Business groups such as Reliance, Adani and government-owned entities have promised investments of nearly Rs 6.89 lakh crore in Madhya Pradesh at the Global Investors Summit, which drew to a close in Indore on Friday. "Expressions of Interest (EOIs) by investors have touched Rs 6.89 lakh crore. I will not let it go at any cost. Within a month our team will get in touch with all of them who have shown investment interest. We have decided to attach one officer each with all serious investors," the state's Chief Minister Shivraj Singh Chouhan told reporters. Union Minister for Chemicals and Fertilizer Ananth Kumar announced that the Centre will set up a Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) at a cost of Rs 1 lakh crore near the Bina petroleum refinery in Madhya Pradesh. The state government received more than 3,160 EOIs in this year's summit. The next Global Investors Summit will be held from October 19 to 21 in 2016, the chief minister said. The government claimed that investment worth over Rs 1.82 lakh crore were received after the last summit in 2012. Chouhan said he will meet investors every Monday with the aim of making his state business-friendly. The Madya Pradesh government in a statement said public sector undertakings (PSUs) have also shown interest in the state. Their proposals include NTPC's Rs 24,000 crore in power plant project. Steel major SAIL has committed Rs 13,500 crore; Rs 22,000 crore in petroleum sector by BORL (Bharat Oman Refinery Ltd), Rs 12,000 crore in fertiliser plant by NFL and Rs 28,000 crore in mining segment by NMDC and NALCO. The Chief Minister said the state government did not talk about 'Memorandum of Understanding' with interested investors, but rather presented Madhya Pradesh as a brand and good investment destination. The chemicals and fertilizer minister said he had two meetings with Petroleum Minister Dharmendra Pradhan and Chouhan about the petrochemicals complex. "The PCPIR project cost will be Rs 1 lakh crore," Kumar said. Union Minister for Steel, Mines and Employment Narendra Singh Tomar said NMDC and NALCO will set up a thermal power plant in Madhya Pradesh at a cost of Rs 22,000 crore once the issues following cancellation of coal mines by the Supreme Court are resolved and the two state owned firms get coal mines. Power and Coal Minister Piyush Goyal said state run NTPC has signed a EOI for setting up a 750 MW solar based power plant in the state. He said if the state government would provide land, Coal India too would invest in setting up a 1,500 MW solar plant. "Together the two are ready to invest Rs 20-22,000 crore" in the power sector, Goyal added. He said tenders would be issued in 2-3 months for two more power projects of NTPC in the state. The plants are proposed at khargaon (1320 MW) and Bareli, (2640 MW) in the state. J.P. Gaur of diversified firm Jaiprakash Associates promised an investment of Rs 35,000 crore and also offered to develop Rewa as a smart city. Ambani brothers -- Mukesh and Anil -- pledged an investment of Rs 50,000 crore, Gautam Adani of Adani Group announced Rs 20,000 crore, followed by Suzlon's Tulsi Tanti Rs 15,000 crore. Industrialists who announced their investment plans include Welspun's Sindoor Mittal (Rs 5,000 crore), Essar group's Shashi Ruia (Rs 4,000 crore) and Future Group's Kishore Biyani (Rs 2,000 crore) and Symbiosis open education society (Rs 200 crore). Many industry bigwigs, including Tata Group's Cyrus Mistry, Aditya Birla Group's Kumar Mangalam Birla, ITC's Y.C. Deveshwar, Larsen & Toubro's A.M. Naik and Godrej Group's Adi Godrej attended the summit, which attracted 4,600 delegates. (Agencies)
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India's Reliance Industries Ltd is seeking a buyer for its stake in the Eagle Ford Basin oil and natural gas joint venture with Pioneer Natural Resources Co, a sale that could raise up to $4.5 billion, according to people familiar with the matter. Pioneer, which has about 230,000 acres in the Eagle Ford Basin according to its website, sold a 45 percent interest in the property to Reliance for $1.2 billion in 2010. The Eagle Ford Basin asset is a three-way joint venture between Mumbai, India-based Reliance; Irving, Texas-based Pioneer, and a division of Mexico's Alpha SAB de CV. Reliance has appointed Citigroup Inc and Bank of America Merrill Lynch to help sell its 45 percent stake, the sources said, asking not to be named because the matter is not public. Representatives for Citi and Bank of America declined to comment, while Reliance could not be immediately reached for comment. The property for sale produces 115,000 barrels of oil equivalent per day, with 60 percent of the production in liquid form rather than gas, one of the people said. There are 472 wells on the Eagle Ford property, according to a Reliance presentation from July. Pioneer owns 46 percent of the joint venture, with Alpha SAB's Newpeck LLC owning 9 percent. As part of its planned exit from the Eagle Ford joint venture, Reliance is also selling its investment in EFS Midstream LLC, an oil and gas gathering treatment and transportation network, the people said. The mid-stream joint venture was initially funded by Pioneer and Reliance in June 2010. EFS Midstream operates 11 central gathering plants in south Texas, according to the company's website. The sale process for the oil production assets and the oil and gas gathering assets is at an early stage, the people said. Pioneer is the operator of the wells in the joint venture, which could complicate the sale process, one of the people said. The company is an independent oil and natural gas exploration and production company with operations in several U.S. regions. (Reuters)
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Even as India grapples with the question of whether industrialisation or environment should be given a prominence, getting an environmental clearance from the government for projects is where most frauds occur, according to a report by Deloitte. Also 15 per cent of the total infrastrure investment, totaling billions of dollars, is stuck due to lack of government clearances and that is what is leading to middle men and government extorting bribes from the companies, says the report.Traditional frauds such as procurement fraud, bribery and corruption dominate the sector, the Deloitte Forensic says in the report titled Teething Issues: Managing Fraud and Dispute Challenges in the Infrastructure Sector. According to the report around 70 per cent of the respondents said that streamlining environmental clearances will help reduce fraud in the infrastructure sector. Also more than 65 per cent of respondents suggested that streamlining and improving transparency in environmental clearances could prove to be effective in tackling fraud.“The key reasons for delays pertain to obtaining environmental clearances and acquiring land. While companies do need to focus on strengthening internal controls to mitigate fraud risks, support from the government towards improving the pace of regulatory clearances is necessary,” says Amit Bansal, senior director, Deloitte Forensic.The report also hinted that often infrastructure projects could not be passed unless bribe was paid to the middle men. “Dependencies on several third parties and the government for its operations may nudge infrastructure companies to resort to bribery and corruption, especially to speed up regulatory clearances in order to restrict delays, a view echoed by 50 per cent of survey respondents,” the report states. Sachin@businesworld.insachin581@gmail.com
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Even as per capita consumption of electricity has been on the rise, generation has failed to keep pace on account of poor fuel linkagesClick here to view graphicCompiled by P.B. Jayakumar; Graphic by Prashant Chaudhary(This story was published in BW | Businessworld Issue Dated 02-06-2014)
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Crude prices slipped today to multi-year lows owing to a build-up in supplies while the dollar rallied in response to a strong US jobs report, as analysts warned of further losses.US benchmark West Texas Intermediate for November delivery was down five cents at $89.69. On Friday it closed below $90 for the first time since April 2013. Brent North Sea crude eased 36 cents to $91.95, a two-year low.While output surges in the United States owing to oil shale extraction, exports are on the rise in Russia, Libya and Kurdistan. Also, Saudi Arabia cut prices for the fourth straight month last week to defend its market share, suggesting it is unlikely to cut production any time soon.Both Brent and New York contracts have shed about 15 per cent in the past three months."Oil prices are likely to keep falling for the rest of the year as global supply is outstripping demand," said Tony Nunan, oil risk manager at Mitsubishi Corp. in Tokyo."Supply of US shale gas alone can cover global demand this year, and unless OPEC countries reduce their production, or unless a fresh geopolitical concern occurs, the best estimate now is a bearish market," he added.Also depressing prices is the stronger dollar, which surged Friday after the Labor Department said the US economy created 248,000 jobs in September and the jobless rate dipped to a six-year low of 5.9 per cent.The news increased the likelihood the Federal Reserve will hike interest rates sooner than later. The greenback is sitting at six-year highs against the yen and two-year highs against the euro.A stronger greenback makes dollar-priced commodities more expensive for buyers using weaker currencies, which tends to dent demand and push prices lower. (Agencies)
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Reliance Industries Ltd gained as much as 4.2 per cent to its highest since April 2011 after the company and its partners in a gas block said on Saturday they were taking the government to arbitration seeking implementation of higher gas prices.Reliance and its partners BP Plc and Niko Resources issued the notice of arbitration to the government on May 9, the three companies said in a joint statement.Shares in Reliance also tracked a broad-based rally that sent both the benchmark Sensex and Nifty to record highs.Reliance Industries Ltd and its partners in a gas block, BP Plc and Niko Resources, said on Saturday (10 May) they were taking the government to arbitration seeking implementation of higher gas prices.The government in June last year approved a formula, linking prices of locally produced gas with global benchmarks, that could have nearly doubled gas prices from the current $4.20 per mmBtu from April 1.The Election Commission, however, in March asked New Delhi to defer an increase until the completion of the five-week general election, results of which will be declared on May 16.Reliance's five-year gas sale pacts with sectors including fertiliser makers and power expired on March 31, requiring buyers to sign new contracts for supplies from its D6 block in the Krishna Godavari basin off the east coast.Reliance, India's second most valuable company controlled by its richest man Mukesh Ambani, and its partners issued the notice of arbitration to the government on May 9, the three companies said in a joint statement."The continuing delay on part of the Government of India in notifying the price in accordance with the approved formula for the Gas to be sold has left the Parties with no other option but to pursue this course of action," the statement said.BP has a 30-percent stake and Canada's Niko owns 10 percent in the gas block.A spokesman for the oil ministry could not immediately comment on the development.Gas output from the D6 block has fallen sharply since 2010. Reliance says the decline is due to the geological complexity of the block, while the government believes contractors have failed to drill the promised number of wells.Reliance, which operates the world's biggest refining complex in Gujarat, and its partners said without any clarity on gas prices they were unable to sanction planned investments of close to $4 billion this year.Overall, the companies said, they were planning to invest $8 billion to $10 billion in the next few years to "significantly increase production" from the D6 block."In addition, this will also delay the ability of the Parties to appraise and develop other significant discoveries made last year," the companies said.The Election Commission in March gave no reason for its move to ask the government to delay the price hike, but it can order any new decision to be put on hold if it's seen influencing voters or benefitting any particular political party.Also, two petitions have been filed in the Supreme Court to strike down the gas price increase decision on grounds that it favoured a corporate house and was against the interests of the nation. The hearing in the case is continuing.Demand for gas in India far outstrips consumption and domestic supply, but the government has kept prices below global market levels for producers of fertilizer and electricity, which has deterred investment in domestic exploration and production. (Agencies)
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Power solutions company ‘Jakson’ has set a target of Rs 650 crore turnover by 2017 from its solar power division. At the group level, the company aims at a revenue of Rs 2,500 crore in the same period.The company plans to invest Rs 700 crore in setting up independent solar plants having a generation capacity of 100 MW over the next three years. At present, the company has a small portfolio of 20 MW in the solar generation.The company has launched a new range of solar power-based products home lighting systems, street Lights, indoor RO systems and PV modules.The company is targeting the rural areas in the country which are not connected with the grid.“We have immense potential in the rural areas wherel conventional power is not available . In the coming years we see out business growing in those areas,” said Sameer gupta, managing director Jakson group.In the first phase, the company is targeting markets like Bihar, Uttra Pradesh, North east and Jammu & Kashmir. The second phase will include Telengana, Rajasthan and Tamil Nadu.
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DLF Ltd, India's top real estate developer, reported a 29 per cent fall in quarterly net profit, hit by slowing home sales in Asia's third-largest economy as high inflation and interest rates continued to deter home buyers.DLF, which builds homes, offices and shopping malls, said late on Thursday (31 July) that net profit for the June quarter was Rs 128 crore ($21.1 million), compared with Rs 181 crore a year earlier.Income from operations fell 25 per cent to Rs 1,725 crore, the company said.While Prime Minister Narendra Modi's election triumph two months ago and his promises of economic revival buoyed business confidence and India's financial markets, home buying has been slow as consumers remain anxious about the future.Sales in DLF's home market in northern India fell 22 per cent in the April-June quarter while countrywide sales rose 5 per cent over the same period from a year ago, according to Mumbai-based real estate data analysis firm Liases Foras.Founded by billionaire K.P. Singh, DLF, which is valued by the market at $5.9 billion, has been selling non-core assets to reduce its net debt, which was $3.15 billion as of end-June.Shares in the New Delhi-based company have risen about 19 per cent since the beginning of the year, but underperformed the wider real estate index that has surged 31.1 per cent during the same period.($1 = 60.5500 Indian Rupees)(Reuters)
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