Monday, April 12, 1999
today's calendar
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B U S I N E S S | Monday, April 12, 1999 |
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spotlight today's calendar |
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JK deal on power project |
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Five-star hotel project
in Chandigarh hits snag
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Himachal to have panel on sales
tax ‘Stay VLS petition’ Inflation up Pakistani delegation invited |
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JK deal on
power project JAMMU, April 11 — After having failed to secure counter-guarantees from the Centre for taking up construction of three major power projects in Jammu and Kashmir, the State Government signed a memorandum of understanding (MoU) with Jai Prakash Industries Ltd, Siemens and Hydro Vevey Ltd for completing a 450 MW Baghliar hydel power project here yesterday. The project is estimated to cost Rs 3495 crore and is expected to be completed within five years. Chief Minister Farooq Abdullah has made up his mind to take in hand the construction of four major hydel power projects, including Uri-II, Sawalakot, Kishenganga and Sewa-II at a later stage. In the absence of counter-guarantees from the Centre, the State Government has decided to divert some funds from the plan allocations and from increased power resources within the State for the Baghliar project. It has already diverted over Rs 150 crore to the project and work is expected to start next month. The Chief Minister has said the project will tap water resources of the Chenab and provide employment to hundreds of workers in the backward belt of Ramban, Banihal, Doda and Cool Gulabgarh. In addition, electricity shortage would be met once the project was completed. The project will have an
initial installed capacity of 450 MWs but it can be
doubled with the expansion programme. The Baghliar dam
will be 144 metre high with head race tunnel two km long
and 10 metres in diameter. It will meet one third of the
total energy requirement in the State. |
Five-star hotel project in Chandigarh hits snag NEW DELHI, April 11 (PTI) — The India Tourism Development Corporation’s five star de luxe hotel project at Chandigarh has hit a snag with the ITDC giving an undertaking to the Delhi High Court that it will not go ahead with the project until further orders. The ITDC gave this undertaking to the court when it heard a petition filed by one of the bidders, Ansal Properties and Industries, alleging irregularities in the award of the contract to the city-based R S Avtar Singh and Co. Ansal, in its petition before Justice C K Mahajan, alleged that the contract for construction of the hotel had been awarded in violation of the terms and conditions laid down in the tender dated May 4, 1998. Ansal’s counsel Rajiv Nayar and Aman Vachher said the bid submitted by R S Avtar Singh and Co was not in accordance with the terms and conditions of the tender and therefore did not deserve to be considered at all and the ITDC should not have waived the rules at its pleasure. R S Avtar Singh and Co, the lowest bidder for the project (Rs 17.77 crore), has also given an undertaking to the court that it will not start any work till further orders. Ansal, the second lowest bidder (Rs 18.91 crore), submitted before the court that its bid was rejected by the ITDC on frivolous grounds. The Ansal petition, seeking quashing of the award of the contract, alleged that the ITDC’s decision was prompted by mala fide and extraneous considerations since R S Avtar Singh and Co had submitted an incomplete tender and also failed to comply with mandatory terms and conditions. The petition, further, said that the contract was awarded to R S Avtar Singh and Co even though it failed to meet the tender requirements relating to the guarantee for water proofing and anti-termite treatment, payment of secured advance and makes of various materials defined. Ansal alleged that all other tenders were subjected to the above mentioned conditions. The same was not done in the case of the awardee of the contract. The other bidders included Ahluwalia Contracts (Rs 19.72 crore), Larsen and Toubro (Rs 20.71 crore), Tata (Rs 22.01 crore) and Tirath Ram (Rs 25.46 crore). Ansal said that R S
Avtar Singh and Co had also not signed all the pages of
the tender document as required. |
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NEW DELHI, April 11 (PTI) — Sign lagao, India jitao (sign and make India Win). A unique signature campaign, has been launched by four leading Indian corporates to cheer up the Indian cricket team in the run up to the World Cup. A record 3.2 million signatures are being collected from cricket enthusiasts across 70 cities nation-wide by the sponsors — Zee Network, the Indian Express group of publications, Bombay Dyeing and Gilbey’s green label manufacturer IDV. “With this initiative, we are sure to create a world record by collecting the largest ever number of signatures to wish the Indian team well,” a Zee network official told PTI. Cricket enthusiasts would sign up on pieces of clean white cloth provided by Bombay Dyeing, which would ultimately be stitched together into a 10 km long single banner. This banner would then be presented to Indian Captain Mohammed Azharuddin on April 23, before the team departs for England. Initiative Media, the media buying arm of Ammirati Puri Lintas, collated the idea and is coordinating the entire exercise by word of mouth publicity and manpower support. To generate awareness about this signature campaign, a special 40-second promotional spot has been created by the Zee network and would be aired on both Zee Cinema and Zee India TV channels from Monday onwards. Also, as part of the
scheme, five of the signatories to this banner campaign
will be selected after a lucky draw and given a free
ticket each for one of the World Cup league matches in
which the Indian team will be a participant. |
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NEW DELHI, April 11 (PTI) — Sunair Hotels has approached the Company Law Board (CLB) for transfer of the petition filed by VLS Finance against it to arbitration for effecting the transfer of shares worth Rs 7 crore being held by the finance company. In an application filed before the CLB, Sunair also sought a stay on the petition filed by VLS alleging mismanagement of fund by the directors of the hotel company. Sunair said the two parties should be referred to arbitration because the agreement between them was neither null and void nor inoperative or incapable of being performed. As per the agreement reached before the CLB between the two companies, Sunair was to pay Rs 19 crore to VLS for purchasing shares worth Rs 7 crore of Sunair by its promoters and Rs 12 crore as loans. When contacted Sunair Hotels Director S.P. Gupta said VLS Finance was not present at the CLB on the last couple of hearing for accepting the payment as per the settlement in lieu of transfer of shares to the promoters of hotel company. However, VLS Finance
Vice-President Pankaj Shrimali told PTI that he was not
sure about capability of Sunair to make payment and
“we are not aware of Sunair seeking
arbitration.” |
Himachal to have panel on sales tax SHIMLA, April 11 (PTI) — A high-level sales tax advisory committee will be set up soon in Himachal Pradesh to solve problems of traders, Chief Minister Prem Kumar Dhumal said today. Addressing a conference of the Beopar Mandal at Solan, he said the committee headed by Excise and Taxation Minister Mohinder Singh would also have representatives of the business community. He said a new scheme called “Maitri yojana” would soon be launched in the State as a first step towards simplification of the sales tax structure. Under the yojana the sales turnover of small traders would be considered valid on the basis of self-assessment. However, the government would make random checkings, wherever it felt necessary. Announcing to set up a marketing centre at Nalagarh, he said that it would help traders. Efforts would also be made to connect it with the railways. Work on the Kalka-Parwanoo broadgauge rail line will also be started this year for which a provision of Rs 2-crore had been made by the railway authorities. One more scheme for the
meritorious students had been introduced under which
three scholarships of Rs 25,000, Rs 20,000 and Rs 15,000
would be given to those students who would stand first,
second and third respectively. |
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NEW DELHI, April 11 (PTI) — Reversing the declining trend witnessed in the last three continuous weeks the annual rate of inflation crossed the 5 per cent mark by 0.08 percentage points to 5.04 per cent for the week ended March 27. The rate of inflation,
based on wholesale price index went up 5.04 per cent
(provisional) from 4.96 per cent (P) a week ago. Annual
rate of inflation had stood at 5.31 per cent during the
corresponding week of the last year. |
Pakistani
delegation invited CHANDIGARH, April 11 — The Hotel and Restaurant Association of Northern India has decided to invite a delegation of Pakistan’s hotel and restaurant community to a star night to be held on the theme of Punjab here. A letter of invitation has been sent through the Pakistan High Commissioner. Talking to mediapersons
here last night, Mr Deepak K. Sharma, its Secretary
General, said the association, which represents about 900
hotels, restaurants and travel agents spread over in
Delhi, Chandigarh, Haryana, Rajasthan, UP, Himachal and
J&K, will also hold cultural programmes, conferences,
quiz contests etc to create tourism awareness. |
Top two control 85 p.c. of two-wheeler market India is the second-largest market for two wheelers worldwide, the first being China. Together, India and China account for around half of the global demand for two-wheelers. The two-wheeler industry in India has a total of major players, seven in the scooter segment, six in the motorcycle segment and five in the mopeds segment. Bajaj Auto and TVS Suzuki are the only manufacturers represented in all the three segments. Although the scooter segment has more players than the motorcycle segment or the moped segment, the scooter segment is more concentrated than the other two segments. The top two players in the scooter market control 85 per cent of the market, while the corresponding figures in the motorcycle segment and the moped segments are 64 per cent and 69 per cent respectively. Hero Honda Hero Honda has a cutting edge on account of its technological expertise, owing primarily to its association with Honda Motors, its sales and distribution capability, skills in niche marketing and financial strength. One perceived weakness that this company has in its cost structure, though this is less of a concern when seen in the light of the shift within the industry towards four stroke technology, an area in which Honda has demonstrable strengths. It is expected that Hero Honda will continue to expand its market share in the motorcycle segment, though at a slower pace than in the past and enhance its market share from 36.2 per cent to 37.2 per cent by the year 2000. Bajaj Auto Based on current forecasts, Bajaj Auto’s earnings growth over the next two years will fall short of its three major rivals in the two wheelers industry, though the underlying trend in earnings is expected to improve. This company scores highly over its rivals in the terms of cost advantage, sales and distribution capability and financial strength, but lags the competitive edge in terms of technological expertise. With tough competition emerging in new products and stronger earnings growth prospects elsewhere there could be continued slippage in Bajaj’s market share on the back of continued market fragmentation. Yet, given the company’s inherent strength coupled with the fact that its competitors have been at the receiving end of the last Union Budget, it should not be too long before this company bounces back. TVS Suzuki Based in the south, TVS Suzuki has been one of the major beneficiaries of the boom in the automobile industry. The company is a manufacturer of scooters, motorcycles, and mopeds. Its venture into the manufacture of scooterettes, which is a hybrid version of a scooter and a moped, resembling a scooter but below 65cc has been a great success with the introduction of its TVS Scooty. TVS Suzuki was immensely benefited by the two wheelers boom in the south which was reflected in the company’s financial highlights. On the financial front, the company has fared satisfactorily over the years. Its future plans include ambitious plans which will enable the company to enhance its bottomlines along with its capacities. Overall, TVS Suzuki appears to be a company with sound fundamentals and given these factors, its prospects in the medium to long term should prove satisfactory. LML LML, the second largest player in the two wheeler market in India has a 29 per cent share in its segment. The company has been in news lately due the tiff between the two joint venture partners, the Singhanias and the Piaggio’s. However, on the
financial front the company’s performance has not
yet been affected. The company’s present
manufacturing capacity is 4,50,000 scooters and by the
end of this year, it plans to increase the production to
6,00,000 scooters. LML is launching four motor cycle
models in 99’ for which it has tied up with a Korean
company for technology. The company also plans to launch
60 cc scooters and 75 cc scooters this year. Though the
management claims that this controversy would not effect
introduction of new models, further technology
upgradation by Piaggio is unlikely until the controversy
lasts. This in turn could affect its growth prospects. |
Wooing passengers with comforts The Minister for Civil Aviation, Mr Ananth Kumar, and his colleagues in the ministry seem to be obsessed with “creating” more international airports than the country can afford to have. The powers that-be do seem to think that mere extension of runway will render an airport fit for international standards. Length for runway is only one of the many pre-requisites for an airport. An international airport should have sufficient facilities. It should actually be a “township” which, in the event of bunching of flights or delayed flights, can keep incoming and outgoing passengers suitably engaged and entertained. Unfortunately, even Delhi’s Indira Gandhi International Airport or Sahar’s Airport in Mumbai cannot handle passengers when there are bunching of flights because of weather or technical snags. There are instances when harassed passengers have not been provided with snacks or soft drinks who cool their heels in hold-in areas or transit lounge for hours. Lucknow has been made an international airport. Indian Airlines operates flights from Lucknow to Sharjah. In return foreign airlines will start operations from there that will challenge the monopoly of the Indian Airlines. The competition will improve standards and efficiency. As new millennium approaches, many foreign airlines are gearing upto provide more comforts to passengers like improved cuisine and entertainment. Aware that only fittest can survive in this razor-sharp competition the airlines are taking measures to woo passengers. This is what should be the message to the two national carriers by the civil aviation Ministry. Needlessly expanding runways with grossly inadequate facilities will bring us only negative publicity. Another crash Yet another Air Force plane, this time fighter MiG-21, crashed in the fields near the Raja Sansi airport in Amritsar. It was the fourth crash within 20 days. Luckily, there was no casualty and the pilot sustained minor injuries. According to the
authorities, a bird-hit led to a mechanical fault. But
the major cause for repeated accidents is that most of
the aircraft are age-old and need to be replaced. |
Jaya’s antics unnerve market JAYALALITHA’S association with the BJP-led coalition government has been troublesome since the first day of the formation of the coalition government but it was generally regarded as a kind of horseplay of promoting her interests and squeezing out every possible concession for herself. But now that Jaya has come close to snapping her ties with the coalition government, her action has caused a political quake and unnerved the stock market. During the last fortnight, the sensitive index lost 242.3 points (6.57 per cent) and the NIFTY shed off 110.6 points (6.82 per cent). Even the software and multinational pharma scrips suffered heavily. The current fortnight is likely to be crucial for both political stability and the stock market. In case the BJP-led coalition government survives the crisis by forging new political and party alignments by April 15, the stock market would jump back after the present government is able to prove its majority in the Lok Sabha. But if the government falls, the market would fall further by another 200 to 400 points on the sensitive index. There is a little possibility of a stable alternative government being formed either by the Congress alone or in association with other political parties. A Congress government supported by Communist parties and the remnants of the Third Front political parties would be even more instable than the present coalition ensemble. What is more, no coalition or single-party government at the Centre depending on the support of AIADMK can be stable. In fact, no major political party can trust this party’s leader because of her fickle and capricious moods and erratic behaviour. In case the Lok Sabha is dissolved and fresh election becomes inevitable, the stock market would tumble. A large part of the present buoyancy in the stock market is based on the expectation of relative political stability, an early revival of the economy and a fresh instalment of the economic reforms. The coalition government’s Budget proposals for the 1999-2000 was surely a step in this direction. Now, it is not certain whether this Budget would be approved by the Lok Sabha. The collapse of the present coalition government would automatically kill the budget unless the Congress-led opposition parties decide to approve it before the fall of the present government. The investors are now faced with a double uncertainty: the uncertainty of the passage of the Budget proposals in the Lok Sabha and the uncertainty about the political stability in the country for a long time. Under the circumstances, it is very likely that the FIIs would largely withdraw from the Indian stock market and the direct foreign investment would virtually dry up. One may hope for the best and be prepared for the worst. The new political script crafted by Swami with the central role of the vamp assigned to Jayalalitha is neither good for the country nor for Jayalalitha. The best way out of the crisis would be setting up a national government of the major political parties, but such a possibility may be ruled out altogether. What should the genuine investors do in the context of the present political situation? The economy is still in a bad shape and the latest data indicate that for the first eleven months (April 1998 to February 1999) the industrial growth rate is 3.9 per cent (as against 6.9 per cent in the corresponding period last year). Fresh investment at this time is hazardous and all that an investor can do is either to mark time till the political situation gets clear or to book profit in scrips which have so far resisted the downtrend in the market. But it may be wise to stay investment in good multinational pharma and good software scrips. The same applies to scrips like Nestle, Hindustan Lever, Britannia and Cadbury. It is also on the cards that Cadbury may reward the shareholders with a bonus issue. Nestle has announced an
interim dividend of 35 per cent and the company is
expected to perform very well during the current year as
well. |
Morepen Lab I deposited Rs 20,000 vide cheque No. 815829 dated 25.12.98, drawn on Harco, Bank Ltd, Sector 20, Chandigarh as FDR for six months with Morepen Laboratories. Till date I have neither received fixed deposit receipt nor any intimation from the above said company. ANIL KAPOOR Adcon Cap I hold 100 shares of Adcon Capital Services Ltd, 164 RNT Marg, Indore (MP) with Folio No. 2220, certificate No. 19247 and Distinctive No. 1924301 to 1924400. I have never received annual report or dividend from the company. I do not know the fate of my investment. AMIT PURI UTI I hold 480 master shares of the UTI with Folio No. MF 400796. I have not received the dividend for the year ending June 1998. Amarjit Kaur Videocon Intl We sent Videocon International Ltd, 100 security bonds of Rs 40 each having Folio No. M-0001926 and Certificate No. 55712 for redemption at the rate of Rs 100 on 4.2.98. More than 13 months have passed and not even a single reminder has been replied by the company till todate. Manju Gupta
(Mrs) & Ram N.Gupta JCT I deposited Rs 15,000 with JCT Ltd , New Delhi vide FD Receipt No. FD002484 dated 2.12.97 for one year and its maturity date was 2.12.98. I forwarded the original receipt four weeks in advance under PO registered receipt No. 1006 dated 2.11.98 for repayment. Till todate I have not received the money back despite reminders Baldev Singh
Kathuria
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World-watch BEIJING (AFP): Separate versions of a US-China joint statement on China’s bid to enter the World Trade Organisation highlight the difference between the two. The latest version, a terse four-paragraph affair carried in the state media on Sunday, said the USA and China had made substantial progress towards the goal of China’s entry into the WTO this year. “This agreement and the significant consensus achieved on a broad range of market access and protocol issues have further advanced that goal,” said the statement, also carried by the official Xinhua news agency. Premier Zhu Rongji and President Bill Clinton have instructed their trade ministers “to continue their bilateral negotiations in order to satisfactorily resolve the important remaining issues and reach agreement on strong commercial terms as soon as possible,” it said. The US version highlighted the agreements reached so far on agricultural cooperation, including the lifting of import bans by China on pacific northwest trading rights, technology transfer and offsets, state enterprises and subsidies. “However, they (Clinton and Zhu) recognise that certain differences remain on a mechanism to ensure implementation, the duration of provisions governing dumping and product safeguards and rules governing textiles trade,” it said. The US version was angrily retracted by China’s Foreign Ministry spokesman Zhu Bangzao in Washington on Friday. “We are still in negotiations on this and whether we will be able to release a joint statement on this depends on the outcome of the discussions,” he told reporters, adding “the things that the US side put on the Internet haven’t yet received agreement from the Chinese side,” he said. US version WASHINGTON (AP): After days of haggling over a deal that would lower Chinese trade barriers for American farmers, the USA and China finally signed an agreement that opens the Chinese markets to American wheat, beef and citrus. “This agreement addresses a long-standing concern of American farmers and I was proud to make their case directly”, US Vice President Al Gore said in a statement on Saturday through a spokesman. Under the agreement, China agreed to lift its bans on shipments of wheat from the pacific Northwest and citrus from Florida, Texas and California. China had imposed long-standing bans on those products on the grounds of worries about plant diseases. US producers complained the bans were not on sound science but were hidden trade barriers. The Chinese also agreed to eliminate burdensome inspection requirements that had severely restricted the amount of US beef that could be sold in China. No WTO deal WASHINGTON (PTI): The US textile industry with an enormous clout in the Congress scuttled the promising Clinton-Zhu deal that would have allowed China to enter the WTO immediately. “The American textile manufacturers started sending out a flurry of faxes warning the USA to protect the industry”. The Wall Street Journal said commenting on the failure of the Sino-US talks on the WTO issue. “US textile companies complain about imports of textiles from China, which directly compete with them and drive prices down”. It said as news of the failure of the Zhu-Clinton talks on the WTO began to trickle out. Delay in recovery WASHINGTON (IANS): The World Bank has forecast that developing countries of Asia and Latin America affected by the current global financial crisis are not likely to regain their economic vigour before 2001. Its “Global
Development Finance 1999” report, an annual feature,
which was released on Wednesday, says average growth in
developing and transition economies will fall to just 1.5
per cent in 1999, down from 1.9 per cent in 1998, making
it the lowest growth rate since 1982. |
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