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Automobiles
Renault-Nissan to set up auto plant near Chennai
In an equal joint venture agreement, Renault and Nissan have decided to invest Rs.45 billion ($1,140 million) to set up an integrated greenfield automotive facility at Oragadam near Chennai. A Memorandum of Understanding (MoU) in this regard was signed with the Government of Tamil Nadu. The project will come up on 678 acres and will provide vehicle production platforms for the two car-makers. It will also have powertrain facility. The plant, which will have an installed capacity of 400,000 vehicles annually plant, would produce a wide range of products for both partners, suited both for the domestic and export markets. The facility is expected to go on stream in 2010.
By 2012, nearly half of its models would be India-made. It would bring in products such as entry-level hatch-backs, pick-up vans and family utility vehicles. The local content of its products would be nearly 80 per cent, he added.
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Banking
UBS gets banking licence in India
Swiss banking giant UBS AG has received clearance from the Reserve Bank of India to set up a branch in India after a three-year long wait.
Defence Equipment
Mahindra and Mahindra in joint venture with Whitehead Alenia of Italy
Mahindra & Mahindra signed an agreement for a joint venture with Italy's Whitehead Alenia Sistemi Subacquei (WASS) for developing underwater weapon systems.
The agreement was signed between M&M's defence arm Mahindra Defence Systems (MDS) and WASS, the maritime underwater subsidiary of 12-billion-dollar Finmeccanica Group. The JV would initially develop underwater weapon systems for the Indian market and in the long run for the global market as well.
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Financial Services
European bank to start financing projects in India
The European Investment Bank (EIB) - the financing institution of the European Union – is optimistic that it will start financing projects in India this year.
Biancarelli visited India recently to tell the Indian authorities that EIB is ready to cooperate in two main sectors, climate change mitigation and energy.
The EIB official held talks with the Indian Renewable Energy Development Agency Limited (IREDA), Export-Import Bank of India (Exim Bank) and also met the Governor of the Reserve Bank of India in Mumbai.
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Insurance
Eight life insurers inject more capital
Eight life insurance companies operating in India have pumped in more capital into their business in the past two months. The latest to raise its capital base is MetLife India Insurance Co. Pvt. Ltd., which is in its seventh year of operations in India. It has infused Rs.350 crore to increase its paid-up capital to Rs.12.30 billion. The other companies include SBI Life Insurance Co. Ltd., which will infuse Rs.3 billion in two months. In January, Aviva Life Insurance Co. India Ltd. raised its capital base by Rs.2.46 billion to Rs.10 billion. Kotak Mahindra Old Mutual Life Insurance Ltd is expected to infuse almost Rs.5 billion of equity capital within the next three years. ING Vysya Life. Insurance Co. Ltd. plans infusion of Rs.5 billion crore in 2008-09. The capital base of Bajaj Allianz Life Insurance Co. Ltd. has grown to Rs.8.75 billion, after a fresh infusion of Rs.1.75 billion last month. Bharti AXA Life Insurance Co. Ltd. infused Rs.3.93 billion up to December.
As per Irda regulations, life insurance companies are expected to maintain a 150% solvency margin.
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Logistics
Blackstone Group invests in Allcargo Global Logistics
New York-based private equity company the Blackstone Group Lp. and its affiliates have picked up 10.38% stake in Mumbai-based logistics company Allcargo Global Logistics Ltd (AGL), for Rs.2.42 billion.
The deal has a built-in clause on a performance-linked bonus under which AGL will receive an additional Rs.550 million from Blackstone Group if the company registers an operating profit of Rs.1.90 billion in calendar year 2008. The operating profit of the company last year was Rs.1.40 billion.
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Petroleum
Punj Lloyd enters drilling rigs business
PLL, the second largest engineering and construction companies in India providing integrated design, engineering, procurement, construction and project management services for energy and infrastructure sector projects, has set up a new subsidiary - Punj Lloyd Upstream Limited (PLUL). The company has decided to foray into onshore drilling rigs business for oil and gas companies in India and abroad plans and has made an initial investment of Rs.440 million. The company plans to buy onshore drilling rigs and lease them to oil and gas companies such as ONGC and RIL.
Outlay for state owned oil companies increased
The public sector oil companies will step up investment in exploration, refining and petrochemicals by 30% to over Rs.465 billion in 2008-09. ONGC will account for more than half of the planned investment, according to the Expenditure Budget of tabled by the Finance Minister in parliament.
ONGC will spend Rs.193 billion and its overseas subsidiary ONGC Videsh will spend Rs.68 billion. GAIL has a planned expenditure of Rs.3.2 billion while Oil India has budgeted Rs.2.2 billion. Indian Oil plans to spend Rs.4.48 billion while Hindustan Petroelum will spend Rs.1.9 billion and Bharat Petroleum Rs.1.66 billion.
L&T wins pipeline order
Indian engineering and construction group Larsen & Toubro Ltd. (L&T) has won an oil and gas pipeline contract from Cairn India Ltd. a unit of Cairn Energy PLC.
The company will provide engineering procurement and construction services to Cairn India's export crude oil insulated pipeline and its gas pipeline from the western Indian state of Rajasthan to Gujarat, another western state. The project is due to be completed by June 2009.
Specific duties proposed on unbranded petrol, diesel
The Budget has proposed to adopt a pure specific excise duty on unbranded auto fuels–petrol and diesel. The proposal is to convert ad valorem plus specific rate on unbranded petrol and diesel to pure specific rate.
The Finance Minister, Mr.P.Chidambaram, in his Budget proposal for 2008-09 said "in order to remove a source of misinformation, I propose to abolish the ad valorem part of the excise duty on unbranded petrol and unbranded diesel and replace the same by an equivalent specific duty of Rs.1.35 per litre. Henceforth, there will be only a specific duty of Rs.14.35 per litre on unbranded petrol and Rs.4.60 per litre on unbranded diesel. There will be no impact on retail prices."
However, the branded fuels such as Extra Premium, Speed and Power will continue to attract the present ad valorem - cum specific rates.
Strategic oil reserve project to be completed in 2011
The completion targets for establishing the strategic crude oil reserves is December 2011, the government has told the Rajya Sabha.
The Government had decided in September, 2005 to set up strategic storage of crude oil of 5 Million Metric Tonne (MMT) capacity at 3 locations viz, Vizag (1.0 MMT), Mangalore (1.5 MMT) and Padur, Udipi (2.5 MMT). The estimated capital cost (as per September 2005 prices) was Rs.23.97 billion and the crude filling cost Rs.88,70 billion (based on the then crude price of $ 55 per barrel). OIDB will finance the cost of building the strategic storage. To meet the cost of crude, the Government could consider a temporary increase in the cess on domestic crude and/or customs duty on imported crude, if necessary.
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OVL investments in Venezuela, Qatar approved by Cabinet
Based on the recommendations made by Empowered Committee of Secretaries (EFS),
The Union Cabinet has approved approved plans by ONGC Videsh Ltd. (OVL), the overseas investment arm of ONGC, to invest up to $458.21 million in oil and gas projects in Venezuela and Qatar investments.
This investment reinforces the confidence of leading global investors in the Indian telecom sector, which is now the fastest growing telecom market in the world, and the Bharti Group. It is also an endorsement of the Indian Government’s visionary policy on sharing of passive infrastructure.
The Cabinet approved the proposal of OVL for formation of a Joint Venture Company with CVP/Petroleos De Venezuela S.A. (PDVSA), Venezuela for development of San Cristobal field located in Orinoco Oil belt, with an invest of up to $356 million. The investment includes signature bonus of $174 million and capex of $182 million in the venture. The investment can be made directly or through OVL’s existing and new wholly owned subsidiary.
The cabinet also approved OVL’s investment upto USD 102.21 million ,directly through its own resources, in the Najwat Najem Appraisal, Development and Production Sharing Agreement (NNADPSA) Qatar Project.
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Project import duty cut
Another proposal in the Budget that that is expected to help the hydrocarbon sector is reduction in customs duty on project imports from 7.5 percent to 5 percent. This would help reduce the project cost for new refineries, pipelines and oil and gas fields development.
Power
BHEL bags Rs.10.75 billion order
The state owned Bharat Heavy Electricals Ltd. has bagged a Rs.10.75 billion order for setting up a 350-MW gas based power plant in Gujarat. Gujarat State Energy Generation has placed the engineering, procurement and construction order for the gas turbine-based combined cycle power plant to be installed at Hazira in Gujarat.
National Electricity fund proposed
The blueprint for the proposed National Electricity Fund (NEF) will be finalized soon. This fund will be used to provide soft loans to the cash strapped State Electricity Boards (SEBs). Although the power sector needs Rs.2,500 billion, the minimum amount that is aimed to be raised is about Rs.1,000 billion. Under the plan, the Power Finance Corporation and Rural Electrification Corporation would raise money from the market and loan it to power distribution companies. The finance ministry has been asked to facilitate this by providing sops and concessions for investment.
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Shipping
Sterling buys Norwegian shipping company
Siva Ventures, the flagship company of the $2 billion Sterling Infotech group, has acquired J B Ugland Shipping AS with a current fleet strength of 40 ships for Rs.12 billion.
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Telecommunications
Tata Teleservices launches Virgin Mobile branded services to India’s youth
The Virgin Mobile brand has arrived in India.‘Virgin Mobile’ services are being offered to consumers by Tata Teleservices through a brand franchise with the Virgin Group. Virgin Mobile India is an association between Virgin Group and Tata Teleservices which will facilitate Tata Teleservices with its experience and expertise in designing, marketing and servicing TTL’s Virgin Mobile branded products for the youth segment.
Urban Infrastructure
ADB to provide loan for urban infrastructure improvement in Uttarakhand
The Asian Development Bank (ADB) will provide a $350 million loan to improve urban infrastructure and services in 31 towns and cities in Uttarakhand, which is one of the country's top tourist destinations. ADB Manila-based regional development bank has identified Uttarakhand as one of its priority States in India as its development was lagging behind other States. Improved urban services are needed to support tourism and industry-two economic sectors with substantial development potential in the State.
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Trade
European Business and Technology Centre Proposed In New Delhi
The European Commission intends to establish a European Business and Technology Centre. The overall objective the Centre to improve links between European and Indian businesses and with Science and Technology (ST) stakeholders involving business, industry and public bodies with a view to essentially promote the EU interests in India and tap the fast-growing Indian economy. The centre will build synergies among the national chambers of commerce of EU Member States established in India; collaborate with the European business associations in India and Europe; provide an interface between public policy makers and private actors; raise awareness about existing European programmes in the field of Science and Technology and business and industry cooperation.
The Centre is expected to target the following sectors: Environment (such as Clean Development Mechanism, Chemicals Management, Water Management and Waste Management); Climate change including mitigation and
adaptation technologies; Transport; Energy (renewable energy, energy efficiency, clean coal, and carbon capture and storage technologies) and Biotech; sectors where the EU business operators experience non-tariff barriers and market constraints.
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