The Tribune, Chandigarh, India

	Telangana Fallout Pharma giant declares temporary shutdown Mumbai, December 11 A unit of global drugmaker GlaxoSmithKline (GSK) temporarily halted operations in Andhra Pradesh today as the fallout from a government plan to carve up the southern state mounted. The Centre approved a plan on Thursday to create a new state called Telangana out of Andhra Pradesh, home to high-tech Hyderabad city, after more than a week of violent protests and a hunger strike by a leading politician. But fresh protests and the mass resignation of local state lawmakers may still force the government to backtrack, fearing not only a political backlash, but also economic repercussions. GlaxoSmithKline Consumer Healthcare, a unit of the global drugmaker, said it was temporarily closing its factory in the state due to the political protests. Shares in several Indian realty firms based in Hyderabad fell, and a local branch of HSBC bank was attacked by a mob of protesters who have shut down the city for more than a week. Investors worry whether the tug-of-war over the creation of a new state will affect investments, as well as where it will leave the status of Hyderabad, home to companies like Microsoft, Google and Dell. The Central government has not yet decided the fate of Hyderabad, once seen as an example of cities fast becoming hubs for global companies looking to cut costs. “Even though it's been years in the making, the decision (to split the state) was quite sudden, so there's been quite a bit of turbulence and uncertainty," said Dipankar Mitra, an economist at Noble Group. "That doesn't send very good vibes to investors." When the states of Jharkhand, Uttarakhand and Chhattisgarh were carved out some years ago for better administration and distribution of funds, everyone was on board and knew what to expect, Mitra said. This time around, the lack of coordination and the tension between the federal and state governments had made investors wary, he added. Apart from slowing investments in new infrastructure projects, which will lead to delays and higher costs, there is also a danger that real estate firms that depend on political connections could suffer from the new equation, analysts said. India's government has an ambitious target of $500 billion in infrastructure spending over the next five years. Besides multinational firms that have back offices and development offices in Hyderabad, local firms including Mahindra Satyam, Infosys and Wipro have a presence in the city, which aimed to rival tech hub Bangalore. All businesses need clarity quickly, said Ganesh Natarajan, a former chairman of software lobby group NASSCOM. "There are some concerns about stability and security in the short term, but these protests will die down," he said. "Then there are the taxes and labour laws that should be clarified quickly." In a sign of nervousness, shares of Hyderabad-based realty firms fell for a second day, with Nagarjuna Construction and GVK Power & Infrastructure down more than 2 percent, trailing the benchmark BSE index, which was down 0.5 per cent. — Reuters
	ONGC’s losing streak in Iraq continues Loses Halfaya oilfield to Chinese-led group New Delhi, December 11 State-owned Oil and Natural Gas Corp's (ONGC) losing streak in Iraq continued today when it lost the bid to develop Iraq's giant Halfaya oilfield to a consortium led by a Chinese firm. ONGC Videsh, its overseas investment arm, teamed up with state-run Oil India Ltd and Turkish Petroleum Corp (TPAO) to bid for the third largest field on offer in Iraq's second post-war bid round today, company sources said. A group led by China National Petroleum Corp bid lower than the $1.76 per barrel fee OVL and partners sought for boosting output from Halfaya field to 550,000 barrels per day. CNPC, Petroliam Nasional Bhd (Petronas) and Total SA offered to boost production to 535,000 bpd from current 3,000 bpd at a cost of $1.4 a barrel. The Halfaya oilfield has estimated reserves of 4.1 billion barrels of oil, they said. The Chinese held 50 per cent stake in the group, while Total of France and Malaysia's Petronas hold 25 per cent each. OVL had, in the first round in June, lost the Zubair oilfield when it along with OAO Gazprom of Russia and TPAO had asked for a remuneration that was about five times higher than $1.90-2 a barrel that Baghdad was willing to pay. Exxon Mobil Corp, Shell, Total and Russia's OAO Lukoil are also vying for the right to develop 10 fields holding 41 billion barrels of oil reserves, a third of the country’s total deposits, on offer in the round taking place in Baghdad today and tomorrow. Iraq, holder of the world's third-largest oil reserve, is seeking foreign investors to boost output after six years of conflict, and prior sanctions destroyed its infrastructure. Iraq wants to boost oil output to seven million barrels a day in the next six years, its Oil Minister Hussain al-Shahristani said in a speech at the round today. Plans to take Rs 4k cr term loan to refinance OVL's debt ONGC plans to raise a term loan of about Rs 4,000 crore to refinance the debt its overseas investment arm had taken to buy UK-based Imperial Energy Corp. “We had taken a bridge loan of Rs 5,250 crore or $1 billion to fund Imperial acquisition. Now we are in the process of refinancing it through term borrowing,” ONGC director (finance) Dinesh K Sarraf said today. — PTI
	Oil companies to lose Rs 45,478 cr this year New Delhi, December 11 State-run oil marketing companies IndianOil, Hindustan Petroleum and Bharat Petroleum are likely to lose Rs 45,478 crore this fiscal on selling fuel below cost, Petroleum Minister Murli Deora has said. Addressing the Parliamentary Consultative Committee yesterday, Deora said such a huge subsidy support was unsustainable in long run. "Today, the public sector oil marketing companies incurs an under-recovery (revenue loss) of Rs 3.10 per litre on petrol, Rs 2.55 a litre on Diesel, Rs 17.30 per litre on PDS kerosene and Rs 241.00 on each 14.2 kg cylinder of domestic LPG," he said. Deora said his ministry has sought oil bonds of Rs 20,871 crore from the Finance Ministry to compensate the three firms for loss on PDS kerosene and Domestic LPG but bonds are yet to be issued. "The delay in oil bonds is reflecting on their financial performance," he said. In the second quarter ended September 30, IOC reported a meager profit of Rs 284 crore while BPCL and HPCL reported losses of Rs 159 crore and Rs 137 crore, respectively. "The OMCs are the backbone of the country's energy security and, hence, their financial health is a cause of concern for us," he said, adding the report of the Expert Group on sustainable pricing policy was expected in January. Deora said the government had taken measures to insulate the consumer from the inflationary impact of high global oil prices last year. The government had last fiscal issued oil bonds worth Rs 71,292 crore to the three fuel retailers while upstream firms absorbed another Rs 32,000 crore of oil price impact. "However, this kind of subsidy support is not sustainable in the long run," he said. — PTI
	Industrial growth at 10.3 per cent New Delhi, December 11 A year since this century's worst financial crisis choked industrial activity, India's factory production expanded by 10.3 per cent in October fuelling hopes that it would power the economy ahead. The growth - stupendous compared to the 0.1 per cent in the year-ago period - however, failed to enthuse the stock market which went into a tailspin before recovering ground. The data comes days after the pleasantly stunning economic growth numbers. GDP grew 7.9 per cent in Q2 this fiscal, showing the country was well on the road to recovery provided farm growth does not dip much in the coming quarters. For the first seven months of this fiscal, the Index of Industrial Production (IIP), which measures industrial growth, expanded by 7.1 per cent against 4.3 per cent a year ago. Economists say strong industrial growth is due to base effect (low figures of last year) as well as genuine recovery. “This is partly base-effect but the economy seems to be sort of moving up... we will have a 7 per cent growth this fiscal. Though, that is subject to the drought conditions," former chief of PM's economic panel chief Suresh Tendulkar. Planning Commission Deputy Chairman Montek Singh Ahluwalia said: “To get a growth rate well above 10 per cent is not just a base effect. There is an element of growth that is taking place which I hope will be sustained.” Manufacturing, which has almost 80 per cent weight in IIP, grew by 11.1 per cent against (-)0.6 per cent a year ago helped by stimulus measures unveiled last year after the global credit crisis. Among other categories, intermediate goods grew by 14.3 per cent against (-) 4.4 per cent a year ago. It could safely be predicted that the industrial recovery would be sustained, as capital goods expanded by 12.2 per cent against 4.2 per cent a year ago. Basic goods could grow by 5 per cent compared to 3.2 per cent a year ago. Industrial recovery could also be gauged from the fact that out of 17 industrial categories, only one - jute and other vegetable fibre textiles (except cotton) - recorded contraction in production in October. The September industrial production figures were revised to 9.6 per cent from the provisional estimates of 9.1 per cent. The government has cut excise duty by 6 per cent in phases, service tax by 2 per cent, besides stepping up public expenditure as part of stimulus packages to spur economic growth. — PTI India Inc: Stimulus needed to sustain double-digit growth New Delhi: India Inc on Friday said the government should continue with the fiscal stimulus measures to ensure that the double-digit industrial growth rate was sustained in the coming months. "The IIP figures clearly establish that the economy has recovered and can be hoped to achieve a high growth trajectory provided the present policy parameters are not changed," Ficci president Harsh Pati Singhania said in a statement here. "Growth in manufacturing, particularly in the consumer durables sector, can be attributed to the low interest rate regime that was introduced October last year. Any reversal of that stance will hit the growth momentum and bring down industrial performance,” Singhania said. Echoing similar view, CII said any hike in the policy rates could impact the economic recovery at this stage. "Any hike in the policy rates at this point could affect the recovery process, especially in those sectors where consumption and investment are sensitive to interest rate changes," it said. — PTI
	US Cos prefer China as best investment spot New York, December 11 Majority of American companies are overwhelmingly optimistic about China and rank the world's factory as the top investment destination for them in 2010, even as they face daunting challenges in their native market, says an industry survey. According to the 2009 China Business Report released today by the American Chamber of Commerce in Shanghai (AmCham Shanghai), a large majority of American firms operating in China continue to see revenue and profit growth even as elsewhere they face downturn. The survey of 369 American companies with operations in China reveals that a record 90 per cent of the surveyed corporations have an optimistic business outlook on the world's fastest growing economy. Based on one of the longest running surveys of American companies in China, the report also tracks the continuing focus of American firms present in China on serving the Chinese domestic market as their primary strategy. "China remains a major investment destination for American companies, the majority of whom are focused on competing in China's growing domestic market," AmCham Shanghai president Brenda Foster said. The survey states as much as 74 per cent of the American companies surveyed ranked China as a top-three investment priority with nearly 20 per cent of them naming it as the number one investment spot for them. Besides, 64 per cent of them have plans to increase their investments in the Middle Kingdom in 2010 against a paltry 5 per cent planning to decrease it. About 90 per cent of the respondents were "optimistic" or "slightly optimistic" about the five-year outlook compared to 81 per cent in 2008, the survey added. Moreover, 82 per cent of American companies are optimistic about revenues in the new year. — PTI
	Govt to strengthen public distribution system: Pranab New Delhi, December 11 Concerned over rising prices of essential commodities, the government today said it would strengthen and improve the public distribution system (PDS) to protect the interest of consumers. “To insulate (common man) from the adverse impact of price rise we are improving the PDS system...this year the prices have not come down after the festival season,” Finance Minister Pranab Mukherjee said while replying to a discussion on the first batch of supplementary demands for grants in the Lok Sabha here. According to recent data, food inflation during November shot up to over 19 per cent, the highest in the decade. Attributing rising prices to shortage of supply, Mukherjee said: “The price rise is not because of demand management... edible oils, sugar and pulses are the things most affected by the price rise”. The minister also recalled various steps taken by the government to improve supplies of essential foods items like pulses and sugar, the prices of which have shot up significantly during the course of the year. The supplementary demands for grants, which was approved by the Lok Sabha, seeks to raise public expenditure by Rs 25,725 crore, over and above what was approved by Parliament during the Budget. “In edible oils, India has always had a shortfall. We always import ... So, if the international prices go up then the domestic rates also suffer," the Finance Minister said. In pulses, there is a problem that no farmer is ready to grow them, he said, adding: “We are looking at another package which can induce the farmers to grow more pulses." Pranab Mukherjee conceded that price is an important issue that needs to be tackled and said the government is monitoring 14 essential items on a daily basis. — PTI
	Jindal Power lines up Rs 65k-cr projects New Delhi, December 11 Naveen Jindal-led Jindal Power today said it would invest Rs 65,000 crore in new power projects and part of the financing for these would be done through its up to Rs 10,000-crore initial public offer (IPO). The company, part of JSPL group, would create fresh thermal capacity of over 4,400 mw and hydel capacity of 6,100 mw, with commissioning of projects starting from 2014. “We need internal financial of Rs 15,000 and the rest would come through debt for financing the projects. All this IPO money will primarily go to our expansion programme and balance would be funded from our internal accruals,” Jindal Power deputy managing director Sushil Maru said a day after the company's board decided for the IPO of up to Rs 10,000 crore. As of now, the company, with a net worth of over Rs 7,000 crore, is generating surplus funds of about Rs 1500 crore, he said, adding: “Finances would not be a problem at all”. The firm plans to fund the projects in the debt-equity ratio of 70:30. Besides, the company would look at all opportunities, including acquisition and bid for any ultra mega power project that the government may put on the block, he added. "We have a 1000 MW power plant operating at present. We have lined up projects to add 10,500 MW capacity entailing an estimated investment of Rs 65,000 crore... we will also look at commercially the best opportunity be it greenfield, brownfield or even acquisitions," he said. "We are bidding. We have bid in the past for UMPPs too.” The government plans to invite qualifying bids for setting up UMPPs in Orissa, Tamil Nadu and Chhatisgarh by the end of the current financial year (FY'10). So far, it has awarded four such projects - Sasan (Madhya Pradesh), Krishnapatnam (Andhra Pradesh), Tilaiya (Jharkhand) and Mundra (Gujarat). The company at present operates the country's first mega power project — the 1,000 MW OP Jindal Super Thermal Power Plant in Chhattisgarh. It is constructing a 2,400-MW Independent Power Project in the state and has plans to set up a 2,000 MW thermal power plant and 6100 Hydel power project. — PTI
	Fiat aims to double sales Mumbai, December 11 Fiat India today said it aimed to double sales of its cars in the next fiscal to touch the 50,000-mark anticipating the good showing of November to spill over in the period ahead. "Next year, we are planning to double this year's numbers. We hope to end the current year with around 23,000 Fiat-branded vehicles," Fiat India CEO Rajeev Kapoor said here. So far, in the current calendar year the company has sold 20,000 cars. The domestic passenger car segment is likely to see a double-digit growth next fiscal, Kapoor said, adding that with the launch of new variants Fiat should not have any problem to reach the 50,000-mark in sales. Fiat India has started docking Linea and Palio to South Africa and is also on the look out for opportunities to export in the neighbouring markets in Nepal and Bhutan. “We are working on neighbouring countries like Nepal and Bhutan. We are already in discussion with the dealers in these countries," Kapoor said. On the proposed small car, Kapoor said it was likely to be launched in the Indian market by the second half of 2011. "We always talk about high percentage of localisation in our cars and even in the proposed small car, which will be produced in India, it will be as high as 90 per cent,"he said. The company is also in the process of launching the CNG-variant of Grande Punto in India. Industry sources said the variant would be launched in the Delhi Auto show. — PTI
	TiE to start online mentoring Tribune News Service Chandigarh, December 11 TiE, leading not-for-profit organisation for promoting entrepreneurship, today announced that its Punjab and Chandigarh chapter will launch online mentoring of budding entrepreneurs. Talking to media persons here today, chief executive officer of the organisation Suren Dutia said with the tremendous success of TiE here, they were planning to launch a TiE Young Entrepreneurs (TYE) chapter in Chandigarh. “The TYE has been an extremely successful programme in Boston, Carolina, Seattle, London and Delhi. Through this programme we are trying to reach out to the young students and help them develop entrepreneurship skills. In the next phase of this programme, we will also start functions in Chandigarh,” he said. He also said there was a growing need for online mentoring. “This singular step will leverage the world wide network of the TiE eco system comprising of 11,000 members and 250 charter members, including entrepreneurs, venture capitalists, lawyers and management professionals. Through this, entrepreneurs here can connect with successful entrepreneurs anywhere in the world and take their guidance on how to run successful business,” he added.