Daily Excelsior...Business

Nuke power emerging as primary choice: NPCIL chief .....

ISA seeks PM’s intervention against hike in steel prices ......

Legal separation no solution to Ambani feud: Experts .....

ISA seeks PM’s intervention against hike in steel prices .....

Emaar properties to invest 205 cr to expand food, retail biz

NEW DELHI, Dec 12: Dubai-based real estate major Emaar properties will invest close to Rs 204.5 crore over the next four years to expand its food and retail business in the country.

The company has presence in retail business through Royal Sporting House (RSH) Ltd and at present own 50 stores. "We plan to increase the number of our store in India to 200 in four years and each store would cost around 300,000 dollars, Emmar properties chairman Mohamed Ali Alabbar told UNI here.

He said the company also plans increase the number of restaurants in India. "We would increase our investment in the food business from present 10 million dollars to 20 million dollars in next two to three years."

Mr Alabbar said he would consider listing the RSH Ltd on Indian bourses once the volume goes up. The RSH Ltd is listed on Singapore stock exchange. Mr Alabbar is presently chairman of RSH Ltd.

He said Indian capital market was much more developed than that of China, and added that the private sector was also much more active here.

Pointing out that "the country is placed second after Russia and ahead of China in the global retail development index," he urged the Indian Government to allow foreign direct investment in the retail business.

He said India offers potential similiar to that of China a decade ago. "It is time for India to move ahead with greater speeed and create atmosphere for more foreign investment to come into this vital (retail) sector," he said.

He said India to should unshackle controls to increase investments from west Asia and educate the west Asian countries about the investment opportunities here.

"West Asian countries have invested 1.5 trillion dollars in western countries but their exposure is very less in India," said Mr Alabbar.

"At present India accounts for only 0.5 billion dollars including in real estate, retail business and food business, of our 9 billion dollar worth assets," he said.

RSH is a pan-Asian marketer, distributor and retailer for sports, golf, active lifestyle and fashion products. The company exclusively manages 75 brand names in over 30 country and has turnover of 150.8 million Singapore dollars.

Emaar properties has recently announced that it would invest Rs 750 crore for taking up real estate projects in India. (UNI)

Higher duties affecting domestic airlines: CII

NEW DELHI, Dec 12: The Confederation of Indian Industry (CII) has recommended for lower excise and sales duty on Aviation Turbine Fuel (ATF) and giving it ‘declared good’ status to make air transport affordable and domestic airlines viable.

For boosting the Indian aviation industry, the CII has suggested that the import duty and sales tax on avgas be removed.

According to CII, import duty and sales tax on avgas has rendered the aviation sector uncompetitive, and the move would greatly benefit the industry. It recommended ATF be brought down and categorised as ‘declared good’ under the Central Sales Tax Act so that sales tax on ATF did not exceed 4 per cent and excise duty be brought down to 4 per cent.

CII, in a statement here, welcomed the abolishment of IATT as suggested by the Naresh Chandra Committee, which was 15 per cent of airfare. "The concept of replacing aviation related taxes and fees such as IATT, FTT and PSF might be replaced with a single, lower ad valorem sector-specific cess of 5 per cent of actual airfare and the proceeds be used to subsidise uneconomical but essential air services," said CII.

According to the chamber, apart from the concept of introducing ad valorem sector-specific cess, the 5 per cent amount suggested in the Naresh Chandra Committee Report is extremely high and must be limited to a maximum of 2 per cent.

CII has also welcomed the suggestion of the committee of allowing airlines to source ATF from the suppliers of their choice.

It also hailed the recommendation of permitting domestic private airlines to provide third party ground handling services, and added that it should be only for Indian nationals.

As regards to the committee recommendation of the need for interfaces with other ministries, CII has said that for implementation of the recommendations and to make them obligatory for the statutory service provider to deliver the desired service, different agencies must be bound tightly by an MoU to facilitate implementation.

In addition to the recommendations made by the Naresh Chandra Committee, CII prescribed a fast track immigration provision for first class and business class passengers and a separate counter (fast track) for NRIs returning to India. Also, there should be smart card based immigration clearances, as it would speed-up the process and reduce entry into the computer by the customs/immigration officials.

On route dispersal guidelines and essential services, CII has welcomed the recommendations of the committee, but pointed out that the figures needed to be updated taking the current market situation and the current lucrative routes into consideration. The ratio needed to be reworked based on revised inputs, says CII.

Also, as the airline industry is capital intensive and safe guards the interest of the vendors/agencies interacting with the airlines, it is recommended that the minimum equity requirements should remain.

CII has also recommended that foreign airlines be allowed to hold 49 per cent equity in domestic air transport in India and the management control of the organisation be given to Indian carriers as it would help the industry gain state-of-art technology, best practices, procedures, systems and manpower expertise.

Regarding airports, CII has recommended that a committee be formed to rationalise lease rentals for hangers and other facilities to encourage aviation related activities.

CII has also recommended that a separate committee be formed to categorise the aviation and non-aviation related activities and also to examine the royalty charged by the AAI on the gross turnover. (UNI)

Govts should promote bio-technology projects: Experts

PANAJI, Dec 12: Experts participating in the two-day ‘Biogoa-2004’ seminar on ‘opportunities in bio-tech industry for small scale industry sector’ here have opined that the Centre and the states should facilitate a viable private-public partnership through Venture Capital Fund, to exploit the full potential of bio-technology revolution, to meet challenges in agriculture, health and environment.

They also felt an intensive effort was required to educate the masses to dispel unfounded apprehensions about the genetically-engineered crops on the future of agriculture and health through a coordinated approach.

The seminar was organised jointly by Small Industries Service Institute (SISI) under the Union Ministry of Small Industries, National Small Industries Corporation and Goa Small Industries Association to chalk out a strategy to explore the potential in Goa with limited irrigable land.

Pointing out success in Andhra Pradesh, Karnataka and Tamil Nadu besides the north eastern states, Biotech Consortium of India Ltd (BCIL), New Delhi, Managing Director Dr S R Nair pleaded for a five-point strategy to exploit the full potential of bio-technology revolution in the country.

While addressing the inaugural session, he said the strategies enlisted included evolution of a strong Government policy, development of skilled manpower for reserch and development, strengthening of Intellectual Property Rights (IPR) framework, provision of wide infrastructure facilities such as incubators and development of enterpreneurship programmes in a big way through venture capital funds route.

High cost of development of infrastructure, cumbersome regulatory regime particularly in development of new drug molecules with poor ipr protection and lack of policy guidelines were some of the factors impeding the bio-technology sector in India, he added.

The department of bio-technology and the Union Ministry of Environment and Forests in collaboration with the BCIL are trying to simplify the otherwise cumbersome regulatory procedures as the centre has realised the potential of the bio-technology.

The sector became successful in Andhra Pradesh with the Andhra Pradesh Industrial Development Corporation encouraging Venture Capital Funds for the bio-technology units. Even the Small Industries Development Bank of India (SIDBI) was also thinking of floating venture capital fund shortly.

Mr Nair informed that as many as 14 bio-technology industries became operational in Andhra Pradesh while four projects had received huge grants from the department of bio-technology. High bio-technology products were expected to enter India from next January under the WTO regime, he noted.

Enlisting the benefits of bio-technology in different fields, he said the small sector could go in a big way for developing products such as detergents and foods with neutraceuticals using certain enzymes, which could be used for clearing environment-threatening oil spills and restoring fertility of fallow lands and highly dangerous toxic soils.

On the diagnostics and vaccines front, India, he said, is likely to come out with anthrax vaccine shortly on the lines of the Hepatitis-B vaccine, which will be free from any animal residues and without any side-effects.

India, Mr Nair said, should engage in production of more therapeutic proteins to benefit the health sector at cheaper cost.

Replying to a volley of questions from the industry and academia, Mr Nair said the transgenic crops were not only pest resistant but also required minimal use of chemical fertilisers for cultivation.

A programme to bring about awareness of their use in agriculture was being chalked out in collaboration with the Ministry of Environment and Forests and the Department of Bio-Technology, he added.

Efforts were underway to find new molecules for treating diabetes, hypertension and Alzheimer diseases in due course using the advances in pharma, bio-technology.

Advisor and senior scientist in the department of bio-technology Dr K K Tripathi said, "the Centre is likely to come out with legislations to encourage enterpreneurs in bio-technology sector in a big way."

Goa Government Chief Secretary D S Negi pleaded with the developed countries to facilitate access to the bio-technology tools for the developing countries so that the latter could come out with several new molecules and biomarkers to benefit the mankind.

He expressed concerns over the shrinking cultivable land for farmers and urged the scientists to allay their fears by introducing the genetically-modified crops.

State Industries Minister Ramarao Dessai said the Government will come out with its own bio-technology policy, which will encourage raising of bio-technology villages and technology parks with incubators.

The policy will also encourage the enterpreneurs to promote employment and GDP with more thrust on bio-technology.

GSIA president Keshav K Kamat said the state will benefit by undertaking specific bio-technology congenial projects. (UNI)

World’s first underwater hotel for scuba-shy

NEW DELHI, Dec 12: Good news for those with deep pockets and a passion for deep-sea life.

Poseidon undersea resort, expected to open in early 2006 off Eleuthera island in the Bahamas, will give non-scuba divers the chance to experience life underwater without air tanks or wet suits, the hotels magazine has reported.

The 40 million dollar project will be submerged 50 feet below the surface, depressurised to sea level, and connected with an onshore reception area via a tunnel.

Guests would sleep in 22 underwater rooms made of transparent acrylic, providing panoramic views of the ocean (with dividers for privacy). Each 550-square-foot room would offer a view of a coral garden, a device to feed fishes outside, and underwater lights.

Back onshore would be a dive shop, swimming pool, tennis courts, cafe and 22 more rooms.

However, sleeping with the fish won’t be cheap—rooms will cost about 1,500 dollars a night. Yet, its promoter bruce jones and others familiar with the industry expect brisk demand.

In 1972, an underwater research habitat for scientists opened off Puerto Rico. It was later moved to key largo and converted to the tourist-friendly Jules’ undersea lodge.

The lodge has just two rooms and guests have to scuba dive to reach there. But, it is relatively cheaper at 300 dollars a night and the rooms are occupied about 75 per cent of the time, according to Ian Koblick, president of Marine Resources Development Foundation and founder of the lodge.

"Poseidon’s Clientele will be bigger because you don’t have to be a diver," he says.

Mr Jones says he expects a 70 per cent occupancy rate and 9 million dollars in net profit in Poseidon’s first year and 80 per cent occupancy and 10 million dollars in profit in its second year.

Poseidon obtained half of its 40 million dollars in construction costs through equity investments from 17 individuals and the other half from bank loans and private debt.

Mr Jones has been designing undersea vessels for nearly two decades. In 1993, he founded US submarines, which designs and builds submarines for resorts and wealthy individuals.

He says his resort is technically less complex to build than the submarines he usually works on, but it faces its own problems.

Most of the subs are 80 per cent steel and 20 per cent acrylic, but the ratio for the hotel is almost exactly the opposite for better visibility.

It took his engineers a year to figure out the precise curvature and thickness of the walls, and poseidon is now developing the capability to produce its own acrylic.

The company reduced construction costs from 3,700 dollarsa square foot to 1,800 dollars mostly by changing the design from one large structure to a cluster of smaller, individual chambers.

The chambers will be built in Fort Pierce, Florida and transported via Barge to the coast of Eleuthera, an hour’s plane ride from Miami, where the final construction will take place.

Poseidon, however, could face some competition here. Developers in west Asia are raising money for an undersea hotel off the coast of Dubai, scheduled to open in December 2006.

However, that is a much larger project—500 million dolars in construction costs—with potential delays of corresponding size.

Mr Koblick says many of these projects spend years on the drawing board. In 1996 he helped plan Aqua resort Panama 2000, a 120-room underwater hotel with a theme park, but construction never began. (UNI)

Inflation slips to 7.30 pc

NEW DELHI, Dec 12: Lower prices of fruits and vegetables pulled down the annual rate of inflation to 7.30 per cent for the week ended November 27 as against 7.34 in the previous session.

The Wholesale Price Index (WPI) for the week ended November 27 declined 0.3 per cent to 189.6 from 190.1.

The rate of inflation, which touched a three-and-a-half year high of 8.74 per cent in August, was only 5.49 per cent during the year-ago period.

Meanwhile, the Government has revised upwards the final WPI for ‘all commodities’ for the week ended October 2 to 188.9 as against 189.0 and the rate of inflation, calculated on point-to-point basis, has been corrected to 7.15 per cent as against 7.20 per cent.

Finance Minister P Chidambaram yesterday defended the Government’s efforts to tackle inflation. Dubbing the current inflation as "petro-inflation", Mr Chidambaram said the worst is over with global crude oil prices begining to moderate.

Despite stringent measures initiated by the Government, including cut in duties on steel and petro products, inflation has been hovering above 7 per cent for over past three months.

The Reserve Bank of India (RBI) was also forced to to raise its overnight repo rate for the first time in four years following the surge in inflation.

The index for the major group fuel, power, light and lubricants, with a weightage of 14.23 per cent, remained unchanged at 289.7.

The index for the major group of primary articles with a weightage of 22.02 per cent declined by 1.4 per cent to 189.8 from 192.4 for the previous week.

The index for food articles group declined by 1.4 per cent to 190.3 from 193.0 for the previous week due to lower prices of fruits and vegetables (6 per cent), ragi (3 per cent), fish-inland by 2 per cent and rice by a percentage point.

However, the prices of jowar (2 per cent) and fish-marine, condiments and spices, maize, bajra and moong moved up by one per cent each.

The index for the non-food articles group declined by 1.3 per cent to 182.2 from the previous week’s level of 184.6 due to lower prices of groundnut seed (7 per cent), raw rubber (6 per cent), linseed by 3 per cent, castor seed by 2 per cent and safflower (kardi seed) and cotton seed (1 per cent each).

However, the prices of copra moved up by 6 per cent, rape and mustard seed by 2 per cent and mesta by one per cent.

The index for manufactured article, 63.75 per cent, rose by 0.1 per cent to 167.2 form 167.0 for the previous week.

Higher prices of oil cakes (7 per cent) and coconut oil (1 per cent) pushed up the index for the food products by 0.7 per cent to 175.3 form 174.0 in the previous week.

However, the prices of salt (3 per cent), groundnut oil (2 per cent) and gur, butter, ghee and khandsari (1 per cent each) moved up.

Lower prices of cotton yarn hanks and other cotton yarn (1 per cent each) saw the index for the textiles group decline marginally by 0.1 per cent to 136.3 form 136.4 for the previous week.

However, the prices of hessian and sacking bags and hessian cloth (1 per cent each) moved up.

Increased prices of soda ash (sodium carbonate) (2 per cent) pushed up the index for chemicals and chemical products by 0.1 per cent to 182.4 from 182.3 for the previous week.

The index for the non-metallic mineral products group rose by 0.1 per cent to 182.4 from 182.3 for the previous week due to marginal increase in the price of cement.

The index for machinery and machinery tools group declined by 0.1 per cent to 141.9 from the 142.0 for the previous week due to lower prices of other pumps (2 per cent) and valve (1 per cent). (UNI)

Japan: Destination next for Indian BPOs

NEW DELHI, Dec 12: Indian IT companies are increasingly planning to set up operations or strengthen presence in Japan to tap the world’s second largest it market, reeling under high costs and shortage of skilled manpower, a survey has said.

Conducted among 70 Indian IT companies, the FICCI survey said 75 per cent of the respondents were either planning to open an office or were already having presence in the 60 billion-dollar Japanese IT market, which is looking to India for outsourcing.

Japan, which accounts for nearly 60 per cent of Asia Pacific IT market and currently outsources around three billion dollar IT services from abroad, is recognising the importance of offshoring to improve operating efficiency amid tough economic conditions.

"They are aligning themselves with cost reduction policy, offering outsourcing opportunities," said the survey by the Federation of Indian Chambers of Commerce and Industry (FICCI).

Embedded software industry, banking and financial services, media, telecom and communications services offered good opportunities for Indian ICT industry in Japan. "As pressure to improve business results will increase, more Japanese companies will look at outsourcing routine as well as non-core operations," it said.

Currently, Indian IT industry offers variety of services from low-end to highly-specialised services to Japanese clients, mostly in offshore software development model. In 2003-04, Indian exports to Japan and other east Asian countries increased 51 per cent to Rs 3,110 crore, reflecting waning over dependence on the US and Canada for export of sofware and ITEs.

However, the survey emphasised that Japanese language proficiency and awareness about its business culture among Indian IT professionals was essential to overcome challenges in penetrating that market. Besides increasing interaction with industry associations, it was also essential to focus on information security.

"Joint ventures with knowledge base transfer and acquisitions of local companies to understand the market will overcome difficulties faced by Indian IT companies," it said.

To build the Indian brand in Japan, it was also crucial to focus on building trust about capabilities of the Indian ICT industry. This could be achieved by establishing forums for promoting ICT in Japan besides organising seminars and conferences, the survey added. (UNI)

Nuke power emerging as primary choice: NPCIL chief

MUMBAI, Dec 12: Nuclear power is emerging as the primary option for electricty generation in the country and the shift in the sector from a seller’s market to a buyer’s market has made it more competitive, according to Nuclear Power Corporation of India (NPCIL) chief S K Jain.

Improved economics, environmental benefits and the safety record of nuclear power will help it to reinforce its position as the number one choice for electricity generation, said Mr Jain, Chairman and Managing Director of Government-owned NPCIL.

The production target set by NPCIL is 20,000 mwe by the year 2020.

Mr Jain said currently 14 nuclear power plants are running satisfactorily with an excellent safety record and producing 2,770 mwe. Eight others are under construction and will add another 3,960 mwe to the country’s power generation capacity.

Talking about the global scenario, he said nuclear power provides about 16 percent electricity the world over through 440 nuclear power plants with a total installed capacity of 361.582 gw, as of January 2004.

In an article in ‘Nu-power’, the international journal of nuclear power published by NPCIL said all nuclear power plants in India have become ISO 14001 (environment management system) compliant, "which shows the importance and thrust we have put on environment management."

Stating that the Indian programme has three stages, Mr Jain said utilisation of the abundant thorium resources in combination with moderate uranium resources through the three stages links the fuel cycle of each stage in a manner that multiplies the potential of nuclear fuel several hundredfold.

Nuclear power, he said, is already economically competitive with coal-thermal away from coal pitheads. But with increase in unit-capacity size, reduction in project gestation periods and safe and higher operation levels, "it is our endeavour to make it competitive with coal-thermal even at the coal pithead", he said.

This will open business avenues at new locations for NPCIL. It also implies that nuclear power will emerge as one of the cheapest sources of energy in the regions which are away from coal belts.

He said radiation doses to the environment from the operating nuclear power plants are less than five percent of the permissible limits. In future, these weighted environmental doses could further be reduced with the start of new plants and evolving technology.

According to Mr Jain, the Indian nuclear power programme has come a long way since the establishment of the dae some 50 years ago. "We have already achieved excellence in several areas of design, construction, manufacture, operation and maintenance of nuclear power plants", he added.

He pointed out that the shift of the electricity market from a seller’s market to a buyer’s market not only means the need for economic competitiveness but reliable and safe operation of nuclear power plants.

He said several measures have already been taken to bring down nuclear electricity tariff which have resulted in reduction by 15 to 20 percent. (UNI)

ISA seeks PM’s intervention against hike in steel prices

NEW DELHI, Dec 12: Private steel producers have sought Prime Minister Manmohan Singh’s intervention to advise the Petroleum and Natural Gas Ministry against raising prices of natural gas for the sector.

In a letter to the Prime Minister Manmohan Singh, country’s largest body of private sector steel producers, the Indian Steel Alliance (ISA) said any increase in the prices of natural gas will "either lead to increasing the burden on the consumers or worsen the viability of the industry."

The ISA said that while the Government is planning to deregulate prices of natural gas for the steel industry which would lead to further escalation of the steel prices, the gas prices for other sector — fertiliser and power — is likely to be increased only marginally, with a aim to keep it regulated and under control.

It said the sudden increase in natural gas prices for the steel sector would be counter productive.

The steel industry has been hit by the hike in freight charges by Indian Railways for coal and iron ore.

Major steel producer, Tata steel had incresed the price of all its products by Rs 500 per tonne. Public sector, sail had before that hiked steel prices.

Sources said that other steel producers are also planning to increase the prices to offset the freight rate increase, forcing the Steel Minister Ram Vilas Paswan to announce that a steel regulator can be brought in to check hike in prices by private steel companies.

"We request you to kindly look into this matter and advise the Petroleum Ministry not to make steep increase in natural gas price for the steel sector which will otherwise worsen the viabilty of the industry," the ISA wrote in its letter.

It said the Government is already concerned about high steel prices and any move by Petroleum Ministry may force steel manufacturers to increase prive even more.

"At a time when inflationary pressures are already severe, the proposal to steeply hike natural gas prices for the steel industry appears inappropriate," it said.

The ISA said natural gas is used as feed stock for gas-base sponge iron which has no other alternative source of energy.

"Therefore, any price increase, which is not affordable, will straight away result in closing down of the these sponge iron plants," it added.

Moreover, it may not be possible to achieve the targeted steel production of 60 million tonnes by 2012, if the prices are unaffordable, the ISA said in the letter.

"This will result in shortage of steel and eventually, the country will have to again start importing steel," it said.

The ISA also said that the Rs 20,000 crore investment made in the downstream steel industry on the basis of continuous availablilty of sponge iron would go waste due to the proposed hike.

The Government reportedly has proposed an increase in APM gas prices by Rs 960 per thousand cubic metre for sectors other than power and fertiliser. (UNI)

Legal separation no solution to Ambani feud: Experts

MUMBAI, Dec 12: Legal separation cannot be the solution to the ownership dispute plaguing the Rs 90,000-crore Reliance Industries Limited (RIL) because of the multi-holding entities including waves of investment firms floated by the late Dhirubhai Ambani during the foundation and public listing of the Reliance empire, according to legal experts here.

The experts, comprising chartered accountants, bankers and investors, were of the opinion that the tussle between the two Ambani brothers should not be considered as an issue in private domain because such ownership fight between the two top executives had already impacted on the performances of Reliance group shares, thereby affecting the interest of the company’s stakeholders such as equity holders, customers and suppliers.

Mukesh was wrong when he told a private TV channel that the dispute was in private domain, said noted chartered accountant and a member of the institute of the Chartered Accountants of India Kanubhai Doshi.

Mr Doshi, speaking on the legal implications of the ownership disputes at a conference organised by the investor education and welfare association at Ghatkopar here today, said the two brothers — Mukesh and Anil — can never work together on the RIL board because of erosion of mutual trust and confidence between them.

However, there is now a welcome move as both the brothers had reposed their confidence and put the responsibility on their mother kokilaben for a settlement. It would basically be a settlement of mind and attitude (rather than legal) between two brothers, said eminent public speaker and spriritual leader Haribhai Kothari.

According to Mr Kothari, the whole issue of management is related to the development of human relationship, centering around the wealth creation and distribution. Its now the inner call that would settle the disputes, he added.

Explaining the ownership structure of the RIL, Mr Doshi said that late Dhirubhai was a visionary who found the novel way of developing the Reliance group through funding from various family-holding investment trusts or firms in order to avoid the then prevailing estate duty as well as wealth tax on individual promoters like him.

Of the total holdings, these privately held investment firms (many of these having registration in overseas centres like Mauritius and Switzerland) hold around 34 per cent equity in the RIL. Its very difficult to identify these firms publicly and find out the individual holders, he said.

These firms operate on the advice of the original founder or investor such as the Letter of Instructions (LoI) given by Dhirubhai during the lifetime about the successive holding of these companies after his death.

In some ways, Mukesh was right when he said that the ownership disputes were settled during the lifetime of his father Dhirubahi, Mr Doshi observed.

In fact, both the brothers had forgotten that they, along with their sisters, had given release deeds in favour of their mother, making her the successor of Dhirubhai’s assets and properties, he added.

Mr Kiran Amrutkar, a consultant and member of the Bombay Management Association, said that the family dispute in the Reliance group has now widened the issues of corporate governance from merely a rule book to enforcement of principles that is beyond the compliance of laws.

There was a failure of corporate governance which created severe damages to the credibility of the corporate group, he said. Its not only the compliance of corporate governance norms but building up the transparency and trust among the board members and owners of the corporates, he said.

In this context, he said that there was a need to broaden the corporate governance norms by bringing in more accountability among the non-executive directors of the company. (UNI)