
employee stock option plans through
a simple majority and follow“an easier
procedure”with regard to holding
general meetings.
“Private companies have also been
allowed to accept deposits from
members without the requirement of
offer circular and creation of deposit
repayment reserve etc. Flexibility has
also been provided in the types of
share capital that can be issued by
private companies,”the Ministry said
in a press release.
The mandatory consent of
shareholders for certain transactions
relating to sale of undertaking,
investments and borrowings etc. has
been done away with.
Among others, private companies not
having any investment by corporates
have been allowed to extend loans to
directors subject to certain conditions.
An interested private company
director has been allowed to can now
participate in board meeting after
declaring his interest.
For government companies, the
Ministry has done away with limits
on managerial remuneration as well
as restrictions on the maximum
number of directorships. Rules for
disqualification of directors in certain
cases have also been eased.
“The provisions relating to loans to
directors, loans and investments
by companies and related party
transactions have been modified to
provide flexibility to Government
companies in complying with such
provisions,”the release said.

The Ministry has already made a
raft of changes to the Companies
Act, 2013 - whose most provisions
came into effect from April 1, 2014
– amid concerns raised from various
stakeholders. Besides, a committee
has also been set up to further review
the new law and suggest further
changes.
PSEs, CENTRAL DEPTS TO GET
RS1 CR PER MW TO SET UP SOLAR
UNITS
To boost the country’s energy
security, the government has
decided to give a push to solar power
generation by roping in Public Sector
units and Central departments and
Ministries. The government has
asked them to set up 1 MW solar
power plant each on their rooftops or
land for which they would be given
viability gap funding of Rs 1 crore per
MW.
The projects have to be implemented
by 2017 and the PSEs and Ministries
would be free to use the power
so generated for either self-use or
sell it to third party or discoms. The
incentives are being given under the
scheme to set up 1,000 MW of grid-
connected solar PV power project
to give fillip to generation of solar
power, which will help in promoting
ecological and sustainable growth
while meeting India’s energy needs.
The viability gap funding (VGF) will
be given in two tranches – 50 per
cent on successful commissioning
of the full capacity of the project and
the rest after one year of successful
operation of the project.
For encouraging domestic
manufacturers, the government
will give VGF of Rs 1 crore/MW if the
cells and modules are procured from
domestic source while it will give Rs
50 lakh/MW if only the modules are
procured from the domestic source.
The PSEs such as NTPC, NHPC,
CIL, IREDA, and Railways would be
allowed to participate in Central or
state government tenders from time
to time up to 2016-17 for selling
solar power to state utilities, discoms
or any other organisation. They
will also be allowed to sign power
purchase agreements and power sale
agreements with state utilities and
discoms at tariff determined by the
Central or state regulators.
The VGF will be provided through
Solar Energy Corporation of India
(SECI), which will be given a fee of
one per cent of the VGF disbursed for
handling the funds and managing the
scheme. However, if the project fails
to generate any power continuously
for any year within the 25 years or the
major assets are sold or the project is
dismantled during this tenure, SECI
will have a right to refund of VGF on
pro-rata basis.
The project falls under the Jawaharlal
Nehru National Solar Mission to
meet the energy demand and tackle
challenges of climate change. The
mission has set a target of deploying
grid-connected solar power capacity
of 20,000 MW by 2022 to be achieved
in three phases – first phase up to
2012-13, second phase by 2017 and
the third phase by 2022.
For encouraging domestic
manufacturers, the
government will give VGF
of Rs 1 crore/MW if the cells
and modules are procured
from domestic source while
it will give Rs 50 lakh/MW
if only the modules are
procured from the domestic
source.
PSE NEWS UPDATE

Tie-Ups, Procurement & Contracts
AIR INDIA SEALS CODESHARE
ALLIANCE WITH AIR NEW
ZEALAND, AVIANCA
Providing a seamless connectivity
to its passengers bound for New
Zealand and Colombia, national
carrier Air India has sewed up a
codeshare alliance with Air New
Zealand and Avianca.
The two partnerships were sealed
during the 71st Annual General
Meeting of the International Air
Transport Association in Miami, in
June this year.
Both Air New Zealand and Avianca
are part of the global airlines group
Star Alliance, of which Air India is also
a member.
Code-sharing allows an airline to
book its passengers on its partner
carriers and provide seamless
transport to multiple destinations
where it has no presence.
Under the codeshare agreement
with Air New Zealand, Air India will
place its code on Air New Zealand’s
services from Melbourne, Sydney,
Hong Kong and Singapore to
destinations in New Zealand, Air
India said.
The state-run carrier would also
codeshare on Air New Zealand’s
domestic network.
In turn, Air New Zealand will place
its code exclusively on Air India’s
services to Delhi from Sydney,
Melbourne, Hong Kong, Bangkok and
Singapore.
In addition, Air New Zealand will
gain access to six points of call in
India – Mumbai, Kolkata, Hyderabad,
Chennai, Bangalore and Cochin apart
from Delhi, the airline said.
As part of its codeshare partnership
with the Colombian national airline,
which is a free flow pact, Avianca
would codeshare as a marketing
carrier on Air India operated flights
on the Delhi-New York and Delhi-
London sectors and Air India would
code share as a marketing carrier on
Avianca operated flights on the New
York-Bogota/Medellin/Cartagena and
London-Bogota sectors, the airline
said. The code share agreement with
Avianca is subject to flinalisation of
an Air Services Agreement between
India and Colombia and other
regulatory approvals.
The agreement will enable both
airlines to get additional feed from
each other’s network as it would
enable Air India to reach out to the
South American market.
The agreement means better
connecting times, seamless travel,
more travel options and more
competitive fares for passengers
traveling between both carriers’
home markets, for which Air India
and Avianca are the premier carriers,
Air India said.
HAL-TURBOMECA SIGN JV IN
PARIS FOR RS 200-CRORE MRO
FACILITY FOR HELICOPTER
ENGINES
Hindustan Aeronautics Ltd (HAL) has
signed an agreement with French
engine manufacturer, Turbomeca,
to support the redoubtable Shakti
helicopter engine, which would
power a fleet of 1,000 Indian military
choppers during the coming decade.
HAL’s joint venture (JV) with
Turbomeca, long in the making,
would support the Bengaluru-
headquartered aerospace company’s
ambitious vision of becoming a
helicopter production giant. India’s
military has already committed to
buying three different types of HAL
helicopters, all powered by the Shakti
engine that Turbomeca custom-
designed for HAL. Optimised to fly
at extreme altitudes of up to 6,000
metres (almost 20,000 feet), the
Shakti engine supports Indian army
troops deployed on the Himalayan
watershed.
An HAL release announced that the
new JV would provide maintenance,
repair and overhaul (MRO) support
for the Shakti engine, as well as for
the Turbomeca TM333 engine that
was initially fitted on the Dhruv
ALH while the Shakti was being
developed.
BEML RECEIVES RS 645 CR ORDER
FROM DELHI METRO
Defence PSE BEML has received an
order worth Rs 645 crore from Delhi
Metro Rail Corporation for supplying
74 broad gauge coaches.
DMRC signed a contract agreement
with BEML for design, manufacture,
supply testing and commissioning of
the coaches. BEML has forayed into
manufacture and supply of metro
cars in 2002 and is the reliable Make
in India partner in Metro Rolling
Stock.
BEML has supplied so far more than
600 metro cars or coaches to DMRC
and 150 units to Namma Metro of
Bengaluru for its Phase I.
The defence PSE claims that it has
emerged as the preferred metro
coach manufacturer in the country
to encash upon the emerging
opportunities in the Metro segment.
HAL, BEL JOIN HANDS TO MEET
DEFENCE NEEDS
Defence PSEs HAL and BEL have
signed an agreement to share their
expertise in design, development,
engineering and manufacturing

to develop and produce advanced
airborne communication equipment
to meet the requirement of the
defence services.
Hindustan Aeronautics Limited and
Bharat Electronics Limited have
agreed to share the business from the
Indian defence services.
HAL has the expertise in design,
development, engineering,
manufacture of airborne
communications equipment and
BEL in communications and secrecy
products and solutions.
NTPC-JKSPDCL TO DEVELOP
COAL BLOCK IN JOINT VENTURE
State-run NTPC said, it has entered
into an agreement with Jammu and
Kashmir State Power Development
Corporation Ltd (JKSPDCL) to form a
joint venture company for mining at
Kudanali-Luburi coal block in Odisha.
NTPC and JKSPDCL will share equity
in the ratio of 67:33 in the joint
venture company for undertaking
exploration, development and
operation of jointly allocated
Kudanali-Luburi coal block by Coal
Ministry to them.
Earlier, a Power Ministry statement
had said that a joint venture
agreement between NTPC-JKSPDCL
was assigned for development of
coal mine for power generation.
According to the statement, the
agreement was signed during a
review meeting over power sector
of Jammu and Kashmir, which was
presided over by Power Minister
Piyush Goyal, on Monday. During
the meeting, Goyal had promised all
help from the central government
for expeditious development of
conventional and non-conventional
energy sources of the state.
US-BASED EMERSON TO PROVIDE
AUTOMATION SOLUTIONS FOR
NTPC’S ORISSA UNITS
US-based engineering company
Emerson will be providing
automation technology and
expertise for two new 80 MW
supercritical generating units of NTPC
at the Darlipali Super Thermal Power
Station in the Sundergarh District,
Odisha, India.
The first unit at the power plant
would be commissioned by
December 2017 while the second
unit would be done three months
after that. Emerson project teams
will engineer, install and commission
Ovation systems to monitor and
control each unit’s supercritical
boiler and critical balance-of-plant
processes and equipment.
“Supercritical technologies boost the
efficiency of coal-based electricity
generation while reducing carbon
and other emissions, but the high
temperatures and pressures involved
make them more challenging to control.
Emerson has earlier worked with
NTPC to automate units at the Sipat,
Simhadri, and Tanda power stations
and is currently carrying out projects
at several other sites.
COAL INDIA NEEDS MORE
CLARITY TO DETERMINE
E-AUCTION VOLUME
Even though Coal India(CIL) has been
allowed to revert to the old system
of removing the cap on e-auction
volumes with effect from April 2015,
in the absence of a specific guideline
from the Ministry, the state-owned
miner is in a fix over determining
the volume to be sold via e-auction
route.
The e-auction volume is key to CIL,
as its profitability to a large extent is
dependent on the realisation from
e-auction sales. While a small part
of overall volumes, e-action sales
contribute 35-40 per cent of total
Ebitda (earnings before interest,
taxes, depreciation and amortisation).
Hence, higher e-auction volumes
would mean higher profitability in
the coming quarters.
The standard practice as interpreted
by Coal India is 8-10 per cent of the
total sales. But out of total sales of
471.58 million tonnes (MT) in 2013-
14, a total of 58 MT of coal or 12.29
per cent was sold by CIL through
e-auctions which prompted the
Ministry to put a cap on the volume,
which has now have been removed.
PSE NEWS UPDATE

MCL FLOATS SECOND TENDER
FOR 10 MT COAL WASHERY
Mahanadi Coalfields Ltd, a subsidiary
of Coal India, has floated an online
tender seeking participation of
interested parties to set up a 10
million tonne (mt) per annum coal
washery at Talcher.
This is the second online tender by
the coal company for establishment
of coal washery. MCL, which plans to
set up five coal washeries in the state,
had floated the previous tender for
another washery on May 29 this year.
The washeries are to be set up under
build operate and maintain (BOM)
concept, where a bidder has the
liberty to choose the technology
keeping in mind the project cost and
return on investments. As per the
tender rules, the operator will have
to establish and operate the plant at
least for 10 years.
COAL MINISTRY INVITES BIDS
FOR THIRD ROUND OF AUCTION
The government on June 8 kick-
started the process for auction of
10 coal blocks in the third tranche,
inviting bids from companies
engaged in sectors like steel, cement
and captive power generation.
“The government of India has
directed the Nominated Authority
to undertake the auction of 10
identified schedule II & III coal mines
to eligible companies. Accordingly,
bids were invited from eligible
companies for shortlisting of qualified
bidders,”the Coal Ministry said in a
notice inviting tender.
“Qualified bidders will be allowed to
participate in the auction for the coal
mines,”the Ministry said.
Government said that it will auction
10 coal mines with reserves of 858.19
million tonnes for steel, cement as well
as captive power plants and the process
will be completed by August end.
The government has so far auctioned
29 coal blocks in two tranches to
private companies and garnered
over Rs 2 lakh crore, surpassing CAG’s
loss estimates of Rs 1.86 lakh crore
in allotment of mines earlier without
auction.
Of the total estimated geological
reserves, these mines have
extractable coal of about 356.245
million tonnes and are located in
Maharashtra, Jharkhand, Chhattisgarh
and Odisha.
Coal Secretary Anil Swarup had said
that the government will execute
agreements with successful bidders
by August 31.
Under schedule II category
(producing) mines, two will be
auctioned, while in the schedule III
(ready to produce) eight mines will
be put on offer.
The two mines in schedule II
category are MarkiMangli-I mine in
Maharashtra and Parbatpur-Central
mine in Jharkhand. Both are explored
blocks having extractable reserves of
62.12 million tonnes.
The eight mines in the schedule
III category are Dongri Tal-II mine
(Madhya Pradesh), KosarDongergaon
(Maharashtra), Margi Mangli-IV
(Maharashtra), Majra (Maharashtra),
Chitarpur (Jharkhand), Bhaskarpara
(Chhattisgarh), Sondiha
(Chhattisgarh) and Jamkhani
(Odisha).
INCREASE PRODUCTION, RAMP
UP EXPLORATION: DHARMENDRA
PRADHAN TO ONGC
Petroleum Minister Dharmendra
Pradhan, who did a detailed review
of India’s flagship explorer ONGC on
June 6, saw several“improvement
areas”and asked the state-run firm to
work towards increasing hydrocarbon
output and expanding exploration
activity.
ONGC has set an ambitious target of
drilling about 1.74 Million Tonne (MT)
incremental crude oil and 2.98 Billion
Cubic Metres (bcm) of additional
natural gas in FY16. It produced 22.26
mt crude in FY15, marginally higher
from the previous year’s 22.25 mt.
Gas output was 22.02 bcm, less than
23.28 bcm in the previous year.
“The chunk of production is coming
from Western offshore. It is a tough
job to take out hydrocarbon from
offshore assets, which ONGC has
been doing for decades. In future,
incremental oil and gas would come
from the same region,”Pradhan
explained.
Currently, 34.5% of ONGC’s crude
production comes from improved
and enhanced oil recovery schemes.
This means extra efforts are being
put in to extract hydrocarbon from
ageing fields, which naturally see
a decline in output. Another 13.1%
hydrocarbon is drilled from new
fields.
ONGC had taken up 15 projects,
worth Rs 38,602 crore, for
monetisation of 39 new and marginal
offshore fields. Of this, nine have
been completed, which produced
2.74 mt crude (13.8% of ONGC’s
production) and 3.35 bcm natural gas
(15% of its gas output) in FY15.
ONGC is working on six major
field development and three
redevelopment projects with an
investment of Rs 41,678 crore. Of
this, Rs 24,188 crore is towards
development projects including
Daman, Vasistha & S-1, Bassein, Vasai,
Gamij and Nagyalanka. Another
Rs 17,490 crore is for three re-
development projects – the third
phase of Mumbai High North and
South and Heera-South.
Dinesh K Sarraf, CMD, ONGC, said
efforts were being made to achieve
the target for the current fiscal.
Meanwhile, if some opportunities
come up that could immediately
add to incremental production, they
would be explored.“The government
is supportive, which gives the push
and encouragement for ONGC to do
more,”Sarraf said.

RINL IN TALKS WITH ODISHA
GOVT, NMDC
Rashtriya Ispat Nigam Ltd is in the
process of becoming a partner with
the Odisha Government and NMDC
Ltd in two projects – one for mining
iron ore and the other for a greenfield
steel plant.
RINL has been designated as the‘lead
player’in these two Odisha projects.
Following up a proposal mooted by
the Centre, the public sector steel
major was currently negotiating with
Odisha Government and NMDC, said
RINL CMD P Madhusudan.
RINL CMD mentioned that the
proposed SPV for mining will have
Odisha Mining Corporation Ltd
(OMC) as RINL’s partner along with
NMDC.
In the SPV for the proposed steel
plant, the Industrial Development
Corporation of Odisha Ltd (IDCOL)
will represent the State Government’s
interest.
RINL hoped to sign the MoU soon.
“The MoU will spell out the capacity
of the proposed steel making project.
As the State agency, OMC will
facilitate allocation of mines to the
SPV,”Madhusudan said.
IDCOL, as a partner, would take care
of the land and the related linkages
for the steel project, he indicated.
BALMER LAWRIE AND CGDA
LAUNCHES AIR TRAVEL PORTAL
FOR ARMED FORCES
An Air Travel Module, developed and
implemented by Balmer Lawrie and
Co. Ltd. in the Defence Travel System
(DTS), was launched as an additional
facility for Armed Forces personnel by
Mr. Arvind Kaushal, IDAS - Controller
General of Defence Accounts (CGDA)
and Mr. Viren Sinha, C&MD (Balmer
Lawrie & Co. Ltd.) on 28th May 2015
in New Delhi. The Defence Travel
System which was developed in
2009 provided the facility of booking
railways tickets only. Senior officers
representing both the organisations
were present during the launch.
BHEL GETS LARGEST-EVER ORDER
WORTH RS 18,000 CRORE FROM
TSGENCO
Bharat Heavy Electricals Limited
(BHEL) secured the largest order
in its history for setting up a 4,000
megawatt (5x800 MW) super-
critical thermal power project from
Telangana State Power Generation
Corporation (TSGENCO). The order is
valued at Rs 17,950 crore.
The company in a statement said this
is also one of the highest value orders
ever placed in the capital goods
sector in India.
In December 2014, TSGENCO placed
an order for setting up Telangana’s
first super-critical thermal power
plant of 800 MW to BHEL, followed
by an order for the 4x270 MW
Bhadradari thermal power station at
Manuguru in Khammam district in
March 2015.
BHEL’s scope of work in the project
would include design, engineering,
manufacture, supply, construction,
erection, testing and commissioning
of 5x800 MW thermal sets on
engineering, procurement and
construction (EPC) basis.
“The key equipment for the contract
will be manufactured at BHEL’s
Trichy, Haridwar, Hyderabad, Bhopal,
Ranipet, Bangalore and Jhansi
plants, while the company’s power
sector construction division will
be responsible for civil works and
commissioning of the equipment,”
said the company’s statement.
To overcome the uncertainty of coal
supply, BHEL said it shall be supplying
its in-house developed fuel flexible
boiler, which is capable of firing the
entire range, from 100 per cent Indian
to 100 per cent imported mix of coal.
This will provide security against
variation in design coal and the coal
actually available during operation,
thereby offering operational flexibility
to ensure uninterrupted generation
of electricity.
Apart, amid a rigorous bidding
process, top public sector company
Bhel has bagged a Rs369 crores
contract for revival of NTPC’s power
plant in Barh in Patna, officials said on
Monday. The contract has been given
for supply and installation of the
Power Cycle Piping (PCP) package
for the Barh Thermal Power Project
- Stage-I (3x660 MW) of NTPC in Bihar.
IWAI, CANARA BANK
DEVELOPING MODEL TO ATTRACT
INVESTMENT IN INLAND WATER
VESSELS
The Inland Waterways Authority
of India (IWAI) is working with
Canara Bank to develop models
to incentivise entrepreneurs to
invest in inland water vessels.“The
proposal is at an advanced stage of
consideration by the government,”
said Amitabh Verma, Chairman, IWAI.
Canara Bank, in a study, has pointed
out that there are positive cash flow
options in case the government
subsidises vessel costs by 10-15 per
cent for inland waterways, said Ajit
Kumar Das, Deputy General Manager,
Canara Bank.
Meanwhile, marking one year
of the NDA government, the
Shipping Ministry said it is working
on a proposal to develop 300
lighthouses and 1,100 islands as
tourist destinations.“The Prime
Minister asked us to develop 300
lighthouses and 1,100 islands as
tourist destinations. We have made
that a part of the Cabinet note,”said
Nitin Gadkari, Minister of Shipping,
Road Transport and Highways.
He also said that Cochin Shipyard Ltd
was working on the first model of a
hovercraft that can operate on land
and water for a cost of Rs. 5 crore,
instead of Rs. 50-60 crore.
PSE NEWS UPDATE

Project Updates
SAIL PREPARES FEASIBILITY
REPORT FOR TELANGANA
PROJECT
Steel Authority of India Limited (SAIL)
has prepared a feasibility report
and carried out site inspection and
market analysis for a proposal to
set up a 3-million tonne capacity
integrated steel plant in Telangana.
GSI and MECL, two government
organisation under the Ministry
of Mines, can assist the state in
assessing its mineral resources for
revenue generation, according to an
official statement.
Preferential treatment to Vizag
Steel (RINL) products needed
for infrastructure and industrial
development in the state and,
allotment of land to Vizag Steel
in Warangal for better reach and
distribution in Telangana were
discussed.
BPCL TO GO AHEAD WITH BINA
REFINERY EXPANSION SANS
OMAN OIL COMPANY IN MADHYA
PRADESH
With Oman Oil Company reluctant to
put more money, Bharat Petroleum
Corp Ltd has decided to fund the Rs
18,000-20,000 crore expansion of the
Bina refinery in Madhya Pradesh on
its own.
Bharat Petroleum Corp (BPCL), India’s
second-biggest state refiner, plans
to raise Bina refinery capacity to 15
million tons in two phases - to 7.8
million tons a year from current 6
million tons at a cost of Rs 3,500 crore
by 2018 and then to 15 million tons
at an additional investment of Rs
18,000-20,000 crore in 5-6 years.
Oman Oil Company (OCC), which
holds 26 per cent stake in the Bharat
Oman Refineries (BORL) - the firm
that built the refinery, is willing
to participate in the first phase
expansion but not in the second
phase, a top official said.
The BORL was formed as an equal
joint venture company way back in
1993. However, following inordinate
delays in the implementation of the
project, OOC froze its investment in
the company at Rs 75 crore for a two
per cent equity stake.
BPCL, which holds 49 per cent
stake in the project, provided
the unbridged portion of the Rs
4,000-crore equity in form of loan.
The state-run firm got its loan back
once OOC made payments for its 26
per cent share.
The remaining 25 per cent is
with financial institutions. BPCL
also operates a 12 million tons a
year refinery at Mumbai and 9.5
million tons Kochi unit. It also has
majority stakes in the 3 million tons
Numaligarh refinery in Assam.
The official said BPCL is expanding
and upgrading its Kochi refinery in
Kerala to process high sulphur crudes
by 2016. Kochi refinery capacity is
being raised to 15.5 million tons from
current 9.5 million tons.
NTPC PLANNING 3,000 MW
CAPACITY ADDITION AT TALCHER
State-owned NTPC said on June
11 Talcher in Odisha will become a
power hub with the PSE planning
around 3,000 MW of capacity
addition there.
“Talcher Thermal Power station we
are planning to add 1,320 MW. In
super thermal power station we are
planning to add another 1,600 MW.
So what will essentially happen is that
in that area itself there will be almost
3,000 MW of capacity addition, so it
will become a power hub in Odisha,”
NTPC Chairman and Managing
Director Arup Roy Choudhury said.
NTPL TUTICORIN TO COMMISSION
FIRST 1000-MW POWER UNIT
The first 500-MW unit of coal-
based NTPL thermal power plant
of NLC Tamil Nadu Power (NTPL) in
Tuticorin has qualified for commercial
operations.
NTPL, a joint venture company of NLC
(89 per cent) and Tangedco (11 per
cent), is establishing a 1,000-MW (2
units of 500 MW) coal-based thermal
power plant at Tuticorin, Neyveli
Lignite Corporation.
The pre-commissioning activities
in Unit II of this plant are nearing

completion and this unit will also be
ready by July.
MRPL COMMISSIONS
POLYPROPYLENE UNIT
Mangalore Refinery and
Petrochemicals Ltd (MRPL), an
ONGC company, has commenced
commercial production of
Polypropylene from its Polypropylene
(PP) Plant as part of its phase-III
refinery expansion and upgradation
project on June 18. The plant has
capacity to produce 440,000 tonnes
per annum of polypropylene, it said.
The feedstock for the Polypropylene
plant, polymer grade propylene,
is being produced from upstream
Petrochemical Fluidised Catalytic
Cracking Unit (PFCCU). The
technology-provider for the
Polypropylene Plant is Novolen of
Germany and the plant has been
engineered and constructed by
Engineers India Ltd, a Navaratna
CPSE.
HYDEL POWER PUSHES NTPC
INTO GLOBAL BIG LEAGUE
State-run NTPC has switched on an
800 MW hydel plant to join a select
group of global peers who span
the entire fuel chain – coal, gas,
hydro power and renewables – for
generating greener electricity.
Last month, the country’s largest
fossil fuel-based generation utility
quietly switched on the last of the
four 200 MW units of its first hydel
project in Bilaspur district of Himachal
Pradesh, roughly 145 km before the
tourist destination of Manali.
The development marks fulfillment
of a vision, the seeds of which were
sown by then Chairman C P Jain
during early parts of the 2000-2002
period. The hydel foray is part of
NTPC’s diversification plan to widen
fuel base.
BHEL STARTS NTPC’S 800-MW
KOLDAM HYDRO POWER PLANT
State-owned BHEL said it has
commissioned NTPC’s 800-MW
Koldam hydro power project in
Mandi district of Himachal Pradesh.
The Koldam project is capable of
generating approximately 3,054 GWH
annually.
All the four units have been
commissioned within a short span
of just 75 days, starting with the
commissioning of the first unit on
March 30, 2015.
Other than Koldam, the other
three hydro projects of NTPC being
executed by BHEL are Tapovan
Vishnugad HEP (4x130 MW), Lata
Tapovan HEP (3x57 MW) and
Rammam Stage-III HEP (3x40 MW).
ONGC INTRODUCES HF
TECHNOLOGY IN TRIPURA
Oil & Natural Gas Corp (ONGC) in
Tripura has undertaken hydro-
fracturing in Khubal to assess the
actual reserves of the field and in
Baramura to enhance production from
tight sands.
According to ONGC, the job involved
intricate coordination to get domain
experts, machine and chemicals from
various regions of the country apart
from understanding the reservoir
characteristics and geology of the
region. Hydro-fracturing units, high-
capacity storage tanks, Proppant
(special sand particles) and chemicals
for the work were mobilised
from six different assets of ONGC:
Ahmedabad, Karaikal, Rajamundry,
Bokaro and Assam.
ONGC said it made discovery of
commercial gas in the Khubal area in
February 2009. It completed drilling
of seven exploratory-cum-appraisal
wells out of which 2 are gases-
bearing, the state-run explorer said.
THREE OF NHPC’S FOUR STALLED
PROJECTS REVIVED
NHPC, the state-run hydroelectric
power producer, which has often
got stuck with environmentally
sensitive projects, may be on the
cusp of turning a new leaf on the
back of progress made on three out
of its four stalled projects and higher
power generation in FY15.
Out of the four under-construction
projects, Teesta Low Dam-IV,
Parbati-II and Kishanganga, with an
aggregate capacity of 1,290 MW,
have seen definitive progress towards
commissioning. While the geological
issues of tunnelling has been solved
for Parbati-II and work is likely to start
this month, work on Teesta Low Dam-
IV also resumed in November and
is likely to be commissioned in the
next fiscal year. Although Subansiri
Lower, with a capacity of 2,000 MW,
still faces headwinds from activists,
Kishanganga project in J&K is slated
for commissioning in FY 17.
INDIAN OIL CORPORATION
BEGINS WORK ON 4 MW
SOLAR POWER PROJECT IN
NAGAPATTINAM
Indian Oil Corporation Limited (IOCL)
has commenced construction work
on its proposed 4 MW solar power
project at Muttam village in the
district.
Commencing the construction work
with a‘bhoomi pooja’, Nagapattinam
District Collector S Palanisamy said
IOC was setting up the plant at a cost
of Rs 31 crore on 20 acres of land.
IOC has entrusted the construction
work to Tata Power Solar Systems
Limited, he said.
The Collector said IOC was setting
up the project with the objective of
generating green energy so as to
reduce carbon footprint.
PSE NEWS UPDATE

In addition to meeting the power
consumption needs of IOC installation
here, the power produced from the
solar plant will help Muttam and
nearby villages of the district, he said.
CAPACITY OF INDIANOIL’S
PANIPAT REFINERY TO BE RAISED
TO 20.2 MMTPA
India’s largest refiner IndianOil will
expand refining capacity of its state-
of-the-art Panipat Refinery to 20.2
mmtpa. This was disclosed at the
first maiden visit of the State Minister
for Petroleum & Natural Gas ( I/C)
Dharmendra Pradhan to the refinery
on June 7.
Krishan Lal Panwar, (MLA), M P
Dhanda (MLA), Sandeep Poundrik,
Joint Secretary (Refineries), Ministry
of Petroleum & Natural Gas, B Ashok,
Chairman, Sanjiv Singh, Director
(Refineries), Debasis Sen, Director
(Planning & Business Development),
IndianOil, T K Basak, ED(I/c) - Panipat
Refinery & Petrochemical Complex
were also present on the occasion.
While appreciating performance of
the refinery, particularly its capacity
utilisation and energy management,
Pradhan emphasised the need for
effective integration of refinery
operations with Petrochemicals and
their positive contribution to develop
downstream industries in the region.
Panipat Refinery commissioned in 1998
with refining capacity of 6.0 mmtpa
had its first expansion of 6.0 mmtpa
in 2006.The capacity of 3.0 Mmtpa
was added in 2010.The proposed
expansion of refining capacity from
15.0 mmtpa to 20.2 mmtpa is being
planned at a cost of Rs 15
ARCELORMITTAL-SAIL PLANT
PROJECT REPORT BY AUGUST
A Detailed Project Report (DPR) on
the proposed Rs 5,000-crore steel
plant to be set up under a Joint
Venture (JV) between ArcelorMittal
and state-run SAIL will be completed
by August.
Last month, the world’s largest steel-
maker and domestic steel giant inked
a pact to jointly set up a steel plant
in India to cater to the fast growing
automotive sector.
FCI SILO PROJECT FETCHES
RESPONSE FROM 21 FIRMS
The Food Corporation of India’s (FCI)
attempt to create state-of-the-art
foodgrain storage facilities,‘silos’,
through private sector participation
has evoked interest among various
companies.
Sources said 21 private players,
including Adani Agri Logistics, LT
overseas and OM Metals, have
evinced interest in setting up silos on
behalf of FCI at six locations spread
across Punjab, Delhi, Bihar, Assam and
Karnataka.
Silos with a capacity of 50,000
tonne each at four locations and
25,000 tonne grain capacity each
at two locations would be created
through private sector participation
at Sahnewal and Kotkapura (Punjab),
Narela (Delhi), Katihar (Bihar), White-
field (Karnataka) and Changsari
(Assam).
Sources also said that in all 92 tenders
have been received from various
private sector companies. At present
the tenders are being evaluated by
the FCI.
BHARAT ELECTRONICS
EMBARKS ON RS 2,000 CRORE
MODERNISATION DRIVE
Government-owned Bharat
Electronics Limited (BEL) is embarking
on an expansion-cum-modernisation
drive to explore new areas in the
defence and non-defence sectors.
In the next four to five years, the
company plans to invest at least
Rs 2,000 crore, to equip itself for new
business opportunities.
“In the past five years, non-defence
business has been 17 per cent of
the overall business and we plan to
increase this share in the coming
years,”said S K Sharma, Chairman and
Managing Director.
Some of the areas identified in
defence are SAM systems, electronic
ammunition fuses, satcom terminals,
LTE, Gigabit passive optical network,
routing and switching products, he
said. In non-defence, infrastructure
protection, air traffic management
radar, intelligent traffic management
systems, solar power plants and
smart city elements are being
focused on, he added.
BEL is planning to set up a Rs
500-crore weapon systems facility
in Andhra, covering design,
development and production. It is
expected to be ready in two years,
said Sharma. Land acquisition is on in
Ananthpur district, he said.

Operation Highlights
INDIA’S CRUDE OIL OUTPUT RISES
0.8% IN MAY
India’s crude oil production rose
marginally by 0.8 per cent in May on
the back of improved performance
by state-owned Oil and Natural Gas
Corp (ONGC).
Crude oil production at 3.18 million
tons in May was 0.8 per cent
more than 3.16 million tons in the
same month a year ago, an official
statement issued here said.
The increase was on account of 1.8
per cent rise in ONGC’s oil output at
1.9 million tons. Its western offshore
fields produced 8.5 per cent more
crude oil at 1.3 million tons and
helped tied over a 9 per cent drop in
onshore output at 0.48 million tons.
However in April-May, the first two
months of the current fiscal, the
nation’s crude oil production dipped
1 per cent to 6.05 million tons. While
ONGC produced 1.7 per cent more
crude oil at 3.71 million tons, fields
operated by private firms saw a 6.3
per cent dip at 1.92 million tons.
Natural gas production declined 3.1
per cent in May to 2.85 billion cubic
meters as ONGC saw dip in output.
ONGC saw gas output dip by 1.8
per cent to 1.9 bcm while eastern
offshore production dropped 8.9 per
cent to 403.16 million cubic meters.
“Restricted gas withdrawal by GAIL
in view of safety issues of GAIL’s
pipeline”was the reasons for lower
output from eastern offshore fields,
the statement said.
In April-May, India’s gas production
decreased 3.3 per cent to 6 bcm.
ONGC’s output was down 1.7 per
cent at 3.67 bcm.
SAIL AIMS TO PRODUCE 50
MTPA OF STEEL BY 2015, SAYS
NARENDRA SINGH TOMAR
Public sector company Steel
Authority of India Limited (SAIL) has
set a target to produce 50 Million
Tonnes Per Annum (MTPA) of steel
by 2025 at an estimated investment
of Rs 1,50,000 crore, Union Minister
for Steel and Mines Narendra Singh
Tomar said.
SAIL’s steel plants are being expanded
from a capacity of 13 MTPA to 23
MTPA, at an investment of Rs 61,000
crore. The long term plan is to take
SAIL’s capacity upto 50 MTPA by 2025,
at an estimated investment of Rs
1,50,000 crore, the Minister said.
Last year, the Ministry placed a special
emphasis on timely completion of
modernisation and expansion of
public sector companies under the
Ministry of Steel.
On April 1, 2015, the Prime Minister
dedicated the modernised and
expanded steel plant of SAIL in
Rourkela to the nation.
The Ministry has also set up a Steel
Research and Technology Mission of
India at an initial allocation of Rs 100
crore which will be augmented by
another Rs 100 crore contributed by
private sector companies, in order to
enhance research and development
in the steel sector, he said.
In order to enhance steel production,
and encourage the‘Make In India’
initiative in the steel sector, a Special
Purpose Vehicle (SPV) is dedicated
to the steel industry. In the first
phase, there are plans to establish
steel plants through the SPV route in
Chhattisgarh, Odisha, Jharkhand and
Karnataka.
HAL HANDS OVER
CHANDRAYAAN-2 COMPONENT
Public sector plane-maker Hindustan
Aeronautics Limited (HAL) has
delivered‘Orbiter Craft Module
Structure’of Chandrayaan-2 to the
ISRO Satellite Centre (ISAC).
Chandrayaan-2 is a two-module
configuration spacecraft comprising
of the‘Orbiter Craft’and the‘Lander
Craft’.
“The Orbiter Craft Module structure is
a three-tonne category bus structure
made out of a central composite
cylinder, shear webs and deck panels,”
CMD of Hindustan Aeronautics
Limited T. Suvarna Raju said.
The Chandrayaan-2 mission is aimed
at placing an orbiter around the
moon and sending a lander and
rover to the surface of the moon. It
will be launched by a Geo-Stationary
Satellite Launch Vehicle (GSLV-MKII).
HAL’s association with ISRO’s space
programme dates back to the early
1970s, when HAL provided technical
inputs and manufacturing support
to ISRO for realisation of light alloy
structural assemblies for satellites and
launch vehicle.HAL has a division at
Bengaluru totally dedicated to cater
to ISRO’s growing requirement.
PSE NEWS UPDATE

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