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Reliance warns of delay in gas production
New Delhi, September 4
Reliance Industries (RIL) has warned of a two-year delay in commencing natural gas production from its eastern offshore KG-D6 fields as lenders are unwilling to finance the project over delays in gas price approval."Lenders to the D6 project are insisting upon a clear picture of the revenue flows and have indicated that in the absence of such clarity, they would not be in a position to allow disbursement of funds," RIL president & CEO (petroleum) P M S Prasad has written to petroleum minister Murli Deora.
Buys 50% in African oil Co

CPM against RIL’s gas price proposal
New Delhi, September 4
As the stalemate continues on the price of gas produced from the Krishna Godavari Basin by Reliance Industries, the Left parties today asked the government to fix the price based on actual production costs plus reasonable profits and reject the company’s proposal as it was “artificially inflated.”

India food platform launched
Mumbai, September 4

The minister for food processing industry, Subodh Kant Sahay, launched India food platform, besides a magazine, Progressive Grocer, at the India Retail Forum here today.The food forum will bring in the much-needed logistics, supply chain and cold store chain managements to India in a more organised fashion.

 

 

EARLIER STORIES

  Jet starts Delhi-Toronto flight
Plans to link Amritsar with world’s major cities
New Delhi, September 4
Jet Airways today said, as part of its efforts to explore newer routes around the world, it was looking at connecting Amritsar to various cities around the world.Jet Airways chairman Naresh Goyal today said his airline was looking at connecting Amritsar, among other cities like Ahmedabad, Hyderabad and Kolkata, to its main hub Brussels and then to other cities of the world.
Jet Airways chairman Naresh Goyal with minister of civil aviation Praful Patel at the launch of Delhi-Toronto flight in New Delhi on Tuesday.
Jet Airways chairman Naresh Goyal with minister of civil aviation Praful Patel at the launch of Delhi-Toronto flight in New Delhi on Tuesday.— Tribune photo by Mukesh Aggarwal

ICICI Bank may raise up to $75 billion
Mumbai, September 4
India's largest private sector lender ICICI Bank today said it can mobilise up to $75 billion in the next three to five years to meet the growing economy's credit requirement by leveraging the bank's just concluded $5 billion public offer.


Raymond Bickson (left), managing director and CEO of Indian Hotels Company — owners of the Taj group of hotels — congratulates Mikio Matsui, president and CEO of Hotel Okura Company Limited , after signing a joint marketing alliance in Mumbai on Tuesday. Under the alliance, both Taj Hotel Resorts and Palaces and Okura Hotels and Resorts will take combined reservations for each other, develop cross-promotional oppurtunities in their respective fields of expertise and will jointly participate in trade shows, niche marketing programmes and culinary promotions. — AFP photo

Japanese watch Co enters India
New Delhi, September 4
Time-tested Japanese clocks and watches, known for their precision, have entered the Indian market.

Godrej in pact with Eicher
Chandigarh, September 4
Godrej Aadhaar - agri services-cum-retail initiative of Godrej Agrovet Ltd — in an agreement with Eicher Motors Limited, will showcase Eicher’s light commercial vehicles. These will be made available at Godrej Aadhaar outlets across nine locations in Maharashtra, Gujarat and in Punjab at Samrala and Doraha.

FM concerned over slow infra growth
New Delhi, September 4
Apprising Prime Minister Manmohan Singh of a slowdown in key infrastructure sectors, like coal, steel and construction, finance minister P Chidambaram has said bottlenecks to production in these areas must be removed.

SBI likely to go for rights issue 
New Delhi, September 4
Amid speculation over the mode of raising resources by the country’s largest lender, SBI, the government today said the bank is likely to go for rights issue to raise funds for meeting capital requirements.

Naftogaz India
New Delhi, September 4
Naftogaz India Pvt Ltd, a subsidiary of NJSC Naftogaz of Ukraine, has been allotted two contracts valued at Rs 831 crore for Bharat Oman Refineries Limited, Bina Refinery Project in Madhya Pradesh. The value for the hydrogen generation unit contract is Rs 576 crore while contract for coke drum system package is Rs 255 crore. — TNS

 
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Online travel booms in India.
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Reliance warns of delay in gas production

New Delhi, September 4
Reliance Industries (RIL) has warned of a two-year delay in commencing natural gas production from its eastern offshore KG-D6 fields as lenders are unwilling to finance the project over delays in gas price approval.

"Lenders to the D6 project are insisting upon a clear picture of the revenue flows and have indicated that in the absence of such clarity, they would not be in a position to allow disbursement of funds," RIL president & CEO (petroleum) P M S Prasad has written to petroleum minister Murli Deora.

RIL had on May 18 applied to the government for approval of a price of $4.33 per million British thermal unit, which it said was discovered through a transparent process, but was stuck since consumers in power and fertilizer opposed it as too high. A group of ministers is now looking into it.

"Clarity on gas price is critical for the lenders, as RIL's ability to repay the loans to the lenders would be largely dependent on revenues generated from sale of gas," Prasad wrote, adding uncertain project finances had created insecurity among the contractors and vendors.

Delay in advance payments could result in vendors de-prioritising D6 over other projects, adversely impacting completion schedule as "only a four-month weather window is available for offshore installation".

"If the forthcoming weather window December 2007 to March 2008 is lost, it could result in delays by at least a year as the next weather window would be available only in December 2008," it said.

Gas production from the KG-D6 fields is scheduled to begin from July 2008, but the company fears there could be a two-year delay due to these factors.

RIL chairman Mukesh Ambani last week held series of meetings with lead lenders and contractors, to convince them to stay on with the project, sources close to the development said.

"The D6 project is at a critical stage of implementation and any delay in the project at this stage would result in severe adverse impact not only on the schedule and anticipated date of commencement of production but the project itself," Prasad said in the seven-page letter.

He said the delay would have tremendous cost implication.

Gas sales agreements, he said, could not be finalised without certainty on gas price. "These gas sales and purchase agreements are required to be concluded well in advance of commercial production, as the process of signing of gas transportation agreement and establishment of pipeline connectivity with the customers as also the facilities to deliver and accept the gas, would take up, at the very least, up to one years time."

The market price of gas, he said, had been discovered through a transparent process, in accordance with the provisions of the existing production-sharing contract and the extant policy and guidelines announced by the government. — PTI 

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Buys 50% in African oil Co

Meanwhile, Reliance Industries has acquired a majority stake and management control of Gulf Africa Petroleum Corp (GAPCO), a company which sells petroleum products in several east and central African countries.

"The acquisition (of 50 per cent stake) has been made through a wholly-owned subsidiary, Reliance Industries Middle East, a company registered in the UAE," Reliance said in a press release here. The company, however, did not reveal the deal value.

GAPCO, with headquarters in Mauritius, owns and operates large storage terminals and a retail distribution network in several countries , including Tanzania, Uganda, Kenya. It also owns and operates large storage terminals in Dar-es-Salaam (Tanzania), Mombassa (Kenya), Kampala (Uganda) and has other well spread depots in east and central Africa. Besides, it runs over 250 outlets covering retail and industrial segments.

RIL said the countries where GAPCO operates have shown rapid economic growth and have progressive government policies in place. The demand for petroleum products in these countries is rising steadily and has mirrored the rapid GDP growth. — PTI

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CPM against RIL’s gas price proposal
Tribune News Service

New Delhi, September 4
As the stalemate continues on the price of gas produced from the Krishna Godavari Basin by Reliance Industries, the Left parties today asked the government to fix the price based on actual production costs plus reasonable profits and reject the company’s proposal as it was “artificially inflated.”

The CPM urged the Empowered Group of Ministers (EGoM) constituted to look into the pricing of domestically produced gas and the UPA government to decide on a price that is based on actual production costs plus reasonable profit.

Reliance Industries had set a base sale price for its gas of $4.33 per million British thermal units (mBtu), excluding transmission and marketing charges.

Transportation charges and sales tax would need to be added giving a delivered gas price of $5.5 to $6/mmbtu.

Reliance Industries is spending about $5.2 billion to develop two deep-sea fields in a block in the Krishna Godavari basin off India's east coast. It aims to produce up to 80 million cubic metres per day by the second quarter of 2008/09.

The party’s Politburo asked the government not to allow an unfair price for the gas produced from the Krishna Godavari basin.

The present price formulation made by RIL in 2007 is in no way consistent with the price of $2.34 quoted by the company in 2004 for supplying gas from the same KG Basin to NTPC through an international competitive bidding.

Moreover, the RIL formulation for gas price is based on the linkage with the international price of crude oil and not with the cost of producing gas, which is wholly a domestic product. Our party has been consistently taking a stand against such import-parity proposition in respect of indigenously produced petroleum products. There is absolutely no justification for such linkage, which is being made only to find a route to artificially inflate the price. 

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India food platform launched
Peeyush Agnihotri
Tribune News Service

Mumbai, September 4
The minister for food processing industry, Subodh Kant Sahay, launched India food platform, besides a magazine, Progressive Grocer, at the India Retail Forum here today.

The food forum will bring in the much-needed logistics, supply chain and cold store chain managements to India in a more organised fashion.

The $180-billion Indian food-processing industry is expected to grow to $300 billion over the next four years.

"India, despite being the third-largest producer of food and accounting for 10 per cent of the total world fruit production, has not been able to cash-in on the lead that it had in the sector. This is because nearly 50 per cent of the farm output is wasted due to the lack of proper storage facilities," he rued.

"Though liberalisation and opeing up of the FDI has given a fillip to the sector yet the food-processing sector that makes up 30 per cent of the GDP is suffering from a plethora of problems," Sahay said.

"Currently, just 6 per cent of food is being processed. The 11th five-year plan is going to focus on food-processing industry and on minimisation of losses occuring on account of bad logistics, near-zero supply chain management and embryonic food-processing industry," he said.

Stating that food and grocery section was going to call the shots in the retail sector, he asked the industry captains to focus on the employment aspect too.

Pointing out that the Indian economy model was different from those of Europe, the US and other developed countries, he said the industry must evolve a mechanism to involve small-time shopkeepers and merchants.

While saying that his government was mooting the concept of mega food parks involving a subsidy of Rs 50 crore for the entrepreneur, he had a dig at the Opposition too.

"Ours is a rainbow democracy. Everyone has the right to speak. Retail has become a 'hot job' for those outside the government. But this is the sector that, if managed properly, can reap in rich dividends. Enhance processing level and make cold chain and supply chain managements better to see it grow," he said.

The three-day India Retail Forum attracted nearly 300 participants, 50 of them international, and 1,000 visitors on day one.

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Jet starts Delhi-Toronto flight
Plans to link Amritsar with world’s major cities
Tribune News Service

New Delhi, September 4
Jet Airways today said, as part of its efforts to explore newer routes around the world, it was looking at connecting Amritsar to various cities around the world.

Jet Airways chairman Naresh Goyal today said his airline was looking at connecting Amritsar, among other cities like Ahmedabad, Hyderabad and Kolkata, to its main hub Brussels and then to other cities of the world.

Goyal was reacting to the suggestion made by civil aviation minister Praful Patel that the Indian airlines’ flying abroad should be ready to explore newer routes. This, he said, was important in view of the airlines’ generating greater revenue, advantage of which has till now been with the foreign airlines.

The comments from the minister came during the function held here to inaugurate Jet Airways first flight between Delhi and Toronto. Jet would be operating five flights a week between Delhi and Toronto via Brussels.

He added that Jet also plans to connect several cities in Europe and the USA, including Zurich, Milan, Dusseldorf, Los Angeles and San Fransico besides Durban in South Africa.

“We would be serving 50 points in Europe. We are also looking at Iran and Tel Aviv and examining the possibility of connecting Tel Aviv with the USA, he said. Jet has also applied to the civil aviation ministry to fly to Dubai, Muscat and Abu Dhabi from January.

Goyal also said the airlines was planning to launch a dedicated cargo airline and was in discussions with international players for a possible tie-up.“We will be announcing our plans for the cargo airline before the end of this year. We are in talks with several players,” Goyal said.

The planned $400 million rights issue has been deferred, Goyal said, adding that the airline will break even by the end of the current financial year.

He said Jet Airways was open to partnership with Air India for international flights. He said there has been a proposed common ground in areas like handling and catering, to start from October 25.

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ICICI Bank may raise up to $75 billion

Mumbai, September 4
India's largest private sector lender ICICI Bank today said it can mobilise up to $75 billion in the next three to five years to meet the growing economy's credit requirement by leveraging the bank's just concluded $5 billion public offer.

"Banking is all (about) leveraging... we just now concluded the $5 billion public offer... this can help us raise funds from borrowing in the ratio of one to ten," ICICI Bank managing director and CEO K V Kamath told PTI.

This coupled with internal generation could help us generate funds between $50 to $75 billion that could be used for the credit needs of the country, about whose sustainable high growth the banker was bullish.

Kamath, however, declined to comment on any of the bank's financial plans and borrowing details. ICICI had raised about $6.5 billion in the previous financial year to meet the growing credit requirements.

On the issue of further hitting the equity market, Kamath said that the bank has no plans to go for this route for at least three years and that the bank was in a comfortable position to meet the credit demand put up by the fast growing economy.

"If the economy grows at a high pace, which I have no doubt about it, then the banking services sector also grows...in case the economy grows by about 10 per cent annually, the financial services sector will grow by 25-30 per cent.

"This would mean doubling the size of the institution in three years," he quipped.

He said the follow-up equity issue had given the bank sufficient flexibility to meet the immediate credit requirement of its insurance and mutual fund business, for which ICICI has sought permission from the Reserve Bank to create a holding company.

"There are hardly any issues on the subject... as a regulator RBI (has) got to satisfy itself," he said when asked about the reports of sharp differences between ICICI and the apex bank.

As part of efforts to leverage funds for the fast growing insurance business, which is estimated to be surging by about over 100 per cent, ICICI had sought to separate it from the bank and create a holding company for insurance and asset management businesses, where it was planning more equity infusion from private participants.

On the possible valuation of the insurance business, Kamath said the bank was earlier contemplating diluting 5 per cent stake in the holding company for over $500 million. "By our estimation, the valuation could be about $11 billion," he said. — PTI

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Japanese watch Co enters India
Tribune News Service

New Delhi, September 4
Time-tested Japanese clocks and watches, known for their precision, have entered the Indian market.

Rhythm Watch Company Limited, based in Saitama city near Tokyo, has decided to set up showrooms in India. A range of clocks and wrist watches are now available in showrooms in Karol Bagh and Noida.

The company announced its launch recently in the Indian market by displaying a range of clocks and watches. The one exhibit that could not be missed was the mineral sound clock, a treasured masterpiece worth Rs 1.8 million.

Yuichi Koizumi, director and general manager of clock planning division of Rhythm said the 57-year-old company has been exporting its products to India for more than four decades. “We found that it was very difficult to export clocks and watches to India as the customs duty was very high. We have entrusted Nikki Overseas with the task.”

Binod Keshan, CEO of Nikki Overseas, said while the clocks are in the range of Rs 350-1,25,000, the wrist watches are priced between Rs 3000-12,000.

He said the company will take care of repairs and offers minimum warranty for a year.

The clocks and watches have a defect rate of .0001 per cent, he claimed.

Delhi-based architect Rajesh Kant, who has designed the two showrooms, says: “We have used very sophisticated hanging devices as some clocks weigh 10 kg. The company is planning layouts of showrooms at Chandigarh and Ludhiana also.”

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Godrej in pact with Eicher
Tribune News Service

Chandigarh, September 4
Godrej Aadhaar - agri services-cum-retail initiative of Godrej Agrovet Ltd — in an agreement with Eicher Motors Limited, will showcase Eicher’s light commercial vehicles. These will be made available at Godrej Aadhaar outlets across nine locations in Maharashtra, Gujarat and in Punjab at Samrala and Doraha.

Both Godrej Agrovet and Eicher Motors are strongly focused on the rural sector and intend to customise their product offerings as per the local needs and requirements. Through this venture, Aadhaar customers can avail advice on the transport business, which can aid the rural consumers to develop themselves as rural entrepreneurs through various programmes that are carried out at Godrej Aadhaar premises like customer orientation sessions, vehicle demonstration as well as free inspection and servicing of trucks. 

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FM concerned over slow infra growth

New Delhi, September 4
Apprising Prime Minister Manmohan Singh of a slowdown in key infrastructure sectors, like coal, steel and construction, finance minister P Chidambaram has said bottlenecks to production in these areas must be removed.

In a recent letter to the Prime Minister, Chidambaram said: “Our assessment is that there has been a slow down in key infrastructure sectors. While there is no evidence of a slow down in investment, bottlenecks to enhanced production need to be addressed and removed.” The shortfall is more pronounced in areas like coal, finished steel, railway revenue freight traffic, fertiliser and natural gas production, construction and strengthening of four-lane national highways, he said. — PTI 

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SBI likely to go for rights issue 

New Delhi, September 4
Amid speculation over the mode of raising resources by the country’s largest lender, SBI, the government today said the bank is likely to go for rights issue to raise funds for meeting capital requirements.

“It would most probably be the rights issue,” a key official source said. However, the quantum and timing of the issue is yet to be finalised, the source said.

The rights issue would allow the bank to raise tier-I capital without diluting government shareholding, which currently stands at 59.73 per cent.

The government had recently bought the RBI’s entire holding of 59.73 per cent in the SBI. Under the current provision, the government may dilute its stake up to 55 per cent.

A bill to further dilute government’s stake in the SBI up to 51 per cent is pending in Parliament. The bill was referred to the standing committee, whose report was tabled recently.

Last month, SBI chairman O P Bhatt said the bank will decide in two months whether to go for a rights issue or follow on public offer for rising funds.

Besides, the bank plans to raise about Rs 15,000 crore during the current fiscal through a mix of tier I and tier II bonds to meet capital requirement. — PTI

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BRIEFLY

Videocon Group
New Delhi, September 4
Videocon Group has been honoured with the SAP Special Recognition Award-2007 in customer excellence category for implementing a templated SAP best-practises-based solution across five countries using global ASAP methodology within five months, the company said. — TNS

L&T bags orders
Mumbai, September 4
Larsen & Toubro (L&T) has bagged two contracts worth Rs 267 crore from IndianOil Corporation and China-based Liaoning Huajin Chemical Corporation for their capacity expansion projects, L&T senior executive vice-president (heavy engineering) MV Kotwal said. — PTI

TCS plans
Mumbai, September 4
Tata Consultancy Services (TCS) and Roche, a leading global healthcare group, today announced a partnership to advance the latter’s global capacity building initiative. Roche is one of the world’s top research-focused healthcare groups in the fields of pharmaceuticals and diagnostics. — PTI

Kotak Life
Mumbai, September 4
Kotak Life Insurance today announced the launch of its new investment-oriented insurance package, ‘platinum advantage plan’. The new insurance plan offers tri-benefit package consisting capital security, embedded investment advice and life cover along with market-linked growth options in one life insurance plan. — UNI

Merrill Lynch
Mumbai, September 4
DSP Merrill Lynch Fund Managers has launched a one-year fixed maturity plan-DSP Merrill Lynch fixed term plan-series 3F. The scheme seeks capital appreciation by investing in a portfolio of debt and money-market securities, which will display the maturity profile that is generally in line with the term of the scheme of one year. The new fund offer period closes on September 10, a release said. — PTI

AnandRathi
Chandigarh, September 4
AnandRathi has opened a branch in Ambala (Haryana). It will offer an array of financial services and products, which will include wealth management, stock broking, commodity broking, depository services, insurance, mutual fund distribution, internet broking and investment banking. — TNS

Awarded
Solan, September 4
A Baddi-based firm Riddhi Packaging has been conferred with a special recognition award by the ministry of small and medium enterprises on August 31. The award was conferred by minister of small and medium enterprises Mahavir Prasad at New Delhi. — OC

UCO Bank
Shimla, September 4
The regional office of the UCO Bank here has been upgraded into a zonal office. R.K.Murgai has taken over as general manager of the zone. — TNS

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