Bangalore: India’s biggest private power utility, Tata Power Co. Ltd, is talking with shipbuilders in South Korea to construct six big ships, which it will use to carry coal from its mines in Indonesia to feed its ultra mega power plant at Mundra in Gujarat. The company will have to invest $550-600 million (Rs2,359-2,574 crore) to buy the ships.
“TPC Energy Asia Pte. Ltd is talking to Hyundai Heavy Industries Co. Ltd and STX Shipbuilding Co. Ltd for building the Capesize bulk carriers,” said a person familiar with the discussions. He did not want to be identified.
TPC Energy Asia is a special-purpose vehicle incorporated in Singapore by Tata Power, for owning ships and trading in fuels. Hyundai is the world’s biggest shipbuilder and STX is ranked fifth, in terms of capacity and order size.
Based on today’s prices, a Capesize ship will cost $95-100 million to build. Capesize ships can carry 175,000 tonnes and are the biggest vessels capable of carrying dry bulk commodities.
Tata Power estimates it would need 8-9 ships to haul coal for the Mundra power project. “This will be met through a combination of outright purchases (of ships) and hiring of ships on long-term contracts,” Tata Power managing director Prasad R. Menon told analysts in March. Tata Power spokesperson Shalini Singh declined to comment.
Tata Power is in a hurry to place orders for new ships and hire more on long-term contracts as they have to be ready by 2012, when its Rs17,000 crore, 4,000MW power plant becomes operational.
“If Tata Power doesn’t order ships now, it will land in serious problems for transporting coal to the Mundra plant,” said a Mumbai-based executive with a South Korean shipbuilder. “Getting ships built by 2012 looks a tough task as most global yards are fully booked till 2010-11. Tata Power will have to shell out a premium on the current market price to get shipbuilding slots.”
States ask Centre to share 50% fuel tax cut burden
New Delhi: In a setback to the Union government’s bid to get state governments share some of the cost of soaring fuel prices, a group of state finance ministers on value-added tax, or VAT, asked it on Monday to share 50% of the Rs8,000 crore revenue loss that they would have to absorb due to tax and duty cuts.
West Bengal finance minister Asim Dasgupta, who is also chairman of the empowered group, said 10 of the 33 states and Union territories have cut sales tax on petrol, while 15 reduced sales tax on diesel. “States cannot take this beating further,” he said after a meeting of the group here.
The Congress party reacted sharply to the demand. “It is a ridiculous and laughable demand,” said Manish Tewari, a Congress party spokesman. “If the Centre could afford to bear the burden, it wouldn’t have urged the states in the first place. The nation is passing through a trying phase. It’s time for the states to measure up.”
To bail out oil marketing companies suffering losses due to surging global crude oil prices, India had on 5 June hiked prices of petrol, diesel and LPG by Rs5 a litre, Rs3 a litre and Rs50 a cylinder, respectively. It also cut excise and customs duty on crude and other petro products, taking a hit of more than Rs22,000 crore.
The Congress party, which leads the United Progressive Alliance-led government, had urged the states to cushion consumers, with Prime Minister Manmohan Singh issuing an appeal.
The group also asked the Union government to provide details of how prices of jet fuel are fixed before they decided on reducing sales tax on it.
Kerala said it might reverse an April decision to reduce sales tax on jet fuel to 4% from 32%. Kerala finance minister T.M. Thomas Isaac said, “We are prepared to forego additional revenues on account of the hike. However, any further cut must be compensated.”
A spokesperson of opposition Bharatiya Janata Party, who did not wish to be identified, said the empowered committee had representation from all political parties and that it was a unanimous view of the panel. “The Centre has earned Rs1 trillion extra from fuel revenues. So, it can afford to compensate the states.” he said.
(Tarun Shukla and PTI contributed to this story.) Ashish Sharma
Crompton denies project business divestment
Mumbai: Electrical equipment manufacturer Crompton Greaves Ltd told the Bombay Stock Exchange (BSE) that the it “is not contemplating divestment of its project business” after a day of speculation that India’s largest engineering and construction firm by market value, Larsen and Toubro Ltd (L&T), is looking to acquire the division.
During the day, Crompton shares rose nearly 6% to close at Rs264.35. L&T shares closed about 1% up at Rs2,737.10 on BSE. Prior to Crompton’s announcement, analysts said its power systems and industrial systems make a lot of sense for L&T, but consumer products is something that the company will not be interested in.
L&T denied it was doing any due diligence of the Crompton business and added it doesn’t comment on market speculation. Staff Writer
Sahara India Financial, RBI officials meet
Mumbai:Sahara India Financial Corp. Ltd had another round of meeting with the Reserve Bank of India (RBI) brass on Monday. At the time of going to the press, the meeting was still on and the outcome of it was not known. The first meeting took place on 12 June.
RBI on 4 June banned Sahara, India’s largest residuary non-banking finance company with a deposit liability of close to Rs20,000 crore, from taking fresh deposits. However, the Lucknow bench of the Allahabad high court stayed the order the next day. RBI then moved the Supreme Court which ruled on 9 June that the banking regulator should give a fresh hearing to Sahara before deciding on its fate. Staff Writer
Sterlite likely to up offer for Asarco
Mumbai:Sterlite Industries Ltd is likely to raise its offer for copper miner Asarco Llc. to thwart the company’s parent Grupo Mexico from winning back the control of Asarco, according investment banking sources in the UK. The Sterlite spokesperson could not be contacted for comment.
Sterlite, an affiliate of London-listed Vedanta Resources Plc. had on 2 June said that it would buy the operating assets of Asarco in an all-cash $2.6 billion (Rs11,154 crore) deal. Following which, Asarco’s parent Grupo Mexico, which owns Asarco but does not have board control, said it would put forward up to $4.1 billion to pay off claims against its subsidiary. The acquisition would give Sterlite total copper smelting capacity of 635,000 tonnes per year and proven copper reserves of 5 million tonnes. Baiju Kalesh
Spice Comm, Idea to announce deal this week
New Delhi: A final announcement on the merger of Spice Communications Ltd and Idea Cellular Ltd is expected in the next couple of days, a person close to the deal who did not wish to be identified said. This person said that final paper work is being carried on and both the companies will be announcing the deal within this week after notifying the Bombay Stock Exchange (BSE) in the next couple of days.
According to the agreement, Idea has accepted to buy each share of Spice Communications for Rs77. Sanjeev Aga, managing director of Idea Cellular, was unavailable for comment. Another person from Telekom Malaysia International Bhd, who did not wish to be identified, said some of the basic issues are being sorted out and an announcement will be made soon. R. Jai Krishna
US seeks commitment from India on climate
New Delhi: A top White House official on Monday asked India and other countries such as China to turn their domestic policies on emission reduction into binding commitments to be included in the new United Nations treaty on climate change.
“We’re seeking from China and India what we offer ourselves,” James Connaughton, chairman of the White House council on environmental quality, said. “ Ahead of his meeting with Shyam Saran, prime minister’s special envoy for climate change, Connaughton said individual domestic plans of such countries should be brought out to the negotiating table and under international scrutiny to be turned mandatory at the next United Nations meeting on climate change to be held in Copenhagen in December. Padmaparna Ghosh & IANS