GoM clears draft convergence Bill
Enron�s oilfield stake valued at $ 500 million
Govt hints at rethink on IPCL selloff
Bajaj Auto net plunges 78%
Telco weighs rights issue
Tisco Q3 net dips 12%
Cisco exhorts govt to move with technology
CESC alerted on dues clearance
Limited mobility may be cleared next week
Foreign Exchange, Bullion, Stock Indices

New Delhi, Jan. 16: 
A group of ministers (GoM) headed by finance minister Yashwant Sinha today approved the final draft of the proposed communications convergence Bill.

The draft Bill, which is believed to have about a 100 clauses, will be placed on a website within a week to elicit comments and observations from the public over a 30-day period.

Based on the feedback, the draft bill will be further tweaked by the Fali S. Nariman sub-group which had drafted the original convergence (concept and carriage) Bill that has now been rechristened as the communications convergence Bill.

It will then be finally seen by the GoM and then sent to the Union cabinet for approval.

The final draft is likely to be placed for cabinet approval by the first week of May and introduced in parliament before the end of the budget session.

But one question remains unanswered: who will pilot the convergence Bill? The overarching legislation will bind together the three ministries of information technology, telecom and information and broadcasting.

Even though the draft convergence bill had aimed to curtail the powers of the three powerful ICE ministries, strong opposition from the ministers had left this vital issue unresolved.

The bill also takes over the powers to implement Telecom Regulatory Authority of India (Trai) Act, Indian Telegraph Act

1885, Cable TV act and Wireless Act. The convergence bill is to be called, �Communications (Carriage and Content) Bill, 2000 will amend most of the existing communications and IT legislations.

The group has also approved the setting up of a single independent statutory commission and one of the statutory functions of the commission will be to issue all licences including �composite licences�.

Sources said, �The bill will not only replace the provisions of the Trai Act but also render superfluous the provisions contained in the 1885 Indian Telegraph Act, the 1933 Wireless Telegraphy Act and the 1995 Cable Television Networks Regulation Act. These legislations will then stand repealed.�

However, neither Trai nor the appellate tribunal constituted thereunder, stand abolished: they only stand transferred to and become part of the new enactment, according to the report.

The final draft has also taken into account the fact that the regulatory structure and mechanism of the new law should be sufficiently flexible to adapt to new developments in the current fast-changing environment.

�Subordinate legislations to rules and regulations promulgated from time to time is one way to meet changed situations that arise in the future on account of rapid and unpredictable changes in Information Technology, as well as on account of (and to address) problems faced by the industry, both in respect of the carriage and the content of all transmitted information,� said sources.

The final draft has also approved the provision to set up a single independent statutory authority headed by a Chairperson and whole-time members to be appointed from amongst persons of eminence with more than 15 years of experience in the fields of broadcasting, telecommunications, satellite technology, information technology, administration and management including financial management, and/or law.

The draft report also proposes to set up a common appellate tribunal dealing with telecom as well as broadcasting and other matters to be regulated by the Communications Act, 2000.

The appellate tribunal will adjudicate the disputes between the licensor and the licensee and shall consist of a chairperson , vice chairperson and not more than six members with an enabling provision to help the appellate tribunal to perform its function through benches of one or two members with a view to deciding the disputes expeditiously.

�The issue regarding allocation of spectrum is a major problem and will get aggravated when a composite licence is to be issued. This has been a major problem for all companies operating in the telecom, IT and I&B sectors. To solve this problem, the draft has recommend setting up of an autonomous commission under the central government (represented by the current Wireless Planning Commission),� said sources.

It has stressed the need for constant and on-going mutual consultation to ensure that no single agency has overriding powers nor creates conditions which are inimical to the growth of IT and the IT-based industry: without in any way compromising the country�s basic security requirements.


New Delhi, Jan. 16: 
International investment bankers value Enron�s 30 per cent stake in the Panna, Mukta and Tapti oilfields at $ 500 million.

This estimate was made when oil prices were ruling above $ 30 a barrel. Though prices have dipped by a few dollars since then, the deal should fetch $ 450-500 million. The situation can change if the prices fall dramatically in the weeks ahead.

Enron has already announced its decision to pull out of these projects as part of a business strategy, but it did so after crude prices shot past $ 30 a barrel.

The basis on which the investment bankers arrived at the price is not clear. Oil industry circles do not share Enron�s perceptions about the size of reserves in these fields. However, bidders will look at the proven reserves, not the potential.

There is a lot of speculation about who will ultimately pick up Enron�s stake. Its partners in the joint ventures operating these fields are ONGC and Reliance Industries. They will get a preference over others if they match the highest price.

ONGC is keen to bid. So is Reliance. Indian Oil Corporation wanted to make a joint bid with ONGC or Petronas of Malaysia, which has always been ready to join hands with it. However, these companies are now worried that Shell might enter the race.

Normally, Shell is not interested in small fields. In Rajasthan, where it struck oil a couple of years ago, it scaled down its participation from being an operator to a minority partner. While pulling out, it made Cairn Energy the operator.

However, Shell has certain compulsions to bid for Enron�s stake in these fields. Its aim is to enter retail petro marketing. It will be allowed to do so only if it invests Rs 2,000 crore in the oil sector. It has announced a plan to set up a LNG terminal at Hazira at an estimated cost of $ 300 million.

By acquiring Enron�s stake in the oilfields, Shell can enter the downstream market, either alone or with Cairn Energy.

For now, it has to outbid ONGC and Reliance. Potential bidders are now finalising their strategies to pick up the stake, whose real worth can only be evaluated by investment bankers.


Dahej, Jan. 16: 
Union minister for chemical and fertiliser S. S. Dhindsa today indicated that the government may reconsider its plan to reduce stake in all the three units of Indian Petrochemicals Corporation Ltd (IPCL). Talking to reporters here, after dedicating the Rs 4,335-crore Gandhar Complex of IPCL to the nation, the minister said only the Vadodara unit of IPCL will be taken over by the Indian Oil Corporation (IOC). The policy of disinvestment will be restricted to only one unit of the IPCL.

�The money we get from IOC will be utilised to run the other two units. After considering the profitability and performance of these two units, we may not reduce the government stake in them�, the minister said. He also assured that there will be no retrenchment in IPCL after the Vadodara unit is merged with IOC.

While defending the government�s decision to disinvest, Dhindsa said the unit is not being taken over by IOC because it was incurring losses, but because it was part of government policy.


Mumbai, Jan. 16: 
Bajaj Auto�s third-quarter net profit plunged 78 per cent at Rs 28.48 crore on a 11.8 per cent decline in sales at Rs 945.39 crore, its bottomline under pressure from shrinking margins in the scooter and step-thru vehicle segments.

Geared scooter sales shrunk 37 per cent from 7.2 lakh to 4.5 lakh in the nine months ended December 2000 compared with the same period last year. Sales of step-thru vehicles were down 22 per cent, from 1.25 lakh to 97,000 in the same period. Reacting to the dismal numbers, the share dived 8 per cent to close at Rs 251 on the BSE. Analysts tracking the industry were not surprised at the poor showing, but they expect the performance to improve over the next few months.

For the nine months ended December 2000, income from the investment of surplus funds fell to Rs 209 crore compared with Rs 243 crore in the same period last year. However, the company�s staff strength was reduced by 2,000 to 15,000 through a voluntary retirement scheme.

Sales volumes in the ungeared segment increased by 19 per cent as against the industry average of 18 per cent. This pushed up its market share from 19.2 per cent to 19.4 per cent.

The troubles lay in the geared scooter segment, where sales declined from 7.20 lakh to 4.5 lakh in the nine months to December. Market share dropped from 73.1 per cent to 71.8 per cent. A premium four-stroke will be launched in February. This will be followed by a similar version of the Chetak. Saffire, a 92 cc automatic four-stroke scooter, was introduced in a few markets. The company claimed it was well received.


Mumbai, Jan. 16: 
Tata Engineering and Locomotive Company (Telco), the company that manufactures a range of commercial vehicles and cars, said its board will meet on January 31 to consider a rights issue of convertible or non-convertible debentures, or other equity-linked instruments.

The news took the stock markets by surprise. Praveen P Kadle, a senior Telco official, told The Telegraph that the rights issue will help the company raise funds for its product-development efforts, finance long-term capital expenditure and meet working capital needs. �The choice of the financial instrument, whether to issue convertible or non-convertible debentures, will be made at the board meeting,� he added.

�Auto companies require massive amounts of funds to finance their product-development and capital expenditure programmes. We not only make commercial vehicles, but also have a significant presence in the multi-utility vehicle and the car markets,� the official said.

Auto industry analysts say a portion of the funds raised in the rights issue might be used to retire old, high-interest debts. However, the official said the debt burden was light, in the region of Rs 150 crore.

Recently, the Tatas and PSA Peugeot Citreon announced that they would conduct a joint feasibility study for the manufacture of a sedan on the PSA-2 platform, which is used by the French auto major to roll out its hatchback models.

The study, expected to be wrapped up in six months, will determine whether a three-box model can be mounted on Peugeot�s PSA-2 series platform. A team comprising Peugeot and Telco engineers will be formed to work on the project. At the same time, the in-house development efforts for Magna, the new luxury sedan planned by Telco, will continue.


Mumbai, Jan. 16: 
Tata Iron and Steel company Ltd (Tisco), the country�s largest private sector steel maker, reported a 12.3 per cent fall in net profit for the third quarter ended December 2000.

The net profit fell to Rs 127.69 crore from Rs 146.18 crore in the year-ago period.

Nevertheless, analysts said the results were encouraging as figures in the third quarter of the previous year included Rs 125.26 crore arising out of profit on sale of assets of the cement division.

However, sales rose to Rs 1868.17 crore from Rs 1698.94 crore in the previous year. Profits were lower despite the steel major producing more during the period. The company revealed that production improved from 7.84 lakh tonnes to 8.38 lakh tonnes.


New Delhi, Jan. 16: 
Cisco Systems, one the world�s largest networking companies, sounding a veiled note of caution to the government, today said the government should open its doors to voice over internet before it is made inevitable by the march of technology.

According to John Chambers, chief executive officer Cisco Incorporated, worldwide all governments are in the process of building enhanced infrastructure to meet requirements in the age of information technology.

Addressing a seminar organised by the Confederation of Indian Industry (CII), Chambers said, �Convergence will soon happen and leapfrog over all other technologies. It is inevitable, since growth and development in technology is moving faster than policies.�

He added, �The equaliser in life will be the internet and education.�

The National Association of Software and Services Companies (Nasscom) has projected that by 2004, India will will have more than 50 million internet users.

�The network effect is taking over the industry. As the internet moves on to become the network of all networks, the whole world will be connected by wires, routers and everyone will be talking about high-speed networks,� he said.

Chambers said Cisco was keen to work with India, since the initiatives taken by the government would be replicated by many other countries.

However, the company is not happy with its market share in India and pledged to invest more to increase it. Business from India contributes only 0.33 per cent of the entire business of Cisco Systems Inc. Currently Cisco�s presence in India is similar to that in China about three years ago, which now constitutes five per cent of the company�s total business.


Calcutta, Jan. 16: 
The state power department has asked the R. P. Goenka-controlled CESC to immediately submit a plan for clearing its dues to the West Bengal State Electricity Board (WBSEB).

CESC vice-chairman Sanjiv Goenka met power secretary Asim Barman on Monday to discuss the matter. �I asked Goenka to put forward a plan to liquidate our outstanding. I have told him that the board and CESC should hold talks to sort out the problems and to ensure that the public is not affected,� the power secretary told The Telegraph.

WBSEB claims the dues stand at Rs 963.54 crore, but CESC disputes the figure and says it is much lower. The city-based power utility argues that the board is claiming a principal amount of Rs 600 crore while the rest is the interest on it. CESC claims the dues are only Rs 360 crore. In addition, it says the interest should be computed in a simple manner, not compounded.

�We will submit a liquidation plan if WBSEB�s claims are fair. What I am supposed to pay, I will. But the disputed portion has to be sorted out,� CESC managing director Sumantra Banerjee said.

The board says it is being asked to explain why it has failed to recover massive dues from CESC. �We are being questioned by the public accounts committee, standing committee on power, public undertaking committee over about CESC�s dues. The Comptroller and Auditor General of India has also rapped us,� WBSEB chairman G. D. Gautama said.

He refuted the claim that the CESC was being overcharged, saying the amount was based on an agreement reached between the two sides. Barman said the terms of the understanding will have to be honoured by both companies.

�We are waiting for the observations of the State Electricity Regulatory Commission (SERC). If SERC feels that WBSEB should charge bulk customers for 20 per cent of its transmission and distribution losses, we are ready to pay it. But if SERC says they should be charged less, we will stick to it,� Banerjee said.

However, a WBSEB official said SERC will only rule on the tariffs in the current financial year, not those fixed earlier.

Power theft

The board has carried out intensive raids in Burdwan and Birbhum districts during which the metering circuits of 37 industrial consumers were found to be tampered. Supplementary penal bills were slapped on them to recover Rs 47.83 lakh.


New Delhi, Jan 16: 
The government is likely to consider allowing fixed service providers to offer limited mobility on January 24 as recommended by the Telecom Regulatory Authority of India (Trai) last week.

�The Telecom Commission is scheduled to meet on January 24 and the issue of limited mobility as proposed by Trai is one of the items on the agenda,� Shyamal Ghosh, chairman of Telecom Commission, told reporters here today.

The telecom regulator, on January 8, had forwarded its recommendations on the controversial issue of allowing basic operators to provide limited mobility to subscribers to the department of telecommunications (DoT).

In its recommendations, the regulator had suggested that the government should allow limited mobility on basic telephones within the local area with Rs 1.20 tariff for a three minute call.

Recommending a matching benefit to cellular operators, Trai had said the operators should be permitted to provide fixed phones on their network as part of providing level playing field.

It also suggested that entry fee and licence fee as percentage of revenue should not be altered and should be as for basic services.

Stating that the recommendations were based on the fact that Wireless in Local Loop (WLL) mobility was not the same as that of cellular mobile services, it had taken the view that the �customers should not be denied the benefits offered by technology.�

Nodal officer

Trai today appointed a nodal officer to handle the issues regarding the registration of consumer organisations/ NGOs and their interaction with the telecom watchdog.

The telecom regulator has also suggested specifies guidelines for the registration of consumer organisations /NGOs. It will hold meetings with registered consumer organisations/NGOs to increase interaction for better understanding of the problems of telecom consumers. These meetings will be organised in different parts of the country.

�Consumers are the largest stakeholders in the telecom sector. Trai appreciates and values the important contribution that consumer organisations and non governmental organisations (NGOs) can make in carrying out Trai�s mandate. Trai considers their participation and representation of essential in its consultative process,� a statement said.



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