Circular-Apr-Jun-2017

Roundtable Conference on “Sustainability of Business vs. Sanctity of Contract”

CIRC in collaboration with CUTS International and Nehru Memorial Museum and Library (NMML) organized a roundtable conference on “Sustainability of Business vs. Sanctity of Contract” on 24th June 2017 at NMML, New Delhi.

The roundtable was organized to discuss the fallout of the Supreme Court decision denying compensatory tariff to Tata Power Limited and Adani Power Limited. Issues with respect to an apparent conflict between the ‘sustainability of business’ and ‘sanctity of contract’ were discussed. The discussion was moderated by Shri Nitin Desai, former Under-Secretary-General, United Nations, India. Dr. Pramod Deo, former Chairperson, Central Electricity Regulatory Commission, Shri Amit Kapur, Senior Partner, J. Sagar Associates and Shri Shantanu Dixit, Group Coordinator, Prayas Energy Group, Pune were present amongst other eminent speakers. The discussion witnessed active participation from several stakeholders including industry, former regulators, think-tanks, academia, media, and consumer organizations.

The discussion resulted in highlighting various research areas and future concepts for the organization to work on. The stakeholders present at the roundtable were able to put in their views and suggestions to improve the current scenario of public procurement and how the related contracts are drafted. The conference turned out successful in an all-dimensional discussion over the issues involved in the case and suggesting the resultant outlook for the future.

Orientation Programme for the 10th Batch of CIRC-NLUD’s Certificate & Diploma Courses on Competition Policy & Law
10th batch for CIRC-NLUD Certificate/Diploma Course in Competition Policy and Law was enrolled The Orientation and first-class on Markets and Competition 10th batch was held on 27th May at Indian Social Institute, Lodhi Road, Delhi.

The orientation class was chaired by Ms. Nidhi Maheshwari COO CIRC, where she spoke to the students about CIRC and the importance of competition law. An introduction to the course and its procedures was also given to the participants. The participants cleared their doubts about the course and its structure and the exam procedures with the CIRC staff.

Mr. Avinash Sharma, Panel Counsel, Competition Commission of India and Advocate-on-Record, Supreme Court of India took the first class for this course for Module 1 i.e. Markets and Competition. A total of 22 students attended the class. Broadly, the students were given an introduction to business laws in India, related economic concepts and the Competition Law and Competition Policy of India.

Latest Publication

1. Resolving the bad-loans puzzle, The Times of India, June 16, 2017.The external web link is https://goo.gl/Zx7edB

Abstract:
Major television channels tell us that the government is likely to take the bull by the horns and tackle banks’ non-performing assets (or NPA) problem squarely. Considering that the “twin balance sheet” crisis is at the root of muted investment sentiment, and therefore suppressed job creation, it is necessary to deal with this at the earliest. However, it is important to understand the totality of the problem first. This paper evaluates the problem and suggests how to solve the ‘bad-loans puzzle’.

2. Supreme Court’s Verdict Denying Compensatory Tariff to Power Projects opens a Pandora box! Modern Diplomacy, May 26, 2017. The external web link is https://goo.gl/snUiaL

Abstract:
The argument is not that who is right and who is wrong. In this case, there is a clear indication of risk assessment by the bidder and risk distribution which is not set through the bidding contract. Can it be reallocated through regulatory or judiciary interventions? Consequently, consumer interest cannot be overlooked. SC in its judgment has not commented on the power of regulator under section 79 to fill in the gaps if any; in the bidding process but it has only highlighted that any foreign change in-laws and regulations cannot be accepted as force majeure for Indian contracts.

No doubt, SC ruling, in this case, affects the economy at large and have long term repercussions for the entire sector. Questions are raised in its intervention on the quasi-judicial bodies like regulators and AET. But SC is the last resort for any justice and its views and opinions are important. The economic consideration arising out of shutting down the power units citing financial concerns and the resultant job losses should have been taken into consideration while pronouncing judgments and a balanced approach could have been worked out for this case by the SC. When assets get stressed, power companies stand to lose credit rating and combined with less equity and higher interest, the cost of capital, the chance of defaulting increases.

This article evaluates the effect of SC ruling on various stakeholders and proposes several measures for the way forward.

Ongoing Projects

Manipur Project
CUTS Institute of Regulation and Competition (CIRC) through its think tank Global Initiative for Sustainable Infrastructure (GISI) has undertaken a research assignment to test the feasibility of developing an integrated tourism hub at the Loktak Lake in Manipur through PPP (Public-Private Partnership) model. The proposed tourism hub will host independent and mutually beneficial facilities like exhibition halls, convention centers, banquet halls, auditoria, arena, financial center, hotels, food & beverage (F&B) outlets & retail services. In the surrounding vicinity of the hub, other facilities such as the traditional market for handicrafts, local food joints, ethnic wear stores, and other related cultural and traditional shops can be set up.

The project is envisioned to be developed through an optimum Public-Private Partnership model with support of viable gap funding if required. The proposed center can become a key facilitator in making Manipur a key destination in NER India under the MICE (Meetings, Incentives, Conventions, and Exhibitions) destination category.

Project Goals: The objective of the research is to assist the government of Manipur to establish an integrated tourism hub through PPPs which would create direct and indirect job creation for the people of Manipur through the following activities:

Odisha Project
The water and sanitation sector has several impediments marred when it comes to private sector participation. The constraints are from all stakeholders in the value chain such as supply side, demand side and from the community. While local bodies/gram panchayats face major problems in financing the projects for asset creation and service delivery, there is apprehension about private sector participation on a very sensitive social need. Fear of ownership, consumer perception of water service delivery as a free service is one of the major causes of concern. There are constraints because of political sensitivities and activism of select NGOs/CSOs on social vs. capital issue which makes it even harder for the entry of private players in this sector

Thus, there is a need to create a structured approach for enabling private investment in the sector, including training and capacity building for the state units. This research is an initiative to focus on identifying various PPP models and structures which can be successfully implemented in the water and sanitation sector. The pilot state identified for the study is Odisha. The study would majorly focus on rural and semi-urban centers with a cluster approach to provide for a minimum economic size of 50-75,000 population. However, as we enter the first phase, other states could be added depending upon the response of the respective governments.

The objective of the project will be the development of a sustainable and inclusive PPP model through the promotion of People’s first PPPs. The model will focus on the development of infrastructure assets and the delivery of associated services that specifically focus on the poor and the under-serviced sections of the society.

CompIP Project
CUTS Institute for Regulation & Competition (CIRC) along with CUTS International is undertaking empirical-based research to advocate for constructive policy and regulatory reforms in the IPR regime in order to foster innovation and competition. This research is envisaged to facilitate the promotion of a balanced IP regulatory framework that promotes and advances technological innovations, resulting in benefits to consumers and producers in India. Currently, the CompIP research program is for a period of 3 years culminating in September 2018 and will provide a sustainable platform for discourse and discussions involving different stakeholders from industry, government, regulators, academia, media, etc.

During the first phase, CIRC organized the launch conference for this project in March 2016. A roundtable discussion on Growth of ICT Sector in India: Issues and Challenges pertaining to SEPs was organized on August 22, 2016, in New Delhi and was attended by government officials, CCI officials, industry players, academicians researchers and other experts in the field. For the second phase of the project, a lot of activities are lined up for the year 2017. These activities include distinguished lectures by international experts, faculty development program (FDP), policy dialogue workshop and research in the area of IP and competition law.

Research study on latent Power Demand assessment for the state of West Bengal
The demand projections made by discoms (Distribution Companies) are based on actual units consumed and a projected rate of growth of demand for each category of customer, based on past trends. They are made assuming the limitations of the existing distribution/transmission network. The latent demand from a population is left without service by the existing network, or from areas provided limited energy due to network limitations, do not figure in the demand projections. Another issue with the demand projections is that the power distribution utilities, due to flawed methodologies are not accounting the actual power consumption correctly, courtesy the faulty metering status and impairments arising due to improper feeder segregation.

CIRC will do a comprehensive study for the state of West Bengal to find out the following:
1. Regional power demand build up and drivers-split based on State-level basis
2. Assess the “Power deficit” and power demand-supply scenario for West Bengal
3. Understand the variable dynamics of power industry under changing the regulatory paradigm
4. Design a factor analysis framework to determine latent power demand through the identification of critical parameters and assigning the right weights.

Research study for Designing SDG Compliance Zero Waste Management Framework for Sikkim
The study will focus on the concept of total waste management in Sikkim and find out the modalities for PPP intervention in the same. It will also focus various technology options in the context of suitability and viability of waste generated there and the kind of private participation required. The complete project will be designed according to the state’s SDG plans and programs.

The UNCTAD Project
The project aims to develop a novel toolkit as well as related training material for attracting and benefitting from investment in key SDG sectors through PPP and innovative financing mechanisms. The toolkit to be designed will help UNCTAD support government policymakers, investment promotion officials and academia to identify, design and implement effective investment policies that will increase the level of corporate investment in SDG related priority sectors and maximize the development contribution of such investments.

Research Study for Latent Demand Assessment for power in the state of West Bengal
The objective of this research assignment is to capture the actual demand for power in the state of West Bengal by assessing the lateral demand of the state through factorial and objective analysis. The project would study the demand centers for power in West Bengal and suggest alternative strategies to capture the data for their long term forecasting of power demand through a factor analysis tool.

Regional Inclusive Growth Project
The project aims to research and promote the role of the internet in promoting inclusive growth. Research on how digital tools and platforms can help consumers in facilitating goods and services at a much lower cost, as compared to conventional practices. The research would embed the set objectives of removing barriers, improving digital literacy and empowering the consumers.