Financial Express

  • Australian co bags $720 m contract from ONGC

    Australian construction company Leighton Holdings Ltd on Tuesday announced that it has bagged a contract from Oil and Natural Gas Corporation worth $720 million for building an oil and gas pipeline in

  • Forest cover is static, greener

    After continuously depleting between 1987 and 1998, the country's green cover now looks to be static for the first time. This is a significant achievement as the forest cover is continuously decreasing from 6.38 million hectares (19.49%) in 1987 to 6.37 million hectares (19.39%) in 1998, according to the latest data released on Tuesday by ministry of environment and forest.

  • World Bank urges benefit assessment of bio-fuel

    The World Bank, admitting the competition between food and fuel crops for land and water, has asked the national governments to carefully assess economic, environmental, and social benefits and the potential to enhance energy security. In its World Development Report-2008, it said: "The challenge for developing country governments is to avoid supporting bio-fuels through distortionary incentives that might displace alternative activities with higher returns - and to implement regulations and devise certification system to reduce environmental risks.' It suggested that the potential environmental risks from large scale bio-fuels production can be reduced through certification schemes for measuring environmentalaspects. It suggested a Green Bio-fuels Index of GHG reductions. The World Bank quoted that according to some available estimates, current bio-fuel polices the world over, can lead to a five-fold increase of the share of bio-fuels in global transport energy consumption - from 1% today to around 5% to 6% by 2020. "The grain required to fill the tank of a Sports utility vehicle with ethanol (240 kg of maize for 100 litre ethanol) could feed one person for a year, so competition between food and fuel is real,' the World Bank report said. It added that future bio-fuel technology may rely on dedicated energy crops and agricultural and timber wastes instead of food crops. "Technology to break cellulose into sugars distilled to produce ethanol or gasify biomass is not yet commercially viable - and will not be for several years. And some competition for land and water between dedicated energy crops and food crops will likely remain,' the report said. It further said that second generation bio-fuels using cellulosic technologies were likely to require even larger economies of scale, with investment costs in hundreds of millions of dollars just to build one plant. The report admitted that in industrial countries and till recently in Brazil, bio-fuel programmes were supported by high protective tariffs and large subsidies. These policies have caused land conversion away from food and led to an upward pressure on global food prices, severely affecting poor consumers. With a view to make bio-fuels compete with gasoline, industrial countries gave massive support and subsidies. According to recent estimates, more than 200 support measures costing around $5.5-7.3 billion a year in the US amount to $0.38-0.49 per litre of petroleum equivalent for ethanol and $0.45-0.57 for bio-diesel. In this context, the World Bank report questions - Are bio-fuels economically viable without subsidies and protection? It answers: "The breakeven price for a given bio-fuel to become economical is a function of several parameters. The most important determining factors are the cost of oil and the cost of the feedstock, which constitute more than half of today's production costs. Other often more cost-effective ways of delivering environmental and social benefits need to be considered, especially through improvements in fuel efficiency.

  • Coal India, IL&FS arm in project development SPV

    Coal India Ltd (CIL) and IL&FS Infrastructure Development Corporation Ltd (IL&FS IDC), a unit of IL&FS, have signed a deal to float a 50-50 joint venture to undertake develop mining, power and other coal-based projects. A special purpose vehicle, Integrated Power & Coal Development Co Pvt Ltd (Intec), will set up a project development fund of Rs 10 crore per project with equal shares from the two partners to fund each project that it takes up. CIL's technical director NC Jha and IL&FS IDC's managing director DK Mittal signed the pact at CIL's headquarters here in the presence of CIL chairman Partha S Bhattacharyya and others. The SPV will undertake the entire chain of project development activities, from project identification, site selection, facilitation in land acquisition and technical and environmental studies to preparation of DPR, EIA, obtaining various clearances and approvals, obtaining linkages, tying of sales (power sales as relevant to power projects), finalisation of evacuation arrangements, financial modeling, legal documentation, engineering, procurement and construction (EPC) contract, O&M, project structuring and marketing with lenders and investors. The SPV will work on projects that involve improving mine performance, accessing difficult mines, developing or implementing pithead coal-based power projects, development of washeries, power plants based on asheries and so on. The venture will also help private sector Companies that have been allotted mines to develop them. CIL expects to gain from the SPV's activities by way of low-cost power from pithead-based power plants and by selling power instead of coal.

  • Expectations of the Left

    Prasenjit Bose Since the Finance Minister would not have the opportunity to present a full Budget in 2009 because of impending Lok Sabha elections, Budget 2008-09 would be his last opportunity to fulfil the promises made in the National Common Minimum Programme (NCMP). The expenditure priorities have already been set forth by the Eleventh Plan. What is required is adequate budgetary support for the Plan, especially in priority areas like agriculture, PDS, education, health and employment generation. To meet the NCMP commitments, the gross budgetary support (GBS) for the Plan has to be stepped up. Budgets in 2006 and 2007 witnessed increases in GBS by around Rs 30,000 crore over previous years. It is evident that an increase of such magnitude, which amounts to less than 1% of current GDP, is inadequate for vital expenditure commitments. The increase in the GBS should be twice the amount seen in recent budgets. Agriculture, which was promised a new deal under the UPA, continues to languish. The advanced estimates for 2007-08 already show agricultural growth slipping to 2.6%, compared to 3.4% registered in 2006-07. To meet the Eleventh Plan target of 4% agriculture growth rate, the government needs to replace the half-hearted measures adopted so far with substantial allocations for debt relief, the Food Security Mission and Rashtriya Krishi Vikas Yojana. The rise in prices of essential commodities over the last two years has underlined the importance of strengthening the PDS. Domestic food production and public procurement also needs to increase to avoid the embarrassment of high-cost wheat imports. India should increase the food subsidy, which currently stands only at around 1% of GDP. It is also time to consider doing away with the targeted PDS, which has turned out to be a failure, and introduce a revamped, more efficient and universal PDS. The ban on futures trading of wheat, rice and some pulses imposed last year should continue for the sake of stability in food prices. Education and health have been accorded high priority under the Eleventh Plan. Expenditure on the former, up five-fold over the Tenth Plan, is aimed at building 6,000 schools, funding the Sarva Shiksha Abhiyan to ensure the Right to Education, building new ITIs and vocational training institutes to bridge the skill deficit, and setting up 30 new central universities along with new IITs, IIMs and IISERs to expand the country's knowledge base. These laudable objectives have to be backed up by adequate outlays. Outlays on the rural health mission and more Aiims-type institutions also have to be increased. The universalisation of the ICDS is being impeded by inadequate funding, which needs to be addressed. The NREGA, despite problems, has succeeded in providing work to 27.7 million people this year. No doubt, its implementation needs to be streamlined and the monitoring mechanism improved. However, this should not come in the way of expanding the employment guarantee to all rural districts and also to urban areas. This is the single biggest welfare measure adopted by the UPA government, and has offered relief to the poorest and most vulnerable. This safety net must be strengthened under all circumstances. The revenue buoyancy seen over the past few years should help mobilise resources for increased welfare expenditure and public investments. Efforts to widen the tax base should continue. The last Budget contained a study of corporate tax, which showed that the effective tax rate for Companies in 2006-07 was 19.2% against the scheduled tax rate of 33.6%. Tax concessions to corporate taxpayers increased from Rs 34,618 crore in 2005-06 to Rs 50,075 crore in 2006-07. Budget 2008-09 should take steps to bring down these tax expenditures. The burgeoning foreign exchange reserves built up on the basis of FII inflows have turned into a liability. Rupee appreciation is hurting export sectors and efforts to buy up foreign exchange followed by sterilisation are also leading to additional fiscal costs. Reintroduction of long-term capital gains tax and increasing the rate of the short-term capital gains tax and the STT would help stanch the inflow of speculative capital, curb equity market volatility and raise resources. Budget 2008 also offers the opportunity to initiate the long pending restructuring of the indirect tax structure on petroleum products

  • Beijing to bring in more pandas for Olympics

    The city zoo is expanding its panda exhibit for the 2008 Olympics and will ship in up to 10 more for visitors to see during the August Games, an official said on Thursday. The zoo is expanding its facilities to accommodate the additional animals and is also building a Giant Panda Museum which will document efforts to save the endangered species, a zoo spokeswoman said. "The pandas will be on loan from the Wolong Giant Panda Centre, but the numbers to be brought in are still under negotiation,' she said. According to the Beijing Youth Daily, up to 10 more pandas would be brought in from Wolong, the world's most successful panda breeding centre located in southwest China's Sichuan province. The panda exhibition is the most popular attraction at the Beijing Zoo and currently houses seven of the animals. A record number of pandas have been bred in China in recent years, with 31 born and 25 surviving at breeding centers around the nation in the first 11 months of 2007, earlier press reports said. In 2006, 33 pandas were born, with most of the new births in both years occurring at the Wolong centre, where artificial breeding techniques are continually improving, the reports said.

  • Schemes for poor fine, but what's the definition of poverty?

    The UPA government is yet to set up an expert group to undertake a survey to identify people below the poverty line (BPL), even as the 11th Plan is already underway. The survey is normally conducted by the Ministry of Rural Development (MoRD) in the first year of every Plan period. However with the government's delay in setting up the group, work is expected to begin only in 2009, the third year of the 11th Plan. In fact, the government is yet to set the criteria to measure poverty for the 11th Plan. In the last three Plans, different criteria have been used to identify the poor

  • Centre show-cause to 12 firms; talks with Goa on SEZs begin

    The Centre has initiated talks with the Goa government regarding the de-notification of three special economic zones (SEZs) in the state, including the 123.2 hectare-Meditab Specialities SEZ planned by pharma major Cipla. The move follows the controversial decision of the state to scrap all SEZs within its territory following widespread public agitations against such tax-free enclaves. The developers of Meditab SEZ have already made investments of over Rs 130 crore in the project. Following a notification in April 2007, Meditab had also committed investments worth Rs 500 crore and imported machinery for its pharma plant. The law ministry has recommended addressing the issue of compensation to SEZ developers if the SEZs are de-notified. Besides Meditab SEZ, the other de-notified SEZs in the state are 20.36-hectare biotech SEZ by Penisula Pharma Research Centre and 105.91-hectare IT/ITeS SEZ by K Raheja Corp. The Centre has also issued show-cause notices to developers of 12 SEZs, which obtained formal and in-principle approvals, in the state, commerce secretary GK Pillai said here on Monday. Pillai heads the board of approval (BoA), the nodal body granting permission for establishing SEZs. "(As regards) all the formal and in-principle approval given to SEZs in Goa, the BoA will issue show-cause notices to them (developers) in the light of the recommendation of the state, following the principle of natural justice,' Pillai said. The developers will be asked why the permission granted to them should not be cancelled. On the 8 SEZ proposals that were forwarded by the state but yet to come before the BoA, Pillai said, the Centre has decided to treat them as "withdrawn'. The state had on December 31, 2007, asked the Centre to scrap all the SEZs citing representations, which said the zones would adversely affect tourism and environment. The state also said it does not have adequate water and electricity for such massive industrial activities. There was also criticism that SEZs will take away scarce land in the state. The Centre has indicated that the state government will have to compensate the developers of the SEZs for the investments made along with the interest amount to avoid litigation and further complications. Officials wonder how the land, acquired for the notified SEZs, would be returned to the original owners. At best, the government can deny the developers the status of SEZ, which entitles them for tax concessions. "Even if the SEZ status is removed, the units will remain in the domestic tariff area,' an official said.

  • Discharge-free green toilets to clean up tracks

    Railway minister Lalu Prasad is embarking on a move to clean up the railway stations and cut down corrosion of tracks. The railways trains will have discharge-free green toilets in all the coaches by 2011-12. "Discharge from toilets of train has been the prime reason for poor sanitation facility at stations

  • Green light for Mundra UMPP, Sasan awaits clearance

    With the ministry of forests and environment (MoEF) giving the crucial environment clearance, implementation of Tata Power's 4,000-mw Mundra ultra mega power project (UMPP) has gathered momentum. However, Reliance Power's 4,000-mw Sasan UMPP is yet to receive the MoEF clearance. The ministry has emphasised the need for an integrated proposal for forest clearance, covering forest area involved in the project limits, and the mining area. While the implementation schedule of the main plant of Sasan project is spread over five years, the development of mines takes about two years. Thus, with the main plant in the process of being implemented, the forest clearance proposal for the mining area can be submitted separately after obtaining an approval for the mining plan. According to power ministry sources, "Power secretary Anil Razdan has recently reviewed the implementation progress of Mundra and Sasan UMPPs. The Coastal Gujarat Power Limited (CGPL)

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