M A I N   N E W S

Centre clears four-lane highway up to Sirhind
GIC to be delinked from subsidiaries *Enron allowed more equity
Tribune News Service

NEW DELHI, Jan 24 — The Cabinet Committee on Economic Affairs today approved a slew of proposals, including the second revised estimate for four-laning and strengthening of the national highway from Punjab and Haryana border to Sirhind.

The Union Cabinet also met and cleared among other things two Bills for introduction in the Budget session.

Apart from four-laning of the highway, the project includes strengthening from km 212.20 to 252.25 of Punjab border to Sirhind on National Highway No.1.

The second revised cost estimate amounts to Rs 241.74 crore. The original approval was given on April 28, 1993, for Rs 82.75 crore. The first revised estimate was approved by the CCEA on July 18, 1995, for Rs 199.50 crore.

Union Minister Pramod Mahajan, who also doubles as the Cabinet spokesman, said the revised estimate had become necessary due to increase in costs of cement, bitumen, steel, labour and plant and fluctuations in the exchange rate of foreign currency. The project is being funded by the World Bank. The project would be completed by April 2001.

On the proposed amendments to two Bills, one related to the General Insurance Business (Nationalisation) Act, 1972. The proposed amendment would delink the General Insurance Corporation (GIC) from its subsidiaries and its role would be limited to reinsurance business only. Ownership of the subsidiaries like the National Insurance and the New India Assurance would stand transferred back to the Central Government from the GIC.

Another Bill proposed is the amendment of the Indian Medical Council Act, 1956 that would provide for screening test for holders of foreign medical qualifications for registration with the MCI or State Medical Councils to practice medicine in India.

Another Cabinet decision related to the policy framework and strategy for development of the inland water transport. The Inland Waterways Authority of India has been authorised to raise bonds from the market, enter into commercial or joint ventures and enlist private participation to the extent of 40 per cent for a built, operate and transfer project.

The CCEA, in its meeting, also approved the continuation of long term agreement with Japanese Steel Mills and POSCO of South Korea for export of iron ore.

In the power sector, the CCEA approvals included the setting up of a Unified Load Despatch and Communication Scheme for the western region at an estimated cost of Rs 262.18 crore by Power Grid Corporation of India Ltd; a proposal for strengthening the southern region transmission system at a cost of Rs 396.28 crore; and the revised estimate for augmenting transmission system in South Assam, Mizoram and Tripura.

The CCEA also approved the establishment of a traditional knowledge digital library (TKDL) for ayurveda. The library would help integrate the scattered but documented reference on traditional system of medicine. Information technology experts and patent experts would assist in the project. The library would be established within a period of eight to 10 months.

The CCEA approved the revised cost estimates for setting up of a National Institute of Biological at Noida and the estimate for creation of mechanised coal handling facilities at the Paradip Port for handling thermal coal.

The CCEA also approved the formation of a joint venture company by National Building Construction Company Ltd with Jamal Trading Company Ltd in Botswana; installation of eighth unit of 120 mw captive power plant of NALCO; and a proposal for setting up of a 100,000 tonne per annum green field zinc smelter plant at Kapasan in Chittorgarh district of Rajasthan.

Another major decision included the approval to Enron Mauritius Company, a wholly owned subsidiary of Enron International of the USA, to contribute $ 1119.9 million as foreign equity for the second phase of the Dabhol Power Project in Maharashtra. Enron is bringing in the entire equity for the second phase as the Maharashtra State Electricity Board (MSEB) could not afford to buy equity in the second phase. The MSEB has, however, been given the option to buy 30 per cent equity, whenever it can, at a price to be decided by the two parties.

Digital Future Investment of Netherlands was permitted to set up a wholly owned subsidiary with an investment of $ 500 million. The investment would be made over a period of five years.

Another decision related to the availability of di-ammonium phosphate and rates of concession on phosphatic and potashic fertilisers during 2000-01.

Ex post-facto approval was accorded for operating the buffer stocking scheme during 2000-01 with effect from April 1, 2000; imports up to a ceiling of five lakh tonnes of the DAP had been decided; and an inter-ministerial committee would be authorised to take decisions regarding further imports within the ceiling of five lakh tonnes.

Rate of concession on single super phosphate would be fixed at Rs 800 per tonne for the period of April 1, 2000 to June 30, 2000. For the remaining part of the year the rate of concession would remain at Rs 700 per tonne.

The CCEA also accorded approval for action to be taken on certain outstanding issues relating to the Oman India Fertiliser Project.

Approvals were given for provisions relating to compensation payable by Oman in case of failure to supply gas were finalised; provisions relating to compensation payable by the fertiliser company to the Indian Government if it fails to deliver urea and the negotiated and reduced contract price in case of EPC contract.