New Delhi/ Mumbai: The government announced a replacement for petroleum secretary M.S. Srinivasan on Tuesday, two weeks before his retirement. Steel secretary R.S. Pandey will move to the petroleum ministry after Srinivasan retires on 31 July.
Pandey confirmed his appointment. “Yes, the orders have come,” he said.
The Samajwadi Party (SP), which has agreed to back the ruling United Progressive Alliance (UPA) in a 22 July confidence vote in Parliament, has demanded an overhaul of the petroleum ministry management including minister Murli Deora.
“I cannot comment on any of these issues as I am yet to take over,” Pandey said.
SP’s support is crucial for the continuance in office of the UPA, which has lost the backing of the Left parties over the Indo-US civilian nuclear agreement. The party has accused the petroleum ministry of contributing to mismanagement of petroleum price-led inflation.
B.K. Chaturvedi, a former cabinet secretary, saw nothing improper in the announcement of a replacement for Srinivasan two weeks before his retirement. “Although the government does not always do it, announcing the name of the successor a few days in advance always makes it more comfortable,” he said.
Meanwhile, the Prime Minister Office brushed aside suggestions that the he was intervening in the feud between the Ambani brothers, Mukesh and Anil. Singh met Mukesh Ambani, head of Reliance Industries, India’s largest private sector company by sales, on Monday.
The meeting was held in the backdrop of an appeal by SP leader Amar Singh to the prime minister requesting his intervention to end the feud.
“People of India know Manmohan Singh better than to believe that he would get involved in corporate affairs,” Singh’s media adviser Sanajaya Baru said. “PM meets corporate leaders all the time to discuss national economic issues as any leader of modern economy would.”
Mint had reported first on 10 July that the Congress party was trying to patch up differences between the estranged brothers.
(PTI also contributed to the story.)
JSW Steel in talks to acquire United Coal, other US mines
Mumbai: India’s third largest steel maker, JSW Steel Ltd, wants to acquire United Coal Co. and other producers of the fuel in the US to secure supplies after prices soared to a record.
“The negotiations with United Coal are on” and the company is looking at other mines as well, JSW managing director Sajjan Jindal said. JSW placed an initial $2 billion (Rs8,640 crore) bid to buy United Coal, ‘The Economic Times’ had reported on 12 July.
Prices of coking coal, used in steel making, have risen three-fold this year after floods in Australia reduced supplies. JSW wants to secure at least 60% of its coal and iron ore requirement as it plans to more than triple its capacity.
“Now companies want to first secure raw material supplies before they embark upon their expansion plans,” said Sanjay Makhija, vice-president at Mumbai-based Fortune Financial Services India Ltd. “Coal and iron ore have become as precious as gold.”
United Coal, a closely-held company, has mines in Virginia and Kentucky with reserves of 165 million tonnes, according to the Texas-based company’s website. Jindal declined to comment on the bid price or provide other details.
Shares of JSW lost 8.62% on Tuesday to close at Rs729.70 on the Bombay Stock Exchange, compared with a 4.9% decline in the benchmark Sensitive Index. Bloomberg
SCI, Cochin Shipyard to get more operational freedom
Bangalore: India’s biggest shipping firm and its largest state-run shipbuilder are set to get more operational and financial freedom. Shipping Corp. of India Ltd, or SCI, will get the “navratna” tag and Cochin Shipyard Ltd, a “mini-ratna” status, said a shipping ministry official who declined being named as he is not authorized to speak to the media.
A navratna tag gives full autonomy to a public sector undertaking, or PSU, for capital expenditure without any ceiling. A category 1 mini-ratna status allows a PSU to spend up to Rs300 crore, or as much as its capital and reserves—whichever is lower—in new projects, modernization and purchase of equipment without government approval. For category 2 mini-ratna PSUs, the limit is Rs150 crore, or up to 50% of their capital and reserves, whichever is lower. SCI is currently a category 1 mini-ratna.
A committee of secretaries led by India’s cabinet secretary has “formally approved” a proposal to upgrade it to a navratna. “A formal notification will be issued by the union department of public enterprises in the next few days,” the official said.
The company, set up in October 1961 and 80.12% owned by the government, owns and operates a fleet of 83 ships, accounting for about 35% of the country’s shipping capacity.
“A navratna status will cut down time involved in decision-making and expedite our ship acquisition plans and other capital investments,” said B.K. Mandal, director of finance at SCI. “We are operating in a competitive field where quick, prompt decisions matter.”
“We plan to buy 46 new ships worth close to $3 billion (around Rs12,960 crore) in the next four years,” said Umesh C. Grover, SCI’s director of technical and offshore services unit.
A formal decision on granting mini-ratna status to Cochin Shipyard will be announced shortly, the same official said. Cochin Shipyard is now building 20 ships worth about Rs6,000 crore. It is also planning to expand its facility to take up more orders in a booming global shipbuilding market. P.Manoj
12 FDI proposals worth Rs354 crore cleared
The government on Tuesday cleared 12 foreign direct investment (FDI) proposals worth Rs354.13 crore, including a Rs160 crore proposal from Hyderabad-based construction firm Costal Projects.
The proposals, approved by finance minister P. Chidambaram on the recommendations of the Foreign Investment Promotion Board, include one from Singapore Telecommunications Ltd (Singtel) to set up a joint venture firm in long-distance telephony, that also required a no-objection certificate from Bharti Airtel Ltd. Singtel’s proposal include foreign holding of up to 74%, which is the cap for FDI in the telecom sector.
Costal Projects of Hyderabad would bring in Rs160 crore for converting its operating company into an operating-cum-holding company.
New Delhi-based Unicon Financial Intermediaries, which is engaged in commodity broking, stock broking and other permitted non-banking finance activity, would get Rs120 crore of funds through an increase in FDI in its holding firm.
Information technology company Aurionpro Solutions would bring in Rs53.65 crore through issue of equity shares and convertible warrants and through a share swap.
Investments worth Rs19.45 crore would come through a proposal by Standard Chartered Bank (Mauritius) for acquisition of additional equity and conversion of operating company into an operating cum holding company. PTI
Labour unions call off strike at major ports
Bangalore: Labour unions have called off a planned strike at the 12 Central government-owned major ports after signing a settlement with the government, brokered by the chief labour commissioner in New Delhi on Tuesday.
“We have got a good settlement. So, we are calling off the planned strike from midnight on 16 July,” said S. R. Kulkarni, president, All India Port and Dock Workers Federation, the leading labour union with a membership of about 35,000 employees.
During the meeting called by the labour commissioner, the management of the 12 major ports and officials from the shipping ministry agreed to the three main demands of employees. These include payment of interim relief at the rate of 13.5% of the basic pay till the new wage revision is finalized, merger of 50% dearness allowance with basic pay and re-calculating bonus pay-out as per the amended provisions of the Bonus Act.
The settlement will entail an extra burden of about Rs200 crore on the 12 major ports that handle about 75% of India’s external trade. These ports employ around 70,000 workers. “The ports have been asked to meet the extra burden from their own internal resources without seeking budgetary support from the government,” said Kulkarni. P.Manoj
Real estate developers may face crunch: Crisil
New Delhi: Several medium-sized and small real estate developers could face a liquidity crunch in the months ahead as these developers have stretched themselves operationally, and borrowed heavily, to benefit from the real estate upturn of the past three years, according to a report by credit rating agency Crisil Ltd.
The slowdown in demand for realty, coupled with declining internal accruals and reduced funding options, exposes them to downside risks of this aggressive strategy, the report added. According to Crisil, there will be delays in many ongoing and planned real estate projects, leading to the possibility of sale of projects or even enterprises. This will result in consolidation in the sector. The larger developers, those that are not over-leveraged operationally are well placed to overcome the current crisis, the report said. Shabana Hussain
Novartis Q1 net profit surges 138%
Mumbai: An increased sales and other income helped Novartis India Ltd, the Indian subsidiary of the Swiss drug maker Novartis AG, to post 138% growth in net profit at Rs29.6 crore during the first quarter ended 30 June.
The company’s total sales for the period at Rs153.7 crore were up by 10.7% compared to a year ago quarter. A company release on Tuesday said that its core business (the branded pharmaceuticals) with sales of Rs105.2 crore witnessed a growth of 9.9% over the corresponding previous period.
“This was due to higher sales of key brands during the period,” the release said. During the quarter, the company had around 11% more income at Rs134.6 crore from other sources.
The company’s generics business recorded sales of Rs18.7 crore showing a growth of 33% over the sales of an year ago quarter, mainly due to institutional sales through tender sales.
Novartis, which is also present in the animal health business posted a 20.8% growth is sales during the first quarter at Rs11.2 crore. However, its non-prescription drug sales declined by 5.9% with sales of Rs18.6 crore due to competitive pressure, said the release. Novartis share price droped 0.33% on Bombay Stock Exchange to close at Rs273 on Tuesday. C.H. Unnikrishnan