New Delhi, August 4
Oil and gas field regulator DGH today rejected industrialist Anil Ambani's charges that it had approved Reliance Industries Rs 45,000-crore "exorbitant capital expenditure" plan for gas fields, saying the actual expenditure is subject to three audits including one by CAG.

The Production Sharing Contract (PSC) provides for auditing of the actual expenditure by three sets of auditors — the management committee appointed auditors, government appointed auditors and by the Comptroller and Auditor General of India (CAG).

"The CAG team has carried out the audit work," said V K Sibal, Director General, Directorate General of Hydrocarbons in a three-page post on the DGH's official website. RIL is investing $8.836 billion (about Rs 42,500 crore) in developing the Dhirubhai-1 and 3 gas finds in block KG-D6 — first two of the 18 gas finds in the block.

"The idea of gold plating betrays a lack of knowledge of business economics. Inflating the expenditure does not benefit any stakeholder- neither the contractor nor the government. No company would like to increase its investment unproductively. Every additional dollar of wasteful investment dents the profit of the contractor," Sibal said without naming Anil.

Anil had yesterday demanded "an independent and objective re-examination by public accountability bodies like the CAG and the CVC of the apparently exorbitant capital expenditure of Rs 45,000 crore... in order that such capex recovery is brought down to realistic levels."

The development cost or capital expenditure approved by a management committee comprising of representatives of petroleum ministry, DGH and companies concerned are broad, indicative numbers that are used to work out the economics of a project over its lifetime, DGH said.

There was no hasty approval of RIL's revised expenditure and due diligence of revised expenditure by different agencies had been carried out.

Sibal, however, stated that DGH had commissioned two independent studies to validate the capex proposed by RIL and both have concurred to the estimates made by RIL.

"This project happens to be the first deepwater development project in India. It is pertinent to mention here that the Dhirubhai gas discovery is the largest gas discovery in the world for the year 2002. In any other country, it would have been hailed and cherished. However, we are content with squabbling over this outstanding success," Sibal said.

In the opinion of the independent and reputed technical experts, RIL's "development plan is highly cost effective and fast track," he said. "A CAG audit has recently been completed," he said.

The Goldman Sachs Report on Global Finding and Development Costs 2008 clearly states that out of the 32 deep water projects developed in the world, D6 ranks amongst the lowest in terms of costs and amongst the fastest in terms of time from discovery to production.

"While criticism and dissent is an intrinsic characteristic of a democracy, it should not become the obsessive subject of endless public debate," Sibal said. — PTI

Hyderabad, August 4
Even as Ambani brothers are locked in a legal battle over supply of gas from Krishna-Godavari basin, Andhra Pradesh government is mounting pressure on the Centre, seeking its due share of the precious natural resource.

Cutting across party lines, the members of the Assembly today said efforts should be made to ensure that AP got priority in the allocation and pricing of gas from KG basin since the first land fall point is located in the state.

Agreeing with the members, Finance Minister K Rosaiah said the issues of share in the royalty or profits and priority in gas allocation were being pursued with the union government.

“We are not sparing any efforts to see that the state’s interests are fully protected,” he said. The Leader of the Opposition and TDP chief N Chandrababu Naidu assured his party’s cooperation to the government in getting due share of gas to the state.

The people of the state were entitled to reap the benefits of the hydrocarbon assets found off the state's coast, the members felt.

Meanwhile, Chief Minister Y S Rajasekhar Reddy convened a high-level meeting with officials to assess the gas requirement of the industries in the state and discuss issues to be taken up with the Centre.

Later, officials said Reliance Industries Limited (RIL), which has struck gas reserves in KG basin, will pick up 67 per cent stake in Krishna Godavari Gas Network Limited (KGGNL), a joint venture promoted by the AP government for the purpose of undertaking city gas distribution in the state.

RIL has sought a meeting with Chief Minister between August 11 and 14 to sign the shareholders agreement to this effect, the Economic Adviser to the state government D Somayajulu said.

Gujarat State Petroleum Corporation (GSPC), IDFC Private Equity Company Limited and the state-owned Infrastructure Corporation of Andhra Pradesh will be the other shareholders in KGGNL with a stake of 11 per cent each.

KGGNL was floated for putting up a network of pipelines across AP starting with the state capital for the supply of domestic gas. The entire piped gas distribution network across the state was expected to cost Rs 1 lakh crore including Rs 3,500 crore for distribution in Hyderabad.

New Delhi, August 4
The government is planning to convert the Airports Authority of India (AAI) into a company by amending laws to enable the airport regulator to raise funds from market for carrying out modernisation of a large number of airports across the country.

Civil Aviation Minister Praful Patel said today the government was looking at corporatising the AAI and turning it into a company from an authority which it is now. “Our objective is to list AAI (in the stock market),” he said .

The changeover of the authority into a company would be carried out by amending the AAI Act,"Funding will become easier if it becomes a company,” Patel said, adding that the amendment was likely to be placed before Parliament latest by March 2010.

Private infrastructure firms, including those involved in airport modernisation, were listed companies and have good standing in the market.

At present, the AAI is modernising major airports in Kolkata and Chennai and 35 non-metro airports. It has several properties, including land and other assets, across the country.

On upgrading non-metro airports, Patel said the AAI had already started upgrading terminal buildings. Private parties under the PPP model are developing the city-side in these airports.

The AAI is also making efforts to increase the non-traffic revenues at airports by better exploitation of the commercial opportunities, he said.

Chandigarh, August 4
Godrej Consumer Products Ltd (GCPL) is targeting to double its market share in the rural areas. This was disclosed by Dalip Sehgal, managing director of the company.

Talking to The Tribune here yesterday, Sehgal said: “North Indian market accounts for 35 per cent of the company’s total business and Punjab is very important market for us. Till last year, we were covering 4,000-5,000 towns and now we plan to reach 8,000 towns by next year and 50,000 villages (15,000 at present) in the next two years.”

He further said, “Rural markets contributed to 38 per cent of the company’s total sales. There is a huge potential in the rural markets and now the company aims at achieve 50 per cent sales from this area in the next three years.”

He said the company’s products were available in three million outlets out of which 2 lakh were added in the last fiscal.

“Our focus this year will be on small packs of Rs 5 and Rs 10 in Godrej No. 1, Cinthol and Fairglow. Though Punjab has a market for large packs, but other states like Uttaranchal, Haryana, Himachal Pradesh and Bihar has a big market for small packs.”

He further disclosed that the company’s market share has gone up by 1 per cent in June quarter as compared to the corresponding quarter last fiscal. In the first quarter ending June, 2009 the company achieved a turnover of Rs 439 crore and its profit before tax increased by 80 per cent to Rs 88 crore.

He also informed that GCPL has got 49 per cent stake in Godrej Sara Lee, a joint venture of the Godrej Group with Sara Lee Corp, USA. Earlier, 49 per cent stake was held by other Godrej group companies, but recently the shareholders of GCPL have approved buying of 49 per cent in the joint venture. The 51% share is still with the Sara Lee Corp. The company is awaiting a court approval for the same and once it comes, the 49% share will be transferred to GCPL. The JV has products like Ambipur, Kiwi shoe polish, Good Knight, Brylcream and Jet.

Meanwhile, GCPL vice-chairman Hoshedar K Press said in Kolkata yesterday that the company was scouting for acquisitions in China, Latin America and the Middle-East. The company proposes to scale up the contribution of international business from the present 23% to 50% of the company’s annual revenue.

At present, GCPL has a presence in the UK, South Africa and Middle East, markets which it entered through buyouts earlier.

Hoshedar said: “We are open to deals valued up to Rs 1,000 crore. International valuations are at an all-time low and several attractive companies are now available.” He further said that GCPL is market leader in the Indian hair colour segment with around 35% market share and is the second largest player in domestic soaps market with 10% share. The company expects to grow its revenues by 25% this fiscal.

New Delhi, August 4
The government today denied that it had taken inadequate steps to prevent job losses caused due to global economic slowdown. Replying to a call attention motion in the Rajya Sabha on the situation arising out of the largescale loss of jobs due to retrenchment and closure of industries, including those in the IT sector, Labour Minister Mallikarjun Kharge assured the House that all possible measures were being taken to develop infrastructure for creating jobs.

He added that steps were also being taken to give stimulus packages to industries, provide income tax exemptions to individuals, social security and insurance to retrenched employees.

The minister said that the government was monitoring the situation regularly and has provided higher allocations in the Budget to provide stimulus to the various sectors like housing, rural development, road transport, railways, self-help groups, infrastructure and urban sector.

He, however, admitted that the labour laws lacked the force like that of CrPC, IPC, but rejected industrialist Rahul Bajaj's suggestion of reforming these laws to create more jobs.

Kharge said the Industrial Disputes Act puts restrictions on layoffs and retrenchment and provides protection to workforce in case of lay off, retrenchment and closure of establishments.

The suggestion of reforming the labour laws was also vociferously opposed by CPM leader Brinda Karat.

Kharge noted that the survey conducted by the ministry on impact of slowdown on job losses had shown that in January-March period there was slight improvement in terms of damage to employment. In April-June quarter, he said there was some decline but again in july there is improvement.

Earlier, D. Raja (CPI) charged that government is underestimating the grave situation that has emerged due to global meltdown and recession. “I don't think the response is adequate to meet the challenges,” he said while adding that the government should take it as an opportunity to take certain drastic measures. 

BRIEFLY

Talks fail, banks strike tomorrow
Chandigarh: Vijay Magan, general secretary, State Bank of India Officers’ Association (Chandigarh Cirle) in a press note issued on Tuesday said the talks between the United Forum of Banks Unions, representing about 10 lakh employees and officers in the public sector banks, and the Indian Bank Association have failed and they have decided to proceed with their strike on August 6 and 7.—TNS

ANZ to buy RBS biz in Asia for $550 m
Melbourne: Australia and New Zealand Banking Group (ANZ) will acquire certain businesses of RBS in Asia for an estimated $550 million, as part of efforts to expand its presence in the region. ANZ would buy Royal Bank of Scotland's (RBS's) retail, wealth and commercial businesses in Taiwan, Singapore, Indonesia and Hong Kong. Further, the entity would acquire the institutional businesses of RBS in Taiwan, the Philippines and Vietnam, ANZ said on Tuesday.— PTI

HCL bags Rs 40-cr SBI order
New Delhi: IT firm HCL Infosystems on Tuesday said it has bagged an order of over Rs 40 crore from public sector bank State Bank of India (SBI) and associated banks to deploy, maintain and service their ATMs. As per the agreement, HCL will deploy over 1,000 ATMs and cash dispensers with enhanced features such as Braille and support for multi-lingual content, HCL Infosystems said in a statement.— PTI

Essar Steel acquisition
Mumbai: Shashi Ruia-controlled Essar Steel on Tuesday said it has entered into an agreement with Shree Precoated Steels to acquire the latter's assets and steel business for Rs 600 crore. With this agreement, Essar Steel will become the country's largest cold-rolled steel maker with an annual capacity of two million tonnes. — PTI

REC to raise Rs 2,900 cr
New Delhi: A follow-on public offer (FPO) of the state-run Rural Electrification Corp to raise around Rs 2,900 crore is likely to come up by the end of the current financial year (2009-10). "Once the cabinet approves, it would take 4-6 months for the company to bring its FPO, so by the end of the current fiscal it (FPO) can be expected," Power Ministry sources said.— PTI

SAIL, Tata Steel hike prices
New Delhi: Leading steel producers SAIL and Tata Steel on Tuesday said they have hiked prices of flat steel products by up to Rs 1,000 a tonne on account of improving demand in the country. However, rate cuts are in the offing for long steel products, used mainly by the construction sector. — PTI