Basic operators want more
Centre removes curbs on oil retail outlets
Ficci seeks Rs 1,440 cr for tourism in 2002-03
Tide Water suitor ropes in ally
IOC sounds Aramco, RIL for Paradeep
Focus on captive power
LIC to relaunch Jeevan Sneha

New Delhi, March 17: 
Basic operators are pushing the telecom frontiers in more than one sense.

After Friday’s major victory when the Telecom Dispute Settlement Appellate Tribunal (TDSAT) granted them the right to offer limited mobility to their fixed-line customers, the basic operators are pressing the government to widen their patch of operations by allowing them to offer mobile services within a radius of 500 kms.

The fixed-line operators, who use a technology called code division multiple access (CDMA) developed by Qualcomm of the US, are currently permitted to allow their customers to make calls up to 250 kms (known in the parlance as the short distance charging area, or SDCA for short) at the cost of a local call. The TDSAT order says that limited mobility can be offered in the SDCA.

The basic operators have now asked the communications ministry to widen the SDCA patch to 500 kms. If the ministry clears the proposal, the beeps could turn to yelps as cellular service operators try to fight this new rampaging competitor.

It isn’t going to be all that easy. There are two things at work: firstly, the cellular operators are expected to move a special leave petition in the Supreme Court on Monday challenging the TDSAT order.

Secondly, the TDSAT is scheduled to give a key ruling that will determine the scope of limited mobility to be offered by fixed line operators. The focus of the TDSAT’s deliberations on a software called V5.2, which is supposed to be used in conjunction with a Wireless in Local Loop (WiLL) system.

The TDSAT order will decide whether it should be mandatory for the fixed line operator to install a software which will limit the mobile calls made from CDMA-based WiLL phones within a specified area.

During his tenure as communications minister, Ram Vilas Paswan had announced a major bonanza for subscribers when he declared that calls made between 50-250 km area would not be charged at STD rates but would be considered as local calls.

Sources in communications ministry said, “They (the fixed line operators) had sought a frequency which will allow them to route their calls up to 450-500 kilometres using the CDMA equipment. But no action has yet been taken, the issue is under scrutiny of the technical officers at the Telecom Engineering Centre (TEC)".

“The demand for a long distance charging area (LDCA) is under examination but the details will have to be worked out and then the same will have to be sent to the Telecom Regulatory Authority of India. This could take anywhere between two-three months,” sources added.

Qualcomm, the pioneer of CDMA technology, is all set to capture a huge market share through sale of equipment to fixed line service providers to enable them to extend calls up to a radius of 250 km. In addition, the company, which has invested $ 200 million in Reliance Infocom, has already said that it may invest about $ 20 million in a research and development centre in India.

During his recent visit to the country, Qualcomm chief Irwin Jacobs had said: “We will support manufacturers in India who wish to manufacture CDMA phones and build infrastructure and also those who want to develop new applications that can be downloaded into phones. I see a large potential for research and development in the software area.”


Mumbai, March 17: 
The Centre has announced that oil companies will no longer be bound by restrictions on setting up retail outlets in a given area, with effect from April 1, the date when the oil sector is expected to be opened up to the private sector.

Public sector companies are interpreting this to mean that the “volume-distance norms,” which placed restrictions on the setting up of new outlets in a given trading area, will now cease to exist.

Further, an official from a leading private sector firm which is drawing up plans for a retail foray, also welcomed the move, adding it would enable them to appropriately harness the existing potential in a given location. With deregulation, the private sector will be allowed to market transportation fuels, including motor spirit (MS), high-speed diesel (HSD) and aviation turbine fuel (ATF).

“The removal of restrictions means that we need not worry about thruput from the existing outlets. We can, therefore, even set up multiple outlets in a given trading area, if it is found to have large potential,” an official from one of the existing PSU oil majors pointed out. For instance, in urban areas, the average thruput (sales from the outlets) per pump has been fixed at 80 kilolitres per month for all companies put together in that area. Meeting the target will mean expansion in that area.

The ministry of petroleum and natural gas also issued a clarification early this month, stating that: “There shall be no limit to the quantum and size of the scheme (of marketing) and the number and location of retail outlets in the scheme”.

The ministry has asked companies in the private sector, which plan to enter retail marketing of petro products, to provide various details while seeking authorisation, such as the source of supply of the products to be marketed, tankage and other infrastructure proposed to be set up along with their capacity, the means of transportation of the products to the depots and the outlets, number and locations of outlets that are proposed to be established, as well as details of their storage and dispensing capacity.

Yet another factor that has come as a relief to PSU firms is the government’s diktat prohibiting ‘encroachments’ on existing retail outlets.

Earlier, these outlets, which are mostly operated by franchisees, were perceived to be the most vulnerable to the new private sector entrants.


New Delhi, March 17: 
The Federation of Indian Chambers of Commerce and Industry (Ficci) has expressed concern over the fact that the budgetary outlay for the tourism sector has remained stagnant at around 0.16 per cent of the total budgetary outlay in the last five years.

The apex chamber is of the view that given the high multiplier effect of tourism and its impact on job creation, the government should consider raising the budgetary outlay for the sector.

“Tourism should have at least 1 per cent of the total budgetary outlay. In absolute terms, this means Rs 1,440 crore, against the Rs 225 crore set aside in budget 2002-03. Such an allocation—assuming that only Rs 500 crore of the Rs 1,440 crore goes into additional investment—would have the potential for creating more than 28 lakh jobs, direct and indirect, in the tourism sector alone,” it stated.

Inder Sharma, chairman of Ficci’s committee on tourism, said, “The budgetary outlay for the tourism sector was Rs 130 crore during 1997-98, which was 0.16 per cent of the total outlay for that year. This increased marginally to Rs 136 crore in 2000-01, which was 0.13 per cent of that year’s outlay. The 2002-03 budgetary outlay of Rs 225 crore is 0.16 per cent of the total budgetary outlay for the year. The importance of the sector should call for a reconsideration of the amount allocated.”

Sharma said several measures in budget 2002-03 would be positive for the sector as a whole. Reduction in expenditure tax on hotel rooms, cut in customs duty on imported alcoholic beverages, and the like, are all steps in the right direction.


Calcutta, March 17: 
The Calcutta-based MKJ group, which holds 14 per cent stake in lubricant major Tide Water Oil Company, has now teamed up with a foreign major to bid for the 41 per cent stake that the government and the financial institutions are planning to jointly divest.

Mahendra K. Jalan, promoter of the MKJ group, said: “We started scouting for a partner after the government announced last year its decision to divest its stake in Tide Water. We have tied up with a foreign major, which is trying to get a foothold in India, to jointly bid for the 41 per cent stake in the company.”

Jalan said he had built up his holding in Tide Water over three years. “If we manage to gain control of the company, the MKJ group will run it jointly with its foreign partner,” he added. He, however, refused to name the foreign company citing a condition of confidentiality.

Tide Water produces lubricants under the Veedol brand. It has a five per cent share of the lubricant market in India, but Jalan feels there is scope for substantially increasing the company’s market share by improving internal efficiencies. The company collaborates with Misubishi Oil Corporation of Japan and markets the latter’s brand of lubricants. “We are expecting a large number of companies, even public sector undertakings, to bid for Tide Water. It’s not going to be easy for any of the bidders,” he said.

Analysts, however, feel Jalan may have a small edge over others given the fact that he has already amassed a substantial stake in the company.

Tide Water has appointed A.F. Ferguson as the adviser for the sell-off. The government holds 26.22 per cent in Tide Water Oil through Andrew Yule. Four Star Oil, an entity belonging to the Chevron Texaco group, controls 22.40 per cent, while financial institutions hold 14.73 per cent. The public holding is pegged at 36.65 per cent. It is not clear yet what the Chevron Texaco group intends to do after the government’s stake is divested to a private party along with management control.

Jalan said he had stopped buying the Tide Water Oil stock from the market. “We would have had to make an open offer if we continued to buy the stock from the market. We would make an open offer only if we acquire control of the company after the divestment,” he said.

Tide Water has a small equity base of Rs 87 lakh. Rough estimates indicate that the successful bidder may have to shell out over Rs 100 crore to acquire the stake being hawked by the government and financial institutions and make an open offer to the public.


Calcutta, March 17: 
Indian Oil is trying to rope in Reliance Industries Ltd (RIL) and Aramco of Saudi Arabia for picking up equity in Paradeep refinery.

The projected capacity of Paradeep refinery has been pegged at 9 million tonnes per annum and the cost of the project stands at over Rs 8,300 crore.

Sources said Aramco has shown keen interest in the project and talks are on between the two companies on a possible equity participation. “If Aramco comes, the refinery will be set up as a 50:50 joint venture, where both the companies will have equal control, as the Saudi firm may not be interested in a minority stake,” they said, adding that IOC is simultaneously holding talks with Reliance.

“The talks are still at a very nascent stage. But various options are being contemplated to rope in Reliance in the project. Talks are also on with Reliance for jointly evacuating products from Paradeep refinery.

“Reliance already has a huge capacity in the western coast at Jamnagar where it has a refinery. The company is interested in having a product base on the eastern coast as well so that its prices remain competitive in the deregulated regime,” they said.

However, the Reliance spokesperson did not confirm the development.

The Paradeep refinery project was mooted long back, but its implementation got delayed because of the absence of a strategic partner. IOC needs an investment partner since it has already deployed a major portion of its investible funds in some brownfield projects, as well as for making some acquisitions.

However, IOC sources said the company has decided to go ahead with the refinery project in the eastern coast, even if it fails to rope in a strategic partner. Currently, IOC owns seven of the total 17 refineries in the country. The company’s total refining capacity stands at 38 million tonnes per annum, with an over 33 per cent market share.

Sources, however, explained that the company did not process at 100 per cent level last year and remained content with processing 33 million tonnes per annum because of the depression in oil demand. The capacity utilisation of IOC’s refineries last year was 85 per cent on an average, they said.


Calcutta, March 17: 
The Union power ministry has asked the states to evolve a mechanism that will encourage setting up of captive power plants and enable surplus captive capacity to be brought to the grid to alleviate shortages in the system. One of the options available for increasing power generation in the short term is to enable surplus captive power capacity to flow to the grid. The country’s captive power capacity is estimated to be about 20,000 MW.

“Accordingly, the states have been requested to evolve a comprehensive captive power generation policy, with facilities for purchasing power from captive generation plants. Some states do have their captive power policies but we do not find those liberal enough,” a senior power department official said.

Confirming the move, G.D. Gautama, chairman, West Bengal State Electricity Board said: “The central government had asked the states to come up with a liberal captive power policy. West Bengal already has its own captive power policy, announced in 2000. Around 3,000 MW of power is produced in the eastern region through captive generation.” The power ministry has forwarded a draft captive power policy, drawn up by the Central Electricity Authority, to all states and Union Territories. The ministry has said that liberal permission may be accorded for setting up of hydro or co-generation captive plants in the states. Captive power plants may be allowed if states/SEBs or successor entities are unable to supply the required power. Such a plant can be considered for uninterrupted power supply to industry, even if the state is surplus in power.


Mumbai, March 17: 
A silent revolution is on. Till recently, men could opt for additional life cover for their spouse when taking an insurance policy, an option women did not have, as it was perhaps unthinkable that the latter could provide cover for their husbands. That is now set to change.

Jeevan Sneha, a life insurance plan from Life Insurance Corporation (LIC) solely targeted at women, will be revived shortly with unique riders. Confirming this, A Ramamurthy, acting chairman, LIC said: “We will introduce the new Jeevan Sneha with riders like additional cover for spouses (husbands) and add features like cover for critical ailments generally associated with women.”

Even after pegging the return at lower rates, LIC hopes to attract customers to the revived scheme by virtue of the new features. Revealing this in an interview to The Telegraph, Ramamurthy said the scheme will be relaunched soon with these “novel features”.

LIC had planned to lower the returns on Jeevan Sneha in view of the general market trend with interest rates seeking lower levels. The survival benefit option for policy holders of Jeevan Sneha was envisaged to be reduced from 11 per cent to 8 per cent, a drop of 300 basis points.

Jeevan Sneha, a plan solely targeting women, is a 20-year policy offering periodic returns of sum assured and a facility to encash 20 per cent of the sum every five years till the term of the policy. At maturity, the balance sum assured would be paid with guaranteed additions and loyalty additions. It also offered the option to retain the funds with LIC, in which case benefits were incremented by 11 per cent compounded yearly. The scheme was launched in 1997.

No plan to cut workforce

Meanwhile, Ramamurthy said that LIC is not planning to introduce voluntary retirement scheme or downsizing its staff strength, adds PTI. The manpower in LIC is as per the requirement, he added. The corporation will enrol 24 million new policies for the current year and is aiming to settle 90 lakh claims which required “skilled and experienced manpower”. The premium earning per employee has increased from Rs 30 lakh to Rs 40 lakh, he said.


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