Mumbai/London, December 28
Anil Ambani's Reliance Communications today joined the battle to acquire India's mobile major Hutch-Essar and is pitted against compatriot Essar and UK's Vodafone, which has reportedly valued the JV at $17-18 billion.

Announcing the move, Group Chairman Anil Ambani did not venture on what value he would attach for Hutch-Essar Ltd (HEL), which he thought was crucial for the future growth of RCom, already the country's second-largest mobile operator.

Reliance Communications jumped into the fray two days after Vodafone's CEO Arun Sarin and Ravi Ruia, Vice-Chairman of Essar, held parleys in Hong Kong with the top brasses of Hutchison Telecom (HTIL) that holds 67 per cent in HEL.

Though Essar has not announced its entry in the race, it has reportedly offered about $11 billion to buyout the foreign partner in HEL, where it has 
33 per cent stake.

While Vodafone can enter the venture by just buying out HTIL's 67 per cent stake, RCom would have to acquire the entire venture to overcome the regulatory issues. But Mr Ambani was confident that all regulatory norms would be adhered to.

Mr Ambani chose the occasion of his father Dhirubhai Ambani's 75th birth anniversary to announce his intention to buyout HEL, for which he said the group had support from global equity funds and banks for offering resources for merger and acquisition plans.

"The commitments are more than what we can consume", he said, adding that commitment was on RCom's balance sheet and not for a particular venture.

Putting forward the argument that "in-country" consolidation could unlock better value for stakeholders than a foreign player taking over Hutch-Essar, he said going by the current valuation, synergy would hold the key.

He, however, termed as speculative reports suggesting that the valuation of HEL was in the range of $21 billion and said: "We have absolute clarity in our mind and we shall be well within our conservative limits." British daily Financial Times had reported that Vodafone has submitted an offer to HTIL valuing its Indian business at $17-18 billion.

On funding options, he said financial institutions are ready to provide both debt and equity. "Majority of top 10 private equity players have approached us. It will be a combination of both as the need may be. This I believe is a strong endorsement in our company and in India's telecom growth," he said.

But he hastened to add there was no certainty on when and how it will be completed or whether RCom would get it.

RCom's Board has discussed various options, which include organic and inorganic routes, for the future growth of telecom businesses and Hutch-Essar is one such opportunity. However, the issue could be decided only after the two partners — Essar and Hutchison Telecom (HTIL) — sorted out the issues like first right of refusal, he said. — PTI 

New Delhi, December 28
The Power Finance Corporation (PFC) today awarded the 4,000-MW Sasan and Mundra ultra mega power projects to successful bidders Lanco Infratech and Tata Power, respectively.

Punjab and Haryana would get power from the Sasan and Mundra mega power projects. Lanco and Tata Power had emerged the lowest bidders for the two 4,000 MW projects, to be set up in Madhya Pradesh and Gujarat, at a total investment of up to Rs 40,000 crore.

The Lanco-Globoleq combine had quoted a tariff of Rs 1.196 per unit to outbid nine other companies for the coal pithead-based Sasan project in Madhya Pradesh. The project would require an investment of Rs 16,000-19,000 crore.

The Sasan project is likely to achieve financial closure by December, 2007, and the first unit would start generation by 2011-12. The company is likely to execute the project in a debt-equity ratio of 80:20 and may raise funds through external commercial borrowings. It is also talking to China's Dongfang Electric for procuring equipment, officials said.

Tata Power had outsmarted five rivals with a tariff of Rs 2.26 per unit for the imported coal-based Mundra project. Generation from the first unit is likely to start by 2011-12.

The PFC is also expected to award two more projects in Andhra Pradesh and Jharkhand, by April-May, 2007.

The Centre has envisaged a capacity addition of 1,00,000 MW to meet its mission of ‘Power For All by 2012’. Achievement of this target requires the development of large-capacity projects at the national level to meet the requirements of states.

These mega power projects, each with a capacity of about 4000 MW, would also have scope for further expansion. These projects will add about 36,000 MW within six or eight years. 

New Delhi, December 28
It has been an year of quite an upheavel in the civil aviation industry with new airlines coming in, new aircraft being ordered, airports getting revamped and attempts for takeovers falling through.

At a time when passenger traffic to India is on the rise, the government also realised the need for providing travellers world-class facilities, hence the idea for privatising at least two of the four metro airports cropped in. Besides a possible merger of two public sector airlines — Indian (airlines) and Air-India, which would, in the opinion of the civil aviation ministry, bring out an airline to take on the world-class competition coming into India.

It was also a year of further opening up of the Indian skies with a large number of bilaterals either being signed or being revised to a higher level to provide more seat availability to both government and private-owned airlines, from not only India, but from other countries.

The privatisation of two metro airports at Delhi and Mumbai, besides falling through of the Jet Airways attempt to take over Air Sahara possibly made the biggest news in the sector. The government managed to privatise Delhi and Mumbai airports despite protests from the UPA allies in Left parties.

The failed takeover attempt by Jet Airways of Air Sahara and their later moving the courts hogged the limelight for quite sometime during the year. But, while the Rs 2,300-crore plan fell through, the government is going ahead with merger plan of Indian and Air-India. Civil Aviation Minister Praful Patel promised that the new mega entity should emerge by next fiscal year beginning April 2007, something that will optimise fleet acquisition, leverage the asset base, strengthen networks and achieve economy of seats.

In focus were almost all airlines for placing orders for 480 aircraft. The placing of orders were in conjunction with the projected growth of air traffic into the country.

First it was Indian which received its first of the 43 spanking new Airbus aircraft and then it was Air-India, which received the first of 68 Boeing jetliners.

Two new airlines started operations in the year that was — Indus Airways and Indigo. Private carriers now number 14 and control over 80 per cent of the domestic market.

But weak infrastructure remains a major cause for concern, though initiatives have been taken to upgrade and modernise airports and air navigation systems. Airports at Chennai and Kolkata are being accorded priority.

The Airports Authority of India (AAI) is also upgrading 35 non-metro airports to world-class standards with focus on air-side and city-side development and enhancement of non-aeronautical revenue. This is in addition to greenfield airport projects currently under way at Bangalore and Hyderabad.

The Airport Economic Regulatory Authority (AERA) has been cleared by a Group of Ministers and is awaiting parliamentary approval. The regulator will approve tariff structure (airport charges, including air navigation charges) and monitor pre-set performance standards for airports.

While a comprehensive civil aviation policy, which the country is awaiting for over seven years, is yet to be announced, the government adopted a liberal approach in granting traffic rights under bilateral agreements with various foreign countries. Pacts were also signed with the European Union and the US Federal Aviation Authority to develop and modernise civil aviation infrastructure in the managerial, operational and technical areas.

To overcome shortage of pilots, the Indira Gandhi Rashtriya Uran Academy is being upgraded and may soon be under management contract of a large reputed international company. The government is also establishing a premier pilot training institute at Gondia in Maharashtra.

The rapid fleet expansion is generating opportunities in maintenance, repair and overhaul (MRO) facilities. Given low labour costs in the country and a large pool of engineers, efficient world-class MRO operations have a potential to attract offshore work from across Asia and beyond.

MRO ventures are being planned by Boeing, Airbus, Singapore Technologies, Singapore Engineering with GoAir and Kingfisher.

Security at over 100 airports across the country remains high and passengers are banned from taking liquids on board after London said in August that it foiled a plot to blow up trans-atlantic flights.

New Delhi, December 28
Air Deccan has been asked by the State Consumer Commission to pay Rs 75,000 as compensation to members of two families who were left stranded at the airport here owing to flight delays due to a technical problem.

The Delhi State Consumer Disputes Redressal Commission headed by Justice J.D. Kapoor and member Rumnitta Mittal rejected the airline’s plea that the delay in flights was caused due to technical problems beyond its control.

"If the contention of Air Deccan is accepted, then every service provider will take one excuse or the other. Such an insensitive or casual or indifferent attitude shall always leave the consumer high and dry and suffer immensely," said Justice Kapoor, dismissimg two appeals of the airlines filed against the orders of a District Consumer Forum.

"To keep consumers waiting for hours together without any valid reason and without any direct proof by the service provider that the service could not be provided well in time as per contract due to reasons which were beyond their control amounted to deficiency in services," he said.

Upholding the consumer forum's verdicts, the Commission awarded travellers Gurpreet Singh and Rakesh Kwatra and their family members a consolidated compensation of Rs 75,000.

As per Mr Gurpreet Singh, he, along with his wife and two minor children, had booked tickets on a Delhi-Banglore flight of Air Deccan for December 5, 2004. At the airport here, he was informed that the flight was delayed by seven hours due to a technical snag throwing his all future assignments haywire, the complaint alleged.

While Mr Kwatra had to wait over seven hours to board a Chennai bound flight at Delhi airport.

Their complaints were allowed by the consumer forum which had held the airlines guilty of deficiency in services.

Earlier, the commission, in an unprecedented order, had held that airlines operating from Delhi will have to pay a compensation of Rs 10,000 each to domestic travellers and Rs 20,000 each to passengers of international flights if the delays exceeded two hours. — PTI 

New Delhi, December 28
Finance Minister P Chidambaram will begin pre-Budget consultations from tomorrow when he meets representatives of agriculture sector, followed by a meeting with trade union leaders.

The meeting with farm sector representatives is crucial as farm production has fallen considerably and suicide of farmers has also increased.

The agriculture sector has shown subdued average growth of just 2.6 per cent in the past eight quarters.

The farm sector representatives are expected to demand doubling of farm credit, hiking of minimum support price and enhanced allocation for completion of irrigation projects in various states.

With only 40 per cent of 193 million hectares of cropped area under irrigation, over 27 million cultivators were left to the vagaries of monsoon. Various farmers associations have been demanding increase in the budgetary allocation for irrigation to a minimum of 2 per cent for the next three years.

The trade union representatives are expected to demand a pro-people, pro-poor policies, including imposition of higher corporate and personal income taxes on the rich class to increase the tax-GDP ratio.

The unions, especially Left-affiliated unions are expected to urge Finance Minister to hike interest rates on special deposit schemes which would enable Employees Provident Fund Organisation to disburse greater interest rates to its more than four crore subscribers.

They are also expected to pitch for introduction of inheritance tax and restoration of long-term capital gains tax.