Centre to introduce 'golden share' for infra projects

The Central government has received a proposal from the Planning Commission to introduce the concept of 'golden share' for infrastructure projects being executed through the PPP mode. The new concept implies that the government will have a say in all major decisions taken by the private concessionaire and it will not need to invest in equity of the company. The Planning Commission mooted the proposal in the new model concession agreement (MCA), which it has developed for the Infrastructure sector. The agreement states that the developer or the concessionaire will sign an agreement with the government for issue of one non-transferable equity share of the company - 'golden share' in favour of the government. The share shall entitle the government to nominate a non-retiring director on the board of the concessionaire. If the proposal takes off, it will bring greater transparency and accountability in implementation and operation of PPP projects.

Centre to revise export obligations for SEZs

The Central government has decided to relax export norms for SEZs, to give impetus to exports. The new norms allow gems and jewellery and some other manufacturing sectors which have units in SEZs, to sell up to a quarter of their production to the domestic tariff area or the area outside SEZs where normal taxes and duties are applicable, by paying only a concessional duty. Such sectors will not have to pay any import duty on value addition, which they would otherwise have had to pay. Sales to DTA will be allowed on the condition that it does not harm the domestic manufacturers. The present norms make it mandatory for the SEZ units to pay full customs duty, including on value addition, on sales to DTA units.

Government to relax captive coal mining norms

The Central government has decided to relax captive coal mining norms, to allow power companies to divert surplus coal from one of their projects to another. Permission will be given to only those power projects based on tariff-based bidding after being verified by the Coal Ministry. However, regulations prohibit power companies from selling surplus coal to other companies, as only government-owned entities are allowed to trade in coal. The Coal Ministry opines that the relaxed norms will give rise to competitive bidding for tariff-based projects, eventually resulting in lower electricity charges for consumers. Captive mining was allowed to boost coal production in the country, as the government expected a demandsupply mismatch. The current norms require captive coal mines to hand over excess coal to the Central government, which disburses it through Coal India. In some special cases, the Coal Ministry permits sale of excess coal on a temporary basis.

Gujarat announces new industrial policy

The Gujarat government announced its new Industrial Policy on 05 January 2009. The policy aims at attracting investments, increasing employment opportunities in the state, focusing on Small and Medium Enterprises (SMEs), developing special investment regions (SIRs), encouraging PPP models, setting up of mega projects, core infrastructure projects, port related projects and logistics and services related enterprises. The policy also envisages incentives for mega projects involving investment of Rs.1,000 crore and for core infrastructure projects of Rs.5,000 crore. Following the new policy, the state government has decided to set up two SIRs - one near Dahej and the other in Dholera, on areas stretching up to 45,000 and 54,000 ha, respectively. The proposed SIRs will be synergised with dedicated freight corridor and the Delhi-Mumbai industrial corridor.

CERC announces new tariff regulations for next five years

The Central Electricity Regulatory Commission (CERC) has issued the tariff regulations for generation and transmission projects for 2009-14 on 20 January 2009. The new regulations will also be the guiding principles for the State Electricity Regulatory Commissions. With the announcement of new norms, CERC hopes to attract the desired investment in power infrastructure in the country, while ensuring the consumers receive electricity at reasonable cost.