Singapore's Changi Airports Group is in talks to buy a 26 per cent stake in the airport business of India's GVK Power & Infrastructure Ltd, the Economic Times reported.Changi, which operates Singapore's international airport, is likely to pay between Rs 2000 crore and Rs 2200 crore for the stake, the paper reported on Monday, citing people close to the deal.At the top end of that range, GVK's overall airport business would be worth about Rs 8000 crore.GVK's shares were up 6.4 per cent at 11.70 rupees in early trading after rising as much as 18 per cent."The deal is in the final stages, and an announcement is likely to be made in January," the newspaper quoted a person familiar with the situation as saying.Sources said last week that GVK has been looking to raise up to Rs 2,640 crore to retire debt and fund operations by selling a minority stake in its Australian unit. The company said in September it would pay Rs 6,652.80 crore to buy a majority stake in three Australian coal projects.GVK has total debt of about Rs 5000 crore, the Economic Times said. A company spokesman declined to comment on the debt or on the reported negotiations.GVK owns 50.5 per cent of Mumbai's airport and 43 per cent of Bangalore's airport, and it operates both.It also holds the first right of refusal to develop a planned international airport at Navi Mumbai, for which bids are expected to be invited next year.The sale of an equity stake in the business would help GVK secure a partner with deep pockets ahead of the Navi Mumbai airport bid.Shares in GVK, valued at Rs 1,742.40 crore as of Friday's close, have slid 71 per cent so far in 2011, compared with a nearly 23 per cent decline in the main stock index.(Reuters)
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In a relief to Anil Ambani-led Reliance Infrastructure Ltd (R-Infra), the Bombay High Court on Thursday stayed an order of Maharashtra State Information Commission bringing the company within the ambit of RTI Act.A division bench of Justices B H Marlapalle and Nishita Mhatre was hearing an appeal filed by R-Infra, challenging the order on the ground that it was a private company and not a public authority and hence the provisions of RTI cannot be applied to them.Granting an interim stay, the bench directed the Maharashtra government to file its reply within eight weeks.The State Information Commission had on July 19 passed an order bringing R-Infra within the purview of RTI after observing that though it was a private company it provided essential public service of electricity and hence came under the Act.The order was passed on a complaint filed by RTI activist Anil Galgali. The commission had also directed the company to appoint a public information officer and an appellate officer as per provisions of the RTI Act.In its appeal challenging the order, R-Infra has said it is not a body or institution of the government established or constituted by the Constitution of India."RInfra does not fall within the definition of a public authority as either being owned, controlled or substantially financed by the funds provided by the government," the petition stated. The petition further said even the State Information Commission has admitted that R-Infra is a private company and has not been set up by the government."Thus there is no question of the RTI Act being made applicable to RInfra. The order passed by the commission is liable to be quashed and set aside," it said.Galgali had approached the information commission after the company declined to provide him information regarding his electricity bills. His application seeking information under the RTI Act was rejected by the company which said its provisions did not apply to private companies.Galgali had argued before the commission that RInfra was formed under the Companies Act and functioned as a public utility and hence should come within the ambit of RTI.Accepting his argument, the commission had held the company was given work under the Electricity Act, 2003 and supplying power was a public service under the act.(PTI)
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OPEC will likely decide to cut oil output at its Dec 14 meeting in Vienna as global oil demand is expected to decline next year, Iraq's oil minister said on Tuesday, a view in line with fellow member Iran but one which runs counter to mainstream expectations.Industry observers say a cut in output is unlikely to find support among the Gulf Arab OPEC members while oil prices remain well above $100 a barrel.Iran aims to persuade OPEC members to return output production to levels before they were raised earlier this year in response to the Libyan crisis.Iran along with African producers and Venezuela, blocked a Saudi-led proposal to increase output targets at OPEC's last meeting on June 8, but Saudi Arabia and its Gulf OPEC allies boosted output unilaterally afterwards.Iraq's Oil Minister Abdul-Kareem Luaibi also told reporters that he expects oil prices to trade between $100 and $120 a barrel, which is "reasonable" and "acceptable" for Iraq.Brent crude rose 37 cents to $107.25 a barrel by 0726 GMT, after falling for four consecutive sessions. US January crude was up 40 cents to $97.32 a barrel.The minister, who was in Tokyo for meetings with Japanese companies, made the remarks through a translator.(Reuters)
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State-run explorer Oil and Natural Gas Corp said on Wednesday its overseas investment arm has signed a three-year agreement with PetroVietnam for developing long-term cooperation in the oil sector.The pact between ONGC Videsh and Vietnam's oil and gas agency covers new investments and strengthening presence from drilling-to-dispensing in Vietnam, India, and other countries, ONGC said in a statement.ONGC Videsh, along with TNK-BP and PetroVietnam, has a stake in a gas field in the Nam Con Son basin, off Vietnam's south coast. In 2006, Vietnam had awarded two exploration blocks -- 127 and 128 -- in Phu Kanh basin to ONGC Videsh.(Reuters)
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Petrol costs more in India than the United States of America because of higher taxes, but diesel is priced lower than the US, Minister of State for Petroleum and Natural Gas R P N Singh said Tuesday.Petrol in Delhi costs Rs 65.64 per litre, as against the retail price of just Rs 45.45 a litre in the US, he said in a written reply to a question in the Rajya Sabha in New Delhi.This is because taxes constitute Rs 26.44 out of the price of petrol in Delhi, while they amount to just Rs 5.54 in a litre in the US.However, petrol is cheaper in Delhi than the United Kingdom, where it is sold at Rs 108.47 per litre, and France, where it costs Rs 103.14 a litre. The taxes on petrol in the UK and France add up to Rs 65.10 and Rs 59.26 per litre, respectively.The rates in New Delhi are also lower than the price of Rs 104.31 per litre in Germany, Rs 110.07 per litre in Italy, Rs 90.04 per litre in Spain and Rs 88.09 a litre in Japan.Singh said the price of diesel in Delhi, at Rs 40.91 per litre, is cheaper than the rate of Rs 53.23 a litre in the US, Rs 95.18 a litre in the UK and Rs 79.85 per litre in France.The tax component in retail prices of diesel in Delhi is just Rs 7.4 per litre, while it stands at Rs 6.41 per litre in the US. Taxes on diesel are very high in the UK, at Rs 47.02 per litre, and France, at Rs 30.29 a litre.Diesel is also costlier at Rs 82.90 per litre in Germany.It is priced at Rs 86.99 per litre in Italy, Rs 76.87 a litre in Spain and Rs 76.14 per litre in Japan, he said.(PTI)
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India is in the development mode, and to accelerate the process, there is an immediate need for vastly improved infrastructure in the country. Unlike the Chinese approach to infrastructure investment, where the country first creates the infrastructure and industry follows, India usually works the other way round. We are long on planning and short on implementation. But the opportunities for further growth are entirely dependent on the ability of our infrastructure to take the extra load, be it in electrical power, highways, ports or communication systems. It is, therefore, a period of opportunity for many industries, such as steel, cement, coal, non-ferrous metals, etc. We are woefully short in steel; a production of around 70 million tonne for the size of our population is inadequate. Similar is the case for cement and certain strategic metals, such as copper. The inadequacy of petroleum products and coal in our country will also hamper our development.Unfortunately, several projects in these vital areas have been delayed due to the usual reasons — indecisiveness of the central and state governments, lack of prompt clearances from the concerned ministries, the list can go on. Very often, political considerations have held back vital projects for the development or production of commodities.We also need greater capital formation in India, and though there has been healthy growth in FDI (foreign direct investment), the country needs much more support — and much less red tape — to produce the desired results. Despite operating in a protected environment till 1990, the corporates have seized the opportunity and shown great agility in project execution, when the necessary sanctions have been made available to them. We, therefore, need greater coordination and speed in hastening pending projects. Land availability for major infrastructure projects — as also the sanctions leading to the proper use of our vast raw material resources — is an absolute must in taking major steps in the industrialisation of our country in 2011.The author is a director of Tata Sons(This story was published in Businessworld Issue Dated 10-01-2011)
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There is no rest for the virtuous either, it appears. Not too long after its inquiries into the questionable basis of the 2G spectrum allocation by then telecommunications minister A. Raja, the Comptroller and Auditor General (CAG) is now enquiring into the allocation and award of ultra-mega power projects (UMPPs, of 4,000 MW each) by the power ministry, raising the possibility of another storm over financial and regulatory propriety.Members of the political opposition and news media have been quick to ask if another scam will emerge that could take Anna Hazare back on the road to New Delhi once again. For the government the spectre of allegation of another scam, will convert current political headaches into a severe migraine attack.Finance minister Pranab Mukherjee acknowledges that the CAG is simply fulfilling its mandate; but he also underscored care to ensure the existence of "malafide intent as distinct from bonafide errors of judgement or divergent opinions on policy options". He was speaking at an event marking the CAG's 150 years.Predictably, power ministry officials are livid at the suggestion that rules were flouted in awarding UMPP projects. "There can be no fixed rule for implementing such policy," says a senior official in the ministry. "When in doubt about the policy intent, we went to an empowered group of ministers (EGoM) for advice.""Each contract was transparent and policy aspects were vetted by the EGoM," a former official of Power Finance Corporation (PFC) says. PFC was the nodal agency for awarding UMPPs in 2007, creating special purpose vehicles for the four UMPPs identified. (Later, the number of projects went up to 16.)The central question in the 2G telecom spectrum allocation scandal was the presumptive loss to the public exchequer of Rs 1.76 lakh crore, a gigantic number. Will there be a similar calculation of presumptive loss to the government? And on what basis will that be determined?At least four of the UMPPs are expected to begin generating power by 2012, and this controversy might derail the process. The CAG may ask whether there were any performance contracts, and which specified penalties that would be levied for non-performance.Readers may recall that Reliance Power was awarded the Sasan UMPP after the original successful bidders Lanco Infratech and Globeleq Singapore were disqualified for misrepresenting financial parameters in their proposal. Lanco was fined Rs 1 crore, instead of forfeiting the bid bond of Rs 120 crore. The CAG could ask why the government allowed that.Officials in the PFC say it was a policy decision taken by the EGoM. Can the CAG question a policy decision? Critics could argue that this is not a policy audit. In his speech, the finance minister said the CAG needed strengthening: if that is political will, what will the way be?(This story was published in Businessworld Issue Dated 28-11-2011)
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Having posted dismal results — a 89 per cent fall in profits — in the second quarter, India's largest steel producer is gearing up for harsher times to come. The quarter ending December (Q3) is expected to be ‘difficult', said Tata Steel Europe's (TSE) CEO Karl-Ulrich Kohler last week after the Q2 results were out.While waning demand for steel and rising costs of raw materials (coking coal and iron ore) have hit Tata Steel hard, the depreciating rupee also ate into its profits. Steel sales in Europe have thinned down since June on fears that Greece and other euro-zone countries may default on debt. TSE, which produces about two-thirds of Tata Steel's total steel and buys all the required raw material from outside, faced a 40 per cent increase in coal prices and 30 per cent rise in iron ore. The 14 per cent surge in the price of hot-rolled coil steel was not enough to power the bottom line.According to Niraj Shah, analyst, Fortune Equity Brokers India, the European uncertainty is likely to continue and this may force the company to shutter or suspend more units there. "Indian operations may be the saving grace, but even here, the shine is off as consumption growth has almost stagnated," says Shah.The rupee depreciation has also lowered the earnings of Indian commodity players. It has affected Tata Steel's exposure to foreign-currency convertible bonds by Rs 150 crore, says group chief financial officer Koushik Chatterjee. The rupee depreciated 8.7 per cent in the three months ended September, the biggest quarterly drop since 1992.Since the Tatas acquired Tata Steel Europe (then Corus) in 2007, the steelmaker has been haunted by the costs of iron ore and coking coal. So the then managing director (now the vice-chairman) B. Muthuraman set a target for sourcing half of the raw materials from captive mines. But the acquisition or development of mines has been delayed because of the financial crises. Now, the company is developing some of its mines in Mozambique, Canada, South Africa and Cote d'Ivoire and looking to acquire mines. Analysts estimate that the European entity could save up to 60 per cent of input costs, translating into a cost reduction of $120 a tonne of steel, if it could achieve full self-sufficiency in raw materials. "Since the company is looking for only 50 per cent raw material security, the overall input cost reduction will be 30 per cent, or $60 a tonne of steel," says an analyst.Tata Steel managing director H.M. Nerurkar expects that raw material prices to come down. The spot indication in the past two to three weeks is that they are coming down, he says. On the Indian steel market, Nerurkar says, "Both prices and demand will be steady."The slowdown in steel prices has softened the raw material spot prices, too. That is a helping hand for Tata Steel. However, it is time for the company to tighten the belt.(This story was published in Businessworld Issue Dated 28-11-2011)
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