New Delhi, September 5
Reliance Communications Ltd. today launched an undersea cable aimed at providing cheaper bandwidth to retail and commercial users. The new fibre-optic cable system, which cost about $400 million, offers high-speed connectivity and is linked to Flag’s global network, said Mr Anil Ambani, Chairman of Reliance Communications that owns Flag Telecom.

The new 11,859-km (7,370-mile) network, stretching from Egypt to Oman and India, will carry data at a speed of 2.56 terabits per second, said Mr Ambani.

The 2.56-terabit Falcon submarine cable system connects 11 countries on its entire length of 11,859 km from India’s financial hub Mumbai to Egypt.

This new cable will be a part of Flag Telecom Global Network, which already has cables running through 35 countries spanning four continents.

The network offers seamless connectivity to 25 million Reliance phone subscribers in India and the customers of telephone companies from 11 countries partnering the so-called Falcon project.

This is the first fibre cable link between India and West Asia, where more than 3.5 million Indians are employed and will lead to high levels of trade and commerce in the region, Mr Ambani said.

Inaugurating the submarine cable, Communication and IT Minister Dayanidhi Maran said the country’s two telecom players MTNL and BSNL had joined hands to lay high-speed submarine cable system, connecting India to South-East Asia and West Asia and finally to the US and Europe that would eventually speed up international long-distance communications apart from bringing tariffs down.

He also urged the telecom companies to reduce the landing costs for calls in the West Asian region which has a sizeable Indian population.

“The present submarine cable system is not very encouraging from Indian point of view, as there are only four Indian bandwidth providers namely VSNL, Bharti, BSNL and Reliance, while there are 33 in London, 32 in the US, 32 in Germany, 24 in France and 14 in South Korea,” Mr Maran said.

VSNL has recently announced setting up a cable on the same route between India- West Asia, Europe at a cost of $350 million that would be ready for service in the next 18 months.

Top telecommunication officials from Egypt, Saudi Arabia, Kuwait, Oman and Bahrain along with their counterparts in India jointly addressed reporters though a video news conference using the Falcon cable system. 

New Delhi, September 5
Backed by investments of Rs 6,000 crore on new model launches and for expansion of the manufacturing and sales set-up, Maruti Udyog Ltd said today the company aimed to sell one million cars in 2010.

“Your company is aiming at sales of one million cars per year in 2010. Investment in new facilities and in research and development are both part of the strategy to achieve the ambitious sales goal,” Maruti Chairman S. Nakanishi told shareholders at the company’s 25th AGM here.

The company, which plans to launch “a series of new models” to attain the target, will introduce five new cars in the domestic market in as many years.

“This will be over and above facelifts of any existing models and launch of new variants,” Mr Nakanishi said, adding that the company would also expand its network of sales outlets and service workshops.

“Besides increasing the number of outlets, your company will also revamp the quality of infrastructure and service at these outlets,” he said.

The company said it wanted to remain debt-free as it planned to fund the expansion plans through internal accruals. “We would like to be a debt-free company and, therefore, most of the new investments would be through internal accruals,” company Managing Director Jagdish Khattar said, brushing aside the demand for bonus shares.

Outlining the Rs 6,000-crore investment plans along with t Suzuki, the company said these would be for a new car plant, a diesel engine and transmission facility, upgradation of the existing plant and for launch of new models.

Mr Nakanishi said the Indian car market was on the threshold of an explosive growth trajectory with positive macro-economic factors, including GDP growth, bias towards lower taxes, a young population and focus on road and rural infrastructure development.

On the company’s diesel engine plant, he said it was on way to begin production this fiscal. “The plant will manufacture 1.3-litre diesel engines for cars. It will start with an initial capacity of 1,00,000 diesel engines per year,” he said.

Mr Nakanishi said the company would launch a new export model during 2008-09. “This compact car model, while serving the Indian market, would be for export mainly to Europe. Your company will target to export 1,00,000 units of this model annually,” he said.

He also said the alliance between Suzuki and Nissan for synergies in manufacturing would help Maruti. “The increased scale of operations on account of the Nissan contract is likely to further improve cost and quality competitiveness at the Maruti facilities, which, in turn, will benefit customers in the domestic market,” he said.

Mr Nakanishi said Suzuki and Maruti were also increasingly consolidating collaboration in R&D efforts. “Suzuki sees a major role for Maruti in the area of R&D for cars in Asia.

“... The talent will be on tapping the vast pool available in India and develop people through extended training at Suzuki Motors Corp, Japan. This, combined with augmentation of R&D facilities, will help Maruti acquire a pre-eminent position in Suzuki’s global R&D set-up,” he said.—PTI

Mumbai, September 5
The Board of United Western Bank Ltd (UWB), placed under a moratorium by the RBI till December 1, said today it had submitted a reconstruction scheme to the Reserve Bank of India.

As part of the scheme, UWB has committed to bringing in funds immediately to meet all liabilities, achieving an adequate capital to risk weighted assets ratio and net worth requirements, the bank said in a statement issued here.

It may be noted that bank was placed under a moratorium on Saturday citing poor financials and the need to protect depositors.

A clutch of banks, including India’s second-largest lender ICICI Bank, Canara Bank, Allahabad Bank and Andhra Bank, besides Saraswat Co-operative Bank, are bidding for UWB.

Meanwhile, the Maharashtra Government has stepped in with a proposal to fund the restructuring of the regional bank located in the politically influential sugar belt of Satara.

The Maharashtra Government is keen on the rural bank, located in the sugar-belt of the state that exercises a considerable political influence, retaining its identity. The government has asked the State Industrial Investment Corporation of Maharashtra (SICOM) to fund the revamp plan.

Maharashtra Industries Minister Ashok Chavan said the government was awaiting SICOM’s reply on the matter.

Inefficient management led to the erosion of net worth of UWB and it was placed under moratorium till December 1 or an earlier date as the management did not come up with any plan to infuse fresh capital.

The RBI is looking for merger of the bank with another bank, which has better synergy.

As UWB has 230 branches, 12 extension counters and 75 ATMs, many banks have queued up to acquire the bank as it will give them a huge presence in western India and a ready-made infrastructure. — Agencies

Mumbai, September 5
The cash-strapped Maharashtra Government is going slow on giving a commitment about purchasing electricity from the Ratnagiri Gas and Power Project Ltd which runs the Dabhol power plant originally set up by Enron.

The RGPPL, which began operating the power plant earlier this year, shut it down just before the monsoons after the stocks of naphtha with it was used up. The Maharashtra Government too let the plant shut down since consumption of power in the state falls sharply during the monsoon months.

However, with power consumption in Maharashtra all set to go up with the end of the monsoons, the state government is in two minds about buying power from the RGPPL. For one, naphtha prices are soaring in the international markets and MahaVitaran, the power distribution arm carved out of the old Maharahstra state electricity board, would have to pay as much as Rs 6.10 per unit of electricity.

Chief Minister Vilasrao Deshmukh’s hopes of getting power at Rs 4.50 per unit were dashed when top bureaucrats pointed out that even duty-free imports of naphtha would not bring down prices that much.

The state government is hoping to manage load-shedding till March next year when the Dabhol plant would be made ready to handle liquefied natural gas (LNG). LNG prices are competitive and the state government hopes to buy as much power as the Dabhol plant would produce.

The RGPPL has indicated to the Maharashtra Government that it would place orders for naphtha only after it received an order to supply power. Sources say few Indian states are willing to buy power at the rate of Rs 6.10 per unit.

Before it closed down in July last, Maharashtra was paying for power at the rate of Rs 4.50 per unit.

Guruharsahai, September 5
The state government has envisaged massive plans for the provision of basic infrastructure in both rural and urban areas in the state, for which Rs 500 crore has been earmarked by the Punjab Infrastructure Development Board (PIDB), said Rana Gurmit Singh Sodhi, Chief Parliamentary Secretary, School Education, Youth Affairs and Sports, while talking to mediapersons after a tour of Shikargarh village, Saide ke Mohan, Jiwa Arahi, More Wala, Shergarh, Chughe Kalan and Kalewala.

Mr Sodhi said Rs 170 crore was being spent on the widening of the Ferozepore-Fazilka road, which would be completed by October. Punjab would be the first state to provide uninterrupted 24-hour electricity in all the villages of the state for which an estimated amount of Rs 1500 crore would be spent.

Mr Sodhi said the state government had also initiated a project worth Rs 1800 crore with the assistance of the World Bank to provide clean, potable water in the state. He added that 16 water work stations were being constructed in the Guruharsahai constituency only. 

London, September 5
Scottish explorer Cairn Energy Plc said today it would invest $2 billion in bringing to production its oil discoveries in Rajasthan and will launch an initial public offering (IPO) of its Indian operations in December.

“We plan to file a draft red herring prospectus (DRHP) for the IPO by September 25... Pricing will be decided by November-end,” Cairn Energy Finance Director Kevin Hart said here.

Cairn Energy would spin off its Indian operations that included 21 oil discoveries in Rajasthan with total reserves of 3.5 billion barrels, 60,000 barrels per day from Raava field off the Andhra coast and oil and gas fields in offshore Gujarat, into a subsidiary - Cairn Energy India.

The subsidiary would be listed on the BSE and the NSE by December.

He said Cairn Energy Plc would retain majority shareholding in the Indian subsidiary and the IPO would be of a maximum 49.9 per cent equity.

Mr Hart said the money raised through the IPO would be ploughed back to Cairn Energy Plc’s shareholders, possibly in the form of a dividend and a part of the proceeds would be retained by the Indian subsidiary for its operations. The UK-based parent firm would also retain a part of the IPO proceeds for exploration activities.

Cairn would invest around $2 billion in developing four main northern fields - Mangala, Aishwariya, Bhagyam and Raageshwari - in the Rajasthan block, he said.

The company’s exploration director Mike Watts said first oil production from Mangala field, the largest of the 21 discoveries in Rajasthan block, has now been rescheduled to 2009. Earlier, it had projected first oil in the last quarter of 2008.

The rescheduling had been done primarily taking into account the lead time required for ordering equipments and building a pipeline to evacuate the crude to a refinery.— PTI

Kolkata, September 5
After establishing presence in the South African market, Tata Group is looking at opportunities in the Far East.

“We are looking at Far East,” Tata Sons Executive Director R. Gopalakrishnan told reporters when asked about the geographies the Tata Group is looking at.

The group had already established presence in the telecommunications sector in South Africa. It has started work to set up a high carbon ferro chrome plant in the port city of Richards Bay. The company is looking at mining opportunities in chrome, manganese, coal and iron ore in Africa.

Mr Gopalakrishnan said the Tata Group was looking at both organic and inorganic growth opportunities and would utilise acquisition opportunities that come in the way.

“We are looking at every type of growth opportunities. If good acquisitions come in the way, we will not hesitate to go forward,” he said.

Tata Group has recently acquired US-based Glaceau, the makers of health drink Vitaminwater for $677 million, making it one of the largest acquisitions by any Indian company abroad.

Mr GopalKrishna was speaking in the sidelines of a CEO conclave organised by the Calcutta Management Association. — UNI

New Delhi, September 5
TRAI is understood to be for the inclusion of income only from “core telecom activities” in the computation of adjusted gross revenue (AGR).

TRAI is presently working on what can be included in the telecom activities as per the licence terms and conditions.

Earlier, the telecom appellate tribunal TDSAT had also indicated that income from non-telecom service should not be included in the AGR and had asked the TRAI to give recommendations on the same especially to give definition of the AGR.

Telecom operators are of the view that whatever relief they get in payment levies by redefining AGR, the same would be passed on to the subscribers in terms of lowering tariffs.

When contacted TRAI Chairman Nripendra Misra said, “We are working on it and we shall give recommendations by September 10”. Asked about TRAI’s view on AGR, Mr Misra declined to comment saying, “We have been asked to put right accounting practices in place and we are looking at various aspects”.

Currently telecom operators have to pay higher taxes as income from many non-telecom activities like consultancy fee, USO subsidy, forex gains interest income and other telecom licences like Internet service provider is included in the AGR of telecom companies. — PTI