<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[STATE MONOPOLY: State-owned NPCIL
is the sole beneficiary of nuclear power
business in India
No sooner had the Nuclear Suppliers Group approved India-specific waivers than the private sector announced a number of projects. But this enthusiasm may be short-lived as India does not allow the private sector in nuclear power, keeping the domain strictly for Nuclear Power Corporation of India (NPCIL).
Indications are that the government is not going to rush into amending the Atomic Energy Act to throw open the nuclear power business to private players. At best, the government would encourage such plants on a public-private partnership mode, and that too with domestic private companies.
According to Jairam Ramesh, minister of state for power, the immediate priority is to get fuel from other countries to enable the existing power units of NPCIL to step up production.
The other priority is to get equipment for NPCIL’s new plants. In this, apart from France’s Areva, Japan’s Mitsubishi and US’s GE and Rolls-Royce, India’s L&T and state-owned Bharat Heavy Electricals (Bhel) will be the biggest beneficiaries. The government is actively pushing L&T, which has a tie-up with Mitsubishi, as the second major equipment supplier.
GLOBAL NEWS
In a soup: Thailand’s Prime Minister Samak Sundaravej has been forced out of office after a court ruled that he had violated the Constitution by accepting payments for appearing on a television show. Sundaravej was paid $2,350 for the cooking show, Tasting and Complaining. Under Thai law, the PM cannot work for a private company while in office.
INFLATION
Selective Coverage
A rise in inflation gets everybody’s goat. The rise of inflation to a 14-year high of 12.63 per cent in August from a benign 5 per cent late last year not only saw all hell break loose, but sanity also getting lost.
Even a small uptick of a few points before a moderation saw hysterical increases in decibel levels. Yet, a similar dip for the past few weeks to 12.34 per cent hardly seems to get the same attention.
“It is too early, I believe, to take a call on inflation,” the new man at Mint Road, Reserve Bank of India Governor Duvvuri Subbarao said immediately after taking over. “However, I do have some sense of satisfaction in moderation of the wholesale price index numbers. So my short answer is we are seeing some moderation, although I am not sure that we can see a discernible trend.”
The statements, however, got routine treatment. It is high time the financial media and commentators brought in a sense of balance.
Raghu Mohan
A ‘Big Bang’ Experiment: European Organization for Nuclear Research (CERN) scientists at the “switch on” of the Large Hadron Collider on 10 September. The $8-billion collider passed its first test by firing a beam of protons around a 27-km tunnel. Scientists believe this will help understand the secrets of the universe. (AP)
TELECOM
Blame Game
iPhone’s stakeholders refuse to take ownership for its exorbitant pricing
(Bloomberg)
It can’t get any curiouser. After the backlash over the pricing of the iPhone in India, all the three stakeholders — service providers Bharti Airtel and Vodafone Essar and phone maker Apple — have refused to take responsibility for pricing the iPhone at four times its US price of $199 (Rs 8,560) for an 8-GB phone.
An e-mail from Apple says: “Pricing-wise, we do not have any comment as that was a decision taken by carriers Airtel and Vodafone.” This has been debunked by the operators. “Airtel does not make any money on this,” says Sanjay Gupta, chief marketing officer for mobile services at Bharti Airtel. “The pricing has been determined by Apple.” This is echoed by Vodafone’s Chief Marketing Officer Harit Nagpal: “We are only agents. It’s an Apple phone and Apple decides the price.” Will the real culprit own up?
Rajeev Dubey
CIVIL AVIATION
Wings Of Desire
(Pic by Satheesh Nair)
Vijay Mallya-owned Kingfisher Airlines has surprised many by starting its maiden international flight towards the end of the season, and that too from India’s IT capital. The daily, non-stop Bangalore-London flight has been greeted by the nearest competitor British Airways, which operates a similar flight, with price cuts. Mallya, however, has downplayed this saying his airline offers superior service, including “prettier air hostesses”.
ENERGY
Diesel Blues
(Bloomberg)
The central government’s consideration of the recommendations made by the B.K. Chaturvedi Committee to charge state transport units (STUs) market rates for diesel has been met with uproar. STUs argument: The annual fuel bill will balloon from Rs 8,345 crore to Rs 13,608 crore.
Industry forecasts point to diesel vehicles cornering about 50 per cent of the entire passenger vehicles segment in India by 2010. The petroleum and natural gas ministry is formulating a proposal to impose 25-30 per cent cess on luxury diesel cars.
The government can use the money thus raised to subsidise CNG or electric vehicles for STUs, which may hold a long-term answer to the inevitable energy crisis. Subsidising the solutions makes more sense than subsidising the problems.
Team BW
MINING
Digging Its Own Problems
Why two ministries are fighting it out over export duty for iron ore
LEVERAGING DEMAND: Brazil’s Vale has
demanded a 20 per cent hike from Chinese
steel makers (Bloomberg)
The mining industry is going through a turbulent phase.
The ministry of mines and the ministry of steel are at loggerheads over a proposal to hike export duty on iron ore from 15 per cent to 20 per cent. The 15-per cent duty itself was imposed just this June as part of the fiscal package to restrict the export of iron ore and ease domestic prices.
With more than 50 per cent of India’s mined iron ore being exported, sections of the government and steel industry have called for a strategic review of the situation. They believe India should not squander this limited resource and maintain adequate stocks for the country’s own steel needs.
The mines ministry recently said that domestic steel prices are increasing “due to shortage of steel production”. It also said “any move to hike the export duty would only make iron ore mining unremunerative and impact iron ore production in the long run”. But the truth is, iron ore miners globally are still able to demand a better price.
Australian miners negotiated a 90 per cent hike from Chinese steel makers a few months ago. And the world’s largest iron ore miner, Brazil’s Vale, has demanded a 20 per cent hike from Chinese steel makers in the middle of an annual contract.
Kandula Subramaniam