No cap on UMPP allocation to sole company

The Union Government on 7 July 2009 ruled out any possibility of putting cap on the number of ultra mega power projects (UMPPs) allotted to a single player citing legal impossibility in doing so. Concerns have been raised over the number of UMPPs allotted to a single company as each high capacity project needs huge investment of about Rs 20,000 crore. Reliance Power is one such developer, which has got three of the four such projects awarded so far. However, the Union Power Ministry hopes to keep a check on whether the company is capable of executing these projects.

New ground-handling policy deferred till 31 December

The Union Government has reportedly delayed the implementation of the new ground-handling policy by six months till 31 December 2009 owing to airport operators' unpreparedness for implementation of the policy. The new policy bars private air-carriers to do self-ground handling. Ground-handling activities include screening of baggage, taxing and fuelling of aircraft and passenger check-in, among others. As per the new policy, there have to be three ground-handlers at the six metro airports. So far, none of the airports have got three operators. The proposed policy announced in 2007 was scheduled to be implemented from 1 January 2009. It was postponed till June 2009 as airlines threatened to cut back nearly 8,000 ground staff employed by them, in case of implementation.

Tax incentives proposed for winning 3G bidders

The department of telecommunications (DoT) has requested the Union Ministry of Finance to allow the winning bidders in the forthcoming auction of spectrum for third generation (3G) phone services to treat their winning bid amounts as expenses over the 20-year tenure of the licence. DoT has proposed that the spectrum bid should be allowed to be set off in 20 equal annual instalments. If the proposal is accepted by the government, bidders will be able to potentially reduce tax outgo over their licence period. DoT expects to award a maximum of six slots of 3G spectrum wherever available. The DoT proposal also covers broadband wireless access or BWA services, expected to be auctioned along with 3G spectrum later this year.

Punjab SEZs Bill, 2009

On 11 July 2009, the Punjab Government has reportedly passed the Punjab SEZs Bill, 2009. The Punjab Act allows exemption for payment of any tax, duty, fee, cess or any other levy on export or import of goods in SEZ, inter unit transaction in SEZ, movement of goods from/in SEZ for value addition and on any service to SEZ developer or unit.

All SEZ units will also be given public utility status. Further, it provides for exemption from stamp duty, registration fee and social security cess on purchase of land for SEZ and on first transfer or lease of immovable property within SEZ for industrial, commercial or residential purposes. The allocation and transfer of land within the SEZ can be done by way of sale or lease as per the Punjab Act.

Besides, permission for generation of electricity in or outside SEZ for consumption of units has been allowed in the Punjab Act. There will be no electricity duty on generation, transmission, distribution and consumption of electricity within the SEZ. Also, there will be single-tier approval process instead of two tier approval process - Project Evaluation committee and Project Approval committee - in the Haryana Act.

Besides, the state government has reportedly requested the Union Government to reduce the minimum land requirement for SEZ projects in the state and allow SEZ as per viability of the project. The state government is of the view that the relaxation will give an upper thrust to the existing SEZs projects as well as attract new investment in the state. The state government has sought relaxation of norms for minimum land requirement of 10 ha, 40 ha, 100 ha and 1,000 ha for IT, Warehousing, product-specific and multiproduct SEZs, respectively.