New Delhi, May 26
Petroleum minister Murli Deora will tomorrow morning meet finance minister P Chidambaram to seek duty cut to bail out state-run oil firms that are reeling under a financial burden in the wake of surging global crude.

"Deora sought a meeting with the finance minister today but since Chidambaram came to Delhi in the afternoon, the meeting has been scheduled for tomorrow morning," a petroleum ministry official said.

The petroleum ministry is seeking lowering of customs duty on crude oil to zero from 5 per cent and that on petrol and diesel to 2.5 per cent from current 7.5 per cent, but finance ministry is not obliging.

The relentless rise in international oil prices that last week touched an all-time high of $135 a barrel has forced the government to mull options to save the oil firms, which expect a revenue loss of Rs 2,00,000 crore this fiscal on sale of petrol, diesel, domestic LPG and kerosene.

The petroleum ministry is not in favour of compensating Indian Oil, Bharat Petroleum and Hindustan Petroleum beyond one-third of the total under-realisation on fuel sales.

Currently, the government meets a little over half of the under-realisation through oil bonds.

Crude oil currently attracts an import duty of 5 per cent and if this is eliminated it will help lower the Rs 272,699 crore oil import bill of 2007-08. Customs duty is levied on petrol and diesel at the rate of 7.5 per cent and its reduction would help oil companies cover some of their losses.

IOC, BPCL and HPCL are losing Rs 16.34 a litre on petrol, Rs 23.49 per litre on diesel, Rs 305.90 per LPG cylinder and Rs 28.72 per litre on kerosene.

The three firms are faced with a huge liquidity crunch and are borrowing Rs 3,500 crore a month to meet day-to-day expenditure. — PTI 

Chandigarh, May 26
The inventory of the oil marketing companies has now fallen victim to the rising crude oil prices. As the global crude oil prices inch closer to $140 a barrel, the oil marketing companies have already been forced to reduce their holding capacity from eight to two days.

Though officials in the ministry of petroleum have denied that there is any shortage of fuel, top officials in the state-run oil companies say that they are now holding stocks for just two to three days. "As public sector companies, we are committed to connect the supply chains. But our holding capacity has been impacted because of the rising crude oil prices," said an official in Hindustan Petroleum.

It's not just Hindustan Petroleum, but also IndianOil and Bharat Petroleum — the other two public sector oil marketing companies, who have been forced to reduce their holding capacity. "Though our service is not linked to this situation and the government is compensating by issuing us oil bonds, the inventory has gone down as the prices of crude oil continue to soar," said a top official in IOC.

With petrol prices likely to go up by Rs 10 a litre this week, and amidst rumours of rationing of fuel, panic buying of fuel has already started. Says J P Khanna, president of the Punjab Petroleum Dealers Association, "We are receiving reports of panic buying of petrol and diesel, especially by agriculturists and factory owners in the state. In case any dispenser at a pump runs dry, the people in the area start panic buying of fuel," he said.

Officials in the ministry of petroleum informed TNS that a price hike in petrol is inevitable, though the government may desist from increasing the price of diesel and liquefied petroleum gas (LPG). The three oil marketing companies, IndianOil, Hindustan Petroleum and Bharat Petroleum, have demanded to increase the price of petrol by Rs 15 a litre and that of diesel by Rs 20 a litre. They claim that the three oil marketing companies are suffering a daily retail loss of over Rs 500 crore.

It is also learnt that the government may marginally reduce the excise duty and customs duty. With the taxes on petroleum products contributing Rs 1,00,000 crore to the Central Government's cash reserves and Rs 50,000 crore to the coffers of all state governments, there may not be any drastic cuts in the taxes.

As the global crude oil prices rise, the oil companies say that they are now forced to sell petrol at Rs 10 a litre less than what it costs to the companies and diesel at Rs 20 a litre less than its cost to the company. The actual price of LPG to the companies, too, is Rs 300 more than the retail price.

The daily sale of petrol in the country is around 10 million tonnes, while that of diesel is around 50 million tonnes. "With a high subsidy on diesel, which is vastly used in the agriculture sector, we have no option but to increase the petrol price. With diesel consumption being five times of petrol consumption, for every Re 1 subsidy on one litre of diesel, we have to increase the cost of petrol by Rs 5 a litre. At current prices, the oil companies are suffering an annual loss of Rs 1,00,000 crore on diesel," added an official in IOC.

New Delhi, May 26
Reliance Globalcom Ltd, a subsidiary of Anil Dhirubhai Ambani Group (ADAG) Reliance Communications today announced the signing of an agreement to acquire UK-based Global Managed Network Services, Vanco group Ltd through one of its wholly owned subsidiary.

Reliance Communications, which earlier in the day said it had started exclusive talks with South Africa's MTN Group that could create a $63 billion telecom giant, will pay $76.9 million for "100 per cent equity of Vanco Group free of debt".

At its peak, the market capitalisation of Vanco had stood at $800 million. However, the trading of the company shares were suspended after the company gave a major profit warning and parted ways with its founder chief Allen Timpany.

Incidentally, the acquisition of Vanco would add Rs 1,550 crore to the annual revenue of Reliance Globalcom through secure long- term contracts with largest enterprise customers.

"The acquisition of Vanco is in line with Reliance Globalcom's vision to create one of the top five global data communication enterprises in the world," Anil Ambani, chairman, Reliance Communications, said.

Vanco is recognised by Gartner to be amongst world's top five Managed global Network players with over 220 MNC customers. Virtual network operators are companies which lease infrastructure and bandwith from others but provide and manage the communication needs of their clients.

Vanco increases the Reliance Globalcom tally of enterprise customers to 1,400. Reliance communications through this acquisition would add nine Network Management Centres to its integrated global service systems.

Vanco, which has been under financial trouble, operates in over 230 countries across the world with over 800 new product offerings that it has developed over the past 20 years. Incidentally, it has over $650 million worth of secure long-term contracts from its customers that would be accrued over the next 3-5 years.

Vanco has over 200 clients primarily headquartered out of the UK, France, Germany, US and Singapore.

New Delhi, May 26
A day after the word came out that following Bharti Airtel pulling out of talks with MTN Anil Ambani Group firm Reliance Communications (RCom) had initiated talks, the group has confirmed that it was in talks to discuss potential combination of their businesses with the South African telecom operator.

RCom today announced that it was entering into exclusive negotiations with South Africa's telecom operator MTN.

The two companies have agreed for a 45-day exclusivity to work out the details for merging their businesses.

The development comes just two days after South African company deviated from agreed terms with the country’s largest telecom player Bharti Airtel, who pulled out of 3-week long negotiations citing “convoluted” new structure presented by the management of MTN as the reason.

In his comments on the development, Anil Ambani said "negotiations are on to achieve global platform for exponential growth." The company has also informed the stock exchange about the development and said further announcement would be made when appropriate.

If the negotiations are successful, the combination of MTN and Reliance Communications would create a global wireless juggernaut, larger even than developed-market giants such as AT&T.

Last week, Bharti Airtel pulled out as the new structure envisaged Airtel becoming a subsidiary of MTN and exchange of majority shares of Bharti Airtel held by the Bharti family and Singtel, in exchange for a controlling stake in MTN.

“Bharti believes that this convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity,” the statement had said.

“Further and more importantly, Bharti's vision of transforming itself from a home-grown Indian company to a true Indian multinational telecom giant, symbolising the pride of India, would have been severely compromised and this was completely unacceptable to Bharti”.

Bharti Airtel had been in exploratory talks with MTN over the possible buying of majority stake or merging of the two companies.

New Delhi, May 26
India's inflation rate may be revised to 10 per cent from the latest estimate of 7.82 per cent as data for prices of different commodities is updated, London-based publication The Economist has said.

"Delays in data collection in India can mean big revisions to inflation... The latest wholesale price rate inflation rate might therefore be pushed up to 9-10 per cent," noted The Economist in its cover story on global inflation.

India faces the challenge of high inflation in the coming months, especially due to rising international crude oil and food prices.

"Prices are also rising partly because loose monetary conditions in emerging economies have boosted domestic demand," the prestigious journal said.

India revised inflation figures for the week ended March 15 to 8.02 per cent from the earlier estimate of 6.68 per cent.

Referring to ban on futures trading in agricultural commodities, it said, "In the short run such measures may help cap inflation and avoid social unrest, but in the long run they do more harm than good." Preventing rising prices reduces the incentive for farmers to increase supply and for consumers to curb demand, thus prolonging the very imbalance that has stoked prices.

It further said if measured correctly, five of the 10 biggest emerging economies could have inflation rates of 10 per cent or more by mid-summer. "Two-thirds of the world's population may then be struggling with double-digit inflation."

The Economist pointed out that China's consumer-price inflation is at a 12-year high of 8.5 per cent, up from 3 per cent a year ago. Russia's has leapt from 8 per cent to over 14 per cent, while most Gulf oil producers have double-digit inflation rates. — PTI 

Mumbai, May 26
Country's top software exporter, Tata Consultancy Services, today said it has bagged a five-year contract worth $100 million (about Rs 426 crore) from Europe's NXP Semiconductors B V.

TCS would provide high-end consulting services as well as application management, development and support services across NXP's supply chain operations.

In a filing to the Bombay Stock Exchange, TCS said the contract would be implemented through multiple centres in India, Asia and the US. These units would be supported by a high tech centre for excellence, based in Eindhoven.

"We were looking for a partner who has a holistic understanding of our business and not just the technology behind it and in this respect, TCS is ideally placed to help us drive growth over the next five years," NXP's senior vice president and chief information officer Louis Luijten said.

Commenting on the contract, TCS' chief operating officer and executive director N Chandrasekaran said the firm would be working wtih NXP at a strategic level to optimise their operations.— PTI

New Delhi, May 26
It could still be time before the security issues surrounding the BlackBerry instrument get sorted out with its vendor Research-In-Motion (RIM) today saying that it cannot hand over the message encryption key to the government.

Last week, there were reports that RIM had agreed to hand over the encryption key to the Indian government as a result of the services coming under a cloud due to the concerns raised by the security agencies who are not able to intercept the data sent on the BlackBerry set.

RIM said its security structure does not allow any ‘third party’ or even the company to read the information transferred over its network.

“The BlackBerry security architecture for enterprise customers is purposefully designed to exclude the capability for RIM or any third party to read encrypted information under any circumstances,” the company said.

The Department of Telecom (DoT) and the security agencies had asked the Canadian company to provide the master key to it so that it can access the contents transferred over the hand-held device.

Assuring lakhs of customers, who were concerned over the fate of BlackBerry services, RIM said: “We regret any concern prompted by incorrect speculation or rumours and wish to assure customers that RIM is committed to continue serving security-conscious business in the Indian market.”

Reports said following the latest move from RIM, the BlackBerry services in the country could actually be restricted by the security agencies, who have been specially concerned as the date sent on the instruments by the individuals cannot be intercepted by them. On the other hand, the data of the corporate clients does get available to it because of the bulk registration by the companies.

Mumbai, May 26
Bajaj Group today listed two of its companies on the stock exchanges after it was demerged from Bajaj Holdings and Investments.

Group chairman Rahul Bajaj listed two-wheeler maker Bajaj Auto on the Bombay Stock Exchange, while Group vice-chairman Madhur Bajaj listed Bajaj FinServ on the National Stock Exchange.

With the listing of these firms, the Pune-based Bajaj has completed the process of demerger that began on May 2007.

Bajaj Holdings and Investments has 30 per cent stake each in Bajaj Auto and Bajaj FinServ.

"2008 will be a challenging year for Bajaj Auto. We expect the domestic market for two-wheelers to be flat. We want the exports to grow and hope to cross 2.5 million vehicles in this financial year," Rahul Bajaj told reporters.

Bajaj Auto would continue to launch new models in association with Kawasaki and KTM. It plans to raise its stake in KTM to 30 per cent from 25 per cent in due course of time, he said.

Bajaj said if the government allows higher FDI in insurance then its German partner Allianz has the call option to raise it from the present 26 per cent to 49 per cent in the insurance joint venture.

However, Bajaj said he doesn't see the FDI hike in insurance cap happening now. It would be taken up by the next government in the Centre, the Rajya Sabha MP said.

Bajaj was listed for the first time in 1966 when it went to the capital market to raise less than Rs 1 crore. — PTI 

New Delhi, May 26
Contrary to the belief that farmers will be hit by the organised retail, the government-sponsored study showed that it will benefit farmers in terms of getting better price for their produce and its impact on neighbourhood ‘kirana’ stores would be short-lived.

The Delhi-based think tank ICRIER that carried out the study recommended nationwide uniform licensing policy to facilitate modern retailing . However, the study states that initially, mom-and-pop stores, in the vicinity of big malls, have seen drop in their sale and profit. The ICRIER study found that profitability of unorganised kirana stores, located in the vicinity of big retail chains, declined by 8-9 per cent over the past five years.

The study, which has been submitted to the Department of Industrial Policy and Promotion, however, did not deal with the impact of foreign direct investment on small retailers.

This study has nothing to do with the impact of FDI on retail, ICRIER chief executive officer and director Rajiv Kumar said.

The study recommended facilitation of cash-and-carry outlets in the organised retail for sale to unorganised stores.

There was an urgent need for increased credit availability to the unorganised retailers, whom the government wants to nurture, said Kumar after submitting the report.

The DIPP has asked ICRIER to gather further inputs from the stakeholders and invite comments from the public. The report will be put on the websites of the DIPP, as also ICRIER.

“In an economy growing by 8 per cent, the retail sector can show a growth of 13 per cent. But if it is not modernised, growth will not be possible,” Kumar said.

The study suggested formation of farmers' co-operatives to sell directly to the big super markets.

Likewise, unorganised retailers should also form co-operatives and associations for direct procurement from suppliers and farmers, eliminating the middlemen, the report said.

The study said mandis should be modernised through public-private partnership, while the Competition Commission should be strengthened to check collusion and predatory pricing by big stores.

While a large number of big retail stores have come up, they faced protests from small traders, who were more often than not backed by political parties in several states. Last year, Reliance Fresh stores came under attack in Uttar Pradesh, where the chain has since suspended operations.

Ludhiana, May 26
Television viewers are in for good days as direct-to- home (DTH) service providers are paying a major focus on providing more content for lesser charges, with a view to combat rising competition in this industry.

The DTH operators are also promoting interactive services like tuitions for students through television and movies on demand. The market is "value driven", say operators, who also claim steep rise in clientele with the launch of new packages.

"Three years ago when we launched services, a customer had to pay around Rs 7,000 for a connection, but now not only have the charges lowered, they are as low as Rs 2,490 along with free subscription. The number of channels that customers get in this amount are much more. Besides, interactive services like online tuitions are getting an overwhelming response and in the coming days, we plan to come out with more such services," Manjit Singh, deputy vice-president, North, Dish TV, that has come out with free set-top boxes for its subscribers, told The Tribune.

Surprisingly for DTH operators, it was rural areas from where a major share of demand emerged. Dish TV has around 3.5 lakh customers in Punjab of which rural customers held over 75 per cent share for a long time. At present, this share is around 60 per cent and the company is framing strategies to increase the share of urban clientele.

"We plan to expand our presence to 2,000 locations from the existing 600 and double the number of retailers," Singh added.

Talking about trends in Punjab, he said viewership for regional content in the state was higher than the other places.

BRIEFLY

RPG group to invest Rs 9,000 cr on expansion
Thrissur: Kolkata-based RPG group will invest Rs 9,000 crore in power, tyre and carbon black industries as part of its expansion programme in the next couple of years, group chairman Rama Prasad Goenka has said. — PTI

BHEL bags 1,150-cr order
New Delhi: State-run Bharat Heavy Electricals (BHEL) on Monday said it has won a Rs 1,150- crore turnkey contract for setting up an energy-efficient 153 MW captive power plant at Bathinda in Punjab. The Rs 1,150 crore order has been placed on the company by HMEL, a joint venture of HPCL and LN Mittal's Mittal Energy Ltd.— PTI

Dhamra port project
Mumbai: The Dhamra port project is estimated to cost Rs 2,463 crore in the first phase, a top company official said on Monday. More than 25 per cent of the work has been completed, Dhamra Port Company's CEO Santosh Mohapatra said here. Dhamra Port Company is a 50:50 joint venture between L&T and Tata Steel and the port, off the Orissa coast, is scheduled to be operational by April 2010. — PTI

Bahrain Air flights
Dubai: Bahrain Air will start operations to India today with its inaugural flight to the South-Indian town of Kochi. "The non-stop flight to Kochi is our first step into the lucrative market of India, particularly the southern region, to serve the increasing demand from travelling public and in particular from the Indian community residing in Bahrain," its managing director Ibrahim Al Hamer said.— PTI

Venus Garments awarded
Chandigarh: Ludhiana-based Venus Garments has been honoured by the world mass marketing retail giant Wal-Mart with the “Supplier of the Year 2007” award. The award was presented to Anil Jain, chairman of the company, in Bangalore in the presence of a high-level delegation from Wal-Mart Global Procurement, the procurement arm of Wal-Mart yesterday. — TNS

Indiabulls to raise $286m
New Delhi: Indiabulls Real Estate will raise up to $286 million through an initial public offer in Singapore, for which it has begun a roadshow there on Monday. It has offered to sell about 353.5 million shares of Indiabulls Properties Investment Trust at a price band of 1.0-1.1 Singapore dollar each. — PTI