The Ministry of Environment and Forests (MoEF) has accorded 'green signal' to Oil India Ltd's (OIL's) proposed exploration activities in KG-ONN-2004/1 block in the Krishna-Godavari basin.According to an order issued yesterday, the Andhra Pradesh government, which forwarded OIL's application to the Union Ministry for environmental clearance, said the sample collected during the exploration activity should not be used for commercial purpose."Government of India, Ministry of Environment and Forests, in their letter...have accorded their approval for undertaking prospecting exploration activities over an extent of 55 sq kms of forest land in KG-ONN-2004/1 block having total area of 511 sq kms of land located in Kakinada Division in East Godavari District, in favour of M/s Oil India Ltd, subject to certain conditions as stipulated therein," the order said.OIL, along with its partner GeoGlobal Resources, Barbados, has already invited global Expression of Interest (EOI) from interested contractors with relevant experience for its exploratory drilling campaign in the block KG-ONN-2004/1 for provision of various services.The JV has a commitment to drill 12 exploratory wells in the 549 sq kms block area on the eastern coast of India, OIL had said earlier."The activities to be undertaken by the user agency (OIL) within the forest land for prospecting shall not result in felling of any tree. The samples collected during the prospecting shall be used purely for investigation purposes and shall in no case be used for trade or commerce purpose," the order further said.The permission for prospecting shall not be construed as any commitment on part of the central government for diversion of forest land for mining purpose and after completion of the prospecting all bore holes shall be completely filled up, it said.The block was awarded by the Ministry of Petroleum & Natural Gas under its New Exploration Licensing Policy (NELP) round VI, to the consortium of Oil India Limited (OIL), a government enterprise (with 90 per cent stake as the operator) and GeoGlobal Resources (GGR: Barbados) with 10 per cent stake as partner for the block.The 549 sq kms block comprises of 511 sq km on land area in the district of East Godavari, Andhra Pradesh and 38 sq km in the district of Yanam, Puducherry (UT).Shares of OIL were quoted at Rs 560.70 apiece, up 1.88 per cent, on the BSE during afternoon trade.(PTI)
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The UPA government seems to be in for some more embarrassment over coalgate. The Indian Express newspaper reported on Saturday, 13 April that CBI may be inclined to inform the Supreme Court that the controversial probe status report it submitted last month had been vetted by Law Minister Ashwani Kumar and Prime Minister's Office officials.The paper reported quoting sources that senior CBI officials, including director Ranjit Sinha, were summoned by Kumar days before the status report was filed. The meeting, also attended by law ministry officials saw several amendments in the status report some of which were incorporated by the CBI.Amid reports of alleged interference in the CBI probe into the coal scam, BJP leader Arun Jaitley on Friday, 13 April, demanded constitution of a special investigation team (SIT), besides accusing the UPA of being a "rogue government" that will not allow CBI to function independently.The Leader of Opposition in Rajya Sabha also charged the government with "interference in the administration of justice" by not allowing CBI to acquaint the apex court with the full truth."CBI cannot find out the truth and even if some honest officer in the CBI tries to find out the truth, the UPA is a rogue government which will not allow it to operate independently," Jaitley told reporters here.His Lok Sabha counterpart, Sushma Swaraj, criticised the government for "vetting" of the CBI report and said it is part of "an attempt to save Prime Minister Manmohan Singh"."This is a very serious matter. This is evidence of the government's pressure on the CBI to save the prime minister," Swaraj said on Twitter.Jaitley said the UPA is interested in "diluting the guilt of the culprits" and does not want the truth to come out."When Ministers, civil servants and officials try that the Supreme Court should not be acquainted with the full truth. This is an interference in the administration of justice. The government owes and explanation," the BJP leader said, while demanding that the CBI's original unaltered report be made public besides being placed before the Supreme Court.He said the scam shows that the allocation of coal blocks were a "tainted" one and "a case of nepotism", as the favourites of the government were allocated coal mines even when power plants in the country are starved of coal."These facts now conclusively show that CBI will not be honestly allowed to investigate this case and therefore, the system will have to seriously consider whether an SIT must take over the administration and investigation of the coal scam. The Coal scam should be handed over to a SIT instead for the truth to come," Jaitley said. "This is now conclusive that the farce of being autonomous and independent which CBI has attempted to maintain is now completely demolished and dismantled," Jaitley said.On the media report that the CBI probe status report had been "vetted" by the Law Minister and the Prime Minister's Office, he said, "That this should be done at the level of the Minister and the officials of the PMO itself raises serious questions.""Now instead of restoring the natural asset back, this government wants to dilute its own guilt and that of the persons to whom it was allotted and those who are responsible, by interfering in a due process of law," the BJP leader said, adding that the PIL pending before the Supreme Court is a due process of law and is a part of the administration of justice.Citing the Vineet Narain case in which the apex court had emphasised on the autonomy and independence of CBI, Jaitley said the Supreme Court categorically had said, quoting from an English legal principle, that no minister can interfere and tell CBI what to do and not to do."That is now completely violated," the Leader of the Opposition in Rajya Sabha said.(BW Online Bureau & Agencies)
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Coal India Ltd, the world's biggest coal miner, plans to cut its stocks by around a quarter this fiscal year, its chairman said, a move that may help increase supply to power producers in the energy-hungry nation. The miner, which produces about 80 per cent of India's coal, ran down its stocks by 18 per cent from a year ago to about 58 million tonnes in the year to March, its lowest in four years. "This year, we plan to reduce it by 15 million tonnes," S. Narsing Rao told Reuters by phone, referring to the current fiscal year that began in April. Shifting more stocks to its mainly power producing customers, who do not get enough of the fuel to run their plants in full capacity, could help trim the supply gap in the country where capacity additions in the power sector have outpaced growth in domestic coal output. Coal fuels more than half of India's power generation and Coal India is chasing a production target of 482 million tonnes and a supply target of 492 million tonnes this fiscal year. The targets, set by the federal coal ministry, represent increases of 3.9 per cent and 4.7 per cent respectively over Coal India's production and supply goals last fiscal year.(Reuters)
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Reliance Industries has shut its ninth well on the main gas fields in the eastern offshore KG-D6 block, leading to output plummeting to all-time low of 15.5 million standard cubic metres per day.RIL on April 2 shut the well A1 on the main producing fields of Dhirubhai-1 and 3 (D1&D3) in Krishna Godavari basin block KG-DWN-98/3 or KG-D6 for "reservoir build-up study," according to a status report of the Directorate General of Hydrocarbons (DGH).The company has been forced to shut the previous eight wells due to high volumes of water and sand seeping in, which affected production. It had previously shut well B6, the eighth well to be closed on D1&D3, on January 9 and B4, the seventh well, on November 29 last year.The latest shutting led to the output slipping from D1&D3 to 11.70 mmscmd in the week April 7, the report said. Together with 4.09 mmsmcd from MA oilfield in the same block, the output totalled 15.79 mmscmd in the week.However, the production has since plummeted further to 15.50 mmscmd this week, the lowest level since D1&D3 started production in April 2009.RIL has so far drilled 22 wells on D1&D3 fields but has put only 18 on production so far. Half of these wells are now shut.KG-D6 fields, which began production in April 2009, had hit a peak of 69.43 mmscmd in March 2010 before water and sand ingress shut down of wells after wells.This peak output comprised of 66.35 mmscmd from D1&D3, the largest of the 18 gas discoveries on the KG-D6 block, and 3.07 mmscmd from MA field, the only oil discovery on the block.Besides the fall in output from D1&D3, gas production from MA field, which had hit a peak of 6.78 mmscmd in January 2012, too has dropped.The report said MA field produced about 6,235 barrels per day of oil during the week ended April 7.Of the 15.79 mmscmd of gas production from KG-D6, 13.50 mmscmd was sold to urea manufacturing fertiliser plants. "No sale was made to power plants during the period," it said.The remaining 2.29 mmscmd was consumed by LPG manufacturing plants and the pipeline that transports the KG-D6 gas, it said.RIL, the report said, has projected an output of 15.50 mmscmd in April.The company has so far made 18 gas and one oil discovery in the Krishna Godavari basin block in Bay of Bengal. While the lone oil find, MA went on stream in September 2008, largest among the gas finds, D1&D3 were put on production in April, 2009. (PTI)
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While much is been talked about the projected GDP growth rate of India, the focus on real estate and its ancillaries as a component of GDP are not stressed upon as much.The sector not only consists of residential housing, but also commercial spaces, trading units etc. This means the enormous business opportunities that arise out of this sector are significant and incomparable to any other.Though it is tough to pinpoint to the exact figure of this sector’s contribution to the GDP, the fact remains that about 250 or more ancillary industries directly depend on the development of the real estate sector.The financial crisis put the spotlight on the real estate sector across all cities in India. What started as a housing mortgage derivative product domino game, ironically led to the collapse of housing markets not just in the world’s most developed economies, but also in an emerging one like ours.What resulted was the initiative to ensure that the housing and real estate industry gradually come out of the crisis and continue to have stable growth like they did before.The need-of-the-hour was to look for a solution that will help both demand, and supply. An approach that will help boost construction of affordable housing, of integrated urban townships where lakhs could live a hassle-free life.The solution came in the form of Public-Private-Partnerships.The Jawaharlal Nehru National Urban Renewal Mission aims to increase the use of PPP in all kinds of infrastructure projects, from roads, ports, airports, railways, housing, telecommunication etc.Policy experts suggest that for successful infrastructure development for an emerging economy, PPP is the way to go.A mutually beneficial and symbiotic relationship like the PPP ensures that both sides can take advantage of the strengths of the other and work on their own weaknesses in partnership with the other.The infrastructure sector as a whole suffers from numerous problems, starting from land acquisition, approvals, clearance, funding.Given that public financing is not easy (lack of retail investor base and absence of a healthy market), the private sector takes charge of funding to some extent. The public sector can take advantage of private sector skills, on-site development, easy finance, greater transparency and accountability that comes from the latter.The working culture of private sector also ensures that projects are delivered on time, there is greater focus to stick to deadlines, regular maintenance and upgradation of machinery is carried out, thereby decreasing the costs and time-taken to hand-over the deliverables.Special Purpose Vehicles (SPVs) created by the public enterprise ensures the development, building, maintenance and everyday operations done by the private company(s) during the contracted period is per the contract.The public enterprise involved typically gets a higher percentage share of the project, apart from safeguarding the project by giving it its backing. Although the inherent risk of the project lies with the private parties involved (because they are at a position to take the risk), the government entity essentially underwrites the risk by forging the bond.Land acquisition, which is by far the biggest hurdle in the development of infrastructure, is taken care of by the public enterprise involved, thereby cutting short a lot of time, which would otherwise have been spent in getting approvals.Global consultancy firm KPMG, in a report on affordable housing said land is the foundation on which a PPP is formed. Consider this: the government, in possession of large land parcels can distribute/sell them through a transparent process, thereby reducing the land cost; it can relax FSI norms; it can provide subsidy to builders; relax ECB norms for housing companies; increase current limits on interest subsidiesWith land as the biggest equity, a PPP model ensures that both the management of the project and the risks involved are equally distributed between the public and the private sector.Off-late, a number of successful infrastructure projects have been the result of a well-planned and well-executed PPP.A large number of waste management, road construction, and airport construction (Navi Mumbai) projects are the fruition of successful PPPs.As per Census 2011, 31 per cent of our population is classified as urban. This translates into an estimated 380 million people. Moreover, out of every 100 households, only 3 are built out of concrete, while 48 are made out of burnt brick and 24 out of mud. For the 11th five-year plan, the Planning Commission pegged the total shortage of dwelling units in urban India at 26.53 million. Urban townships provide an answer to this housing shortage with integration of a variety of elements such as Schools, Residences, Recreation areas, Hospital and Retail which aims to provide a healthy lifestyle along with all amenities. This enables in achieving a community vision for the township. Given these numbers, and given the scope that PPPs have, it goes without saying that the housing sector, both rural and urban, needs to address their problems by forging long-run partnerships with either state or central governments to ensure housing needs of millions of these people are met without further delay.(The author of this article is Brotin Banerjee, MD & CEO, Tata Housing)
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The Supreme Court on Thursday, 9 May 2013, upheld $8.5 billion Cairn-Vedanta deal, saying that the Centre and ONGC not exercising the right of pre-emption over sale of shares of Cairn India Limited (CIL) was a prudent commercial decision.The court said that the decision on not buying the shares of CIL was taken by the Centre and ONGC after considering various commercial and technical aspects and it cannot sit in judgement over the commercial or business decision taken by parties."We are of the view that on facts, as well as on law, the ONGC and the Government of India have taken a prudent commercial and economic decision in public interest. We are not prepared to say that the decision is mala fide or actuated by any extraneous or irrelevant considerations or improper motive," a bench of justices K S Radhakrishnan and Dipak Misra said."We notice that the ONGC and the Government of India have considered various commercial and technical aspects flowing from the Production Sharing Contract (PSC) and also its advantages that ONGC would derive if the Cairn and Vedanta deal was approved," it said.The court passed the order on a PIL alleging that there was a clause in the agreement between Cairn group and ONGC that in case Cairn Group wanted to sell its shares in Cairn India, it would first offer the same to ONGC and this right was "not asserted" by the PSU and the Centre.The bench after going through all the aspects came to the conclusion that the decision taken by ONGC not to exercise its Right of First Refusal (RoFR) was taken after elaborate and due deliberations as the price of shares was in excess of intrinsic value."The report of SBI Caps, after making a detailed financial analysis, also supported the decision taken by the ONGC. The decision to grant no objection to the transfer of shares of CEIL (Cairn Energy India Pvt. Ltd.) from Cairn to Vedanta was also on the basis that the proposed price of share was at Rs.355 per share, was well in excess of its intrinsic value as were evaluated by SBI," the bench said, adding that SBI had evaluated each share.The bench also said that courts should not interfere in commercial and business decision unless there was violation of any statutory provisions or the decision was taken for extraneous considerations or improper motives.The court "cannot sit in judgement over the commercial or business decision taken by parties to the agreement, after evaluating and assessing its monetary and financial implications, unless the decision is in clear violation of any statutory provisions or perverse or for extraneous considerations or improper motives," the judgement said."The state or the state undertaking being a party to a contract, have to make various decisions which they deem just and proper. There is always an element of risk in such decisions, ultimately it may turn out to be a correct decision or a wrong one. But if the decision is taken bona fide and in public interest, the mere fact that the decision has ultimately proved to be a wrong, that itself is not a ground to hold that the decision was mala fide or done with ulterior motives," it said."Matters relating to economic issues have always an element of trial and error, so long as a trial and error are bona fide and with best intentions, such decisions cannot be questioned as arbitrary, capricious or illegal," it said.Cairn India Ltd, a subsidiary of UK-based Cairns Energy, is the operator of Rajasthan oil block.It had entered into an agreement with UK-based Vedanta Group on June 16, 2010, to sell its majority stake in Cairn India for a consideration of around USD 8.48 billion.The petitioner, a Bengaluru resident Arun Kumar Agarwal, had challenged the approval granted by the Centre on January 24, 2012 for the acquisition of stake in CIL by Vedanta group.It was also pleaded that ONGC be directed to exercise its right of pre-emption over sale of shares of CIL on the same terms and also for a direction to CBI to probe against the company for not exercising its legal rights under RoFR and giving clearance to the CairnVedanta Deal.(PTI)
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The government will invite bids this week from merchant bankers and advisers for selling a 10 percent stake in state-run Coal India through a share auction, two sources involved with the matter said.The government's department of disinvestment (DoD) expects to launch the share sale by August or September, the sources, who declined to be identified, said.At the current price, the sale would be worth as much as $3.6 billion, although the shares are likely to be offered at some discount to the market price.The Indian government owns 90 percent of Coal India, the world's largest coal miner by output.(Reuters)
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The government is working out modalities for the roll out of direct transfer of cash subsidy to cooking gas (LPG) consumers, Petroleum Minister M Veerappa Moily said. "We discussed moving LPG under Direct Benefit Transfer (DBT) scheme. We believe LPG subsidy can be given out under DBT. The Finance Ministry is working out modalities of LPG subsidy roll out under DBT," Moily said after a meeting with Finance Minister P Chidambaram.The government was to implement the DBT for LPG in a phased matter beginning with one district and extending to 20 by 15 May.It will be extended all over the country as and when beneficiaries get the unique identification number Aadhar and have their bank accounts linked to that.Once implemented, the government will transfer close to Rs 4,000 to every household annually to enable people to buy 9 cylinders of LPG at market price.Currently, state-owned oil firms sell domestic cooking gas at a highly subsidised rate of Rs 410.50 per 14.2-kg cylinder. It is half the market price and the difference is made good by the government in the form of subsidy to oil companies.When DBT is implemented, the government will transfer the Rs 435 per cylinder subsidy to consumers directly instead of giving it to oil companies.Consumers are entitled to get 9 cylinder of 14.2-kg each at the subsidised rate in a year. So each consumer will get a little less than Rs 4,000 annually but will have buy LPG at market price.Chidambaram had last week said he would meet his petroleum counterpart to work out modalities for direct fund transfer to LPG customers. (PTI)
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