Kakinada, March 19
Reliance Industries will invest more than $9 billion in developing a gas field off the east coast of India and building pipelines to sell fuel to consumers.

The company will spend $5.2 billion in bringing to production Dhirubhai-1 and Dhirubhai-3 fields in block KG-D6 by June 2008. It will invest another $4 billion in laying a 1,386-km pipeline from this city in Andhra Pradesh to Bharuch in Gujarat to transport the fuel.

It will begin producing about 40 million standard cubic meters per day in June 2008, and raise it to peak output of 80 mmscmd in next five months, RIL CEO (oil and gas) P.M.S. Prasad said.

KG-D6, world’s second largest deepwater find of the last decade, is being brought to production in less than six years of discovery at a cost of $2.8 per barrel of oil equivalent (boe), he said.

World-over, energy majors like Shell and Norsk Hydro took 10 years to begin production from gas fields. British Gas started production from its Egypt field in 6.5 years but the output was only 15 mmscmd and the field lay in water depths of 250-850 m as against KG-D6 in 850-1,100 m.

“Our finding and development cost is the lowest in the world,” he said.

Prasad said RIL had seen its field development cost rise from $2.47 billion budgeted in 2004 to $5.2 billion as seismic acquisition costs increased more than 200 per cent and drilling and services charges escalated by 100-200 per cent.

He said almost all of the country’s natural gas deficit would be wiped out when KG-D6 field comes into production.

“If oil equivalent to the gas production from KG-D6 is imported, it will cost the country $120 billion (current oil import bill is over $40 billion),” he added.

The current availability of 91 mmscmd gas meets only half the demand in the country.

"Considering a well-head gas price of $4.5 per million British thermal unit (mBtu), the value of KG-D6 gas if expressed in oil terms comes to $54 billion. This is a net saving of $66 billion," he said.

In-place reserves in Dhirubhai-1 and 3 have gone up from 5.7 trillion cubic feet to 11.3 Tcf, he said.

RIL will drill 22 development wells to produce gas from the two fields and then pipe it to a gas processing facility here. From this city, a pipeline to Gujarat would be built by April 2008.

Another line to Chennai and Bangalore in the south will be build by 2009-end. It also plans to pay a pipeline from Kakinada to Haldia in West Bengal to transport the fuel.

Costs of pipeline to the south and east have not been included in the $9 billion investment planned currently. — PTI 

New Delhi, March 19
The Lok Sabha today passed a Bill to phase out in four stages the central sales tax (CST) and eventually abolish it in three years.

Abolition of CST will pave the way for an integrated goods and services tax (GST) which will be introduced by April 1, 2010, finance minister P. Chidambaram said.

He said under the Taxation Laws (Amendment) Bill, CST was proposed to be reduced from 4 to 3 per cent from April 1, 2007. The Bill seeks to amend the CST Act of 1956.

It will go down from 3 to 2 per cent from April 1, 2008, from 2 to 1 per cent from April 1, 2009, and eventually abolished from March 31, 2010.

The package for compensation to states for revenue loss on this account shall consist of non-monetary as well as monetary measures, the minister said, amid uproarious scenes in the House over the Nandigram issue.

Chidambaram said CST being an origin-based tax was inconsistent with VAT which was destination-based tax. He said CST resulted in cascading of tax (tax on tax) since it was not rebateable against VAT.

It was proposed to drop tobacco from the list of declared goods to enable the states to levy VAT. — PTI 

London/Amsterdam, March 19
Shares in ABN AMRO, the Netherlands’ biggest bank, hit a record high today after what sources said was a merger approach by Barclays for Europe’s biggest financial services deal.

As speculation of a takeover or break-up of ABN AMRO intensified, Barclays approached its Dutch counterpart with a merger blueprint that would create a global bank worth about $160 billion, sources familiar with the matter said.

Barclays, Britain’s third-biggest bank and with a big presence in Europe and Africa, acknowledged press speculation about its interest in Amsterdam-based ABN AMRO and said it would clarify its position before stock markets open on Tuesday.

Its holding statement indicated it has or had some interest in ABN, which owns large retail banks in the US, Brazil, Italy and the Netherlands.

Several other banks, including Dutch rival ING, Spain’s BBVA and France’s BNP Paribas have also expressed interest, directly or through advisers, in either exploring a full merger with ABN AMRO or buying some of its large non-Dutch businesses, sources said yesterday.

ABN has come under pressure from investors, including British hedge fund TCI, to consider a sale or break-up to boost shareholder returns after several years of underperformance.

ABN shares were up 8.2 percent at 29.51 euros after hitting a high of 29.95, to lift its market value to 56 billion euros ($74.6 billion). Barclays shares rose 0.5 per cent to 686 pence, valuing it at 45 billion pounds ($87.6 billion). — Reuters

New Delhi, March 19
Bank unions today requested Prime Minister Manmohan Singh to allow resumption of large-scale recruitments in public sector banks and disallow outsourcing in the sector as it would affect job opportunities.

“The Prime Minister gave us a patient hearing and said he would get in touch with the finance minister to look into our demands,” convener of the United Forum of Bank Unions (UFBU) Prafullo Kumar Patnaik said after the 30-minute meeting.

The meeting assumes significance in the wake of the proposed three-day all-India bank strike from March 28.

The bank unions are scheduled to meet representatives of the Indian Banks Association in Mumbai tomorrow in this regard.

Outlining the demands, Delhi convener of the UFBU V.K. Gupta said the government should also agree to banks undertaking recruitment on compassionate ground in the event of the death of any employee.

The UFBU, comprising nine bank unions and representing over 10 lakh employees, has also asked the government to provide a second option for bank workers wanting to opt for the pension scheme.

Many employees did not join the pension scheme because of earlier stipulation that their years of services would factor in the number of days they go for a strike.

The leaders alleged while workload has increased manifold, banks had put a ban on recruitment, leaving more than one lakh vacancies. This is forcing bank employees to work for extra hours without overtime.

The leaders also charged the managements with stopping compassionate employment, a kind of social security for employees. — PTI

New Delhi, March 19
In a setback to Sun TV, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) today directed the Kalanidhi Maran-owned broadcaster to provide signals to DTH operator TataSky.

In an interim order, the TDSAT asked Sun TV, which plans to launch its own DirTH service shortly, to provide its 20 channels on a-la-carte (pick and choose) basis to TataSky.

“We direct the respondent (Sun TV) to make available signals of all channels to the petitioner (TataSky) on a-al-carte basis at 50 per cent of its declared rates," TDSAT chairman justice Arun Kumar said in the interim order.

The tribunal rejected Sun TV’s contention it was offering all its channels under a single package for DTH operators.

“We are unable to accept the contention of the respondent that petitioner has to accept all channels as a package”.

“The respondent has not placed any material before us nor anything was referred to in support of the stand that it was offering its channels only as a bouquet/package to its customers,” the tribunal said.

Further, Kumar rejected Sun TV’s argument that it was providing channels to TataSky's rival Zee Group promoted DTH platform Dish TV on the same packages.

Sun TV had demanded Rs 85 for all its 20 channels from TataSky and said it would be discriminatory to Zee if it gave signals to TataSky at a lower price.

TataSky had opposed this argument, saying the agreement between Sun TV and Zee appeared to be a sham as even after four months of the pact, Dish TV was showing only one or two channels of Sun TV.

TataSky, an 80:20 joint venture between Tata and Star India, has been contending that Sun TV was denying signals due to its own interest in the DTH business.

The decision comes as a setback to Sun TV as it no longer would have exclusivity of channels in its own DTH service. — PTI

New Delhi, March 19
Honda Motorcycle and Scooter India (HMSI) will launch a new bike in the 100 cc segment and is scouting for locations for setting up a new plant for the purpose.

“We plan to launch a bike in the 100 cc segment in the near future and are looking for a suitable location for a new plant. We will also introduce new products in the Indian market, including a scooter by the end of this calendar year,” HMSI president and CEO Y Aoshima said at the launch of the company’s latest version of Unicorn.

“Out of the 9 lakh per annum capacity, 6.5 lakh units will be contributed by scooters and 2.5 lakh units by motorcyles,” Aoshima said.

The new model of Unicorn is priced at Rs 58,150 (ex-showroom Delhi) and will come in three colours, red, silver and black, to be available in the market from April 9. The company presently has 391 outlets, which it will increase by 70 per cent to reach 663 outlets by 2008. — UNI

New Delhi, March 19
Dutch asset manager Robeco Groep NV, a part of European banking giant Rabobank Groep, will buy 49 per cent stake in Canara Bank’s asset management arm to gain a foothold in the country’s robust mutual fund industry.

Robeco, which has assets under management of 139 billion euros worldwide and posted operating profits of 233 million euros in 2005, will pay Rs 115 crore to Canara Bank for its stake in Canbank Investment Management Services Ltd (CIMS).

“The total valuation of our asset management entity is Rs 230 crore and 49 per cent stake sale will bring about Rs 115 crore,” Canara Bank chairman and managing director M.B.N. Rao said after signing an MoU with Robeco.

The RBI has already given its assent to the proposed venture, he said, adding approval from market regulator SEBI and the Foreign Investment Promotion Board would be sought soon.

Robeco’s entry follows other Dutch companies such as ABN Amro and ING Group as well as a number of other US and European players like HSBC, Franklin Templeton, Prudential, Standard Chartered and Fidelity.

In all, India has 32 mutual fund players with total AUMs of more than Rs 3,50,000 crore. CanBank is a relatively smaller player with AUMs of about Rs 2,200 crore.
— PTI

New Delhi, March 19
RSWM Limited, a leading integrated player in the textiles sector in India, today announced that it had concluded a transaction to acquire 48.17 per cent stake in Cheslind Textiles Ltd, a 100 per cent export-oriented unit, manufacturing cotton yarn with its headquarters at Bangalore.

RSWM will acquire shares of Cheslind Textiles at Rs 25 per share from the promoters at a total consideration of Rs 278 million.