Newsletter | May 2018
Infra News
 

Solar Parks of 1500 mw to be established in Agar, Shajapur & Neemuch
The state government has already made preparations to set up Solar Parks in Shajapur, Agar and Neemuch after the successful establishment of Rewa Solar Project, the biggest solar power project of the country. More

India, Japan agree to work on electric vehicle development
India and Japan on Tuesday agreed to initiate discussions on development of electric vehicles (EVs) by collaborating at a policy dialogue on next generation zero emission vehicles, an official statement said. More

India-Japan agree to work together for energy security
The 9th India Japan Energy Dialogue was held in New Delhi, today. Minister of State(IC) for Power and New &Renewable Energy, Shri R.K Singh, and Minister of Economy, Trade, and Industry (METI) Mr. Hiroshige Sekosigned a Joint Statement at the conclusion of the meeting. More

India to tender first ever first offshore wind energy project of 1000 MW capacity
The National Institute of Wind Energy (NIWE) an autonomous body under the Ministry of New and Renewable Energy (MNRE) has called for ‘Expression of Interest’ (EoI) for the first offshore wind energy project of India. The global EoI is intended to shortlist prospective offshore wind energy developers for a 1000 MW offshore wind energy project in Gulf of Khambat, off the coast of Gujarat. The proposed area is located 23-40 km seaward side from Pipavav port. MNRE plans to install at least 5 GW of offshore wind capacity by 2022. More

Leisang lights up, now every Indian village has power
When the bulbs lit up in Leisang village in Manipur’s Senapati district at 5.30pm on Saturday, it became the last village in India to be linked to the national power grid. With electricity now reaching all 597,464 census villages, Prime Minister Narendra Modi’s aim of providing all Indian households access to electricity is a step closer to reality. More

UDAN: How steel giant SAIL’s tie-up with Airports Authority of India will help in air connectivity development
Domestic steel giant SAIL has inked a pact with the Airports Authority of India (AAI) for utilisation of airstrips at its three facilities — Rourkela, Bokaro and Burnpur — under the regional connectivity scheme UDAN. Three steel cities of Steel Authority of India Ltd (SAIL) Rourkela, Bokaro and Burnpur belonging to states of Odisha, Jharkhand and West Bengal, respectively, will soon prominently feature on the aviation map of India. More

Diu Smart City first in India to run on 100 pc renewable energy during daytime: Official
The Diu Smart City has become the first city in India that runs on 100 per cent renewable energy during the daytime, setting a bench-mark for other cities to follow. Diu had been importing 73 per cent of its power from Gujarat till last year. More

AAI-managed 15 profit-making airports likely to be privatised
About 15 profitable airports, including the facilities at Chennai and Ahmedabad, could be put under private management in the first such privatisation initiative by the National Democratic Alliance (NDA) as part of the broader government move to enhance India’s aviation infrastructure. More

Soon, flyers may get up to Rs 20,000 for delays, cancellations
The Union aviation ministry has recommended increasing compensation to up to Rs 20,000 per flyer for deficiencies in airline services such as flight delays and cancellations. The ministry will soon put up the draft of a passenger charter containing the proposals online before the final set of rules are issued once it has weighed comments from the public and the carriers. More

Indian Railways bets big on tourism! 5 metre gauge lines to be preserved as heritage routes
The railways has decided to preserve five of its metre-gauge lines across the country and run them as heritage lines, in a shift from its plans to convert all of them in to broad-gauge ones, sources in the ministry said. The lines to be preserved include sections in Madhya Pradesh, Rajasthan, Assam, Uttar Pradesh and Gujarat. Sources said these lines are linked to tourist destinations and were earlier identified for gauge conversion, but now will be retained as heritage lines. More

Indian Railways achieves new ‘Make in India’ feat! Record number of rail coaches manufactured by ICF this year
Indian Railways' Integral Coach Factory in Chennai has created a new manufacturing record by making over 2,500 coaches in the financial year 2017-18. Not only that, the factory has crossed another milestone in the production history of Indian Railways. More

Modi government awards roads contracts at ‘breakneck pace’; set to create $15 billion record
NHAI is at the center of Prime Minister Narendra Modi’s ambitious Bharatmala plan to spend $106 billion on 83,677 kilometers of road construction by 2022 to boost economic growth and employment. More

 
Firm News
 

“Law Firm of the Year Domestic” Award at IDEX LEGAL AWARDS 2018
Link Legal India Law Services wins the prestigious “Law Firm of the Year Domestic” award at IDEX Legal Awards 2018 held at The St. Regis Hotel, Mumbai on April 13, 2018. More

Mr. Atul Sharma, Managing Partner was a Panelist on the Topic “Bureaucracy, Judiciary And Dispute Resolution” at the India Infrastructure Forum 2018
India Infrastructure Forum, an initiative of India Infrastructure Publishing recently held its first Annual Meeting and Summit in Delhi on April 9 and 10, 2018. The Forum brought together various stake holders such as government officials, developers, regulatory agencies, investors, management consultants and legal professionals and give them a platform to discuss the key issues faced by the infrastructure sector and to highlight key government initiatives and investment opportunities in the same. More

Link Legal India Law Services Initiates Continuous Legal Education Program for its Lawyers
Link Legal believes in legal excellence which requires continuous learning and self-development. Resolutely, the Firm has recently started a structured Continuous Legal Education (CLE) program for its Lawyers. This program is amongst first of its kinds and is aimed at investing in Firm’s lawyers and increasing interactions with the academic world. More

 
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Previous Issues:
January 2018
November 2017
October 2017
September 2017
August 2017
July 2017
June 2017
May 2017
April Part I 2017
April Part II 2017
March 2017
December 2016
November 2016
October 2016
September 2016
August 2016
April 2016
March 2016
February 2016
THE FUTURE OF MOBILITY

GOVERNMENT’S PLAN

The National Electric Mobility Mission Plan (NEMMP) was notified by the Ministry of Heavy Industries and Public Enterprises in 2013 with a focus to put 6-7 million electric/hybrid vehicles on the road by 2020. Under the same framework, in 2015, the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicles (FAME) scheme was introduced, which promised to provide subsidies for manufacture of electric vehicles (EVs) and hybrids. While these policy initiatives did catalyse some positive responses, they were not able to produce results and were too little and too slow.

In 2017, the Central Government had announced that not a single petrol or diesel vehicle would be sold from 2030. The Government wanted to lay a path for the auto industry in the form of a policy. They wanted a policy roadmap first which answered some of the basic questions: (i) would India go to EVs via the hybrids route or leapfrog straight to EVs?; (ii) what would be policy regarding the charging infrastructure?; (iii) what about the battery market and battery swap mechanism?; (iv) what kind of fiscal and non-financial incentives would be on offer for battery research and development and EV manufacture?, and so on.

During all this, policymakers promised that a policy document was being prepared. Even comments for the zero-emission policy were invited by NITI Aayog. Unfortunately, in February 2018, the Government backpedalled on its commitment (to provide for all EVs by 2030) and informed that a policy was not required. The backpedalling has affected the credibility of the Government and has left the auto companies confused and uncertain than earlier.

While the Central Government is uncertain about its stand on the need for an EV policy, a few states have been taking initiatives to promote a more conducive environment for the EVs to flourish. Some State Commissions have provided for a separate EV charging tariff category under the tariff orders. Further, Maharashtra is the first State to have come out with the EV policy, which introduces incentives to create a robust environment for promoting EVs in the State.

 
INDUSTRY’S PLAN
Several Indian automotive companies have come together to forge new partnerships, geared towards introducing affordable EVs in the country over the next few years.

In the backdrop of the Auto Expo 2018, over a dozen automakers are in the process of joining hands to make the transition to all electric, zero-emission vehicles as seamless as possible, such as:
  1. Toyota-Suzuki – To come up with EVs in India by 2020 and Toyota will export from India to other Asian countries;
     
  2. Mahindra-Ford – Improvise the present technology;
     
  3. Hyundai - Planning to invest over USD 1 billion in India in the next three years on new products, development of powertrain and setting up of a new office building. They have targeted launching an EV in India by 2019;
     
  4. E-commerce companies and Indian app-based transportation network companies like Ola are also working on making electric cars more common over the next two decades.
It appears that the industry is ready and more than willing to bring EVs sooner than what the Government expected. All that the industry needs is a clear path from the Government, and all that the Government needs to do is to take the lead, consult the auto industry and come out with a policy. If the Government is not able to provide a clear path today, the industry will not invest and after a few years the country will be dependent on China for lithium batteries, like the country is today for the solar panels.
 
REGULATORY/LEGAL FRAMEWORK
Electricity Act

In the present regulatory regime, the following questions need to be addressed: (i) EVs – effect on distribution of electricity?; (ii) how can the charging stations required for EVs be set up?; (iii) who will determine the tariff?; and (iv) whether tariff of privately owned charging stations be regulated under the Electricity Act, 2003 (Act)?

The Ministry of Power by notification dated 13 April 2018 has clarified that setting up charging stations for electric vehicles does not require a separate licence under the Act. The clarification states that The charging of battery essentially involves utilisation of electrical energy for its conversion to chemical energy, which gets stored in the battery. Thus, charging of the battery of an electric vehicle by a charging station involves a service requiring consumption of electricity by the charging station and earning revenue for this purpose from the owner of the vehicle…”

In view of the above clarification, under the present regulatory regime, the following models can  be implemented:
  1. Distribution licensee owned EV charging stations:
    Under this model, the supply of electricity to vehicle owners would be part of the activities of the distribution licensee and the retail supply tariff for supplying to the electric vehicle owners will be determined by the State Commission.
     
  2. Distribution licensee franchised EV charging infrastructure:
    Under this model, the distribution licensee can authorize a third party (Franchisee) to install and/or operate charging stations on its behalf in its area of supply. The Franchisee can also be a public private partnership. Under such an arrangement, charging stations can receive electricity at a single point as bulk supply. The single point supply tariff as well as the tariff cap for retail sale will be determined by the State Commission.
     
  3. Privately-owned battery swapping stations:
    Under this model, the distribution licensee, its Franchisee or any other third party can aggregate the demand for batteries and set up battery swapping stations.
     
  4. Privately owned EV charging infrastructure:
    This model will require the private owner of the charging station to obtain electricity from a distribution licensee and sell it to consumers (i.e. the electric vehicle owners).
     
  5. Charging Stations for Captive Use:
    Under this model, a captive power producer will own and operate a charging station within the consumer’s premises. However, considering the present captive requirements, it will have to be ensured that the minimum consumption for captive use is 51%.
     
  6. Mini and Micro Grids:
    Under this model, renewable energy based electricity generators will own and operate charging stations.
While the above notification provides that no amendment to the Act is required for implementing the charging infrastructure, the Government may have to rethink considering the volatility of the grid due to increased and variable demand of electricity by charging stations. Some countries like the UK and New Zealand have already provided for amendment to their electricity acts or introduced new legislations to provide a framework for setting up of charging stations.

Integration of Renewables

One of the major aspects that needs to be paid attention to while looking into the regulatory framework for EVs is the integration of renewable energy and energy demand for e-mobility. One of key objectives of EVs will be defeated if conventional (thermal) power is used for charging EVs. Renewable Purchase Obligation (RPO) could provide for an additional percentage for procurement of power by distribution licensees only for EVs. This will be similar to solar/non-solar RPOs created earlier through the Jawaharlal Nehru National Solar Mission (JNNSM).

Battery

EVs are largely relying on lithium-ion batteries. Presently, there are no laws in India addressing disposal of lithium-ion batteries. The Batteries (Management and Handling) Rules, 2001 (Battery Rules) issued by the Ministry of Environment and Forests define “battery” as lead acid battery which is a source of electrical energy and contains lead metal. Battery Rules are not applicable to lithium-ion batteries. An amendment to the definition of “battery” under the Battery Rules along with a detailed procedure for disposal, treatment and recycling of used/waste lithium-ion batteries needs to be formulated and incorporated in the Battery Rules.

WAY FORWARD

India is facing four key challenges: (i) low mineral reserves; (ii) absence of major EV battery producers; (iii) lack of co-ordination among stakeholders; and (iv) high perceived risk due to lack of policy.

Due to the uncoordinated efforts by different stakeholders and the relatively nascent stage of battery manufacturing in India, investment risks in this sector are high. Due to the absence of long-term policies for manufacturing and uncertainty around the future technology in the area, battery and vehicle manufacturers are not too keen to make significant investments.

To reinforce the Government’s commitment to Make in India movement and for the auto industry to continue to repose trust in the Government, it is imperative for the Government to come out with a comprehensive policy to set out the position on timelines, assistance from various ministries, incentives (tax holidays, financial assistance) for manufacturing of EVs and batteries. We hope that the Government will soon address all these issues and the vision for EVs will be better calibrated.

 
 
Law Firm of the Year Domestic by IDEX Legal Awards 2018.
Ranked # 2 for two consecutive years in Asia (excluding Japan) and Australasia in Project Finance League Table - Dealogic Rankings (January 1- December 31, 2016) and (January 1- December 31, 2017) 
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Recognised as outstanding law firms of 2017-18 in Aviation and Energy, Projects & Infrastructure by India Business Law Journal
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