Andhranews

Kolkata, Sept. 11: The Union government is planning to set up a regulatory authority to monitor the functioning of the airports in the country. The proposed Airports Economic Regulatory Authority (AERA) will be a three-member body, Mr Ajay Prasad, secretary, Union civil aviation ministry, said in Kolkata on Monday. The draft bill is likely to be placed before the Union Cabinet for its approval this month. Mr Prasad said: “We are preparing the draft bill to set up the Airports Economic Regulatory Authority. The bill is likely to be tabled in Parliament during the Winter Session.”

The proposed AERA will be set up on the lines of the Telecom Regulatory Authority of India. The AERA will be responsible to fix the landing charges, air bay charges and the other tariffs to be paid by the airline companies. It will also ensure the proper delivery of promised services at the airports. “When we have appointed private companies for modernising Delhi and Mumbai airports and are open to the idea of attracting private capital in setting up greenfield airports in any part of the country, there is a need for such a body to monitor the functioning of the airports, particularly the private ones and the airports coming up under the public-private partnership,” Mr Prasad added.

He also disclosed that the Airports Authority of India (AAI) will raise nearly Rs 4,000 crores through issuing bonds. “The AAI has got the assignment to modernise 35 non-metro airports in the country. This job involves a huge investment of Rs 6,000 crores approximately. The AAI, which owns a fund of Rs 2,000 crores, will need another Rs 4,000 crores to meet the requirement,” Mr Prasad added.

Civil aviation minister Praful Patel said that while AAI would be engaged in the modernisation of 35 non-metro airports, the Centre would invite joint venture partners to carry out other developmental works near the vicinity of the airports. After attending the meeting of the Parliamentary Consultative Committee on civil aviation in Kolkata on Monday, Mr Patel said that the AAI would construct airports in Sikkim and Arunachal Pradesh.

There was also a proposal to build an airport near Kohima in Nagaland. Regarding the proposed merger of the Indian and Air India, Mr Patel said that the two government airline companies would be merged by March 31, 2007. The merged entity might float an IPO, the minister indicated.

Hyderabad, Sept. 11: When Perot Systems, a business solutions provider, wanted to hire software professionals for its Consulting and Applications Group in Bangalore and Noida last week, the company first spread the word on its own network. Employees were emailed under the company’s Refer Reward and Rejoice (3R) programme.

The objective of the email: “Refer friends and family members with the right skill set, the technical capability or the correct attributes to make a great addition to our company.” Welcome to the world of hiring by referrals. The system is also called “buddy” hiring, and technology companies, both Indian and MNCs, are increasingly resorting to hiring by referrals. The reason: Current employees are presumed to have a better idea of the people they recommend. The Perot Systems email said: “Go ahead and let us know of people who you believe as good as you are.”

“More and more IT companies are encouraging their employees to refer their friends or family for jobs, as part of a strategy to curb the attrition levels,” says Mr Arun Tadanki, president and managing director (India, Hongkong, Singapore and West Asia) of Monster, Inc. Says Mr Achutan Nair, V-P, strategic resourcing of Wipro Ltd, “We put the job requirements on our net, and employees are aware of the vacancies within seconds. They are encouraged to refer people they know.”

“We have had the referral programme for the past 10 years, though the response in the earlier years was not very encouraging,” says Mr Murty A.S., director, HR, of Satyam Computer Services Ltd. Apart from the immediate benefit of hiring people existing employees know, Mr Nair of Wipro says, the cost of hiring is also reduced. “We need to pay 20 per cent of the new employee’s wages to an outside recruiter. The referral programme is relatively less expensive,” he says.

What do employees get for referring their friends and family? Cash money, really. Perot Systems offered a cash incentive of Rs 30,000 to employees referring buddies or family having more than 12 years’ of relevant experience. “Some MNCs offer Rs one lakh to employees referring potential new recruits, payable over a period of time,” says Mr Tadanki.

“There is a cash incentive for every successful recruitment through the referral programme, from Rs 5,000, which is automatically paid to the employee 90 days after the candidate is hired,” said Mr Nair. The incentives are not given to senior executives, he says. “The incentive is Rs 25,000 per employee hired and retained successfully. We expect the referral programme to contribute 30 per cent of the total recruitment in a few years,” says Mr Murty.

New Delhi, Sept. 11: ONGC’s overseas arm, ONGC Videsh Ltd. (OVL), has entered into a production-sharing-contract with CUPET, the State oil company of Cuba, for two blocks — N-34 and N-35. The blocks are located in the exclusive economic zone of Cuba and are spread over an area of around 4,300 sq. kms. According to ONGC, the blocks are located in a very favourable geological set-up and are estimated to hold considerable hydrocarbon resources.

The contracts were signed on Saturday in Havana. ONGC Videsh had earlier submitted expression of interest for these two blocks located in the deep-water of the Cuba offshore and negotiated the production sharing contract. The Government of Cuba has the option to take 20 per cent participating interest in these blocks.

ONGC Videsh will be the operator of the block. The exploration period is spread over a period of six years in three phases. During the first phase of exploration and acquisition, processing and interpretation of seismic data would be carried out for identification of prospects.

Accident statistics attract worldwide attention, and India is no different. In India, according to some estimates, more than 40,000 people are killed in automobile accidents each year, like in the US and Europe. Technology, including ultrasonic, radar, lidar, and camera-based safety systems, can address many of the causes, according to a new study from ABI Research.

“Some of these obstacle detection systems have been available for a number of years,” ABI Research says, “but only at the top end of the market. Costs are coming down with volume, but not by the same amount across the board.” The research firm finds that the market is primed to take advantage of the benefits of a number of different approaches to obstacle detection, and that some technologies are going to drop in cost more rapidly than others. But in the absence of legislation, how many buyers will choose to pay for them?

“In the consumer market, education is critical to the uptake of obstacle detection systems,” it says. “Widespread adoption is needed if we are to achieve a significant improvement in accident statistics. Car buyers need to learn more about how the technologies work, and to understand that they really will benefit from purchasing these systems.”

While initial cost is still an issue, the benefits are potentially huge. Avoiding costly body and paint repairs may deliver a big enough ROI, but saving a life or avoiding an injury is priceless. “Luxury cars have had obstacle detection options long enough to get the bugs out,” ABI Research says. “The first OEMs to make them available to the mass market could reap huge rewards.”

Handheld consoles

In the past year, the Nokia N-Gage, Tapwave Zodiac, and Gizmondo have all been taken off the market, leaving only two competitors in the handheld game platform space: Nintendo and Sony. In the current generation of handheld consoles, the Nintendo DS will outship the Sony PSP over the life of the consoles, reports In-Stat.

“The DS’s two screens have proven popular, and have opened up the handheld market to new types of game play, as well as new demographic groups,” the high-tech market research firm. It says while the PSP outshipped the DS in 2005, the DS has turned the tables in 2006, spurred by very strong sales in Japan. “While the DS is a more traditional game console, Sony’s PSP aims to be a portable multimedia convergence device that primarily plays games, but also offers web browsing and a digital audio player,” it says.

Mumbai, Sept. 11: There have been 57 merger and acquisition deals (M&A) deals in the first eight months of 2006 in the IT & ITeS sector valued at over $ 1.73 billion, as compared to 80 deals valued at $1.33 billion for the year 2005. The research by Dealtracker is Grant Thornton’s newsletter, published by the corporate finance group, shows that the increase in the deal value was 95 per cent on an annualised basis and the average deal size has almost doubled. The outbound cross border deal value has increased close to 200 per cent on an annualised basis.

The research group says that the IT sector has been the topmost sector in garnering the maximum number of deals among all sectors. Detailing the reasons for this, the groups says that since the core business fundamental of this sector lies in international business, it has adopted the strategy of establishing a global footprint through inorganic growth.

“This has been the reason why more and more IT companies in India re making cross-border acquisitions and consistently increasing their acquisition sizes.” There have also been significant domestic deals like global IT leaders like Oracle acquiring controlling majority stakes in iflex and EDS in Mphasis. Interestingly, the Dealtracker points out that while the deal volume has more or less remained stable, the total value of the M&A deals has increased by about 95 per cent on an annualised basis between 2006 and the previous year 2005.

And the average deal size has almost doubled from $16.7 million to $30.5 million. The outbound cross border deals has increased by close to 200 per cent with the average size of the acquisitions more than doubling from $10.6 million to $24.3 million.

Top 5 M&A deals in the IT & ITeS sector

Acquirer Target Acquisition
price in million (US$)

EDS Mphasis BFL 380

RR Donnelly OfficeTiger 250
and Sons Co.

Subex Azure Solutions 140
Systems

Aditya Birla Minacs Worldwide 125
Group Inc.

i-flex solutions Mantas Inc. 122

Chennai, Sept. 11: In one of the biggest deals in India’s transportation sector, Shriram Transport Finance Company Ltd, a truck financing company, on Monday said that Merrill Lynch, through its NBFC India arm DSP Merrill Lynch Capital Ltd, will be acquiring the truck
financing portfolio from Shriram amounting to $200 million (Rs 924 crore).

The first tranche of $100 million has already been disbursed and the next tranche of $100 million will be disbursed during the third quarter of 2006-07, Mr R. Thyagarajan, chairman, Shriram group, told reporters here. “The funds channelised through Merrill Lynch will help the small truck owners to get easier access to funds, thereby helping the modernisation of the trucking fleet of the country,” Mr Thyagarajan said.

This strategic relationship, according to Mr Arun Duggal, chairman, Shriram Transport Finance Company Ltd, will enhance the company’s market share significantly in the truck financing business. The deal is expected to provide more loans to the small truck operators, who constitute more than 75 per cent of the truck population.

“The company is witnessing rapid growth and our involvement will help them finance part of this growth,” said Mr Rajiv Garg, head, global structured finance & investments, DSP Merrill Lynch Capital. Shriram Transport has more than Rs 7,500 crores of assets under management, a company release said.

New Delhi, Sept. 11: After Tata, Reliance is ready to enter the direct-to-home (DTH) market. The Anil Dhirubhai Ambani Group has got a go-ahead from the government to start its own DTH services, say sources. Tata had in August launched its DTH services by the name of Tata Sky. Tata Sky is the joint venture between the Tata and Star Television. Reliance would be the fourth player to enter the DTH market, the other being Doordarshan, Zee and Tata.

With the entry of Reliance, the competition in the DTH market is expected to become more ferocious. Reliance is known to market its brand very aggressively. Even Tata Sky has been promoting Tata Sky very actively. But being the first to enter the DTH market, Zee’s Dish TV has edge over others. Dish TV has been able to rope up over 1.4 million subscribers in less than two years of its launch.

With the competition increasing, DTH service providers have started value-added services. While Tata Sky is offering “showcase,” an innovative channel, where subscribers can call and order the blockbuster of choice, Dish TV has already launched a “movie-on-demand” service where its subscribers can watch the movie as many times within 24-hours of placing the orders. The reason Reliance is entering the DTH sector is because that there is a huge potential of growth, that has been neglected till now.

Hyderabad, Sept. 11: Betting on the inherent potential of the auto industry and spurred by the reduction in excise duty on small cars, major Indian and foreign automobile companies have lined up investments worth Rs 26,500 crores to add fresh capacity or greenfield facilities in the country.

The investment figure takes into account new plans unveiled by Tata Motors, Hyundai Motor India, General Motors, Maruti Suzuki, Nissan, Honda Siel India, Volkswagen, BMW and Mahindra & Mahindra. Car makers are gearing up for 2010 and beyond when the size of the market would cross the 2.2 million mark and, therefore, have planned expansion. “Globally, India is the second-largest growth market in the automobile sector. In FY 2005, 14 lakh units were rolled out and for this fiscal the target is a growth of 19.4 per cent. Therefore, the potential to grow is tremendous,” Mr P. Balendran, vice-president (corporate affairs) of General Motors India, told this newspaper on Monday.

In a bid to address this surge in demand and roll out its small car Spark, GM India is setting up its second unit in the country at Talegaon at an investment of Rs 1,500 crores. Elsewhere, Maruti Udyog Ltd intends to manufacture 1 million units by 2010 once its new unit in Manesar is ready and its nearest competition Hyundai expects to roll out 3,00,000 units by 2008. Whereas Honda Siel India, looking for another unit in the country, is reportedly looking at increasing its capacity to 1,00,000 cars from the current 60,000, Toyota Kirloskar Motor is scouting for a second manufacturing facility in Karnataka to launch its small car.

Tata Motors and M&M too have planned huge capital expenditure in the next 3-4 years to launch the 1-lakh car. Experts believe two reasons are driving growth in the industry. Firstly, the reduction in excise duty on small cars has forced car majors to rejig strategies and look at the small car actively, which previously were the domains of Maruti and Hyundai only. Secondly, with high fuel prices and stricter emission norms in the West, consumers are shifting to small, fuel-efficient cars and India has the wherewithal to emerge as a low-cost manufacturing base for small cars.

“The auto industry benefits from scale. And with the kind of scale-growth planned, major players will cater to both the export and the domestic markets with an equal focus,” said Ashutosh Goel, an auto analyst with Edelweiss Securities. If stumbling blocks like high taxes and manpower are suitably dealt with, India’s auto industry is on its way to become a major hub like Thailand and Brazil and increase its contribution to the GDP to 10 per cent by 2015 from the current 5 per cent.

Hyderabad, Sept. 11: GMR Hyderabad International Airport Ltd, which is developing an international airport here, said on Monday it has entered into two in-flight catering concessional agreements with LSG Sky Chef and Sky Gourmet. The contracts envisage setting up of world-class in-flight catering units in the upcoming international airport in Shamshabad.

LSG Sky Chef is a subsidiary of Lufthansa, and the world’s largest provider of airline catering and in-flight solution. It produces around 369 million airline meals per year. In India, it is currently operating in Hyderabad and Bangalore. Sky Gourmet Catering Pvt. Ltd operates under the trade name of “Skygourmet” with operations spread across Mumbai, Delhi, Bangalore and Pune.

“The in-flight catering concessions involve financing, constructing, operating and maintaining in-flight kitchen facilities for catering to the in-flight kitchen services at GHIAL. Both the in-flight catering units will have an initial capacity of around 7,500 meals each per day,” a GHIAL release said.

New Delhi, Sept. 11: Left trade union leaders and Airports Authority Employees’ Union leaders visited Chennai recently to convince Tamil Nadu chief minister M. Karunanidhi to allow Chennai airport to be modernised by the state-run Airports Authority of India (AAI) because they were concerned about Mr Karunanidhi’s communication to the Union civil aviation ministry favouring the modernisation of Chennai airport on the lines of the Delhi and Mumbai airports.

“We met Mr Karunanidhi and requested him to get Chennai airport modernised by the AAI. He told us that he would consider the matter. We have also requested the AAI to prepare a presentation on how they could develop Chennai airport. The idea is to show Mr Karunanidhi this presentation,” senior Left leader and Centre for Indian Trade Union (Citu) president M.K. Pandhe told this newspaper.

“Yes, it’s true that we did meet Mr Karunanidhi last week. Just as we prepared modernisation plans for the Delhi and Mumbai airports, we will prepare development plans for Chennai airport too,” confirmed AAEU general secretary M.K. Ghoshal. Mr Pandhe has been at the forefront of the struggle by the AAI unions against the privatisation of Delhi and Mumbai airports along with other Left leaders such as CPI leader Gurudsas Dasgupta and CPI(M) leaders Sitaram Yechury and Dipankar Mukherjee.

The Left, which has asked for the development of Kolkata airport by AAI, similarly wants Chennai airport too to be developed by AAI. The CPI(M) and CPI had fought the recent Assembly elections in Tamil Nadu jointly with the DMK and the opinion of the Left is bound to mount pressure on the DMK government.

Civil aviation secretary Ajay Prasad had recently told this newspaper that the Tamil Nadu chief minister had sent a communication to the civil aviation ministry favouring the modernisation of Chennai airport on the lines of the Delhi and Mumbai airports. This, in effect, would mean the privatisation of Chennai airport. The joint venture companies running Delhi and Mumbai airports are led by representatives of private consortia.

Hyderabad, Sept. 11: Nava Bharat Ventures Ltd, a Hyderabad-based ferro alloys, power, sugar and infrastructure firm, said it has launched and priced an offering of Foreign Currency Convertible Bonds due 2011 of JPY 5,250,000,000 (with an option to purchase an additional JPY 750,000,000).

The bonds will be listed on the Singapore exchange and are convertible over five years. The bonds will be convertible at a conversion price of Rs. 136.50 per equity share, and are convertible into equity shares at the option of the bond holders. The bonds are zero coupon and will be redeemable on the expiry of five years at a yield to maturity of 4.67 per cent, a release said. D. Ashok, MD, Nava Bharat, said, “The proceeds of the FCCB will be used in fueling the expansion plans of the company in power and sugar”.

New Delhi, Sept. 11: India’s external debt has risen by $2 billion to $125.2 billion as on March 30, year-on-year as short-term debt surged due to increase in oil import bill and NRI long-term deposits escalated. However, the rise in NRI deposits and short-term debt was partially offset by decline in commercial borrowings by $1.4 billion to $25.56 billion and bilateral loans by $1.14 billion to $15.78 billion at the end of 2005-06, the report said.

“The increase (in external debt) was essentially due to rise in NRI deposits partly because of flow-back of funds from redemptions of IMDs and surge in short-term debt owing to larger trade credits buoyed up by higher import demand,” finance minister P. Chidambaram wrote in his forward to the report. The report said short-term debt has increased during the last two years to $8.78 billion from $4.43 billion in 2003-04 as trade credits expanded particularly under oil trade.

The short-term credit was shade higher than the earlier peak of $8.54 billion in 1991.
Large accumulation of short term debt, considered as a part of volatile capital flows, exposes the economy to external shocks as was witnessed by the currency meltdown in east Asia in 1997. However, in India short term debt is maintained well within a permissible limit, the report said.

Besides commercial borrowings and bilateral loans, rupee debt declined by $270 million to stand at $2.03 billion as on March 30. External debt had risen by 10.4 per cent or $11.6 billion as on March 30, 2005 from $111.6 billion a year ago, according to the report. The report attributed less growth in external debt during 2005-06 vis-a-vis 2004-05 to repayment of $7.1 billion SBI-sponsored IMD in 2005.

New Delhi, Sept. 11: The compulsions of the market economy are forcing the cola majors — Coke and Pepsi — to mount their ad campaigns not against each other, but as a crucial effort to vouch for their product safety. Pepsi has already released such an advertisement and now a Coke ad is set to be on air soon.

The new Coke ad on safety is in the process of being completed. McCann Ericcson is the ad agency working on it. Early this month, forgetting Shah Rukh Khan and the jazz associated with a Pepsi ad, the cola major brought in its chairman, Rajeev Bakshi, to claim safety for its product. Sources said that Coke is unlikely to feature its CEO, even though the message remains that of safety.

The cola majors, famous for sly digs and being one up on the rival brand, are busy fighting the same issue, pesticide, rather than each other. When the controversy broke, the two companies were initially communicating only through the platform of the ISDMA (Indian Soft drink Manufacturer’s Association), rather than as individual companies.

The cola giants were once again hit by the “pesticide” controversy which broke out in early August when the Centre for Science and Environment (CSE) levelled charges of unacceptable quantum of pesticides in the various soft drink brands of the two companies. A similar charge was brought out by CSE against the two cola companies, three years back.