Hyderabad, December 5
Prime Minister Manmohan Singh has called for unlocking the investment potential of the public sector for the benefit of the country.

“We have invested a significant amount of our national resources in building up a sizeable public sector…but the productivity of the investment locked up in our public sector is very low. We need to unlock this investment potential if the country has to benefit from the past investments,” Dr Singh said.

He was delivering the golden jubilee address at the Administrative Staff College of India (ASCI) here.

The Prime Minister underlined the need to put PSUs on a sound financial footing by giving them the opportunities to restructure and rationalise, enter into public-private partnerships and enable them to build on core competencies.

Dr Singh said his government was keen to create a culture that rewards risk-taking, innovation and product development so that “the public sector can compete effectively on a global plane”.

Pointing out that trust was declining in the government as an institution, the Prime Minister felt that the answer to this did not lie only in cutting back government but in reform and repositioning the government so that it “addresses the tasks that only it can deliver”.

Drawing attention to the low levels of R&D, the Prime Minister said India’s share in scientific research worldwide was less than 1 per cent and had been declining over the time. The private and public sectors need to play their role in reversing this trend, he said.

Dr Singh said his government was committed to promote a “code of conduct that better defines the relationship between civil service and political executive.”

Stating that there was a huge shortage of skilled workers in the country, he said the government was opening new institutions at various levels of knowledge pyramid with particular emphasis on vocational education mission to meet this shortage.

The Prime Minister announced Rs 5 crore interest-free loan for the ASCI to construct its second campus in the city. The ASCI, set up in 1956, is a pioneer in post-experience management education in the country.

The Chairman of the Court of Governors of the ASCI, Mr M. Narasimham and its Director-General, Dr S.K. Rao, were among those present.

Kochi, December 5
SEBI proposes to introduce Indian Depository Receipts (IDRs) in the Indian capital market by 2007, said SEBI Chairman M. Damodaran so that domestic and foreign companies could raise funds in the Indian market in a cost-effective manner.

In the next 12-18 months, some of the biggest companies in the world would file for IDRs in India, Mr Damodaran said while delivering the ninth K.P. Hormis Memorial Lecture organised by the Febbank K P Hormis Trust here last night.

Other initiatives being planned by SEBI were a dedicated exchange for Small and Medium Enterprises (SMEs) by next year and a comprehensive training institute for capital market personnel in Mumbai. The world class institute would be set up on public private partnership, he said.

Along with imposing regulations, SEBI also wanted to reach out to investors and was in the process of starting a major investor campaign, which would be funded by the Investment Protection Fund (IPF).

The government's decision was being awaited on whether foreigners could invest in Indian stock exchanges. The ownership structure of the stock exchanges would be different in the coming few months, he said.

Though there were more than 950 registered foreign institutional investors (FIIs) in India, there was no need to fear that FIIs held sway in the Indian capital market. There were about 40 mutual funds, including some biggest names from overseas, in the Indian market.

The Korean Mutual Fund was waiting to invest in the country, Mr Damodaran said, adding that this could be seen as a 'vote of confidence' for the Indian market, which is marginally behind the Korean market in terms of market capitalisation. — PTI

New Delhi, December 5
Reliance Industries Ltd has won two oil exploration blocks in Yemen, but has denied having talks to acquire Premier Oil of the UK.

"Yemen has awarded onshore exploration Blocks 34 and 37," a source said.

The source, however, said Reliance was not looking at acquisition of Premier Oil of UK.

"Reliance did have a look at Premier several months ago but pulled out of talks as it did not find the company attractive at current valuations," the source said.

The Mukesh Ambani group firm has taken local company Hood Oil as partner in the two Yemen blocks, but equity structure is yet to be agreed.

Blocks 34 and 37, each measuring around 7500-sq km and located on the border with Oman, were among the seven blocks offered by Yemen in its second licensing round.

RIL, which also has exploration blocks in Oman, East Timor and Columbia, is likely to sign production sharing contract (PSC) for Blocks 34 and 37 next month.

The Indian company already partners Hood Oil in producing Block 9, where the two companies hold 25 per cent each.

Calvalley Petroleum of Canada is the operator with 50 per cent stake. The block currently produces 7,500 barrels of oil per day and the output will go up to 10,000 barrels this month.

"Production is constrained by infrastructure to transport crude. Currently oil is trucked and the output will increase to 30,000 barrels per day once a pipeline is build," the source said.

Calvalley plans to lay a 250-km pipeline to evacuate crude. The pipeline construction will take four months. — PTI 

New Delhi, December 5
Eight months after it was phased out from the market, Maruti today unveiled the new Zen sporting an all-new look and under a new name Estilo, pricing the base variant at Rs 3.19 lakh (ex-showroom Delhi).

The company, which had discontinued the sale of the Zen after deciding to go in for an all-new model, decided on an aggressive entry-level pricing to make it competitive in the market, against models like Hyundai’s Santro and Tata’s Indica.

“Young people in India today desire products with contemporary styling and international appeal. The new Zen will appeal to this new India, just as the original Zen appealed to the India of the mid 1990s. It incorporates features and attributes that are uniquely suited to India and valued by Indian car buyers,” Maruti Managing Director Jagdish Khattar said.

The Estilo, which is a Spanish word meaning style, will strengthen Maruti’s position in the compact car segment where it already has models like Alto, WagonR and Swift.

However, analysts say the presence of many models around the same price band could also lead to some cannabalisation.

The company said the Zen Estilo is roomier than the original Zen and sports a bigger engine (1061 cc). “It delivers 64 bhp and its low-end torque of 84 nm (at 3500 rpm) makes it ideal for Indian city conditions,” the company said. — PTI

New Delhi, December 5
The Appellate Tribunal of Electricity has set aside the Central Electricity Regulatory Commission’s (CERC’s) order prohibiting Essar Power from selling electricity to trading companies and enter into pacts with distribution companies directly for its 1,500 MW project in Gujarat.

The CERC while granting “in-principle” clearance to Essar’s Hazira project in August this year had told the company to sign power purchase agreement (PPA) directly with distribution firms and not with any trading company.

Essar, which is likely to commission 750 MW capacity by April 2007, had entered into an MoU with PTC in August 2004, under which it agreed to sell the entire power to the trading company for 25 years. PTC, in turn, was to sell the electricity to state utilities.

Following CERC directions, PTC India Ltd, the country’s largest electricity trader, and Madhya Pradesh Power Trading Co Ltd, challenged the regulator in the tribunal. PTC alleged that CERC’s order was arbitrary and the regulator exceeded its jurisdiction in directing Essar to enter into PPA directly with distribution companies and not through the trader.

Agreeing with the contentions of PTC and MPPTCL, the Tribunal held that CERC was not authorised to stop independent power producers from signing PPAs with any trading company. — PTI

Mumbai, December 5
Larsen and Toubro and Tata Power have applied for the 'Rashtriya Udyog Ratna' status that would enable them to bid for defence contracts on a par with public sector defence companies.

The applications made by these companies are pending before a special committee set up by the Ministry of Defence, top officials of L&T and Tata Power said here today.

"This status will enable us to bid for defence contracts and we will be treated on a par with defence PSUs," an official said.

The move came following the constitutional amendment in 2001 after the Vijay Kelkar Committee report recommended allowing private sector participation in defence production.

Currently, the Ordnance Factory Board and eight other defence PSUs are delivering contracts worth over Rs 17,000 crore.

Both L&T and Tata Power have bagged a Rs 172-crore worth contracts to supply Pinaka multi-barrel rocket launchers for two regiments of the Indian Army.

L&T is developing prototypes for various Defence Research and Development Organisation projects and has strong capabilities in composites for aerospace applications.

Tata Power's strategic electronic division has received seven licences for various defence projects recently for electronic warfare, naval combat and air defence.

Close to 1,000 companies in the country are supplying structural parts and sub-assemblies to the services and defence PSUs and according to analysts, the estimated size of the market is about Rs 30,000 crore.

The MoD has already put an offset clause in its arms purchase policy, forcing foreign military contractors to source parts and components worth at least 30 per cent of the deal size from domestic manufacturers.

The services have already lined up major modernisation contracts, which include a $10 billion multi-role combat aircraft deal for the IAF.

India's defence budget for the current fiscal stands at Rs 89,000 crore. — PTI 

New Delhi, December 5
The Company Law Board (CLB) today put a brake on the controversial sale of majority stake in news agency UNI to Subhash Chandra’s Essel group declaring that the deal did not appear to be bona fide and was prima facie not valid.

Ordering status quo be maintained, CLB Chairman N. Balasubramanian ruled that the sale of 50.05 per cent shares to Essel Group’s Media Vest was prima facie in violation of the Articles of Association of UNI, a non-profit sharing company set up in 1961.

He directed that no meeting of the reconstituted Board of the agency should be held without CLB’s permission. It directed UNI, Mr Chandra and other respondents to file reply in six weeks and posted the matter for March 7 for further hearing.

UNI stake sale to Media Vest was also questioned by a Bhopal Eveninger Sandhya Prakash and the case is now being heard in the Delhi High Court. — PTI

Mumbai, December 5
The RBI today allowed non-banking finance companies (NBFCs) and residuary non-banking companies (RNBCs) on a selective basis to market and distribute mutual fund products as agents of mutual funds.

They will be permitted to conduct the business for an initial period of two years, but only with the prior approval of the apex bank. This permission will be subject to a review after the completion of two years, an RBI release issued here today stated.

The NBFCs will have to, however, have a minimum net-owned fund of Rs 100 crore and should have made a net profit as per its past two years audited balance sheet.

Two other conditions the NBFCs should fulfil include their percentage of net NPAs to net advances being not more than three per cent as per their last audited balance sheet and that non-deposit-taking NBFCs (NBFCs-ND) should have a CRAR of 10 per cent while deposit-taking NBFCs should have a CRAR of 12 to 15 per cent, as applicable to the company.

Other conditions imposed by the apex bank are that the company should not adopt any restrictive practice of forcing its customers to go in for a particular MF product sponsored by it. “The customers should be allowed to exercise their own choice,” the bank said. — PTI

New Delhi, December 5
Anil Ambani-controlled Reliance Communications has bid for a national fixed wireless service licence in Bahrain.

The company is among the nine bidders for the licence. Reliance had unsuccessfully bid for telecom licences in Bhutan and Egypt earlier. The financial bids will be opened on December 13. — PTI

Mumbai, December 5
ICICI Bank has opened representative offices in Thailand (Bangkok), Indonesia (Jakarta) and Malaysia (Kuala Lumpur), extending its presence to 17 countries.

Mr Chanda Kochar, Deputy Managing Director of the bank, said here today ''this would enable the bank to increase its participation in India's trade transactions in the region that are likely to see a spurt once the ASEAN-India FTA is announced''. — UNI

Paris, December 5
Airbus has kicked off a $13.2 billion plan to build its A350 XWB wide-bodied jet, designed to compete with Boeing's successful 787. CEO Louis Gallois said A350 would be funded through the savings generated by a painful cost-cutting plan, cash flow and Airbus' partners. The cost-saving plan was announced in the wake of delays to the A380 super jumbo and management turmoil that has shaken the company and its parent, EADS.

The Board of European Aeronautic Defence & Space Co approved the A350 plan on Friday. — AP