The Tribune, Chandigarh, India

	Total reconstruction cost may cross $159 billion Sanjeev Sharma Tribune News Service New Delhi, March 16 The earthquake in Japan will likely have negative short-term impact on the production and shipment activities of Japanese automakers and steelmakers, says Fitch Rating. Although only a few automakers such as Toyota Motor and Nissan Motor had manufacturing presence in the areas directly affected by the earthquake and the subsequent tsunamis, almost all automakers and some steelmakers suspended operations after the quake to assess the potential impact on their operations. The total cost of the disaster for Japan is still unclear. However, it is widely expected to be significantly higher than that in the aftermath of the Kobe earthquake in 1995. The Kobe disaster cost Japan $159 billion over 1995-2000. Production and shipments could be affected by potential disruption in the supply chain, logistics and electricity supply. Fitch notes that at this stage it is difficult to quantify the impact on individual companies, adding the extent to which each company’s business and financial profile will be affected varies according to its specific circumstances. The direction of the Japanese yen over the next three to six months as a result of this catastrophe will also affect the profitability of the Japanese automakers. After the 2008 financial crisis, a strong yen against other major currencies had adversely affected automakers’ revenue and profitability. Toyota has estimated an output loss of about 97,000 units. For the nine months ended December 2010, domestic production accounted for over 50% of total global production. Honda Motor Company has suspended production at all facilities in Japan until March 20. In 2010, domestic production accounted for 27% of total global production. Nissan Motor Company has suspended the production of its Tochigi and Iwaki plants until March 18. Nippon Steel Corporation has restarted three blast furnaces at its major Kimitsu factory in Chiba, and is also resuming rolling operations. The steelmaker stopped production at its Kamaishi plant in northern Japan, after some facilities were inundated by the tsunami. Standard & Poor’s Ratings says the earthquake-related economic and fiscal impact on Japan is significant; but, given the unfolding situation believes it is too early to judge the implications for the unsolicited sovereign credit rating.
	Punjab approves 3 mega projects The industrial projects entail Rs 1,900 cr investment Tribune News Service Chandigarh, March 16 The Empowered Committee of the Punjab government today approved three mega projects and one super-mega mixed-use integrated Industrial Park Project. The projects involve an investment of Rs 1,900 crore and would generate direct and indirect employment for nearly 7,400. A spokesperson in the Chief Minister’s Office said the meeting of the committee was held under the chair of Punjab Chief Minister Parkash Singh Badal. The committee approved a mega manufacturing project at Rs 210 crore at Nangla village in Bathinda over 48 acres. Film City, another mega project, of Hansa Infra developers Ltd with an investment of Rs 111 crore has also been approved. The City would be spread over Dera Bassi in District Mohali, over 30 acres. The committee approved setting up of Trade Centre with an investment of Rs 360 crore on 11.25 acre at Dhandari Kalan in Ludhiana consisting of convention centre-exhibition hall and conference halls, business hotels, financial hub office space for banks, insurance and financial companies, offices for other businesses, educational institutions and organized factory outlet shopping. The empowered committee also approved a super mega-mixed use integrated industrial park project being developed by Janta Land Promoters Ltd in Mohali on 290 acres at an investment of Rs 1,219.20 crore. The committee also decided to delink any defaulter to either the state government or to the state’s institutions from fresh investment.
	Japanese funds for Indian projects may be slashed Shiv Kumar Tribune News Service Mumbai, March 16 The devastation in Japan has raised doubts about the future of availability of funds from the island nation for infrastructure projects in India. Institutional investors like the state-owned Japanese International Co-operation Agency (JICA) had committed funding for a number of projects like the Delhi-Mumbai Industrial Corridor, the Delhi-Mumbai freight corridor, Metro Rail projects in Mumbai and Delhi. The agency would also have given funds for cleaning of the Yamuna and a crop diversification project in Himachal Pradesh. Only last month, JICA had signed an agreement to provide 46.401 bn Yen (Rs 2,557 crore) in overseas development assistance for the Yamuna, HP and a conservation project in Tamil Nadu. Total Japanese overseas development assistance for Indian projects amount to 3,164.82 bn Yen. JICA is also slated to fund the dedicated Mumbai-Delhi freight corridor to the tune of Rs 30,000 crore. Another Rs 11,200 crore is due for the Delhi Metro expansion project. The Mumbai Metropolitan Region Development Authority (MMRDA) had also tied-up with JICA for Rs 9,000 crore for the construction of the ongoing metro railway project in the city. The Indian government is now bracing for a contraction of funds from Japan. C Rangarajan, Chairman, Prime Minister’s Economic Advisory Council, said here on Tuesday that investments from Japan would be impacted. “The impact will be somewhat indirect. To some extent, Japanese investment in India will be affected because there will be demand for investment within the country and there will be very little available to invest outside,” Rangarajan told reporters. Officials say that the Japanese may divert at least part of the funds for reconstruction activity at home. “It is too early to say, but there is a possibility that funds deployed overseas may be reduced,” says Rahul Asthana, Commissioner, MMRDA. Organizations like MMRDA say they will then look for other sources of funding. Analysts said the cost of obtaining funding from other sources would increase the cost of projects as the Japanese were providing funds at very competitive rates.
	Hero Honda promoter raises Rs 200 cr by pledging shares Tribune News Service New Delhi, March 16 The promoter of Hero Honda, Hero Investments Private Ltd (HIPL), has pledged shares of the company to IL&FS Trust Company Ltd, to raise another estimated Rs 200 crore. In a filing to the Bombay Stock Exchange Hero Honda said HIPL pledged an additional 13,18,653 shares aggregating to 0.66 per cent stake in the company on March 7. On the basis of the closing price of the company’s shares on the BSE on March 7, the value of the pledged stake is around Rs 200 crore. The latest transfer of shares by HIPL has increased IL&FS Trust Company’s stake in the two-wheeler maker to 5.98 per cent from 5.32 per cent. HIPL had raised an estimated Rs 1,585 crore by pledging 5.32 per cent stake with IL&FS Trust Co. On March 9, HIPL raised Rs 900 crore by pledging shares to Axis Trustee Services Ltd. HIPL is one of the main shareholders of Hero Honda, holding 17.33 per cent stake in the company on December 31, 2010. The BM Munjal led Hero Group has is raising fund to finance the buyout of Honda's 26 per cent stake in Hero Honda for Rs 3,841.83 crore. The group is also looking to raise funds from private equity firms, including Bain Capital and Lathe Investment, which are estimated to be around Rs 4,500 crore to finance its buyout by selling stake in HIPL. It has already sought government clearance to bring in foreign investment of up to Rs 4,500 crore in HIPL.
	Tax on lotteries increased 3 times Agencies suspend work Manav Mander Tribune News Service Ludhiana, March 15 The Punjab Excise and Taxation department has issued a notification which trebles the tax levied on lottery business. Traders are shocked at the notification and have suspended draws. Presently, there are three companies namely Pan India Network, Swastik Agencies, and S and Company operating in Ludhiana. These three take out 27 draws everyday and contribute Rs 50 crore towards the state exchequer. Harpal Singh, general secretary, Lottery Stockists Association, said. “If the tax is increased, we will suffer huge losses and lottery business will become unviable for us. With this over 1.50 lakh families which depend on lottery will become unemployed,” he said. He added the government had taken a hasty decision, which will be a boon to illegal lottery business. In 2010, the government had banned lottery of 2 digit numbers, but the continued unabated. Only 4-digit lottery is legal in the city and it too might take to the gray market under the pressure of heavy taxes, he added.
	Air India accepts new debt plan Mumbai, March 16 National air-carrier, Air India, today said that it has accepted the corporate debt restructuring (CDR) package first prepared by SBI Caps and then vetted by Deloitte. “Air India has accepted the CDR package submitted by Deloitte,” the airline’s CMD Arvind Jadhav, told reporters here. The package was approved after several confabulations with banks and the government, he said. “We are going to meet the bank consortium and will soon announce the details,” the Air India chief said. In early-December, Air India had appointed global consultancy firm Deloitte to vet the SBI Caps-prepared financial restructuring plan. The firm, after going through the proposal, has now submitted it to Air India. While asking Deloitte to vet the SBI Caps report, Air India claimed the foreign agency was appointed mainly to vet the business plan as an independent aviation consultant before the restructuring plan was submitted to the Reserve Bank. Air India is saddled with a debt of about Rs 40,000- crore. — PTI
	I-T searches Jindal Steel premises Mumbai, March 16 The Income Tax (I-T) department today conducted searches at the business premises of steel giant Jindal Steel works here for alleged charges of tax evasion. A team of I-T officials from the investigation and tax collection wings of the department reached the premises of the company and began scrutinising documents related to purchase orders and other financial dealings, sources said. "Its part of routine survey being conducted by the income tax department. They have certain queries and we are fully cooperating with them. The survey is going on only one office of ours at Lower Parel, Mumbai," JSW spokesperson Sharmila Banerjee said. "I can't comment on that," she said when asked about the queries being posed by the I-T department. The department is also looking at records of the company's recent financial dealings related to diversification, sources said. The searches come a day after JSW Steel announced its ambitious expansion plans. With the expansion, the company is all set to become the country's largest steel maker by next month, surpassing state-run SAIL. It would be commissioning the 3.2 million tonnes per annum blast furnace at its Vijaynagar plant in Karnataka. After the new capacity addition, JSW will be able to produce 14.3 million tonnes per annum (MTPA) steel, 0.4 million tonnes more than SAIL. "Our expansion is on track. We should be starting our new blast furnace sometime in April end," JSW Steel's Director Marketing Jayant Acharya had told reporters in New Delhi on the sidelines of a steel conference. At present, the company has a steel making capacity of about 7.8 MTPA at its Vijaynagar and Salem units. It entered into a deal in December to acquire 41.29 per cent stake in loss-making Ispat Industries having a capacity of about 3.3 MTPA. By 2020, the Sajjan Jindal-led company is aiming to produce 34 million tonnes of steel annually with greenfield integrated steel plants coming up in West Bengal and Jharkhand. It is also adding further capacities at the Vijaynagar and Salem units. — PTI
	EPFO fund managers to get extension for three months New Delhi, March 16 Provident fund body EPFO’s existing four fund managers ICICI Pru, HSBC, Reliance Capital and SBI will get three months extension to manage the Rs 3 lakh crore retirement fund till June 30. Although the term of the existing four fund manager's term ends on March 31, they will be asked to continue for three more months as the EPFO has not been able to complete the process of appointing new asset management companies (AMCs). "The existing fund mangers would continue to manage EPFO's Rs 3 lakh crore corpus till June 30 because of delay in appointment of new AMCs for a term of three years beginning April 1," a source said. The matter, he said, would be placed before the EPFO trustees on March 30 for final decision. The Central Board of Trustees (CBT), which is headed by the Labour Minister, is the apex decision making body of the EPFO. "Since there is no possibility of new fund managers taking over from April 1, the proposal to give three months extension to existing AMCs is likely to be approved by the CBT," he added. EPFO had started the process of appointing the new fund managers last year after it engaged credit rating agency CRISIL for appointment and to later monitoring the performance of new fund managers. As many as 11 AMCs have evinced interest to manage the EPFO huge corpus which receives incremental deposits of about Rs 30,000 crore every year. — PTI
	Essar eyes Shell’s stake in 4 Nigerian oil fields New Delhi, March 16 Ruias-owned Essar Group is among four consortia in race to buy Royal Dutch Shell Plc's stake in four Nigerian oil fields. "At least one Indian group has expressed interest to buy the stakes," visiting Nigerian Foreign Minister Henry Odien Ajumogobia told reporters here. Though the minister did not name Essar, sources said Essar has bid together with Nigerian-owned Energy Equity Resources and UK-based Sacoil. Four consortia shortlisted by Shell as preferred bidders for four onshore blocks in Nigeria's troubled Niger Delta that it is looking to offload, include a grouping led by Perenco of France with Swiss trading firm Addax & Oryx Group Ltd and Oando Plc of Nigeria. Another bidding group includes Heritage Oil Plc of the UK and Nigerian contractor Shoreline Energy International. Vertex Energy backed by Capital Alliance is also in race, they said. Long-standing Nigerian National Petroleum Corporation joint venture partner PanOcean, Nigerian independent Conoil and the Seven Energy tie-up with international construction contractor Petrofac. — PTI
	Videocon launches 3D video recorder New Delhi, March 16 Videocon d2h, the DTH arm of Videocon group has launched India’s first high definition — digital video recorder with 3D. Saurabh Dhoot, director Videocon group said, "We have seen excellent growth from the time of inception.” Anil Khera, CEO added , “We are hopeful that this high definition digital video recorder with 3D will be providing customers a major reason to move from cable to DTH.” — TNS