Mumbai cannot stop, come what may

Mumbai may be under siege, but the fabled Mumbai spirit will be back in full play when the dark night dissipates and the morning dawns. After all, Mumbai, a city in incessant movement, cannot stop, inherently.

The stock, money and commodity markets will probably be up in the morning. The chief minister has already left instructions to the effect. Offices and banks will be buzzing again. And after a gap, everything will be just as intact as normal as before in the financial capital.

But one thing will change. The most audacious and direct terrorist attack on the Indian business will see industry too becoming a stakeholder in the anti-terrorism drive of the government.

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Bhel to set up Rs 8,700 crore power plant in Tamil Nadu

Tamil Nadu Electricity Board (TNEB) has entered into a joint venture agreement with Bharat Heavy Electricals Ltd (BHEL) on Wednesday to set up a 2 X 800 mw thermal power plant at Udangudi in Tuticorin district of Tamil Nadu with an estimated investment of Rs 8,700 crore. The agreement was signed in the presence of Chief Minister M Karunanidhi by chairmen of both TNEB and Bhel. A special purpose vehicle (SPV) called Udangudi Power Corporation Ltd has been floated to execute this project.

The project, coming up in 760 acres, will have equity investors other than TNEB, and Bhel. Institutions such as Rural Electrification Corporation (REC), Power Trading Corporation (PTC) among and a host of others are expected to invest in this project, said sources here. While BHEL will provide the entire equip ment, the state electricity board will execute and run this project, government sources added.

It may be recalled that the state government has given its approval to conduct a project report in February this year.

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Saudi Aramco in talks to join Vizag refinery project

The world’s largest oil company, Saudi Aramco, is likely to step in as the new joint venture partner in one of India’s largest oil and gas projects: the over Rs 50,000-crore refinery-cum-petrochemical project at Visakhapatnam in Andhra Pradesh. The project is currently being set up as a five-way alliance between Hindustan Petroleum Corporation Ltd (HPCL), GAIL, Oil India Ltd (OIL), French energy giant Total and steel czar LN Mittal.

When contacted, HPCL CMD Arun Balakrishnan confirmed that Saudi Aramco has shown interest in the Vizag project. “Talks are on to bring in Saudi Aramco as a strategic partner in this project, which will cost anywhere between Rs 45,000 crore and Rs 50,000 crore. Saudi Aramco’s presence will ensure crude oil supplies to the project. We are waiting to hear from them,” he said.

Asked about the extent of equity stake being offered to Saudi Aramco, Balakrishnan said, “We have had no discussions on this front. But anywhere up to 15% would be offered.”

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October adds highest ever mobile subscribers at 10.42million

During these times of cutbacks there’s one thing which Indians are buying in abundance—mobile connections. During the month of October the country added the highest-ever addition to the mobile subscriber base at 10.42 million taking the total number of mobile users to over 325 million, according to the data released by the Telecom ReThe landline wireline segment saw the subscriber base falling to 38.22 million in Octgulatory Authority of India (Trai). India already has the distinction of being the world’s fastest growing telecom market.

During the month of September, the total(GSM, CDMA and WLL) addition was of 10.07 million.

However, the net addition of about 10.29 million users (wireline and wireless) during the month, could have been higher but for the decline in the landline user base. ober from 38.35 million in September. During September the net addition stood at 9.79 million. The total number of both wireless and wireline users now stand at 363.95 million, Trai said.

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Jet Air proposes 5-10 percent salary cut

Efforts by Jet Airways chairman Naresh Goyal to keep the cash-strapped private carrier afloat amid a global recession suffered a setback when the company’s local pilots reportedly refused to accept the proposal of salary cut and suggested to do away with expatriate pilots.

In a meeting chaired by Goyal at a hotel here to discuss several issues related to the salary cut of the Jet Airways staff, the chairman of the private carrier asked his employees to accept a salary cut of up to 20%, said sources who attended the meeting.The sources said the domestic pilots did not accept the proposal of a salary cut and instead they wanted to remove the foreign pilots, who draw 40% more salary than their Indian counterparts.

Jet Airways has 700 domestic pilots and 200 expatriate pilots. The senior management staff of Jet Airways brought a proposal seeking a voluntary retirement scheme (VRS) for them, but Goyal reportedly told them he could not sanction it since the company was cash strapped, sources said.

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Air India may give wings to Reliance Fresh

Reliance Fresh, the retail venture of Reliance Industries Ltd (RIL) is seeking to acquire one of ageing cargo aircraft of National Aviation Company of India Ltd (Nacil)—formed by the merger of Air India and Indian Airlines—to service its network of retail outlets.

While both companies have denied any such plan, a source close to the developments said RIL is open to either buying or leasing one aircraft from Nacil’s fleet. Reliance Fresh is likely to invest more than Rs 25,000 crore over the next four years in its retail business.

The reserve price for each of the older Boeing aircraft in Air India’s stable is approximately $60 million, while that of old Airbus aircraft is pegged at $20 million each. Of the 147 aircraft in the Nacil fleet, eight are freighters (all from Air India), including four Boeing 737-200s and four Airbus A310-300s. Reliance Fresh wants to source its aircraft from among these.

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Maruti rolls out A-Star

Maruti Suzuki, India's largest passenger carmaker launched its much-awaited hatchback A-Star on Wednesday. The car is the company's fifth global model, which would be manufactured only in India. It is also the company's fifth launch in the A2 segment.

Manufactured completely out of Maruti's Manesar facility, the company has set a target of selling 50,000 units in the domestic market. It also plans to export the car to 150 countries across Europe, Middle East, Latin America, Asia, Australia and Africa.

Keeping the car's export target at 1-lakh units, the company will start exporting it to Europe first by early 2009. The company has set an export target of 2 lakh units by 2010-11.

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Intel launches new desktop processor

Chip maker Intel launched its advanced desktop processor, Intel Core i7, the first member of a new family of Nehalem processor designs, in Bangalore on Tuesday. The release comes days after its rival Advanced Micro Devices (AMD) launched Opteron, built for server platforms, in Bangalore.

Built on 45nm processor technology, the i7 processor is energy efficient. Intel claims that it enhances processor speed for video editing, immersive games and other internet and computer activities by up to 40%, without increasing power consumption. Intel is targeting animation, gaming and digital content space verticals for the i7 processor.

Prakash Bagri, director, marketing, Intel, South Asia, said, "These are the relevant verticals we are looking at immediately. However, technology opens up new possibilities. Thus, going forward, a number of new verticals and areas are likely to come up."

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Plastics units appeal for sops

Due to diminishing demand in the Rs 25,000 crore plastic processing industry, many industrial units in this segment will become non-performing assets and will face at least 40% to 50% of job losses. This was stated by the members of All India Plastics Manufacturers’ Association (AIPMA) while addressing a conference titled `Global Economic crisis affecting plastic industry’,held here.

While addressing the conference, AIPMA appealed to the finance ministry, commerce ministry and the parent ministry of plastics industry to consider and approve various demands which will save the industry from losses.It includes among other encouraging imports of raw material and finished goods of plastics as they are cheaper. Also, reducing excise duties from 14% to 8% on polymers and articles of plastic is imperative so that investments by domestic players come down.

According to Kailash Murarka, president, AIPMA, “The Chinese government provides 9% subsidy to exporters of plastics from China to other countries.

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Ads could go off repeat Television shows

Starting Monday, the worst fears of television channels might turn true. Media planners feel that given the ongoing cine workers’ strike, which has led to general entertainment channels (GEC) telecasting repeat programmes, advertisers may now be compelled to either cancel their ad spots on the channels or ask for compensation.

In the current standoff, Advertising Agencies Association of India (AAAI) had written to key advertisers requesting them to stand by the broadcasters and give them an interim period of 10 days to resolve the matter, which is ending Tuesday. Media planners feel that if the dispute is not resolved within this time, advertisers will ask for a rebate from the broadcasters.

Every broadcaster in the country today is dependant on revenues from advertising. According to a Price water house Coopers report on the Indian media & entertainment industry, the Indian television industry, estimated at Rs 22,600 crore, is projected to grow to Rs 60,000 by 2012 on the back of advertising revenues, especially in GECs.

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Meltdown to slow worldwide IT spending in 2009

On a day when British Telecom announced 10,000 outsourcing job cuts, research agency IDC painted a grimmer scenario for the IT sector, predicting a sharply lower growth in worldwide IT spend. It said IT spending would grow only by 2.6% in 2009, down from 5.9%, with 0.9% growth in the US.

With the global financial crisis creeping into most sectors of the world economy now, worldwide IT spending is expected to grow by 2.6% in 2009, down from the pre-crisis forecast of 5.9% growth. According to the revised forecast from the research agency IDC, IT spending growth in the US is expected to be 0.9% in 2009, while that of Western Europe and Japan are expected to hover around the 1% range. Considering that the Indian IT industry derives around 90% of its revenues from the US and the UK market, this could mean greater pressure on revenues.

"Firms cutting their budgets by half does not mean that revenues of Indian IT companies will also go down by that number. As companies try to get the maximum bang for their buck and optimise their costs, there could be more work coming the Indian way," said Ganesh Natarajan, chairman, Nasscom. He added there could be a 15-20% impact on the revenues as the demand slows down to some extent.

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Bharti Wal-Mart to go on with launch plans amid slump

Despite the US economy slowdown, the Bharti Wal-Mart joint venture plans to start its business-to business (B2B) wholesale cash-and-carry stores in Punjab in the first quarter of 2009. The managing director and CEO of Bharti Wal-Mart India Pvt Limited, Raj Jain, said that despite the difficulties of economic meltdown, there was no change in the plans and the stores will be rolled out from Punjab.

Talking to FE, Jain said, “We are committed to start this venture of carrying out wholesale stores and we have already opened a distribution centre near Chandigarh which will cater to facilities located within the distance of 100-150 km. If need arises then more distribution centres will be opened. The distribution centres will service both the cash-carry stores as well as large retails like Bharti Retail. Besides, we have already announced membership registration for selfservice cash and carry stores by bonafide business owners in Punjab and between 50,000-60,000 owners are expected to get registered.”

A typical cash-and-carry store will stand between 50,000 to 100,000 sq ft and will sell a wide range of fruits, vegetables, groceries, footwear, clothing and other merchandise items. The joint venture is expected to open 10-15 stores in seven years and will employ over 5,000 people.

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Cell shopping makes wallets redundant in Japan

Japanese office worker Satoshi Tada pays for shopping, wins free food and gets store discounts all by waving his cell phone.

“I use it pretty much every day,”the 25-year-old said.“You can charge money on it right there if needed, and you don’t have to run around trying to find an ATM.” The world’s top firms such as Visa Inc and Nokia are still mostly testing phone use for payments, but in Japan, more than 50 million, or about half of all cell phone users,already carry phones capable of serving as wallets.

Japan has pioneered not just the technology but also the business models that will pave the way for wallet phones to become a standard payment method in the future. Some 700 million people worldwide are expected to own such phones by 2013.

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Nitish, Lalu trade charges over resignations

The war of words between Bihar chief minister Nitish Kumar and Union railway minister Lalu Prasad over the issue of resignation of legislators and MPs continued even with both blaming each other for breaching the unity among the political parties on the issue of hate attacks on north Indians by MNS activists.

While Prasad shot off a letter to Kumar seeking resignation by all MPs and legislators from the state for a united struggle to protest cruelty against Biharis, Kumar suggested that instead of politicising the issue Prasad should put pressure on the Centre to take stern action against the Maharashtra government for its failure torin in the divisive forces.

‘‘Prasad is a strong Cabinet minister and I have no doubts that he can compel the Centre to initiate action against the Maharashtra government’’, Kumar told reporters on the sidelines of the Janata Darbar.

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FM radio plays samaritan tune

Even as the government approval on allowing news and current affairs content on FM radio is awaited by the end of the year, the medium has proven to be sensitive to the events unfolding around it and has played “the friend in need” more than a few times.

Some of the commendable initiatives in the later part of this year include Fever104 Mumbai Monsoon Help Line’ to ease the woes of Mumbaikars resulting from water-logging, power cuts, traffic snarls, accidents, diseases.

“Apart from running a daily ‘Monsoon Update’ providing the latest information on traffic-jams, accidents, diversions, suitable routes,amount of rainfall, flooding or water logging situations,high tides, and train delays, power cuts, Mumbai residents could call on a phone number and record their grievances.

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State Bank of India cuts rate by 75 basis points, to raise buyout chest

The country’s largest lender, State Bank of India, on Thursday said it would reduce its lending & deposit rates and raise a chest of Rs 5,00010,000 crore for possible foreign acquisitions.

The bank’s chairman hinted at a reduction in the housing loan rates and talked about the resource crunch faced by overseas branches and an incumbent liquidity problem.

The bank would cut its benchmark prime lending rate (BPLR) by 75 basis points to 13% from Monday, November 10, and pare interest rates by 50 bps on deposits between 91 days and five years and 25bps on those above five years,from December1.

“The recent monetary measures have allowed us to lower the PLR. SBI is attracting deposits worth around Rs 1,000 crore per day.

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Indian industry to gain from energy, environment policies

Change, Barack Obama’s theme, will also resonate through the spectrum of India’s engagement with the US after the 44 th President of the United States of America takes over on January 20.

There is a sense of uncertainty here about the stand the new US administration will take on several issues that affect India.

An analysis of Obama’s position, detailed in his ‘Blue Print for Change’, shows his stance on environment and energy, for instance, may give India a long-term boost. A 35% reduction in US oil consumption by 2030, as he envisions, would soften the world’s oil demand. India’s coal- and import-dependent energy economy stands to gain more from Obama’s plan to invest $150 billion in clean energy over the next decade and double fuel economy standards within 18 years.

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Moody's cuts ICICI Bank UK's ratings

Global rating agency Moody's has said the longterm debt and bank deposit ratings for ICICI Bank UK, the British subsidiary of top Indian private sector lender, have been revised to a notch lower to bring it in line with the baseline credit assessment of the parent company.

While affirming the bank financial strength rating (BFSR) and a stable outlook on all ratings, Moody's said in its rating action note that the long-term bank deposit and senior unsecured debt ratings for ICICI Bank UK are being changed from Baa1 to Baa2, which is similar to the Indian parent's senior debt rating.

Moody's said that the current BFSR incorporates "a certain degree of volatility in earnings, which could potentially arise from the bank's large securities holdings".

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India-Lanka undersea link project on course

Undeterred by the ongoing war by LTTE, the governments of Sri Lanka and India are going ahead with the implementation of an ambitious Rs 1,000 crore under sea transmission link project between the two countries. As reported by FE on April 13, both the governments have given top priority to this project and are expected to sign an MoU soon, which will pave for an appointment of an agency to carry out a comprehensive undersea/marine survey. The proposed survey is like to be completed in six months and there after, a detail project report will be prepared.

The proposed undersea/marine survey is necessary, prior to the laying of the undersea/submarine cables. The cable survey will look into the traffic of movements of ships in the area, depth of sea, earthquake zones and volcanic actives as well as the presence of sharks in that area of sea. The link is likely to connect Madurai in Tamil Nadu and Anuradhapura in Sri Lanka’s North Central Province. The transmission line is expected to be 400KV HVDC overhead lines from Madurai to the Indian coast (near Rameshwaram(139km), a 400 KV HVDC cable from the Indian sea coast to the Sri Lankan sea coast (39 km), a 400 KV HVDC overhead line from the Sri Lankan coast to Anuradhapura/Putta lam (125km). PowerGrid Corporation,which is India’s central transmission utility, will be the project implementation agency.

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Going On Strong Testing

Outsourcing in the Indian IT sector might be on the down slide due to the global financial crisis and recession in the world economy, but the software testing industry and outsourcing in it is growing rapidly. The incessant pressure on increasing the performance of various software is ensuring that the software testing market is getting bigger. The business potential in this industry is also at an all time high.

Typically under software testing, an investigation is done to check the execution and capability of the software programmes for evaluating its performance. “The business potential in software testing area continues to grow, considering the growing complexity of software products and increasing expectations from the end-users demanding the best quality product, along with the increasing number of options available to them,” says Manish Rathi, head, delivery management (Version1.0/ New Venture Services), GlobalLogic Inc.

Software testing, according to Rathi, inherently remains complex and human intensive and software products now require strong domain experience. This has increased opportunities for businesses, which bring in new value propositions in software testing in terms of the processes, technology and business models.

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Foreign reserves drop $15.5 billion in steepest ever fall

India’s foreign exchange reserves for the last fortnight have dropped by more than $10 billion each week. For the week ended October 24, RBI data shows that reserves slipped $15.5 billion, or 5.65%—the largest drop ever—to $258.4 billion.

The decline was a result of major intervention by RBI in forex markets and a fall in the valuation of reserves as the euro slipped against the dollar. Due to the RBI measures, on Friday the rupee closed at 49.44/6 against the dollar, an improvement of 23 basis points. Last Friday, the euro fell to its lowest level in two years against the dollar, while the UK pound traded at a five-year low.

“The change in foreign currency assets is partly because of changes in the value of the dollar against the euro, yen and other currencies during the period,” RBI’s weekly statistical supplement noted. In the first three weeks of October, India’s foreign exchange reserves dipped $32.50 billion, on top of a fall of around $5.4 billion in September.

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