The Competition Commission of India (CCI) said the probe into suspected unfair business practices by around 20 realty players is in progress. Without disclosing specific details, Competition Commission of India (CCI) Chairman Ashok Chawla said the investigation is still under progress. "We are looking at that if there is some formal (or) informal understanding even if they are not dominant. (This part of probe ) is in advance stage," he said. Among other charges, these developers are being probed for inserting one-sided clauses in favour of the companies and against the interest of consumers in the buyer agreements for sale of flats, apartments and other residential properties, along with other other anti-competitive practices. The CCI has pulled up many realty players in the past for violating fair trade norms. In response to a query on the probe that was initiated against oil marketing companies on petrol pricing, Chawla said the basic point is how the prices move in a similar manner despite being deregulated. "The basic point is that how is it that all of these oil companies increased or decreased the petrol prices (which is otherwise deregulated by the government) almost to the same extent at the same time," he said without divulging specific details. (PTI)
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Indian refiners on Thursday paid $400 million to Iran ahead of a Nov. 24 deadline of the interim deal with six world powers that allows Tehran to recover part of its overseas frozen oil revenues, two industry sources privy to the development said. Essar Oil paid about $201 million, Mangalore Refinery and Petrochemicals Ltd about $154 million, Indian Oil Corp about $42 million and Hindustan Petroleum about $3 million, said the sources, who declined to be named due to the sensitivity of the issue. With this, India has paid $1.3 billion to Iran in three installments under the interim deal, which allowed Tehran access to $2.8 billion of its funds held in foreign banks in addition to $4.2 billion paid between January and July. The Indian refiners - Essar, MRPL, Indian Oil and Hindustan Petroleum - could not be immediately reached for a comment. Western powers and Iran are in talks this week to hammer out a final deal to ease sanctions against Tehran in exchange for curbs to its nuclear programme. Iran has said it would resist Western pressure to make what it considered to be excessive concessions in nuclear talks, highlighting obstacles that could prevent a historic deal being reached by Nov. 24. U.S. Deputy National Security Adviser Tony Blinken said it appears difficult to reach a comprehensive nuclear deal with Iran by a Nov. 24 deadline but it is not impossible. The latest payments would be made using an existing mechanism of a series of back-to-back transactions in different currencies that are initially channeled through the Reserve Bank of India. Iran will eventually get paid in dirhams from the central bank of the United Arab Emirates. India, Iran's top oil client after China, has imported 40.3 percent more oil from Tehran in the first 10 months of this year than in the same period last year, data obtained from trade sources show. (Reuters)
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Companies that win the captive coal mines in the auction route would be allowed to swap the coal with other companies and even divert their coal to their other power plants under the new guidelines issued by the Ministry of Coal ahead of the auction.The Coal Ministry on Tuesday (18 November) released draft guidelines for allocation of 74 coal blocks.The clause has been included to avoid the controversy that surrounded the coal mines, named Kerandari B&C in Jharkhand. The government had allowed the R-power, the allottee company for running the Sasan UMPP to divert its coal to another group plant. The decision was challenged by Tata Power in the HC and was also questioned by the Comptroller & Auditor general of India which said that allowing diversion of coal to another power plant after awarding the mine will lead to a windfall gain ot the company.Under the new bidding rules, the government has given flexibility to the companies to divert their coal to other power plants with prior notice to the government,” said Anil Swarup, Coal Secretary.The government is yet come up with the floor price of mines that are to be auctioned and aan expert group is working on the subject. The government is also planning to have a cap on the maximum number of mines that a company can bid for in the auctions.The due date for coal auction is February 11. The Ministry plans to complete technical process of allotment by March 3, 2015, and issue letter of award by March 16. In September 2014, the Supreme Court had cancelled 214 coal blocks allocated since 1993, saying the blocks had been given out in an ad-hoc and casual manner. After the order, the NDA government moved an ordinance that allows auction of these blocks. In the first phase the government plans to auction only 34 blocks.neeraj@businessworld,inneeraj.epiphany@gmail.com@neerajthakur2
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The Bombay High Court on Tuesday ruled in favour of the Indian unit of Royal Dutch Shell Plc in a multi-million dollar tax dispute, the latest verdict against the tax department that has been vigorously pursuing claims against foreign firms in India. Shell had challenged the largest ever claim in an Indian tax case related to transfer pricing -- the value at which companies trade products, services or assets between units across borders, a regular part of doing business for a multinational. A rash of high-value tax claims on foreign firms including IBM Corp and Nokia Oyj in the past year has sparked criticism that overly zealous tax authorities could undermine foreign investment in India. In the Shell case, the tax office alleged in February last year that the company's Indian unit under-priced shares transferred to the parent by about $2.5 billion, demanding tax on the interest the Anglo-Dutch oil company would have earned. It did not disclose the value of the claim. The Bombay High Court favoured Shell on the grounds that issuance of shares by an Indian company to its foreign parent was not taxable under the transfer pricing provisions, said Mukesh Butani, a lawyer for Shell India in the case. The court felt the tax department "clearly exceeded its jurisdiction", Butani, who is managing partner of Indian law firm BMR Legal, said in a statement. Tax department officials in Mumbai were not immediately available for a comment on the court verdict. It was not immediately known if the department would approach a higher court to challenge the verdict. Shell India welcomed the Bombay High Court decision. "This is a positive outcome which should provide a further boost to the Indian government’s initiatives to improve the country’s investment climate," Shell's Indian unit said in a statement. Last month, an Indian court ruled in favour of Vodafone Group Plc, the biggest foreign corporate investor in India, in a long-running transfer pricing dispute with the local tax department. (Reuters)
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If Saudi Oil Minister Ali al Naimi wants to stop conspiracy theories spreading before a crucial OPEC meeting next week, it's too late. Naimi's intervention last week after a two-month silence failed to address a question energy markets want answered: is the OPEC leader no longer willing to defend oil prices which have dived by a third to their lowest since 2010, and is it pursuing new commercial or even geopolitical goals? Despite Naimi's instance that Riyadh wants stable markets, diplomatic and market sources say Saudi officials told recent private briefings that the kingdom can live for some time with current, or even lower, levels. Reading Saudi oil policies has long been like Kremlinology - understanding the politics of that other secretive power, Russia. The next OPEC meeting on Nov. 27 is taking this art to a new, higher level. A number of explanations have been offered to fill the information vacuum on Riyadh's intentions and they aren't all from the usual conspiracy theorists in Russia and Iran, which are at loggerheads with the kingdom. Oil market watchers are divided on the outcome of the meeting in Vienna. Predictions range from a large OPEC production cut to revive prices through a small cut to none at all. Even those who have known Naimi for decades are puzzled. "For the first time, I really do not know what is likely to happen at the meeting. It is not clear," said a long-serving senior OPEC delegate. When Naimi finally spoke on Nov. 12, he said Riyadh's desire for stable markets had not changed. "Saudi oil policy... have been subject a great deal of wild and inaccurate conjecture in recent weeks. We do not seek to politicise oil ... For us it's a question of supply and demand, it's purely business," he said. According to four market and diplomatic sources, who asked not to be named, Saudi officials briefed OPEC watchers privately in New York and Riyadh in September and October. Nasser al-Dossary, Saudi Arabia's national representative to OPEC, Naimi's deputy Prince Abdulaziz bin Salman and the kingdom's OPEC governor Mohammed Al-Madhi attended at least one of these meeting to give the message that, with its large currency reserves, the kingdom was prepared to withstand oil prices as low as $70-$80 per barrel for up to a year. Benchmark Brent crude oil slipped to $79 on Tuesday. Most members of the cartel apart from Saudi Arabia need much higher prices to balance their budgets but ironically are unable or unwilling to reduce their output to counter a global glut caused by slowing economic growth in China and Europe, just as U.S. oil production booms. Seeing Off Shale OilShould the Saudis tell fellow OPEC members, badly suffering from the oil price collapse, that they will not cut output, debate will intensify on what prompted the policy shift. One possibility is Riyadh wants to see off U.S. shale oil, which is believed to need much higher prices than conventional production to remain competitive. "They are after U.S. shale," said one participant in the meetings with Saudi officials. However, the source added that the Saudis might also regard low prices as an opportunity to put even more pressure on Iran and Russia for supporting Syrian President Bashar al-Assad, an arch-enemy of Riyadh, in the country's civil war. Several Saudi oil sources have denied over the past month that geopolitics are now driving the policy, but they have failed to stifle theories that Riyadh and Washington are working together to hold down prices. "What is the reason for the United States and some U.S. allies wanting to drive down the price of oil? To harm Russia," Nicolas Maduro, president of fellow OPEC member Venezuela, said last month. Masoud Mirkazemi, an Iranian lawmaker and former oil minister, said Riyadh was helping the G20 group of major economies. "Saudi Arabia, which intends to manage OPEC, serves the interests of the G20 group," he said. In Russia, the idea of a Saudi-U.S. plot against Moscow has become common currency as the economy struggles under the effects of low oil prices and Western sanctions imposed over its annexation of Crimea and support for rebels in eastern Ukraine. Leonid Fedun, a co-owner of private oil firm Lukoil, cited President Barack Obama's visit to Riyadh in March. "Obama travelled to meet the king of Saudi Arabia just after the Crimea events to push him to these actions (to lower the oil price)," Fedun, whose firm has large U.S. assets, said last month. Russia and Iran routinely allege U.S. plots against their economies, but the conspiracy theories are spreading. "Is it just my imagination or is there a global oil war underway pitting the United States and Saudi Arabia on one side against Russia and Iran on the other?" New York Times columnist Thomas Friedman, wrote last month. U.S. Secretary of State John Kerry sidestepped the issue after a trip to Saudi Arabia in September. Asked if past discussions with Riyadh had touched on Russia's need for oil above $100 to balance its budget, he smiled and said: "They (Saudis) are very, very well aware of their ability to have an impact on global oil prices." (Reuters)
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The redevelopment of Mumbai's mostly derelict docklands will, if a government appointed panel has its way, create a waterfront where people living in the world's second most densely-populated city can go to lift their spirits, and the rich can go to play. "This is a real opportunity to give Mumbai what it doesn't have, to give it open space," said Narinder Nayar, a businessman who sits on the panel, whose recommendations will be unveiled this week. Owned by Mumbai Port Trust, the largest landowner in India's financial hub, much of the 7 square kilometres (2.7 square miles) up for redevelopment is occupied today by crumbling warehouses, informal housing and workers who eke out a living breaking down disused ships or sorting through scrap metal. The government, which has valued the land at $12 billion, is pitching the project as a shining example of what urban regeneration in India should look like: transport minister Nitin Gadkari wants a giant ferris wheel similar to the London Eye. "We should be looking towards the examples of New York, London, Sydney...Barcelona as well, to see what can be done with our former industrial areas on the waterfront," Nayar said. Whereas as Mumbai's western shoreline looks out to the Arabian Sea, this land is located on the protected eastern side of the city's southern tip, affording a view across the harbour to the mainland, where a new deep-sea container port is based. Nair says the panel will recommend that about 30 percent of the land be opened as public space, and the construction of a hospital and affordable housing, linked by new train lines. There are plans for a floating hotel and convention centre too, and a tender is already out to build a luxury marina to cater for the city's super-rich. With its natural harbour, Bombay, as it was called back then, was rapidly developed during British colonial times, and much of today's city sits on reclaimed land that joined up a string of tiny islands off India's western coast. Mumbai hasn't got a great track record for urban planning, however. Mounting demographic pressures and long delays for infrastructure projects have often meant that whatever progress takes place has already been overtaken by the population's growing needs. 'Not a Single Square Inch'"You can really feel the pressure this land must be under from developers," said Aneerudha Paul, a Mumbai-based architect, staring up at new blocks of flats towering over the empty warehouses lining the docks. There are some 12.5 million people crammed on the 'island city', a narrow wedge of land jutting into the sea, and around 21 million in the greater metropolitan area. Half of them live in slums, and according to a 2012 study, there is just 1.1 square metres of open space for each resident. This is less than the 15 square metres available in capital city Delhi and the 31 square metres in London. Residents and urban experts worry that the Mumbai port project will either fail to get off the ground, or succumb to the same unregulated building sprees seen across the country. There was a plan in the 1990s to reserve a third of 2.4 square kilometres (0.9 square mile) of defunct mill land in central Mumbai for public space, and a third for affordable housing. It ended with most of the area sold privately and turned into luxury skyscrapers set amid landscaped gated gardens. R.M. Parmar, Mumbai Port Trust Chairman, said that "not a single square inch" would be sold to developers, although plots might be leased to property firms to raise cash for redevelopment elsewhere. "So far the intentions from the government have been good," said Nayar. "But only time will tell." (Reuters)
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The NDA government is working on a formula to limit the number of people getting subsidised LPG cylinder on the basis of their income. The formula is being worked out and will be unveiled during the Budget of 2015, allowing the government to bring down its fuel subsidy bill substantially.“Why should upper middle class people be entitled to subsidy in the LPG cylinder? The NDA government wants only the poor and the middle class people get the subsidy on LPG cylinder,” said a person privy to the issue.Earlier, the ministry of petroleum had urged the senior executives of the oil marketing companies to surrender subsidised LPG connections voluntarily. The government has also urged people in the high income bracket and users of piped natural gas, to give up their subsidised cylinders. However, as per the newspaper reports, a little over 8,000 people have registered for surrendering their subsidised LPG connections. There are 15 crore LPG connections in the country and the government- including the previous UPA government- has been trying to dissuade people from consuming subsidized cylinders.The government is likely to decide a threshold for LPG subsidy based on the income tax return filed by people. However, it does not want to omit people at the lower end of the tax pyramid.From November 14, the government also re-started the direct subsidy transfer to the accounts of consumers of LPG cylinders in select districts. From January 1 this year, only those people will get the subsidy in their accounts who will have attached their bank accounts with Aadhar number.Union minister for petroleum had earlier said that his ministry was consulting the department of expenditure on a new system of fixing the subsidy with Department of Expenditure. Currently, consumers pay less than half the market price for up to 12 subsidised cylinders.In 2013-14, the government and its oil marketing companies s bore a revenue loss of Rs 46,400 crore on account of selling LPG below market price.In Delhi, the cost of a non-subsidised cylinders is Rs 880 each, as against Rs 414 for a subsidised cylinder.In its attempt to control the fuel subsidy, the NDA government in October de-controlled the diesel prices in the country. The fall in the international crude oil prices and the de-control of diesel will lead to reduction of fuel subsidy at Rs. 75,000 crore in FY15 as against Rs 1,40,000 in the previous year. neeraj@businessworld.inneeraj.epiphany@gmail.com@neerajthakur2
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India's JSW Energy Ltd said it has agreed to buy two hydropower projects from Jaiprakash Power Ventures Ltd for 97 billion Indian rupees ($1.57 billion) including debt. The two projects -- both in the north Indian Himalayan state of Himachal Pradesh -- have a combined capacity of 1,391 megawatts, JSW said in a statement. Jaiprakash has been in talks with JSW, controlled by billionaire Sajjan Jindal, since September, part of its efforts to sell assets and pay down its debts. The talks with JSW followed the collapse of two sets of negotiations -- first with a consortium led by the Abu Dhabi National Energy Co in July, and then with Reliance Power Ltd in September -- over the sale of Jaiprakash's hydropower projects. Jaiprakash, alongside its parent Jaiprakash Associates, is one of several Indian power and infrastructure companies weighed down by debts and weak profitability. Many of these firms have struggled to sell assets as quickly as hoped. For JSW, the purchase of the hydropower projects marks an expansion of its portfolio beyond coal and lignite-based plants. JSW said in September it would also acquire a thermal power plant in central India from Jaiprakash, but there was no update on the status of that project on Sunday. (Reuters)
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