Selloff process mired in doubts
RIL may lose pricing edge
Please-all fertiliser price norm
Reliance captive jetty at Haldia
Entry models to drive Maruti
Software firms set to scale Chinese wall
Many suitors for Bharat Bhari unit
Damodar Valley, CESC spar over unpaid bills
Lessons in karma to attain nirvana in office
Foreign Exchange, Bullion, Stock Indices

Mumbai, April 17: 
Is the disinvestment process running aground? That was the question hanging in Mumbai’s air on a day of reports that Reliance could drop its quest for Indian Petrochemicals Corporation (IPCL).

The government, having won plaudits for steering the selloff earnestly, now faces the prospect of seeing the only two private suitors turning away from the petrochemical company. That would leave the ONGC-Indian Oil duo as the sole contender, raising misgivings about the credibility and motives of disinvestment.

Analysts fear delays if the process of selling the government’s stake in PSUs is preceded by controversy. The IBP selloff took close to a year to be wrapped up. Merchant bankers warn that the divestment process for HPCL and BPCL may take longer.

Analysts who have been watching the process say much will depend on how the government goes about executing its planned stake-sale in the two oil marketing firms. Reliance’s possible departure from IPCL could be a way of protesting against this brand of disinvestment. “This could be a pressure tactic,” an analyst said.

Already, indications that ONGC and Gail may be allowed to bid for HPCL and BPCL may have disillusioned several other prospective bidders.

“This could be shadow-boxing and the real target could be the two petroleum marketing companies.” The allusion is that no private company will bid for state-owned firms if the government repeats what many observers call the charade of privatisation.

“This is not privatisation,” merchant bankers say about a process where government corporations are allowed to succeed by making mega bids.


Mumbai, April 17: 
The pricing power over certain petrochemicals enjoyed by Reliance Industries Ltd (RIL) may be under threat if it pulls out of the race for Indian Petrochemicals Corporation Ltd (IPCL). RIL may also lose out on an opportunity to increase its market share, while that of Indian Oil Corporation (IOC) is expected to climb steadily, following the public sector oil major’s efforts to set up a petrochemicals complex and its bid to acquire management control of Haldia Petrochemicals Ltd (HPL).

Analysts point out that while the take-over of IPCL would have been of immense benefit to RIL at least synergistically, the company would have obtained a commanding position in ethylene-related products by acquiring the government’s stake.

“IPCL has a good share in ethylene-related products. If RIL were to be successful in taking over the company, it would have further strengthened its presence in this segment. But if IOC and ONGC were to emerge as the winners, it would reduce the pricing power of RIL in this segment,” said Satyam Aggarwal, analyst at Khandwala Securities.

However, there are others who point out that the loss of IPCL would not make any difference to RIL, which already has a commanding presence in many product categories.


New Delhi, April 17: 
The Group of Ministers on fertilisers today cleared new norms for the eighth pricing period or 2000-2002, which allows naphtha-based plants to claim money for capacity up to 90 per cent and gas based ones up to 95 per cent.

The move will mean a gain of about Rs 2,100 crore for the industry. The government will also manage to save about Rs 1,000 crore despite the higher outgo by making other norms stringent.

The GoM also recommended phased dismantling of vintage allowance given to urea units for better targeting of subsidy. “The GoM is of the view that vintage allowance should be withdrawn in a phased manner by April 2001 retrospectively,” fertilisers minister S.S. Dhindsa said after the meeting. The excess amount paid to fertiliser manufacturers would be recovered for which details would be worked out.

The group, headed by Planning Commission deputy chairman K.C. Pant, will again meet in the future to debate a long-term fertiliser policy which would switch over from unit-wise subsidy mechanism to group pricing from July this year.

According to plans which are yet to be cleared in the first phase, fertiliser companies are to be bunched into nine groups based on parameters such as age of the plant, feedstock, technology and location for the fixation of subsidy pay-outs. Companies using similar technologies and fuel, enjoying similar locational advantages and whose plants are in the same age group will be given similar subsidies.

Distribution of fertilisers is to be partially decontrolled and there would be graded deductions in subsidy from those who are getting amounts higher than their group average. Implementation of this new group-based scheme will be prospective and not retrospective, giving units time to switch over to the new scheme.

The meeting also decided that from April 1, 2000, older units will be assessed on the basis of a formula drawn up earlier by the Alagh committee which allows capacity utilisation of units to go up by 5 per cent annually to 100 per cent.

Imports of machinery or spares as input costs will be assessed at foreign exchange rates as on the date of purchase. Gross salaries will be taken to have increased at 5 per cent annually over actuals in the fiscal year 2000. However, wage hikes based on pacts with labour unions will be allowed at actuals.

The GoM pointed out that the vintage allowance would cost the exchequer an additional Rs 370 crore for four fertiliser units—Namrup Fertilisers, Iffco, Indo-Gulf Fertilisers and National Fertilisers—which are now entitled for the allowance from 1997 to 2001 only.


Calcutta, April 17: 
Reliance Petroleum Ltd (RPL) is planning to set up a captive oil jetty at the Haldia Dock Complex (HDC). Recently, Tata Steel struck a similar agreement with HDC for a captive berth.

According to sources, the private sector petroleum major has already carried out a preliminary survey in this regard.

While Tata Steel has to invest around Rs 40 crore, an oil jetty will require investment of over Rs 50 crore, CPT officials said.

HDC already has three oil jetties, which handle around 15 million tonnes of crude per annum required by Indian Oil Corporation’s Haldia refinery.

The Reliance oil jetty, if in place, will be the fourth one at HDC. It will handle the company’s refined products that will be distributed in the eastern region. Reliance has already decided to set up a storage tank in Haldia to cater to the needs of the eastern region.

Sources said the company plans to invest around Rs 800 crore to set up an oil hub for this region, part of which will be used to finance the oil jetty project.

While hinting that talks with Reliance are yet to take shape, CPT sources said such a jetty will require an investment of around Rs 50 crore.

RPL recently sought the government’s permission to set up 1.7 million kilolitres of tankage capacity across the country. These capacities will come up in 11 coastal locations that include Haldia, although it is a riverine port.

“Haldia is very strategically located so far as setting up an oil hub is concerned. The city is not only well connected through pipelines but it has also a very good port facility which the company plans to exploit,” a Reliance official said.


New Delhi, April 17: 
Maruti Udyog (MUL) will focus on its entry-level cars, M-800 and Alto, to pep up sales in 2002-03.

The market for the two models will remain strong despite the excitement of launches in the mid-priced car segment, which includes the likes of Santro, Fiat Palio and Indica.

The two models have been picked up as growth-drivers despite the fact that sales of M-800 and Alto dropped 1.5 per cent. “There are a number of models in the small car category, but Maruti feels it is the entry-level car that will continue to grow,” a company official said.

The B segment, the one represented by mid-priced cars, is a close competitor, but buyers’ first option is a M-800 or Alto. The B-segment has grown 5 per cent this year, while the sale of entry level cars has declined. “With a little focus, this trend can be reversed,” said Jagdish Khattar, managing director of Maruti Udyog Limited.

In 2001-02, Maruti sold 3.35 lakh cars in the domestic market and 11,874 units in the global market. More than half its sales came from the two-entry level models.

The company has bagged an order for 16,000 Alto VX from the Netherlands, marking the entry of the luxury version of “the hottest little car” overseas. Buoyed by the deal, it plans to launch Alto VX in the UK soon.

“Alto VX created ripples when it was launched at the Geneva Motor Show. We have been getting a lot of enquiries from Europe, but this is the first order we have signed,” Khattar said.

The 999 cc Alto was being exported to European markets before, but this is the first time a 1081cc version of the car will be shipped to the European market.

The company is confident that recent changes Europe Union policies will help it double exports to the region by the year-end. “The European Union is offering the highest rebate on Alto, as it is the most environment-friendly small car available in that market. They are giving a 1000 Euro (Rs 43,000) rebate on an Alto, priced there at 7999 Euro (Rs 3.43 lakh),” Khattar said.


New Delhi, April 17: 
The slumbering elephant is finally getting ready to take on the might of the dragon. With ‘if you can’t beat them, join them’ as its watchword, the Indian software industry is out to beat competition from China in the Chinese way.

With China projected to emerge as the largest IT market in the Asia-Pacific region excluding Japan, the Indian IT industry, especially the software sector, has decided to look eastwards.

The National Association of Software Service Companies (Nasscom) will soon unveil a blueprint to enable the Indian software and services industry maintain its competitive edge and enter the Chinese market.

The blue print will be based on a series of discussions on its findings about the Chinese IT market, with government officials and the Indian IT industry.

“China has come to be a formidable force in the IT sector. Unless a strategic investment environment is created here for building basic infrastructure, India’s efforts to become an IT superpower will only remain a dream,” said a senior executive of a hardware company.

In a comparative analysis between India and China on key indicators, China scored higher with respect to government investments in education, research and development, venture capital and infrastructure. China also scored high on parameters such as size of domestic market, cost of telecom bandwidth and equipment.

However, India scores high on parameters such as size and quality of talent pool, cost of talent, project management skills, quality processes and domain skills and customer access, which are essential to the growth of software.

The formula for Indian software companies evolved by the Nasscom team, which recently completed a three-week tour of the ‘Land of Dragons,’ is simple: “India should adopt a policy of collaboration and co-operation with China.”

Nasscom president Kiran Karnik said, “The possibilities and advantages of ‘co-operation and collaboration’ with China far outweigh any concerns about competition. In any case, engaging rather than ignoring China, is the better policy. A well thought out entry strategy into the Chinese market will further help boost India’s software exports”.

Nasscom urges Indian software companies to tap the growing domestic market in China. It has identified banking, securities, telecommunications energy utilities and applications areas such as enterprise resources planning, information security and network management, as revenue earners for India.

“Most Chinese companies lack domain expertise or project management skills which offers potential opportunity for Indian IT companies to enter into joint ventures with Chinese IT companies. This also will provide the opportunity to serve multinational customers of Indian companies who are already operating in the Chinese IT market. China can also help Indian companies to tap the Japanese market through offshore development,” said Phiroz Vandrevala, chairman Nasscom. “The billing rates in China are more attractive than that here, currently about Rs 60,000 to Rs 24,000 per man-month,” he added.

But a senior executive in a hardware company here cautioned, “The Chinese economy is two-and-a-half times that of India, exports six times the IT goods and services that India sells abroad. China has now enough muscle to go full steam ahead in software. In the face of the dancing dragon that does not tire, will a slumbering elephant suffice?”


Calcutta, April 17: 
Private sector construction giants have shown keen interest in the disinvstment programme of the city based public sector Braithwaite Burn and Jessop Construction Company Ltd (BBJ).

The department of heavy engineering is believed to have shortlisted 18 parties for pre-qualification, out of the 22 construction companies which had expressed their interest in taking over one of the oldest construction companies in the country.

Although officials in BBJ or its holding company, Bharat Bhari Udyog Nigam Ltd (BBUNL), refused comment on the interested parties, sources say that several big names in the industry such as Gammon India, Gannon Dunkerly and Simplex figured among the 18 short listed parties.

Sources said the government will now appoint an assessor for BBJ to work out its valuation.

BBJ was formed in 1935 by a consortium of three engineering giants Braithwaite, Burn and Co and Jessop, for design and construction of the city’s engineering marvel—Howrah Bridge—now named Rabindra Setu.

BBJ has constructed nearly 90 per cent of rail bridges across the country. Other major constructions include two rail-cum-road bridges over the Brahmaputra in Guwahati and Jogighopa, the Godavari bridge in Andhra Pradesh and the second Hooghly bridge, called Vidyasagar Setu.

The company had grossed a little over Rs 40 crore net of excise in 2001-02 and orders-in-hand are believed to be around Rs 61 crore. The pending orders include 11 rail bridges on the Tamluk-Digha railway line on South Eastern Railway, Brishna Bridge in Andhra Pradesh and Kanha Bridge in Madhya Pradesh.

BBJ was taken over by the government in 1987 which put it under BBUNL along with Burn Standard Company Ltd, Reyroll Burn Ltd, Braithwaite and Co, Jessop, Bharat Brakes and Valves Ltd, Weighbird India Ltd, and Bharat Wagon. The government has set a disinvestment target for all BBUNL group companies by September 2003.

With just about 150 people on its rolls, BBJ has become attractive for private sector players. BBJ as such is likely to command value on its intellectual property apart from a fabrication unit at Taratala.

Financially too, BBJ has hardly much of accumulated losses unlike other BBUNL group companies. It has a historical loan of around Rs 15 crore given from time to time by the three promoter companies Braithwaite, Burn Standard and Jessop.

To facilitate a smooth disinvestment, the government is believed to be working out a financial restructuring to pen a clean balance sheet.


Calcutta, April 17: 
A fresh row has erupted between RPG-controlled CESC and Damodar Valley Corporation (DVC) over unpaid bills worth Rs 11.22 crore.

The Calcutta utility claims it has already forked out Rs 11 crore, but DVC denied having receiving the cheques. According to CESC officials, Rs 3 crore was paid on March 30 and another Rs 8 crore was sent on April 15.

“We received Rs 3 crore on March 30. But that was not on account of arrears. That was paid against the current bill, which amounts to Rs 4-5 crore per month. CESC does not clear current bills regularly,” DVC officials said.

“CESC has sent us a letter and a cheque of Rs 8 crore through a fax on April 15. However, we have not yet received the cheque physically,” the officials added.

CESC was supposed to clear the dues of Rs 11.22 crore within March 31 under directions from the Supreme Court.

DVC says CESC owes it Rs 75.91 crore in accumulated dues, in addition to the Rs 25.88 crore held up in arbitration. “However, CESC feels its dues stand in the region of Rs 11.22 crore,” the DVC officials said.

DVC has regulated power to CESC since the last fortnight over non-payment of dues. The electricity CESC buys from DVC — 30 MW — is distributed in the Howrah district, which is going through six-hour power cuts daily because of the reduction in energy supply.

DVC secretary Ashok Basu has written to Bengal power secretary K. S. Bagchi, asking him to take the district out of CESC’s purview. He has suggested that its licence for Howrah be handed either to West Bengal State Electricity Board (WBSEB) or to another agency. A similar claim was made by the state power board a few months ago over the non-payment of dues by CESC.

The charge has left CESC officials fuming. “Has DVC become a consultant these days?” they said indignantly.

The government has not intervened in the wrangle so far. “We cannot take a hasty decision. We are watching whether CESC clears DVC’s dues,” a power department official said.


New Delhi, April 17: 
This is a karma lesson with a difference. No chanting of shlokas from the scriptures to ensure the victory of good over evil. Just stark, down-to-earth lessons on corporate and business philosophy to get ahead in a world of cut-throat competition.

Meet Sanjay Salooja, management guru, in the business of training modern day managers and executives in the art of coping with professional pressures to get ahead and yet yield results.

The man is currently in the news for organising what he calls ‘Karma workshops’ to empower top corporate houses and their executives with ‘New Age’ wisdom.

Claiming his management programmes have attracted the who’s who of the corporate world, including Hutchison Essar, Bank of America, American Express, Seagram, Luxor, Siemens, Plexus Technologies, Ernst & Young, India Today, Cosmopolitan, Corning and SAS Global Consulting Services, Salooja says “The Karma workshop imparts knowledge and action strategies to generate practical results and achieve success, attain greater self-confidence and demonstrate higher levels of optimism to deal with adversity”.

The 40 companies which have agreed to participate in the workshop to be held this weekend include Tata Telecom, Hero Corporation, Bharti, Revlon, Adidas, Amway, Hutchison and Dabur CGU, he added.

The 32 year-old management graduate from IMT Ghaziabad has been conducting counselling sessions for various companies for the last one-and-a-half year now and also has plans to conduct similar workshops in Malaysia, Singapore and Sri Lanka by the end of this year.

Commenting on a plethora of key issues that concern the government and other PSUs, Salooja said “Most government employees lack drive and initiative in their work. Low salaries, no acknowledgement of individual performance, slow growth and the mundane nature of work have marred their performance and left a lot of them emotionally suppressed and frustrated”.

While working towards ‘lifting-up’ such organisations, Salooja says “I try and share various techniques with them, depending upon the type of the problem. Approximately 80 per cent of PSU employees complain about their inability to form a healthy relation with their bosses mainly due to lack of communication”.

Salooja stresses that “feelings of an individual change according to how they interpret a situation and not depending on the action of the other. We help people master their interpretations in a positive way”.

In spite of retrenchments and lay-off by various companies becoming a common feature, the corporate guru promises to keep the mood upbeat. “We help people look for newer opportunities in life. Doing a case-by-case study helps us to figure out exactly the strengths and weaknesses of the individual and accordingly we give our suggestions. This really helps them to bounce back from their depression faster,” he says.



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