Goldman Sachs has made an equity investment of 2.55 billion rupees ($40 million) in Vatika Hotels, the hospitality company said. Vatika Hotels, part of Delhi-based real estate developer Vatika Group, said it received the investment from an affiliate of the New York-based investment bank. Gurgaon-based Vatika group did not disclose the stake bought by the US investment bank in Vatika Hotels, which currently has two hospitality projects in Haryana. "Goldman Sachs, through its affiliate, have taken equity worth Rs 255 crore into Vatika Hotels," Vatika Group said in a statement. The announcement comes close on the heels of Vatika group raising Rs 150 crore from Singapore's sovereign wealth fund GIC to develop two residential projects on Dwarka Expressway. When contacted, Vatika group President (Hospitality) Vineet Taing said, "We have received investment from Goldman Sachs. The equity stake is still being worked out." Vatika Hotels currently has two operational hotels in Gurgaon and Sohna, comprising about 425 rooms. It is planning to open two more hotels in Jaipur and Pondicherry. Vatika Hotels also owns and manages Vatika Business Centres comprising 3,000 seats over 0.5 million sq ft area across India and plans to double its capacity over the next 36 months. It is also managing 45 million sq ft of space through its facility management division. "Vatika Hotels were the first to establish Starwood's 'Westin' Brand in India and currently owns Westin Gurgaon & Westin Sohna with Jaipur & Pondicherry under active planning," the statement said. Vatika Hotels has recently ventured into the healthcare industry with the acquisition of Health Square, a premium diagnostic centre chain, rebranding it as "Vatika Medicare". Vatika Hotels also plans to expand its premium restaurant brands "56" and "Coriander Leaf" across India. (Agencies)
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Arab OPEC producers expect global oil prices to rebound to between $70 and $80 a barrel by the end of next year as a global economic recovery revives demand, OPEC delegates said this week in the first indication of where the group expects oil markets to stabilise in the medium term.The delegates, some of which are from core Gulf OPEC producing countries, said they may not see - and some may not even welcome now - a return to $100 any time soon. Once deemed a “fair” price by many major producers, $100 a barrel crude is encouraging too much new production from high cost producers outside the exporting group, some sources say.But they believe that once the breakneck growth of high cost producers such as U.S. shale patch slows and lower prices begin to stimulate demand, oil prices could begin finding a new equilibrium by the end of 2015 – even in the absence of any production cuts by OPEC, something that has been repeatedly ruled out."The general thinking is that prices can’t collapse, prices can touch $60 or a bit lower for some months then come back to an acceptable level which is $80 a barrel, but probably after eight months to a year," one Gulf oil source told Reuters.A separate Gulf OPEC source said: "We have to wait and see. We don't see 100 dollars for next year, unless there is a sudden supply disruption. But average of 70-80 dollars for next year – yes.”The comments are among the first to indicate how big producers see oil markets playing out next year, after the current slump that has almost halved prices since June. Global benchmark Brent closed at around $60 a barrel on Monday.Their internal view on the market outlook will provide welcome insight to oil company executives, analysts and traders, who were caught out by what was seen by some as a shift in Saudi policy two months ago and have struggled since then to understand how and when the market will find its feet.Not AgainFor the past several months, Saudi officials have been making clear that the Kingdom’s oft-repeated mantra that $100 a barrel crude is a “fair” price for crude had been set aside, at least for the foreseeable future. At the weekend, Saudi Oil Minister Ali al-Naimi was blunt when asked if the world would ever again see triple-digit oil prices: “We may not.”Saudi Arabia, the world’s biggest exporter – and its close Gulf allies within the Organization of the Petroleum Exporting Countries (OPEC) – say it’s time for others, whether that is countries like major exporter Russia or U.S. shale drillers, to slow down; OPEC can no longer slash output, ceding market share, to spare them a downturn.As Naimi told the Middle East Economic Survey (MEES) in an interview this weekend: “It is not in the interest of OPEC producers to cut their production, whatever the price is.”Without OPEC to defend prices, oil entered a free-fall, but most of OPEC’s members are holding fast.At this point, intervening in the market would simply invite new rivals to carry on pumping crude, eroding OPEC’s market share without any guarantee of a sustained price recovery, another Arab oil source told Reuters on the sidelines of a meeting in Abu Dhabi of the Organization of the Arab Petroleum Exporting Countries (OAPEC)."Every time prices fall, we would be asked to cut," the source said.The second Gulf OPEC source reiterated that OPEC would not cut alone. Non-OPEC producers such as Russia, Mexico, Kazakhstan and "anyone producing more than one million barrels per day" should also cut or at least freeze their output if they wanted a stable market and better prices, the Gulf OPEC source said.No Price TargetTo be sure, there is no suggestion that OPEC is targeting a specific price, or would want to do so. The group hasn’t had a formal price goal in about a decade, and Saudi Arabia has long maintained that it is only seeking price stability, not a set level.But it offers a convenient metric at a time when traders are struggling to figure out where and when markets will settle down.Asked about market signals OPEC is looking for to decide on whether the market is stabilising or not, irrespective of the price, Naimi said: "The signals need time, one year, two years, three years. There is not one signal that we look to and say that's it... but for sure those who are the most efficient producers are the one who would rule the market in the future."Iraqi oil minister Adel Abdel Mehdi told Reuters in an interview on Monday he thought prices would stabilise now at about $60 a barrel but could rise to over $70 by mid-next year."I believe that market has started to stabilise itself now," Falah al-Amiri, head of Iraq state oil marketing SOMO told Reuters in Abu Dhabi. "The future for next year, I don't think there would be much optimism in the market that the price would go to $80 or above. But I don't even think prices would reach $80," said Amiri, citing a resilient shale oil production to current prices.(Reuters)
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State-run power systems maker Bharat Heavy Electricals Limited (BHEL) has bagged a 16.96 million euro contract for a thermal power project in Turkey. The deal marks the company's entry into the fast-growing Turkish power market. "The company has bagged a contract for rehabilitation of 3 units of Electrostatic Precipitators for the 430 MW Tuncbilek Thermal Power Project in Turkey on EP (Engineering, Procurement and Construction) basis," BHEL said in a statement. Valued at 16.96 million euro (approximately Rs 130.8 crore), the order envisages dismantling, supply, civil works and erection and commissioning of the electrostatic precipitators. The order has been placed on BHEL by Electricity Generation Company which is the largest electric power company in Turkey. It is owned by the Turkish government and it generates and supplies electricity throughout the country. For this prestigious contract, the electrostatic precipitators will be manufactured and supplied by BHEL's Ranipet unit, motors and other auxiliaries by its Bhopal facility and controls by the company's Bangalore unit, the statement added.
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With the price of oil tumbling to new lows, some are rejoicing that falling consumer prices and low inflation will finally bring the happy days that Prime Minister Narendra Modi promised during his campaign. For the sake of a healthier India and a safer world, however, rather than ramp up spending on cheaper fossil fuels this may instead be the moment for a more responsible course correction. Governments all over the world should seize the moment to scale back fuel subsidies that cause budgetary distortions and swell deficits. If they are clever, they may even redirect the sums earmarked for subsidy payments to promote investments in wind, solar and biomass energy. As someone who has long argued for proactive steps to wean the country off its fossil fuel addiction, I was encouraged by the Modi government’s recent moves. Ahead of hosting the First Renewable Energy Global Investors Meet & Expo in February, the government offered long overdue incentives to grow the solar energy sector. In a written statement submitted to the Lok Sabha in early December, Piyush Goyal, Minister of State for Power, Coal and New and Renewable Energy, announced fiscal and financial incentives, including capital subsidies for off-grid and decentralised solar power generation systems. Given the vast area of the country that enjoys regular sunshine, a strategy that focuses on smaller decentralised units avoids the need for the costly development or expansion of electrical grids. Goyal, also wisely offered up to 100 per cent financial support to government and non-profit research organisations and 50 per cent to industry and civil society organisations. We do not yet have a price tag for these incentives, but we can be sure it will be less than the Rs 63,426.95 crore earmarked for oil subsidies for this financial year. Most importantly, it sends an important message to producers and consumers that it is time to embrace renewable energy as a way forward. India, which imports 75 per cent of its energy, is considered to be among the winners in the drastic fall of crude oil price, which recently reached its lowest level in five years at $65.29 per barrel. With the price plunging by 40 per cent since just April, it would have been tempting to woo voters with lower prices of diesel, cooking gas and kerosene oil — but doing so would have squandered this historic opportunity to shift the country’s energy policy onto a more sustainable path. This adjustment could not come soon enough. Following the US-China pact on reducing fossil fuel use, India has come under intense international scrutiny. The announcement by environment minister Prakash Javadekar that India has stepped up its use of renewable energy and that 11 lakh households are using solar energy only helped to underline how far behind India, one of the world’s most sun-lit countries with a billion plus people, is in this area. Currently only 6.5 per cent of the country’s electricity is generated from renewable sources, though Modi aims to almost double this in the next three years. From its currently installed 2.8 GW capacity, India plans to grow solar power generation to 100 GW by 2019-20. According to an International Energy Agency estimate, governments worldwide paid $550 billion in subsidies to offset the price their consumers pay for fuel. In comparison, wind, solar and other renewable technologies received subsidies of just $121 billion in 2014. Last year, almost 70 per cent of these subsidies were provided by just five countries: Germany ($22 billion), the US ($15 billion), Italy ($14 billion), Spain ($8 billion) and China ($7 billion). It is high time that India, the world’s third-largest polluter, take its place among countries promoting sustainable and clean energy alternatives. The forthcoming Renewable Energy Global Investors Meet and India’s readiness to allow 100 per cent FDI in solar parks will hopefully mark a sunny departure from the coal-powered future that India has pursued so far. (This story was published in BW | Businessworld Issue Dated 12-01-2015)
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Oil rose above $62 a barrel on Monday (22 December), mirroring gains in equities, as investors became confident there would be no further substantial price loss in the run-up to the new year.Saudi Arabia's powerful oil minister, Ali al-Naimi, said on Sunday that lower crude prices would help demand by stimulating the economy and slow down supply growth."Naimi said that the market would correct itself and was confident that the fall was temporary," Michael Hewson, chief market strategist at CMC Markets, said."The market has calmed down and it is forming a short-term base above $60, and it's to be expected that there would be a bit of a rebound after such a sharp fall."Brent rose 74 cents to $62.12 by 0854 GMT. It is down 46 percent from the year's peak in June above $115 per barrel. U.S. crude was up 66 cents at $57.79 a barrel.OPEC's decision not to reduce production at a meeting in November sparked the recent rout in oil prices. Prospects for a cut in the near future look remote.Saudi Arabia is prepared to increase its oil output and claim a bigger market share to meet the demands of any new customers, Monday's edition of the Saudi-owned al-Hayat newspaper quoted Naimi as saying.While analysts said Brent would likely remain over $60 a barrel for the rest of the year, they said further large jumps in price were unlikely."Any oil relief rally is likely to be limited and short-lived, barring a major outage. We see too many headwinds that must be addressed," Morgan Stanley said on Monday in a report.National Australia Bank said: "Given the lead time in permit approval and rig construction ahead of oil production, a sizeable negative U.S. supply response given the price drop is unlikely to take place until late 2015, which places further downward pressure on oil prices in the first six months of next year."The bank added that it expected Brent and U.S. crude to average $68 and $64 per barrel respectively in 2015.Analysts also said they expected relatively low price volatility for the rest of the year as traders begin to wind down their 2014 positions.(Reuters)
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Saudi Arabia would not cut output to prop up oil markets even if non-OPEC nations did so, in one of the toughest signals yet that the world's top petroleum exporter plans to ride out the market's biggest slump in years. Referring to countries outside of the Organization of the Petroleum Exporting Countries (OPEC), Saudi Oil Minister Ali Al Naimi told reporters: "If they want to cut production they are welcome: We are not going to cut, certainly Saudi Arabia is not going to cut." He added he was "100 percent not pleased" with prices but they would improve, although it was unclear when. He blamed the fall in prices to half their levels of six months ago on speculators and what he called a lack of cooperation from non-OPEC producers. His remarks at a conference in Abu Dhabi marked the second time in three days that the kingdom has signalled that it would not alter output levels, preferring to allow the market to stabilise on its own. The determined tone of his comments was echoed by some other Arab oil ministers at the conference in the United Arab Emirates (UAE) capital. UAE Oil Minister Suhail Bin Mohammed Al Mazroui urged all of the world's producers not to raise their oil output next year, saying this would quickly steady prices. He did not elaborate. Oil Demand"The oil market will recover," Naimi said, adding that “fossil fuel will remain the main source of energy for decades to come." The world is forecast to need less OPEC oil in 2015 because of a rising supply of US shale oil and other competing sources, with no significant increase in world demand growth. Kuwaiti Oil Minister Ali Al Omair said OPEC did not need to cut production and would not hold an emergency meeting ahead of its next scheduled talks in June. "I don't think we need to cut. We gave a chance to others (and) they were not willing to do so," he said, referring to contacts with non-OPEC producers before OPEC's meeting in November in Vienna. There, OPEC kept its target output of 30 million barrels per day (bpd) unchanged, leaving the market to balance itself without the group's intervention. That stance was seen as a shift from a longstanding policy in which OPEC powerhouse Saudi Arabia has acted as a swing supplier. According to Mohammed Al Sada, Qatar's energy minister, the oil market is oversupplied by 2 million barrels a day. He said markets have stabilisation mechanisms that will bring stability. "We don't know exactly how long it will take but it will stabilize because the current prices will separate the efficient producers from the producers who have high costs," Al Sada said. Asked about possible cooperation between members of OPEC, which include the world's lowest-cost producers, and non-member countries, Naimi replied: "The best thing for everybody is to let the most efficient producers produce". Conspiracy TheoriesHe also said that OPEC's decision would ultimately help the world economy. "Current prices do not encourage investment in any form of energy, but they stimulate global economic growth, leading ultimately to an increase in global demand and a slowdown in the growth of supplies," he said. Iraq's oil minister, Adel Abdel Mahdi, said he saw no need for an OPEC emergency meeting but "we have to wait and see" whether the group was right to keep output unchanged. Naimi denied politics played a role in the kingdom's oil policy and said the price fall would not have "a noticeable and big" impact on Saudi Arabia or other Arab economies. The market slide has triggered conspiracy theories, ranging from the Saudis seeking to curb the US oil boom, to Riyadh looking to undermine Iran and Russia for their support of Syria. Before the Vienna meeting, there were hints that Russia could cut output or exports if OPEC did the same. But the message from Moscow after the meeting was that the world's second largest oil exporter would maintain its output. (Agencies)
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India is offering to set up an insurance pool to indemnify global nuclear suppliers against liability in the case of a nuclear accident, in a bid to unblock billions of dollars in trade held up by concerns over exposure to risk. Prime Minister Narendra Modi's government is hoping the plan will be enough to convince major U.S. companies such as General Electric to enter the Indian market ahead of President Barack Obama's visit at the end of next month. Under a 2010 nuclear liability law, nuclear equipment suppliers are liable for damages from an accident, which companies say is a sharp deviation from international norms that put the onus on the operator to maintain safety. From the 1950s, when the United States was the only exporter of nuclear reactors, liability has been channeled to plant operators across the world. India's national law grew out of the 1984 Bhopal gas disaster, the world's deadliest industrial accident, at a factory owned by U.S. multinational Union Carbide Corp which Indian families are still pursuing for compensation. The law effectively shut out Western companies from a huge market, as energy-starved India seeks to ramp up nuclear power generation by 13 times, and also strained U.S.-Indian relations since they reached a deal on nuclear cooperation in 2008. GE-Hitachi, an alliance between the U.S. and Japanese firms, Toshiba's Westinghouse Electric Company and France's Areva received a green light to build two reactors each. They have yet to begin construction several years later, according to India's Department of Atomic Energy. Even Indian suppliers refused to sell equipment until the law is amended or they can be sure they are indemnified against any liabilities. "We are working fast to address the concerns of suppliers. We are working on a solution with the insurance companies," R.K. Sinha, Chairman of India's Atomic Energy Commission, told Reuters. State-run reinsurer GIC Re is preparing a proposal to build a "nuclear insurance pool" that would indemnify the third-party suppliers against liabilities they would face in the case of an accident. Under the plan, insurance would be bought by the companies contracted to build the nuclear reactors who would then recoup the cost by charging more for their services. Alternatively, state-run operator Nuclear Power Corporation of India (NPCIL) would take out insurance on behalf of these companies. Sinha said New Delhi believed the insurance plan was the best option given how tricky changing the law would prove, and that the proposal should be ready within the next two months. Details of the plan have yet to be thrashed out, and Sinha said the government was considering how it would better capitalise NPCIL. India wants to generate 62,000 megawatts from nuclear sources within two decades from the current level of 4,780 megawatts, even as other countries shift away from nuclear energy following Japan's Fukushima disaster. GE declined to comment on the Indian proposal to offer insurance cover. Westinghouse said it needed more information before it could comment. Areva said in a statement that the creation of an insurance pool was an "encouraging signal", and that the government appeared committed to working out a comprehensive solution soon. However, India's nuclear liability regime remained open to interpretation and an Areva spokeswoman said the company needed more clarification to make the legal framework acceptable. Russia Muscling InOne Indian company said it was ready to return to the 2,800 megawatt Gorakhpur nuclear power project in the northern state of Haryana it abandoned, once the insurance cover is in place. The insurance scheme would convince Walchandnagar Industries Ltd, which makes heat exchangers for reactors, to restart supplying equipment for Gorakhpur, managing director and CEO G.K. Pillai told Reuters. Moves to win over the Americans coincide with Russia's push to build more nuclear reactors in India. Earlier this month, during President Vladimir Putin's visit, Russia's state-owned Rosatom said it would supply 12 nuclear energy reactors for India over 20 years, following two it has already built in the south of the country. G. Balachandran, one of India's foremost nuclear affairs experts, said Russia appears to believe it can operate with the existing nuclear liabilities law without suffering a loss. This week U.S. and Indian nuclear affairs officials, as well as representatives from the NPCIL Ltd, Westinghouse and GE-Hitachi met to advance implementation of the nuclear deal, an Indian foreign ministry official said. The group is meeting again early next month, before Obama arrives, to move the discussion forward. Creating the insurance scheme to help projects get off the ground is GIC's "top priority", chairman Ashok Kumar Roy said in an email, although he cautioned that the timing, coverage and level of participation were yet to be finalised. (Reuters)
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At this juncture when government focus is to build smart cities across India, we are entering into an exciting and critical phase in real estate development where we have to redesign our built environment. The smart city has a capability to transform the life and living of its resident as they are efficiently managed cities which increase the quality of life. These automated systems help save time and energy and make life easy and cost effective for the residents. In India it will take time to really create these cities as this would require a large amount of capital, planning and latest technology. While the government has recently allocated approximately $1.2 billion for fiscal year 2014-15 and promoting foreign investment in smart cities, it will require cost effective advance technology. For countries like India, the starting point of building smart cities can be development of smart building concept in India. Large Funding through private investors and abroad and supporting government policies will drive the business case for smart buildings in India. Currently, the perception is that smart building technology is expensive and unique but markets can transform in a very short amount of time, with smart buildings quickly going from being unique to being standard practice. The advantage of following smart building concept is that they can be considered as future-proofed assets. As a smart building is energy efficient and operational effective building that integrates major building systems on a common platform and share information and functionality between systems. They use clean energy and emit less carbon emissions thus can be referred as 'future-proofed' against changing government policies and shifting tenant demands as tenants increasingly understand the benefits of smart buildings. Tenants who understand the benefits of smart buildings may prefer them over competing conventional stock. Good smart building performance can also be seen as an indicator of building quality, and a commitment to good management practices. Buildings that are more attractive to tenants can also enjoy stronger tenant retention and shorter lease up and vacancy periods. Moreover, reduced Costs, efficiency in energy and water consumption can reduce out goings, which can either be retained or used to incentivize tenants.Given that it can be difficult to change the design of a new building once development is advanced, it is important to be prepared for a rapidly changing market. For developers in India, as smart building is somewhat a newer model, knowledge can be money. Generally, adopting with smart buildings concept take time and developer has to go through a learning process. Those who will invest in learning quickly will comprehensively find that dealing with smart buildings becomes easy with time and that they can actually drive down the costs of doing so and increase their returns. The expertise and depth of experience of their design and development team will be instrumental in managing costs for developers.The technologies and design approaches of smart buildings and their ability to perform in operation have now been demonstrated in various locations around the world. It is now just a matter of how this knowledge is shared and adapted. With the focus of government on creating smart cities across India, the businesses have to be prepared for rapid transformation. The shift to smart buildings has only just begun, and will now accelerate very quickly with pro-active govt. support. It is the time for forward-thinking developers and landlords to prepare themselves to lead, rather than follow, the change.
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