Daily Excelsior...Business

Rupee weakens against USD on monthend dollar demand......

Vimplecom says gets 21 million 2002 tax notice .....

Infosys technologies Q3 results on Jan 12 ....

Tokyo rises on wall st, but Korea lower .....

BHEL bags Rs 410 cr order to set up power plant for JSL

NEW DELHI, Dec 29: Engineering giant Bharat Heavy Electricals Ltd has bagged a Rs 410 crore order from Jindal stainless to set up its 250 mw captive power plant in Orissa.

The 2x125 mw power plant would be installed as part of JSL’s upcoming Duburi stainless steel plant in the state, a BHEL release said today.

While the first unit is likely to be commissioned in 24 months, the project would be completed in 28 months.

As per the contract, the state-run major would build, supply, erect and commission two 125 mw turbine generator sets, coal-fired boilers, Control and Instrumentation (C&I) system alongwith auxilliaries.

The turbine generator sets would be manufactured by BHEL’s Hyderabad unit and the boilers would be supplied by its Trichy plant. The state-of-the-art C&I system would be supplied by the Bangalore-based electronics division. (PTI)

Cab allows pvt carriers to operate on int routes, except Gulf

NEW DELHI, Dec 29: In a path-breaking move, the Union Cabinet today decided to permit private carriers to operate on all international routes, barring Gulf destinations, and synergise the operations of Air India and Indian Airlines.

The cabinet, at its meeting today, also decided to discontinue the practice of mandating commercial agreements on all new services and review the existing commercial agreements, aiming at phasing them out over the next five years.

It also mandated that only those private scheduled carriers would be allowed to operate to foreign destinations which have "a minimum of five years continuous experience and minimum of 20 aircraft in their fleet", besides a minimum mileage coverage, a condition only Jet Airways and Air Sahara may be able to comply with.

Emerging out of the cabinet meeting, Civil Aviation Minister Praful Patel said only Indian Airlines and Air India would operate in the Gulf region for the next three years and the private carriers would stay out of this region during that period.

Defence Minister Pranab Mukherjee, who also briefed reporters after the meeting, said the private carriers allowed to fly abroad would have to abide by the norms laid down by the Directorate General of Civil Aviation in this regard.

Mukherjee said the Civil Aviation Minister has also been asked to come out with a policy paper on liberalisation of the sector, including the concept of ‘open sky’, soon for the cabinet’s approval.

So far, Jet Airways and Air Sahara have been operating to the SAARC nations of Sri Lanka, Nepal and were planning to launch services to Bangladesh.

The cabinet, which decided to "strengthen Air India" and "improve operational synergy" between IT and Indian Airlines, felt that these decisions would result in improvement of utilisation of the bilateral traffic rights on international routes, leading to heightened competition and "reasonable and affordable" fares.

In order to allow its network growth, the Government decided that it "may reserve traffic rights for Air India in accordance with its operational plans for the next two years".

Similarly, the existing compensation being received by the international flagship by way of commercial agreements with foreign airlines would be allowed to continue "subject to review over the next five years", ministry sources said.

In order to synergise the operations of the two public sector airlines, "a calibrated approach may be adopted so that the national carriers get time to adjust to the new competitive environment".

Keeping this in mind, the Government decided to reserve operations to the Gulf nations like UAE, Qatar, Oman, Bahrain, Kuwait and Saudi Arabia for AI and IA and their subsidiaries for the next three years "as most of their operational revenue and profits accrue from these routes". (PTI)

Construction boom spurs cement industry growth in 2004

NEW DELHI, Dec 29: Propelled by boom in construction sector, the Rs 30,000 crore cement industry recorded a growth of over seven per cent even though a slump in prices was seen towards the end of 2004.

Intense construction work in road and highways during the year spurred demand for cement though the transporters’ strike came in the way of higher growth by affecting despatches of cement to various destinations.

The positive factors led to fresh investment plans in the sector as company after company realised potential of creating new capacity due to sharp increase in demand.

The year also saw the successful de-merger of Larsen and Toubro’s (L&T) cement division in favour of Grasim industries.

L&T demerged its 17.5 million tonne cement division after rechristening it as ultra tech cement in favour of Grasim.

This made Aditya Birla group company the eighth largest global player with 31 million tonne installed annual capacity.

The Birla group also announced a Rs 200 crore expansion plan for raising capacities at various plants by two million tonne through debottlenecking in next two years.

ACC made intention clear that it wants to tap lucrative Chinese market although cement exports from India is yet to make to any mark in the global arena.

The Ambuja group also took a major decision to invest Rs 100 crore to set up a cement grinding plant at Dadri in Uttar Pradesh during the year.

The year also saw Grasim’s initiatives to strengthen its Ready Mix Concrete (RMC) wing by announcing its intention to set up 200 RMC units in next 2-3 years.

Extended rainy season and consequent fall in construction activities from July to September affected demand for cement.

Fears were expressed that with the change in guard at the Centre, the focus would shift to creating disposable income in rural areas rather than creating physical assets.

Finance Minister P Chidambaram, however, announced that the golden quadrilateral and other Rural Roadway Development Projects would go ahead as per scheduled.

It is also felt that the phase of housing boom witnessed during last couple of years seems to have mellowed down a bit during the second half of the year.

Growth in housing industry seems to have changed gear as the rate of interest that touched as low as seven per cent has started moving up.

Leading Housing Finance companies like HDFC, SBI housing finance and Lichfl have raised their interest rates retarding the pace of house construction activities.

Experts feel that the real impact of rise in home loan interest rates would be clear only after a year or so. (PTI)

GAIL to take 33 pc stake in Ennore LNG terminal

NEW DELHI, Dec 29: Gas utility GAIL (India) Ltd will take 33 per cent stake in Indian oil corp’s proposed Liquefied Natural Gas (LNG) import terminal at Ennore in Tamil Nadu.

"GAIL will undertake marketing of 3 million tonnes of regassified-LNG (R-LNG) from the Ennore terminal," the company said in a press release here.

IoC plans to build the tender to cater to the fuel needs of its subsidiary Chennai Petroleum Corp Ltd and to supply regassified LNG to prospective industries in Tamil Nadu and Karnataka who are willing to switch over from liquid fuel to natural gas.

"GAIL would also construct, own and operate the entire pipeline required for marketing of R-LNG from Ennore terminal," the release said.

Ioc has already called for bids seeking 2.5 million tonnes per annum (130 trillion british thermal units) lng for 20 years with a possibility of doubling the quantity.

A feasility study for ennore lng terminal is underway. "A major advantage of this terminal is that LNG could be sourced from multiple countries like Malaysia, Indonesia and Australia," it said.

"Discussions are also in progress with Tata group which had evinced interest in setting up an integrated power plant with LNG import terminal," an official said.

GAIL has proposed a Coimbatore-Erode-Salem-Dharampuri pipeline besides the Chennai-Bangalore and Chennai-Tuticorin lines to transport regassified LNG. Besides a local network of 163-km (Kuttalam-Narimanan-Kovilallapal-Perungulam-Bhuvanagiri) was under implementation.

Tamil Nadu is currently being supplied only 1.4 million standard cubic meter per day of gas against an allocation of 6 mmscmd.

Import of gas in its liquefied form is planned to supplement the deficit.

"The current deficit of 4.6 mmscmd is besides the 25-30 mmscmd latent demand that could arise from potential customers in industry, power and desalination plants. The ennore power station, north Chennai Power Station, Tuticorin Power Station and Mettur Power Station are a few of the potential customers of the Ennore terminal," the release said.

For the Ennore project, IoC is seeking supply of LNG from 2009. Its earlier tender seeking 0.5 million tonnes of LNG for own use had received no response from LNG suppliers. (PTI)

India to seek long-term oil contracts from Arab countries

NEW DELHI, Dec 29: India will seek long term crude oil supply contracts from Arab countries when they come to New Delhi next month to discuss stability, security and sustainability of oil supplies with their principal buyers.

The meeting of key oil producing countries - Kuwait, Saudi Arabia, Iran, Qatar, Oman, UAE and Malaysia, and four principal oil buyers in Asia - India, China, Korea and Japan -on January 6 would also seek to develop joint emergency response mechanism to tackle disruption in supplies in Asia.

"Oil producers currently enter into only one year supply contracts with consumers. We want the producers to commit to supplying specified volumes at per-determined price formula for 5-6 years," a top Government official said.

New Delhi is bringing together oil producers and principal buyers in asia face-to-face to sensitise each other with concerns of one another.

"We would also discuss mutual investment in oil and gas exploration and production, refining, pipelines and terminals in participating countries," the official said adding the idea was to create mutual dependency and evolve closer contact.

Also on agenda for the January 6 meet is development of an oil market. "While the India, China, Korea and Japan consume most of the crude oil produced by the west Asian countries, there existed no benchmark for pricing of crude for them. The crude oil these countries buy is indexed to major markets in Europe and US. We want to develop our own trading market."

Besides, measures to tackle emergencies like disruptions in supplies or shortages would also be discussed.

"We will be discussing all the dimensions of oil economy - from marketing issues to investment issues to research and development issues to environmental issues," the official said.

The buyers and sellers conference is an attempt by India to bring about a consensus among the key Asian oil producers and buyers for creating a different price benchmark than from the prevailing benchmarks based out of London and New York.

"We want to see if we can evolve an Asian oil products market that could service as marker for the markets such as India," he said. (PTI)

Railway set to enter ‘bullet train’ era

NEW DELHI, Dec 29: Indian Railways might have signed off the year on a tragic note with the train accident in Punjab but the long-term outlook appears promising with the Prime Minister himself taking the initiative to formalise a Rs 24,000 crore five-year integrated railway modernisation plan to pave the way for high-speed ‘bullet trains’.

An integrated modernization plan seeks to introduce a dedicated high speed corridor of 250-300 km per hour on Mumbai-Ahmedabad section, besides introducing 150 km per hour high speed on Delhi-Howrah (Kolkata) section, Delhi-Chennai, Delhi-Agra and Delhi-Lucknow sections over the next five years.

The Government also worked out a mechanism for resources for a modernisation plan besides completing 235 throw-forward ongoing railway projects at a cost of Rs 46,000 crore under a time-bound programme.

The modernisation on the one hand and the introduction of common man-oriented schemes like introduction of Kulhar, the earthen cup, in place of plastic cups, khadi and handloom, milk and its products on railways across the country has given it an enviable impetus. Being seen as a measure for providing employment to the poorer segments of the society, these new endeavours have been well received, specially by the rural masses.

Along with these steps, the domineering presence of new Railway Minister Lalau Prasad Yadav and his pro-people measures have generated a lot of positive energy within and outside the railway.

Indian Railways, doing well in almost all the revenue earning areas, is all set to adopt modern technology for passengers’ safety, security and amenities.

Indian Railways have recorded excellent performance during the year ending November, 2004. The total earnings from freight and passenger traffic were Rs 30032.75 crore compared to Rs 27785.37 crore during the corresponding period of the previous year. The earnings were higher by 8.09 per cent over the previous year and 3.34 per cent over the budgetary target of Rs 29062.92 crore.

The loading of freight traffic has been 8 million tonnes higher than the budgetary target. The passenger traffic also jumped the target of three per cent. The actual performance was 5.46 per cent, higher than the target of three per cent.

A total of 2094.58 million passengers were booked during the period compared to 1986.15 million passengers during the corresponding period of the previous year.

A new catering policy-2004 was announced to provide for open tender for the award of contracts to private caterers, besides ending the monopoly of large-scale caterers on Indian Railways. The policy, for the first time, provides for 49.5 per cent reservations for Scheduled Castes, Scheduled Tribes, other Backward Classes and minorities. When fully implemented, the railways earnings from catering services would go up to Rs 500 crore per annum from the existing annual earnings of Rs 22 crore.

The bookstall policy also saw changes during the year. Provision of book vendors has been subjected to periodic open tenders, resulting in increased revenues to the railways, besides reservations for unemployed graduates and other weaker sections.

The Government also announced filling up of more than 80,000 vacancies in group C and D categories of safety segments of Indian Railways, besides filling up of 9000 vacancies in railway protection force. These vacancies had accumulated during the last six years.

With the Myriad upgradation of technology and induction of new devices, safety of rail services has improved substantially. As a result, accidents have come down substantially over the years. As against 1393 accidents per year, accidents in 2003-04 were 325. This further come down to 156 from April to November, 2004 against 235 in the corresponding period of 2003, representing a reduction of 33.62 per cent.

The year also saw the United Progressive Alliance Government according priority to development and expansion of railway infrastructure including modernization, safety and security of passengers, replacement and renewal of assets, particularly track renewal, cleanliness, improvement in passenger amenities, control over expenditure and prevention of leakages of revenues, as thrust-areas for improving rail services to the nation. (UNI)

Small scale sector waited for SSI bill for answers

NEW DELHI, Dec 29: The small sector spent the year 2004 waiting with baited breath for a comprehensive bill for the sector which was promised by the erstwhile National Democratic Alliance Government.

The draft Small Industries Development Bill, finalised by the NDA Government with assistance from the Administrative Staff College of India (ASCI), was found to be inadequate by the United Progressive Alliance (UPA) and it started the entire process of changes in the draft.

It promised to introduce the bill in the monsoon session but even the winter session got over and the public is yet to see the proposed legislation.

In November, Minister for Small Scale, Agro and Rural Industries Mahabir Prasad had claimed that the draft of the bill was ready. What stopped the tabling of the bill, which has been redrafted, in Parliament is not known.

On numerous occasions the minister said that the basic purpose of the new act, which would supersede all legislation dealing with the sector, is to cut down on inspector raj so that small units can concentrate on their core activity.

The bits and pieces of information filtering in suggest that the bill will seek to make it mandatory for inspectors to give a 15 day notice prior to inspection. It also recommends that no routine inspection shall be carried out more than once in five years.

The other problem that the bill seeks to address is the difficulity faced by small units in obtaining credit.

The draft recommends the small enterprise credit guidelines to be binding upon all financial institutions.

The draft bill also proposes the setting up of the National Small Enterprises Board that will advise centre in formulation of the small enterprises development policy. The board will recommend measures to improve marketing of products of small enterprises in the country and abroad.

The bill will also empower the Government to decide on the definition of a small scale unit. At present a unit with a maximum investment of Rs one crore in plant and machinery -excluding equipment for environmental control and research and development - qualifies as a small scale industrial unit.

While the bill is awaited, the Government continued with the tradition of removing some products from the list of items reserved for small scale sector in every union budget. This year 85 items in were struck-off from the list and investment limit was hiked to Rs 5 crore for seven ssi items pertaining to sports goods.

With the removal of these items, now 570 articles remain in the reserved list in 22 categories.

The items removed from the ssi list include several consumer goods, paper products, three items pertaining to fast colour bases, four items pertaining to roofing tiles and one item pertaining to flooring tiles.

Under the category of auto part components, ancillaries and garage equipment, four items have been dereserved including luggage carrier, brake and pedal pads, wiring harness and auto leaf springs.

Pending the formulation of the bill the UPA Government has dispensed the need for collateral security for loans upto five lakh and selectively for loans upto Rs 25 lakh.

The Government is also formulating new soft loan schemes to provide infrastructure support to SME clusters. The Government will bear the cost of the interest incentive.

The package also envisages common facilitation centres, with funding from the Central Government, to meet technology needs of SMEs.

The package also focusses on technology, marketing and infrastructure support.

Under Cluster Development Programme (CDP), 59 clusters have already commenced in consultation with the State Governments, industry associations, financial institutions and other organisations involved in industrial development.

To fulfil the promise made in the National Common Minimum Programme regarding the restructuring of Khadi and Village Industries Commission (KVIC) the Government dissolved the commission.

The task of the Commision Chairman, BJP leader Mahesh Sharma, was handed over to Commission’s Chief Executive Officer and Financial Advisor Maya Sinha.

To suggest ways of revamping KVIC, the Govenment has decided to appoint a committee to examine the functioning and performance of the erstwhile Khadi and Village Industries Commission and suggest its restructuring and changes in KVIC Act. The committee is yet to be appointed.

In the meantime the Government has a four member national commission on enterprises in the unorganised/informal sector under the chairmanship of Arjun Sengupta who has been given the rank of Cabinet Minister. The Commission will function both as an advisory body and a watch dog for the informal sector.

The small scale sector will be the key part of the strategy of the UPA Government to create more ‘high quality’ jobs as food for work programme can have a limited impact will not be self sustaining.

As many as 11.4 million units of small scale industries provide employment to over 27.1. Million people. It contributes 40 per cent of the countrys industrial production and 34 per cent of the exports from the country but face many constraints.

If inspector raj is done away with, access to credit is made simpler and the Government comes out with effective schemes for capacity building in the sector the results by the industry will surprise all. (PTI)

Rupee weakens against USD on monthend dollar demand

MUMBAI, Dec 29: The rupee weakened against the US currency early today on fresh month-end dollar demand from corporates and importers in moderately active but cautious trade at the interbank foreign exchange (forex) market ahead of the year-end.

Opening lower at Rs 43.73/75 per dollar, the rupee slipped to Rs 43.76/77 per dollar in late morning deals, sharply lower from Tuesday’s close of Rs 43.71/72.

Customary month-end pressures weakened the rupee early today but there is ample local dollar supplies to absorb the buying and even spur a renewed rally on the back of rising foreign fund inflows into the booming stock markets, a dealer said.

The BSE sensex today pierced through the key 6600-level and hit new life-time highs of 6610 in early trade at the stock exchange, driven up mainly by foreign funds buying.

Meanwhile, global oil prices were quoted higher at 42 dollars a barrel in early Asian trade.

Turning to cross currency trades, the euro was quoted at Rs 59.45/47, pound sterling at Rs 84.37/39 and the Japanese yen (100) at Rs 42.30/32. (PTI)

Vimplecom says gets 21 million 2002 tax notice

LOS ANGELES, Dec 29: Russian telecommunications company Vimplecom on Tuesday said it has been notified it owes nearly 21 million in taxes and penalties after a review of its 2002 tax filing.

Vimplecom said this is a preliminary notice and said it is considering whether to object to some or all of it.

The company is in "constructive discussions" with the authorities on a 2001 tax claim, it said, and it expects a review of its 2003 tax filings to begin at some point.

Last week russian news outlets quoted a Finance Ministry official as saying Vimplecom’s 158 million 2001 back tax burden could be cut "significantly."

Separately, the company also said it has been told to reapply for certain licenses, after its November merger with its former subsidiary Vimplecom-region.

The company said it has been told it can continue to offer services in accordance with Vimplecom-region’s licenses while waiting for the Russian Government to approve the list of services to be licensed and the conditions on the licenses. (AGENCIES)

Infosys technologies Q3 results on Jan 12

NEW DELHI, Dec 29: Nasdaq listed Infosys Technologies Ltd will announce its third quarter results on January 12.

Infosys has informed BSE that a meeting of the Board of Directors of the company will be held on January 12, 2005 to consider the audited financial results as per Indian gaap for the third quarter and nine months ending December 31, 2004.

The board will also discuss audited consolidated financial results of the company and its subsidiaries as per Indian gaap for the third quarter and nine months ending December 31, 2004 as well as the the unaudited financial results as per US gap for the third quarter and nine months ending December 31, 2004.

For the second quarter ended September, Infosys posted 49% jump in net profits at Rs 447.37 crore and had upped its revenue guidance for this fiscal after posting.

In Q2, it had posted a 52 per cent growth in revenues to Rs 1,749.33 crore. (PTI)

Tokyo rises on wall st, but Korea lower

HONG KONG, Dec 29: Asian stocks were mixed early on Wednesday, with Japanese shares following a wall street rally and Korea stocks falling after a deadline passed for investors to qualify for the next round of dividends.

At 0031 gmt, Tokyo stocks .N225 traded about 0.4 percent higher, led by brokers such as Nomura Holdings Inc. 8604.T .

Traders said the market was playing catch-up with gains on wall street. The nikkei touched a five-month high on Tuesday.

South Korea’s benchmark index fell 0.3 percent as the date for buying shares for the next round of dividends passed.

But ailing credit card issuer LG card 032710.Ks rose 7.48 percent to 15,750 won amid hopes a bailout plan is in sight.

Australian shares .Axjo , the top performer of the Asia-Pacific region’s major bourses this year, traded slightly lower after a long Christmas break.

Insurance and tourism shares reacted to the deadly Tsunami which swept Asia last weekend.

QBE insurance QBE.AX , the biggest underwriter in the Lloyd’s of London Insurance Market, fell by more than a percent, although it said the Tsunami damage would not have a material impact on 2004 insurance profit targets.

Qantas Airways Ltd. Qan.Ax , Australia’s biggest airline, fell by about 0.8 percent.

US tech and blue chip stocks closed at 3 1/2-year highs, boosted by a strong set of US consumer confidence data and signs of strong Christmas sales.

The blue chip dow jones industrial average .DJI rose 0.73 percent to 10,854.54. The tech heavy Nasdaq composite index .Ixic rose 1.07 percent to 2,177.19, helped by a brokerage upgrade of online retailer Amazon.Com Amzn.O .

Wednesday marks the last full Tokyo trading day of the year. The markets will be open for a half-day on Thursday and will re-open on January 4 for a half-day session. (AGENCIES)