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B U S I N E S S

Reliance seeks sops for selling petrol, diesel
New Delhi, January 9
Reliance Industries Ltd, India’s largest private sector oil firm, has sought compensation similar to what is extended to public sector fuel retailing companies for selling petrol and diesel below cost price.

Let market decide price: Teri
Industry think-tank Teri has demanded an end to government dictats on pricing of petroleum products and sought subsidies on domestic cooking gas (LPG) and kerosene to be directly provided to consumers.

Maruti hikes prices
Increase between Rs 1,500 and Rs 15,000
New Delhi, January 9
Faced with increasing input and freight costs, Maruti Udyog Ltd today hiked the prices of all models between Rs 1,500 and Rs 15,000, the second time in the past three months.

Industry seeks reforms in Budget
New Delhi, January 9
Industrial chambers led by FICCI and the CII today called upon Finance Minister P. Chidambaram to take bold steps, including a cut in corporate tax to 25 per cent, review of the fringe benefit tax and simplification of taxes, to put the manufacturing sector on the high trajectory of growth path.

Chairman and Managing Director of Reliance Infocomm Ltd Anil D. Ambani shakes hands with Chief Managing Director of Bharti Group Sunil Bharti Mittal as Swati Piramal of Piramal Group and President of Ranbaxy Laboratories Ltd. Manvinder Singh look
Chairman and Managing Director of Reliance Infocomm Ltd Anil D. Ambani shakes hands with Chief Managing Director of Bharti Group Sunil Bharti Mittal as Swati Piramal of Piramal Group and President of Ranbaxy Laboratories Ltd. Manvinder Singh look on, prior to a meeting with Finance Minister P. Chidambaram, in New Delhi on Monday. — AFP photo

BSNL STD rates may see 70 pc cut
New Delhi, January 9
Long distance rates are likely to see massive reduction with telecom PSU BSNL all set to announce fresh rates under the uniform STD tariffs — IndiaOne — where a reduction of 70 per cent is likely to take place for basic telephony segment.


ICICI Bank Limited, India’s second largest bank, on Monday signed up Bollywood actor Shah Rukh Khan as its global brand ambassador
ICICI Bank Limited, India’s second largest bank, on Monday signed up Bollywood actor Shah Rukh Khan as its global brand ambassador. Shah Rukh image and popularity with the NRI segment will further reinforce ICICI Bank’s global identity, the bank said in a statement.

EARLIER STORIES
 

Reliance Info to raise $300 m loan
New Delhi, January 9
Reliance Infocomm, an Anil Ambani group company, is likely to clinch a $300 million foreign loan next week to repay previous high cost debts. The mobile operator will sign the agreement for this loan by January 15. Thirty global banks have been involved in arranging the loan spread over 5 to 7 years, banking sources said. When contacted, Reliance Infocomm officials declined to comment.

Pak telecom co signs MoUs with Reliance, BNC
Islamabad, January 9
Setting aside security concerns, state-run Pakistan Telecommunications Company Limited (PTCL) has signed MoUs with two Indian telecom companies to provide cable link between the two countries through the Wagah border.

PowerGrid to buy choppers
New Delhi, January 9
Concerned over the failure of the North power grid on December 23, PowerGrid has decided to procure helicopters and other utilities to wash thousands of insulators on transmission lines, especially North India, during the winter when heavy fog, coupled with dust particles, cause short-circuits in the lines.

Federal Bank keen to acquire Ganesh Bank
Mumbai, January 9
After suspending the operations of Ganesh Bank of Kurundwad following the erosion of its networth, the RBI today announced a draft scheme of merger of the ailing bank with Kerala-based Federal Bank.

Volvo to foray into city bus segment
New Delhi, January 9
After creating a niche in the inter-city bus market, luxury bus maker Volvo is now targeting the city-bus segment, bagging the first order in Bangalore. “We have bagged the first order for city buses in Bangalore and will be expanding the segment further by targeting newer cities,” Volvo Buses South Asia Head and Vice-President Akash Passey said.

Mazda CX-7 is shown at the North American International Auto Show iin Detroit on Sunday. The vehicle is a crossover SUV and will be launched in April, starting at $23,750 Mazda CX-7 is shown at the North American International Auto Show iin Detroit on Sunday. The vehicle is a crossover SUV and will be launched in April, starting at $23,750. — AP/PTI

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Reliance seeks sops for selling petrol, diesel

New Delhi, January 9
Reliance Industries Ltd, India’s largest private sector oil firm, has sought compensation similar to what is extended to public sector fuel retailing companies for selling petrol and diesel below cost price.

“After APM (Administered Pricing Mechanism) was demolished in 2002, I (Reliance Industries) should be treated on par with public sector companies,” RIL director R.K. Narang told reporters on the sidelines of a panel discussion on petroleum pricing organised by Teri here today.

He said if part of the losses made on petrol and diesel sales by IndianOil Corp, IBP, Bharat Petroleum Corp and Hindustan Petroleum Corp were made up through issue of government bonds and discounts extended by upstream firms like Oil and Natural Gas Corp (ONGC), Oil India Ltd and GAIL, then the same should also be given to Reliance.

Reliance, which has set up over 900 petrol stations throughout the country, commands 9 per cent of the petrol and diesel market share.

While the retail-selling price of petrol barely makes up for its cost of production, diesel was currently being sold at a loss of Rs 2 a litre.

When asked why was Reliance selling fuel at a loss when it was unlike the PSU firms, not bound by government pricing dictats, Mr Narang said: “I cannot sell (petrol and diesel) at a price more than my competition.” Reliance, he said, had been “unfairly” asked to extend discounts to the tune of Rs 750 crore on the petrol, diesel, LPG and kerosene it sells to PSU retailers. “Its illogical and irrational call made (on Reliance). I am not in marketing of LPG and kerosene yet I have to pay Rs 750 crore.”

“We should be treated on par with public sector firms,” he said.

Reliance Industries has made out a case for being compensated on par with public sector firms before the high-powered Rangarajan Committee appointed by the Prime Minister to look into the pricing of petrol, diesel, LPG and kerosene.

“I do not agree to the subsidy sharing (scheme of the government). The scheme has led to oil companies bleed,” he said.

Under the subsidy sharing scheme, the losses made by IOC, BPCL, HPCL and IBP on petrol, diesel, LPG and kerosene sale are shared by upstream firms, stand-alone refiners — Reliance, Kochi Refinery, Chennai Refinery and Mangalore Refinery — and the retailing firms equally. — PTI

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Let market decide price: Teri

Industry think-tank Teri has demanded an end to government dictats on pricing of petroleum products and sought subsidies on domestic cooking gas (LPG) and kerosene to be directly provided to consumers.

Instead of government providing subsidy to oil companies, prepaid cards with subsidy amount loaded can be provided to targeted consumers, The Energy and Resources Institute (Teri) said in a study on Petroleum Pricing in India.

The government should move to market determined prices of petrol, diesel, LPG and kerosene immediately. Subsidised LPG and kerosene can be provided to targeted consumers by giving them prepaid cards from which the subsidy amount would be deducted every time a purchase was made.

This would help check black-marketing and help track pattern and extent of subsidy utilisation, the study said.

“The Import Parity Pricing formula (used for calculating retail prices of fuel) needs to be revisted to ensure that the Indian refining industry enjoys a rational margin that is fair to producers as well as consumers,” it said.

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Maruti hikes prices
Increase between Rs 1,500 and Rs 15,000

New Delhi, January 9
Faced with increasing input and freight costs, Maruti Udyog Ltd today hiked the prices of all models between Rs 1,500 and Rs 15,000, the second time in the past three months.

The company, which earlier announced a hike October last year, said the rising oil prices were behind the increase in costs.

“The company had decided to pass on only a part of the impact of increase in freight costs and other input costs to the customers then (in Oct 2005) and had indicated that another price revision may be undertaken in the early 2006,” Maruti said.

As per the new prices, entry-level Maruti 800 will be costlier by Rs 3,000 while the popular Alto model will also be dearer by the same amount.

On the other hand, the company’s latest offering Swift will see a Rs 3,500 hike on the base model while the mid and top-end variants will be expensive by Rs 10,000.

The price increments on the Zen and WagonR models is Rs 5,000 while the highest impact will be on the prices on the SUV Grand Vitara, which will see the prices go by as much as Rs 15,000.

The mid-size Baleno and Esteem will be dearer by Rs 3,000 while the MPV Versa will be expensive by Rs 12,000.

The Omni van will be dearer by Rs 1,500 while its LPG variant will be expensive to upwards of Rs 3,000.

Ford Fiesta to cost more

Chennai: The Ford Fiesta, the fifth model of Ford India in six years, will cost more from January 16 with the diesel version crossing the Rs 7 lakh barrier.

The company cited rising input costs as the reason for revising the prices of the newly launched Ford Fiesta. “The price revision will come into effect from January 16,” a press note said here.

As a special gesture, the company would hold the present price for all orders booked for Fiesta till January 15.

The revised ex-showroom prices for Fiesta in Chennai would be Rs 5.65 lakh for its 1.4 EXi petrol version, Rs 6.39 lakh for 1.6 ZXi petrol version. The 1.6 SXi petrol Fiesta would cost Rs 6.99 lakh while 1.4 diesel would be available at Rs 7.09 lakh. The other models that Ford offered in India included the Ikon, Fusion, Endeavour and Mondeo. — PTI

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Industry seeks reforms in Budget
Tribune News Service

New Delhi, January 9
Industrial chambers led by FICCI and the CII today called upon Finance Minister P. Chidambaram to take bold steps, including a cut in corporate tax to 25 per cent, review of the fringe benefit tax and simplification of taxes, to put the manufacturing sector on the high trajectory of growth path.

In his pre-Budget consultations with industry leaders, Mr Chidambaram hinted at taking measures in the Budget to boost the farm, irrigation, food processing and social sectors.

There was a broad consensus among India Inc for simplifying FBT and lowering the overall tax burden on corporates, now at over 40 per cent. “If you don’t abolish it (FBT), you can simplify it,” CII President Y.C. Deveshwar told reporters after the meeting. FICCI and Assocham also pitched for scrapping or simplifying FBT.

“There is a need to review the existing FBT provisions and simplify it. Genuine business expenditure incurred by corporates should be allowed deduction,” FICCI Vice-President N. Srinivasan said.

Instead of FBT, Assocham President Anil K. Agarwal and Senior Vice-President Venugopal N. Dhoot said the Finance Minister should hike corporate tax by 2 per cent.

The CII President submitted that the FM should announce a target for capital formation in infrastructure for the next three years. Expressing concern over the misuse of ground water in states like Punjab, Haryana and Maharashtra, Mr Deveshwar asked the FM to begin a price regime that could promote a shift of resources to horticulture and agro-forestry in these regions.

The CII urged the government to give tax exemptions for five years to companies engaged in R&D, agro-forestry.

FICCI proposed a cut in the corporate tax rate from 30 to 25 per cent as it in the case of most ASEAN members.

“Telecom is a vital sector but has punitive taxation. We wanted lowering of licence fees, ADC and USO charges,” Bharti Chairman Sunil B. Mital said

Mr Anil Ambani of Reliance Infocomm, who also attended the meeting, refrained from making any comment.

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BSNL STD rates may see 70 pc cut

New Delhi, January 9
Long distance rates are likely to see massive reduction with telecom PSU BSNL all set to announce fresh rates under the uniform STD tariffs — IndiaOne — where a reduction of 70 per cent is likely to take place for basic telephony segment.

The IndiaOne Uniform STD rates, which are likely to be announced by January 15, will come before the announcement of revenue-share based access deficit charge and set in motion the PSUs’ tariffs aligning themselves to this grand initiaitive of telecom minister Dayanidhi Maran who sees a single rate for STD across the country as the way to bring affordability in this segment.

This will put rest to speculation on delay in launching IndiaOne tariffs by telecom PSUs.

Sources in BSNL said OneIndia rates should see enough reduction in mobile STD also.

At present, BSNL call charges for distance beyond 50 km is Rs 2.40 for a 30 second pulse rate effectively making Rs 4.80 for a minute inter-circle (STD) call for its basic telephone users. Intra-circle rates below 50 km is also charged at Rs 2.40 but for a 90 seconds pulse.

For cellular users of BSNL, under various plans there are different STD rates for a 60 second pulse. Under Plan 225, the cell-to-cell STD rates are Rs 2 a minute for a 60 second pulse while under Plan 325 and Plan 525, it is Rs 1.80 for the pulse for same duration.

Officials also said rentals were to remain at the same level and there is no change on rental as well as on local call fronts.

About 7.5 crore mobile users can look forward to a major cut in their STD bills this month, as the government is likely soon to approve collection of a fee (access deficit charge) from telecom operators based on revenue-share mode instead of a fixed amount.

The revenue-share percentage is likely to be less for national long distance calls (STD) compared to international long distance calls (ISD), which would allow operators to cut STD tariffs. — PTI

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Reliance Info to raise $300 m loan

New Delhi, January 9
Reliance Infocomm, an Anil Ambani group company, is likely to clinch a $300 million foreign loan next week to repay previous high cost debts.
The mobile operator will sign the agreement for this loan by January 15. Thirty global banks have been involved in arranging the loan spread over 5 to 7 years, banking sources said. When contacted, Reliance Infocomm officials declined to comment.

The entire $300 million syndicated foreign currency loan is likely to bear an interest rate of less than Libor+100 basis points.

The proposed loan will be used to repay the company’s earlier $300 million loan, which was raised at a higher rate of Libor plus 200 basis point, sources said, adding this will directly result in a saving of 100 basis points above Libor, which in turn will go a long way in improving the bottomline and profitability of the company.

Meanwhile, Reliance Infocomm today extended its ‘India One’ tarrif scheme to fixed wireless segment.

Under the new plan, fixed wireless customers will be able to make calls to anywhere in the country for Re one per minute, the company said here.

But the STD calls across the country would be available at Re 1 per minute under a particular scheme with a fixed monthly rental of Rs 499.

Meanwhile, the new scheme hiked the local call charges from Reliance to other networks by 2.5 times. The current fixed phone STD charges vary from Rs 1.80 to Rs 2.40 per minute. — PTI

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Pak telecom co signs MoUs with Reliance, BNC

Islamabad, January 9
Setting aside security concerns, state-run Pakistan Telecommunications Company Limited (PTCL) has signed MoUs with two Indian telecom companies to provide cable link between the two countries through the Wagah border.

Reliance and BNC inked the agreement while Indian telecom is expected to join the pact shortly.

This is the first time that Pakistan has opted to have a direct link with India in the telecom sector. Last year, the Indian companies were not permitted to take part in the bidding of privatisation of PTCL.

“Pakistan is ready to make the new cable operational as early as in a month. We are waiting for the final go-ahead from India,” the Daily Times quoted a top PTCL official as saying.

Meanwhile, Pakistan has given the go-ahead for a long-pending deal to sell a strategic stake in the country’s main state-run telecom company to Etisalat of the UAE, a statement said today.

Under the deal approved by the cabinet committee on privatisation, Etisalat will pay $1.14 billion of the $2.6 billion it agreed on in June for 26 per cent of PTCL.— PTI, AFP

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PowerGrid to buy choppers
Manoj Kumar
Tribune News Service

New Delhi, January 9
Concerned over the failure of the North power grid on December 23, PowerGrid has decided to procure helicopters and other utilities to wash thousands of insulators on transmission lines, especially North India, during the winter when heavy fog, coupled with dust particles, cause short-circuits in the lines.

Almost all thermal and hydel power stations had to be shut down on that day after the failure of around 20 main transmission lines in Punjab, Haryana and J&K.

A high-level meeting convened by the Ministry of Power took this decision .The meeting was attended by senior officials of state electricity boards in North India, Central Electricity Authority and was chaired by CMD of PowerGrid R.P. Singh.

Members expressed concern over the tripping of so many lines on December 23 due to heavy fog although preventive maintenance, including the cleaning of insulators, was claimed to have been done before the onset of the winter.

A senior official, who attended the meeting, said it had been agreed that Power Grid would procure helicopters and costs would be recovered by imposing tariff on the state power utilities which may recover it from the consumers. It would also give helicopters to the state electricity boards on rent for washing the insulators on their lines. These helicopters could also be utilised for construction in difficult terrain.

He said it has been decided that de-mineralised water available from nearby thermal power stations located in the northern region would be utilised for cleaning.

“Use of helicopter would minimise transmission lines shutdown duration and the consequent interruption to consumers,” said the official, adding that a committee with members from the CEA, PowerGrid and UPPCL had been formed to examine this scheme and submit a detailed feasibility report within one month.

The CMD of PowerGrid pointed out on December 23 that major damage was averted since the main transmission system of Northern Grid was fairly robust. It helped in minimising the adverse effect even after the outage of 49 lines in 220 KV and 400 KV network and the system showed its resilience.

The members felt the need for undertaking the renovation and modernisation (R&M) of protection equipment and transmission system on priority as any such failure had the potential to cause a grid disturbance.

A major disturbance in 2001 in the Northern Regional Power System resulted in collapse of the Northern regional grid, causing a loss of about 15,500 MW of generation. 

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Federal Bank keen to acquire Ganesh Bank

Mumbai, January 9
After suspending the operations of Ganesh Bank of Kurundwad following the erosion of its networth, the RBI today announced a draft scheme of merger of the ailing bank with Kerala-based Federal Bank.

Both banks have been given time till January 21 to consider the draft scheme after which the central bank will take a view on the future set-up of Kolhapur-based Ganesh Bank.

Earlier in the day, Federal Bank expressed its intention of acquiring Ganesh Bank.

“We have submitted our expression of interest for the amalgamation of Ganesh Bank to the RBI and expect the due process to be completed in one month”, Federal Bank Chairman and Managing Director Venugopalan said.

Federal Bank has, among other things, proposed to pay the depositors fully.

The RBI has examined the proposal received from Federal Bank, keeping in view its financial parameters, retail network and synergies as well as strategic advantages.

About the amount that Federal Bank would have to shell out to acquire the beleaguered bank, Mr Venugopalan said: “We expect the maximum outflow to be around Rs 10-15 crore.”

According to the draft scheme, if there is any disagreement between the two banks over valuation, the matter will be referred to the RBI — PTI

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Volvo to foray into city bus segment

New Delhi, January 9
After creating a niche in the inter-city bus market, luxury bus maker Volvo is now targeting the city-bus segment, bagging the first order in Bangalore. “We have bagged the first order for city buses in Bangalore and will be expanding the segment further by targeting newer cities,” Volvo Buses South Asia Head and Vice-President Akash Passey said.

Mr Passey said the company was talking to city-bus service operators in Mumbai, Hyderabad, Chandigarh and Ahmedabad for the buses.

“We will be delivering the first lot of 25 buses in Bangalore before March,” he said adding that despite high costs, the company was hopeful increased safety and efficiency levels will help the vehicles penetrate the market.

The company is already a preferred player on the inter-city route, having sold as many as 1,000 buses since 2001.

In fact, in 2005, it sold 400 units and Volvo buses are not only being used by inter-city operators in Delhi, Himachal Pradesh, Haryana, Rajasthan and Punjab but also on the India-Pakistan bus route. — PTI

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Sona Group into car rental business
Tribune News Service

New Delhi, January 9
The Sona Group today formally announced its foray into the rental car segment in association with Europe’s SIXT with an initial investment of $15 million. SIXT India will enter the northern region in 2006-07 before it enters other regions. The company also plans to go in for an IPO in 2008 to fund further expansion plans. The group has tied up with SIXT, one of Europe’s leading mobility service providers, as the latter’s master franchisee for India. SIXT India will begin operations tomorrow.

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Rupee at 44.29 v dollar

Mumbai, January 9
The rupee today closed at a three-month high of 44.29/30 against the US dollar, as compared to last close of 44.57/60 at the forex market here, a dealer said. Weaker US dollar in the overseas market and exporters selling dollars resulted in the rupee going up today, the analysts said. Also, strong inflow of foreign funds at Rs 1,943 crore on the first four days last week in the equity markets, as per the Securities and Exchange Board of India (Sebi) data, was keeping the sentiments up. — UNI

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BRIEFLY

IAFL Jalandhar unit expands
Jalandhar, January 9
Expecting to double its turnover of Rs 200 crore by the next financial year, Indo Asian Fusegear Ltd (IAFL) has upgraded and expanded capacity of its state-of-the-art manufacturing facility at Jalandhar by investing Rs 66 crore. A manufacturer of compact fluorescent lamps, circuit protection equipment and switchgear equipment, IAFL set up its first manufacturing unit in Jalandhar nearly 50 years ago. Since then the company has substantially expanded its activities all over the country, including the recent major investments in Uttaranchal and Himachal Pradesh, the company CMD V.P. Mahendru said here. — PTI

Bank of Rajasthan branch at Shimla
Shimla, January 9
The Bank of Rajasthan has opened its first branch in Himachal at Shimla Mr C.R.B. Lalit, Managing Director of the HPMC, and Mr Vinod Juneja, Dy Managing Director of the Bank of Rajasthan, inaugurated the branch at the HPMC building near Sabji Mandi, Shimla. — PTI

Kribhco-Oswal deal has govt nod
New Delhi, January 9
Putting to rest any uncertainty over its acquisition of the Rs 1,900-crore Oswal’s Shahjahanpur urea plant, the Krishak Bharati Cooperative Ltd (Kribhco) said today it had the government’s firm support for the deal and would make the final payment of Rs 900 crore for the unit this week. “We have already taken over the management control of the Shahjahanpur plant and have made a payment of over Rs 500 crore”, Finance Director of Kribhco B.D. Sinha said. Mr Sinha denied the deal was overpriced. — PTI

TIS bags two European firms
Mumbai, January 9
Tata group’s global e-learning firm, Tata Interactive Systems (TIS), today acquired two European software companies in a move to expand its global presence for an undisclosed amount. The company acquired Tertia Edusoft AG in Switzerland and Tertia Edusoft Gmbh in Germany from the Tertia Group, TIS said. The Tertia group is the leading provider of human resource management solutions in Germany. — PTI

Dish TV offer
Hyderabad, January 9
Dish TV, India’s first direct-to-home service, today announced a “Dish freedom package” plan, which would allow viewers to watch over 40 channels in true digital quality without having to pay the monthly subscription fee. “The subscribers of the package will have an option to increase the number of channels they view by upgrading to the next entertainment package offered by Dish TV — all at a nominal subscription cost”, Dish TV CEO Sunil Khanna said here. To avail the benefit of the new scheme, subscribers will have to make a one-time investment of Rs 2,690 in a digi-box, he said. — PTI

Erich Stamminger
Frankfurt (Germany), January 9
Sporting goods and apparel maker Adidas-Salomon AG said today that Mr Erich Samminger was named President and Chief Executive of its core Adidas brand unit. The new position means Mr Stamminger, formerly in charge of the company’s global marketing efforts, will be in charge of the Adidas brand’s business worldwide. He will report directly to company CEO Herbert Hainer. — AP
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