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The combined turnover of the central public sector enterprises (CPSEs) has gone up 84% to Rs.10.81 trillion (Rs.10,81,000 crore) last fiscal from Rs.5.87 trillion in 2003-04, Minister for External Affairs Pranab Mukherjee said here on Monday.
http://economictimes.indiatimes.com/articleshow/4137013.cms
Public sector companies' turnover rises 84%
16 Feb 2009, 1521 hrs IST, IANS
NEW DELHI:
Presenting the interim budget for 2009-10 in the Lok Sabha on behalf of Prime Minister Manmohan Singh who is recuperating from heart bypass surgery, Mukherjee said combined profit of the CPSEs has increased 72% from Rs.530 billion to Rs.910 billion. The public sector companies' contribution to the central exchequer by way of dividend, interest and taxes and duties went up 86%. The minister added that the number of loss making enterprises has come down from 73 in 2003-04 to 55 in 2007-08, while the number of profit making enterprises has gone up from 143 to 158. Mukherjee said the government set up the National Investment Fund in November 2007 to finance select social sector schemes. The proceeds made by disinvesting government stakes in public companies were deposited in the fund. "The residual 25% annual income of the fund will be used to meet the capital investment requirements of profitable and revivable CPSEs," Mukherjee added.
Saturday, February 21, 2009
Friday, February 20, 2009
Oil companies stare at losses on petrol, LPG
Unkindest cut: Kerosene loses Rs 12 a litrePetrol on the vergeOnly diesel makes a profit of Rs 3.26/litre
http://www.thehindubusinessline.com/2009/02/19/stories/2009021950190500.htm
Murali Gopalan Mumbai, Feb. 18 Barely weeks after the Centre slashed prices of petrol, diesel and liquefied petroleum gas (LPG), the public sector trio of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) are now facing the possibility of another round of losses on the retail side. For the fortnight beginning February 16, the estimated profit on petrol has tumbled to 5 paise a litre while it is a lot healthier in the case of diesel at Rs 3.26/litre. Losses on LPG (or cooking gas) are mounting steadily to Rs 79 a cylinder and on kerosene to Rs 12 a litre.Set to get worse “By the next fortnight, we will begin making losses on petrol too while the figure on LPG could rise sharply as global prices are beginning to firm up. “The silver lining in the cloud is diesel but consumption in India has seen a drastic reduction lately which means we cannot capitalise on this gain either,” top oil industry sources told Business Line. Compare this with the scenario in early January when IOC, HPCL and BPCL were making profits of nearly Rs 10/litre on petrol and a little over Rs 3 on diesel. Prior to this, in December last year, profits on petrol were close to Rs 15 while it was Rs 5 on diesel. It explains why the Centre went in for successive price cuts in December and January to the tune of Rs 5 and Rs 2 each time.What was puzzling, though not entirely surprising given that this is election time, was the move to cut LPG prices. The three oil companies were already losing close to Rs 33 per cylinder before the announcement, which consequently went up to Rs 58 and is today inching towards Rs 80. “We are worried about LPG and, going by global price trends, losses could cross Rs 100 a cylinder within a month,” sources said. Losses on LPG were close to Rs 150 (a cylinder) in early December and twice as much in the preceding months when the oil price crisis was spinning rapidly out of control. This was the time when some of the companies were contemplating freezing fresh connections for households. Oil industry executives are puzzled by the Centre’s alacrity when it comes to price cuts. “Six months ago, we were reporting losses of Rs 550 crore daily and were on the verge of bankruptcy. When crude prices fell and we had begun breathing again, the tinkering began on petrol and diesel. Today, we are back to square one though the losses may not be as heavy,” they say. According to them, this is the best time to deregulate prices of petrol and diesel while the under-recoveries on LPG and kerosene can be transferred to the Union Budget. The Nirmal Singh Committee report on oil reforms tabled a decade ago had recommended freeing of prices by 2002 but successive governments dithered on the proposal for fear of antagonising the voter. It is only too obvious, experts aver, that the oil companies should become the “fall guys” in an election year. “There is no guarantee that crude prices will stay at this depressed level of $35/barrel forever as much as nobody expected them to crash so rapidly from $147 in mid-2008,” they say. However, the damage has been done and IOC, BPCL and HPCL may end up reporting their first ever net losses for an entire fiscal in 2008-09. They have sought nearly Rs 15,000 crore, in addition to the oil bonds, to make up for losses incurred and this estimate may go up further if the price movements in the fourth quarter are any indication. The question this: will the Centre comply?
http://www.thehindubusinessline.com/2009/02/19/stories/2009021950190500.htm
Murali Gopalan Mumbai, Feb. 18 Barely weeks after the Centre slashed prices of petrol, diesel and liquefied petroleum gas (LPG), the public sector trio of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL) are now facing the possibility of another round of losses on the retail side. For the fortnight beginning February 16, the estimated profit on petrol has tumbled to 5 paise a litre while it is a lot healthier in the case of diesel at Rs 3.26/litre. Losses on LPG (or cooking gas) are mounting steadily to Rs 79 a cylinder and on kerosene to Rs 12 a litre.Set to get worse “By the next fortnight, we will begin making losses on petrol too while the figure on LPG could rise sharply as global prices are beginning to firm up. “The silver lining in the cloud is diesel but consumption in India has seen a drastic reduction lately which means we cannot capitalise on this gain either,” top oil industry sources told Business Line. Compare this with the scenario in early January when IOC, HPCL and BPCL were making profits of nearly Rs 10/litre on petrol and a little over Rs 3 on diesel. Prior to this, in December last year, profits on petrol were close to Rs 15 while it was Rs 5 on diesel. It explains why the Centre went in for successive price cuts in December and January to the tune of Rs 5 and Rs 2 each time.What was puzzling, though not entirely surprising given that this is election time, was the move to cut LPG prices. The three oil companies were already losing close to Rs 33 per cylinder before the announcement, which consequently went up to Rs 58 and is today inching towards Rs 80. “We are worried about LPG and, going by global price trends, losses could cross Rs 100 a cylinder within a month,” sources said. Losses on LPG were close to Rs 150 (a cylinder) in early December and twice as much in the preceding months when the oil price crisis was spinning rapidly out of control. This was the time when some of the companies were contemplating freezing fresh connections for households. Oil industry executives are puzzled by the Centre’s alacrity when it comes to price cuts. “Six months ago, we were reporting losses of Rs 550 crore daily and were on the verge of bankruptcy. When crude prices fell and we had begun breathing again, the tinkering began on petrol and diesel. Today, we are back to square one though the losses may not be as heavy,” they say. According to them, this is the best time to deregulate prices of petrol and diesel while the under-recoveries on LPG and kerosene can be transferred to the Union Budget. The Nirmal Singh Committee report on oil reforms tabled a decade ago had recommended freeing of prices by 2002 but successive governments dithered on the proposal for fear of antagonising the voter. It is only too obvious, experts aver, that the oil companies should become the “fall guys” in an election year. “There is no guarantee that crude prices will stay at this depressed level of $35/barrel forever as much as nobody expected them to crash so rapidly from $147 in mid-2008,” they say. However, the damage has been done and IOC, BPCL and HPCL may end up reporting their first ever net losses for an entire fiscal in 2008-09. They have sought nearly Rs 15,000 crore, in addition to the oil bonds, to make up for losses incurred and this estimate may go up further if the price movements in the fourth quarter are any indication. The question this: will the Centre comply?
Thursday, February 19, 2009
Courts Propose, Govt Disposes- Strikes in Oil Sector
Supreme Court may have ruled that it is a Constitutional Right for any body to go on strike in a Democracy but Govt thinks otherwise! Soon a Law soon to ban oil strikes is going to come it seems!!
http://www.indianexpress.com/news/law-soon-to-ban-oil-strikes/425400/
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Maneesh Chhibber Posted: Feb 19, 2009 at 0139 hrs IST
New Delhi: The Government is set to bring a bill in parliament making it illegal for Oil sector employees to go on strike. The Petroleum Sector Employees (Prohibition of Strikes) Bill, 2009 will ban strikes by all categories of employees of oil companies including contractual staff and employee associations, sources in the petroleum ministry told The Indian Express. The bill is likely to be introduced in the current session of parliament, the sources said.
A three-day strike by nearly 55,000 employees of state-owned oil companies demanding higher salaries and perks paralysed the nation last month with fuel pumps and gas outlets running dry and air traffic getting disrupted. The striking oilmen backed off after the government took a tough line, sacking 70-odd officers, invoking ESMA and calling in the Army to maintain supplies.
According to the draft of the proposed law, striking oilmen will face, in addition to strict disciplinary action including summary dismissal, jail terms of up to a year and/or a fine up to Rs 50,000.
But, the most striking feature of the proposed law is that it allows police to arrest striking employees without a warrant. Arrested employees will not be released on bail unless the prosecution has been heard by a magistrate and given an opportunity to oppose the bail plea.
Another tough clause provides for summary trials by designated courts.
Oil employees who will lose their right to strike work if the bill is passed include those involved in exploration, drilling, processing and distribution. They include all types of employees, whether in managerial, supervisory, non-managerial, manual or contractual labour categories.
Sources said many provisions of the proposed law are not in sync with the Industrial Disputes Act, 1947 — something that could lead to opposition from some parties.
http://www.indianexpress.com/news/law-soon-to-ban-oil-strikes/425400/
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Maneesh Chhibber Posted: Feb 19, 2009 at 0139 hrs IST
New Delhi: The Government is set to bring a bill in parliament making it illegal for Oil sector employees to go on strike. The Petroleum Sector Employees (Prohibition of Strikes) Bill, 2009 will ban strikes by all categories of employees of oil companies including contractual staff and employee associations, sources in the petroleum ministry told The Indian Express. The bill is likely to be introduced in the current session of parliament, the sources said.
A three-day strike by nearly 55,000 employees of state-owned oil companies demanding higher salaries and perks paralysed the nation last month with fuel pumps and gas outlets running dry and air traffic getting disrupted. The striking oilmen backed off after the government took a tough line, sacking 70-odd officers, invoking ESMA and calling in the Army to maintain supplies.
According to the draft of the proposed law, striking oilmen will face, in addition to strict disciplinary action including summary dismissal, jail terms of up to a year and/or a fine up to Rs 50,000.
But, the most striking feature of the proposed law is that it allows police to arrest striking employees without a warrant. Arrested employees will not be released on bail unless the prosecution has been heard by a magistrate and given an opportunity to oppose the bail plea.
Another tough clause provides for summary trials by designated courts.
Oil employees who will lose their right to strike work if the bill is passed include those involved in exploration, drilling, processing and distribution. They include all types of employees, whether in managerial, supervisory, non-managerial, manual or contractual labour categories.
Sources said many provisions of the proposed law are not in sync with the Industrial Disputes Act, 1947 — something that could lead to opposition from some parties.
Tuesday, February 17, 2009
PSUs cough up record interim dividends
Despite economic slowdown and weak results this fiscal.
Major payouts
NTPC Ltd forked out Rs 2,308.73 crore for 2008-09
SAIL handed over a crisp cheque of Rs 460.81 crore
ONGC board approved 180% interim dividend
Anil Sasi Richa Mishra Anil Sasi Richa Mishra
New Delhi, Feb. 14 A slowdown may well be in the air, but the interim dividends being forked out by the ‘navratna’ public sector undertakings (PSUs) seem oblivious to the worsening economic outlook.
State-owned firms, led by the blue-chip companies in the power and oil sectors, have announced all-time high interim dividends, despite the financial performance so far this fiscal being less than cheerful in most cases.
The biggest beneficiary in all of these PSU dole-outs is the largest shareholder in all of these companies, namely the Government of India.
Leading the charge, power major NTPC Ltd, forked out its highest-ever interim dividend of Rs 2,308.73 crore for 2008-09, of which Rs 2,066.30 crore works out as the Centre’s share.
The electricity generator had reported only a marginal increase of around Rs 13 crore (0.22 per cent) in net profit for the nine-month period of this fiscal.
Steel Authority of India (SAIL) handed over a crisp cheque of Rs 460.81 crore to the Government as the interim dividend for the fiscal, despite reeling under rising input costs and waning demand.
SAIL’s net profit was down 9.1 per cent for the first nine months of this fiscal, compared with the corresponding period last financial year, while the third quarter net nosedived 56 per cent.
Upstream oil PSUs also continued with high dividend payouts despite their bottomlines coming under strain.
The ONGC board approved an interim dividend of 180 per cent for 2008-09, even as its nine month net profit slipped by 1 per cent and the third quarter net fell 43 per cent.
GAIL (India) Ltd announced a 40 per cent dividend for the fiscal just after the third quarter results, which were down from Rs 651 crore to Rs 253 crore, even though the nine-month net was up 16 per cent.
However, the oil marketing companies such as IOC, BPCL and HPCL, which have taken a major hit on their profits, have desisted from announcing any payouts this fiscal.
“There has been an informal directive from the Finance Ministry to administrative ministries governing profitable public-sector companies, especially in the power and petroleum sectors, to pay interim dividends.
“The fiscal giveaways in the stimulus package have resulted in a big spurt in Government spending, and there is pressure on PSUs to maintain last year’s dividend pay-out levels despite the downturn,” a Power Ministry official said.
http://www.thehindubusinessline.com/2009/02/15/stories/2009021551270100.htm
Major payouts
NTPC Ltd forked out Rs 2,308.73 crore for 2008-09
SAIL handed over a crisp cheque of Rs 460.81 crore
ONGC board approved 180% interim dividend
Anil Sasi Richa Mishra Anil Sasi Richa Mishra
New Delhi, Feb. 14 A slowdown may well be in the air, but the interim dividends being forked out by the ‘navratna’ public sector undertakings (PSUs) seem oblivious to the worsening economic outlook.
State-owned firms, led by the blue-chip companies in the power and oil sectors, have announced all-time high interim dividends, despite the financial performance so far this fiscal being less than cheerful in most cases.
The biggest beneficiary in all of these PSU dole-outs is the largest shareholder in all of these companies, namely the Government of India.
Leading the charge, power major NTPC Ltd, forked out its highest-ever interim dividend of Rs 2,308.73 crore for 2008-09, of which Rs 2,066.30 crore works out as the Centre’s share.
The electricity generator had reported only a marginal increase of around Rs 13 crore (0.22 per cent) in net profit for the nine-month period of this fiscal.
Steel Authority of India (SAIL) handed over a crisp cheque of Rs 460.81 crore to the Government as the interim dividend for the fiscal, despite reeling under rising input costs and waning demand.
SAIL’s net profit was down 9.1 per cent for the first nine months of this fiscal, compared with the corresponding period last financial year, while the third quarter net nosedived 56 per cent.
Upstream oil PSUs also continued with high dividend payouts despite their bottomlines coming under strain.
The ONGC board approved an interim dividend of 180 per cent for 2008-09, even as its nine month net profit slipped by 1 per cent and the third quarter net fell 43 per cent.
GAIL (India) Ltd announced a 40 per cent dividend for the fiscal just after the third quarter results, which were down from Rs 651 crore to Rs 253 crore, even though the nine-month net was up 16 per cent.
However, the oil marketing companies such as IOC, BPCL and HPCL, which have taken a major hit on their profits, have desisted from announcing any payouts this fiscal.
“There has been an informal directive from the Finance Ministry to administrative ministries governing profitable public-sector companies, especially in the power and petroleum sectors, to pay interim dividends.
“The fiscal giveaways in the stimulus package have resulted in a big spurt in Government spending, and there is pressure on PSUs to maintain last year’s dividend pay-out levels despite the downturn,” a Power Ministry official said.
http://www.thehindubusinessline.com/2009/02/15/stories/2009021551270100.htm
Strikes are not banned under any Law or Court Order- Supreme Court
Strikes are not banned under any Law or Court Order- Supreme Court is what the Apex Court ruled on Monday 15th Feb 2009. So what stops the PSUs, in general and OSOA from going to court whenever Court orders are used to restrain PSU strikers wanting their demands to be met in a democratic manner? Resorting to all sort of repression is totally undemocratic. Even the Supreme court says so!!
We had put up an earlier post here on this Supreme Court judgement here. On Monday it has ruled again.
Read on.. TOI Chennai 16-02-2009
Supreme Court Judgement on Strike
We had put up an earlier post here on this Supreme Court judgement here. On Monday it has ruled again.
Read on.. TOI Chennai 16-02-2009
Supreme Court Judgement on Strike
Monday, February 16, 2009
Vulgarity
In a country like India which allows voting for people being tried for murders and scams on one end of the spectrum and people who appear to be polished but are actually the most cunning of them all and parties who bank on Dynastic Rule or caste based or religion based voting system and a world which is run by moneyed people it was inevitable that the definition of Vulgarity would soon change its meaning. That is why a group of salaried people who were denied a just raise in their salaries were termed anti indian and their method was portrayed as Vulgar by the media channels- the same media channels which showed the auction of Human Beings who were purchased by our buisness people and film stars on whom the whole country swoons! There was no vulgarity in the very thought of such auctions being shown on TV when more than 25 % lives below poverty level. [Even the BPL which is Rs 300/- per mth is a highly reduced figure as what person can survive on a mere Rs 10 per day? Our earlier post on this is here.]
Here is a very good article by Mr Santosh Desai, columnist in TOI on 16-02-2009. Hope he does not mind us hosting it here.
Vulgarity by Santosh Desai
Here is a very good article by Mr Santosh Desai, columnist in TOI on 16-02-2009. Hope he does not mind us hosting it here.
Vulgarity by Santosh Desai
112 oil and gas discoveries in four years: President
The UPA government's focus on increased exploration..... read below
12 Feb 2009, 1234 hrs IST, PTI
NEW DELHI: The UPA government's focus on increased exploration and turning the nation into a refining hub has seen a record number of oil and gas discoveries and a phenomenal 20 per cent jump in crude processing capacity in the past four years. In her customary address to the joint sitting of Parliament at the beginning of the Budget session, President Pratibha Patil said significant increase in refining capacity, which has quadrupled fuel exports to $ 26.8 bn in 2007-08. "During the last four years, 112 oil and gas discoveries have been made, significant amongst them being the discovery of gas for the first time in the ultra deep-water areas," she said. The President, however, did not name state-owned Oil and Natural Gas Corp (ONGC) for the Krishna Godavari basin UD-1 discovery, the lone ultra deepsea well that may hold up to 2 trillion cubic feet of in-place gas reserves. Refining capacity has increased from 127.36 million ton on April 1, 2004 to 179.5 million tons currently, turning the nation into a major export hub in the region. "The refining capacity has significantly increased and our exports of petroleum products have quadrupled from USD 6.6 bn in 2004-05 to USD 26.8 billion," she said. India is 76 per cent dependent on imports to meet its energy needs and fuel export revenues brings down crude import bill.
12 Feb 2009, 1234 hrs IST, PTI
NEW DELHI: The UPA government's focus on increased exploration and turning the nation into a refining hub has seen a record number of oil and gas discoveries and a phenomenal 20 per cent jump in crude processing capacity in the past four years. In her customary address to the joint sitting of Parliament at the beginning of the Budget session, President Pratibha Patil said significant increase in refining capacity, which has quadrupled fuel exports to $ 26.8 bn in 2007-08. "During the last four years, 112 oil and gas discoveries have been made, significant amongst them being the discovery of gas for the first time in the ultra deep-water areas," she said. The President, however, did not name state-owned Oil and Natural Gas Corp (ONGC) for the Krishna Godavari basin UD-1 discovery, the lone ultra deepsea well that may hold up to 2 trillion cubic feet of in-place gas reserves. Refining capacity has increased from 127.36 million ton on April 1, 2004 to 179.5 million tons currently, turning the nation into a major export hub in the region. "The refining capacity has significantly increased and our exports of petroleum products have quadrupled from USD 6.6 bn in 2004-05 to USD 26.8 billion," she said. India is 76 per cent dependent on imports to meet its energy needs and fuel export revenues brings down crude import bill.
UPA re-prioritising gas distribution in the run-up to the elections
UPA re-prioritising gas distribution
10 Feb 2009, 2108 hrs IST, Soma Bannerjee & Prabha Jagannathan, ET Bureau
NEW DELHI: An EGoM may have decided to prioritise low dependence on fertiliser imports as well as gas supply to the sector when it comes to the RIL’s KG basin (D6) produce but politics appears to have other plans. General elections in mid 2009, but more specifically, assembly polls in key states like Andhra where the ruling Congress has honed its “free power for farm” plank into a shining populist shibboleth, may now find the UPA re-prioritising gas distribution in the run-up to the elections. This would mean that instead of relegating gas supply to the power sector to the second phase pegged around mid April, the sector would get priority supply in the first phase of supply, from end February. The fertiliser sector, as a consequence, would only begin to receive supply in the second phase beginning mid April. Urgent fertiliser (mainly urea) needs in the meantime would, instead, be met wholly through imports as finished fertilisers. State chief minister Y S Rajashekhar Reddy (YSR) was here last week lobbying hectically with EGoM head and external affairs minister Pranab Mukherjee, power minister Sushil Kumar Shinde and petroleum minister Murli Deora for an urgent re-think on KG Basin gas allocation priorities to the power sector. The proposal is being mooted, significantly, on the eve of RIL’s plans to start signing term sheets with prospective customers within the next fortnight or so. In a letter written to Mr Mukherjee on February 2, YSR suggested a high level meeting for taking a decision on the issue with the ministers and RIL representatives present. The subliminal message in the note? If we don’t manage to garner enough power for markedly short-supplied AP, it could dent the party’s electoral performance noticeably. What is high irony, though, the letter to his party’s senior most leader at the national level does not suggest a meeting with fertiliser minister and UPA ally Mr Ram Vilas Paswan from whose sector he wants to divert the impending gas supply, even if only in the run-up to assembly and general elections, strictly in that order. The first five mmscd of KG Basin gas is set for production from February 25, totalling 40 mmscd roughly by the end of June or thereabouts. Of that, the EGoM earmarked the bulk of 18 mmscmd for the power sector and another 14 mmscmd for the fertiliser sector, three mmscmd for LPG extraction and another five mmscd for city-based piped gas. Over and above that, another 1.7 mmscmd of gas is set to be released to the Ratnagiri Power Projects Ltd in Maharashtra, ranking alongside fertiliser in priority. This means that the fertiliser sector plants on the mainline and the Ratnagiri project would get first charge on the gas to be produced and released by the RIL. The EGoM which met on October 23 2008 under the chairmanship of Mukherjee also directed of the gas allocated to the power sector, power projects in AP should get priority and that is something that the state chief minister is extremely keen on getting re-phrased and re-prioritised before the first of RIL’s KG Basin gas starts production end February, atleast for the weeks leading upto the assembly and general elections. “Many states in the country today have been suffering from severe shortages of power. The problem will be even more acute in the months of March and April because of summer, when lots of ground water drawls are required. Besides, globally the prices of urea have fallen from $900/tonne in May 2008 to $250 per tonne now. So, it makes greater sense to utilise the available gas first for the power sector and then for fertilisers,” YSR’s missive to Mr Mukherjee asserts. The letter has suggested that the fertilser sector that has been thirsting for gas for sometime now (and the shortfall of impacting directly on capacity utilisation and production and leaving the country__ the biggest fertiliser shopper in the world market at the complete mercy of export cartels at the height of the peak prices that both fertiliser inputs and finished ferts hit in 2008. India’s urea needs (27 m tonnes p.a,) already rely heavily on imports (6.7m tonnes imported in FY 08) and urea capacity is not increasing at the pace needed to meet the 3% annual growth in demand. Some three million tonnes of additional capacity is expected to be added in the next two years. However, natural gas availability remains a key block to capacity addition although a big 700/ of the 86% of the captive ammonia -urea capacity in the country is based on natural gas although government policy pro-actively favours conversion of all non-gas units to gas based units by March 2010. Gas, along with naphtha, fuel oil or LSHS are major feedstock for urea and of these, gas is the cheapest and the urea thus produced is the cheapest, with the lowest manufacturing cost per unit. “This arrangement is required for just 45 days as by the middle of May 2009, both power and fertilsier units will anyway get gas. I therefore request you to consider a change in the warrant of priority of gas allocation for just two months, that is, for the months of March and April 2009 by interchanging the priority between fertilisers and power so that the power sector can get priority over fertiliser during these two months,” the letter states. Speaking to ET, the high profile AP chief minister maintained “The kharif season requirements for fertilisers are topmost in July, which is the key sowing season. The only fertiliser Rabi crops now sown would need is urea which is much cheaper now compared to mid 2008 and can be imported in the finished form to meet the needs of agriculture. But what is crucial is that AP has acute power shortage, also in the key agriculture sector. Ensuring a re-prioritisation of gas supply to the power sector countrywide for just March and April will mean that in peak summer, states with acute power shortfall will not suffer whether for the industrial sector or for agriculture. According to the current decision, the power sector will only get gas supply in the second trance of KG Basin Gas release from somewhere in mid April 2009, which means that in March 2009, they will not be able to get any gas. Not only will sufficient gas supply to the sector in the first phase in the place of the fertiliser sector mean that the Ratnagiri power plant gets an additional 2500 mw to Maharashtra, power projects in AP will also get an additional 2500 mw of power if the available gas is given to the power sector for the two months. That alone spells 5000 mw of additional power in the peak power demand period.” Nor indeed do YSR’s political compulsions to re-prioritise gas supply take into account the fact that the country is passing through an economic downturn on account of which politically motivated funding of imports takes priority, particularly since several fertiliser inputs and raw materials are still relatively highly priced compared to imports in 2007. For instance, Rock Phosphate, a key input into DAP, still reigns in the global market at $250/tonne compared to $350/tonne at the peak time but is nowhere near the $70-80/tonne it was bought at in 2007 from the same market. Glossing over that, YSR’s letter contends smugly “... we can import fertilisers at some price but not power at any cost. ...” Interestingly enough, Nagarjuna Fertilsers in AP, among the big fertiliser plants that have fully converted to gas-based and are therefore entitled to gas supply from the first tranche of 14 mmscmd earmarked to the sector, is set also to be among the first in the sector to receive the gas. Currently, the feriliser units that have fully converted to gas-based plants in consonance with the government’s own policy rely heavily on gas supplied at administered price to them for the fuel and feedstock but also need to shop in the spot market for LNG at relatively high price to bridge the shortfall. In the event of the KG Basin Gas not being supplied to them on priority from February to March, they would have to depend on the same means despite the EGoM’s decision and the lengthy wait for production of KG Basin Gas. Several of the units identified for gas supply in the sector are in the private sector since the parent ministry, according to officials in the know, has accorded equal priority to public, cooperative and private sector units on this although they have earlier been occasions where first two sectors were granted priority vis a vis fuel/feedstock. What’s worse, importing finished urea would be directly to their disadvantage. Among those units who would lose out would be not just Nagarjuna Fertilsers but also the Aonla, Phulpur units of Iffco, one plant of KK Birla etc. Energy Conservation Consciousness (ECC) Campaign is a step towards better Energy Habits. We can avoid wastages in work area by implementing effortless energy conservation tips to create a more sustainable and greener organization.
10 Feb 2009, 2108 hrs IST, Soma Bannerjee & Prabha Jagannathan, ET Bureau
NEW DELHI: An EGoM may have decided to prioritise low dependence on fertiliser imports as well as gas supply to the sector when it comes to the RIL’s KG basin (D6) produce but politics appears to have other plans. General elections in mid 2009, but more specifically, assembly polls in key states like Andhra where the ruling Congress has honed its “free power for farm” plank into a shining populist shibboleth, may now find the UPA re-prioritising gas distribution in the run-up to the elections. This would mean that instead of relegating gas supply to the power sector to the second phase pegged around mid April, the sector would get priority supply in the first phase of supply, from end February. The fertiliser sector, as a consequence, would only begin to receive supply in the second phase beginning mid April. Urgent fertiliser (mainly urea) needs in the meantime would, instead, be met wholly through imports as finished fertilisers. State chief minister Y S Rajashekhar Reddy (YSR) was here last week lobbying hectically with EGoM head and external affairs minister Pranab Mukherjee, power minister Sushil Kumar Shinde and petroleum minister Murli Deora for an urgent re-think on KG Basin gas allocation priorities to the power sector. The proposal is being mooted, significantly, on the eve of RIL’s plans to start signing term sheets with prospective customers within the next fortnight or so. In a letter written to Mr Mukherjee on February 2, YSR suggested a high level meeting for taking a decision on the issue with the ministers and RIL representatives present. The subliminal message in the note? If we don’t manage to garner enough power for markedly short-supplied AP, it could dent the party’s electoral performance noticeably. What is high irony, though, the letter to his party’s senior most leader at the national level does not suggest a meeting with fertiliser minister and UPA ally Mr Ram Vilas Paswan from whose sector he wants to divert the impending gas supply, even if only in the run-up to assembly and general elections, strictly in that order. The first five mmscd of KG Basin gas is set for production from February 25, totalling 40 mmscd roughly by the end of June or thereabouts. Of that, the EGoM earmarked the bulk of 18 mmscmd for the power sector and another 14 mmscmd for the fertiliser sector, three mmscmd for LPG extraction and another five mmscd for city-based piped gas. Over and above that, another 1.7 mmscmd of gas is set to be released to the Ratnagiri Power Projects Ltd in Maharashtra, ranking alongside fertiliser in priority. This means that the fertiliser sector plants on the mainline and the Ratnagiri project would get first charge on the gas to be produced and released by the RIL. The EGoM which met on October 23 2008 under the chairmanship of Mukherjee also directed of the gas allocated to the power sector, power projects in AP should get priority and that is something that the state chief minister is extremely keen on getting re-phrased and re-prioritised before the first of RIL’s KG Basin gas starts production end February, atleast for the weeks leading upto the assembly and general elections. “Many states in the country today have been suffering from severe shortages of power. The problem will be even more acute in the months of March and April because of summer, when lots of ground water drawls are required. Besides, globally the prices of urea have fallen from $900/tonne in May 2008 to $250 per tonne now. So, it makes greater sense to utilise the available gas first for the power sector and then for fertilisers,” YSR’s missive to Mr Mukherjee asserts. The letter has suggested that the fertilser sector that has been thirsting for gas for sometime now (and the shortfall of impacting directly on capacity utilisation and production and leaving the country__ the biggest fertiliser shopper in the world market at the complete mercy of export cartels at the height of the peak prices that both fertiliser inputs and finished ferts hit in 2008. India’s urea needs (27 m tonnes p.a,) already rely heavily on imports (6.7m tonnes imported in FY 08) and urea capacity is not increasing at the pace needed to meet the 3% annual growth in demand. Some three million tonnes of additional capacity is expected to be added in the next two years. However, natural gas availability remains a key block to capacity addition although a big 700/ of the 86% of the captive ammonia -urea capacity in the country is based on natural gas although government policy pro-actively favours conversion of all non-gas units to gas based units by March 2010. Gas, along with naphtha, fuel oil or LSHS are major feedstock for urea and of these, gas is the cheapest and the urea thus produced is the cheapest, with the lowest manufacturing cost per unit. “This arrangement is required for just 45 days as by the middle of May 2009, both power and fertilsier units will anyway get gas. I therefore request you to consider a change in the warrant of priority of gas allocation for just two months, that is, for the months of March and April 2009 by interchanging the priority between fertilisers and power so that the power sector can get priority over fertiliser during these two months,” the letter states. Speaking to ET, the high profile AP chief minister maintained “The kharif season requirements for fertilisers are topmost in July, which is the key sowing season. The only fertiliser Rabi crops now sown would need is urea which is much cheaper now compared to mid 2008 and can be imported in the finished form to meet the needs of agriculture. But what is crucial is that AP has acute power shortage, also in the key agriculture sector. Ensuring a re-prioritisation of gas supply to the power sector countrywide for just March and April will mean that in peak summer, states with acute power shortfall will not suffer whether for the industrial sector or for agriculture. According to the current decision, the power sector will only get gas supply in the second trance of KG Basin Gas release from somewhere in mid April 2009, which means that in March 2009, they will not be able to get any gas. Not only will sufficient gas supply to the sector in the first phase in the place of the fertiliser sector mean that the Ratnagiri power plant gets an additional 2500 mw to Maharashtra, power projects in AP will also get an additional 2500 mw of power if the available gas is given to the power sector for the two months. That alone spells 5000 mw of additional power in the peak power demand period.” Nor indeed do YSR’s political compulsions to re-prioritise gas supply take into account the fact that the country is passing through an economic downturn on account of which politically motivated funding of imports takes priority, particularly since several fertiliser inputs and raw materials are still relatively highly priced compared to imports in 2007. For instance, Rock Phosphate, a key input into DAP, still reigns in the global market at $250/tonne compared to $350/tonne at the peak time but is nowhere near the $70-80/tonne it was bought at in 2007 from the same market. Glossing over that, YSR’s letter contends smugly “... we can import fertilisers at some price but not power at any cost. ...” Interestingly enough, Nagarjuna Fertilsers in AP, among the big fertiliser plants that have fully converted to gas-based and are therefore entitled to gas supply from the first tranche of 14 mmscmd earmarked to the sector, is set also to be among the first in the sector to receive the gas. Currently, the feriliser units that have fully converted to gas-based plants in consonance with the government’s own policy rely heavily on gas supplied at administered price to them for the fuel and feedstock but also need to shop in the spot market for LNG at relatively high price to bridge the shortfall. In the event of the KG Basin Gas not being supplied to them on priority from February to March, they would have to depend on the same means despite the EGoM’s decision and the lengthy wait for production of KG Basin Gas. Several of the units identified for gas supply in the sector are in the private sector since the parent ministry, according to officials in the know, has accorded equal priority to public, cooperative and private sector units on this although they have earlier been occasions where first two sectors were granted priority vis a vis fuel/feedstock. What’s worse, importing finished urea would be directly to their disadvantage. Among those units who would lose out would be not just Nagarjuna Fertilsers but also the Aonla, Phulpur units of Iffco, one plant of KK Birla etc. Energy Conservation Consciousness (ECC) Campaign is a step towards better Energy Habits. We can avoid wastages in work area by implementing effortless energy conservation tips to create a more sustainable and greener organization.
IIT Bombay banking on PSUs for bailout
IIT Mumbai banks on PSUs for Jobs this year.
9 Feb 2009, 1450 hrs IST, Abhijit Deb, ET Bureau
MUMBAI: In order to cushion the blow that the economic slowdown has on final campus placements this year, placement co-coordinators at IIT Bombay
are banking on navratna companies or public sector units to bail them out.
Seeing the poor response by traditional recruiters in the first month of placement, public sector units such as IOC, ONGC, GAIL, BPCL, HPCL, BHEL, MTNL, NTPC and SAIL are being contacted by the student placement cell of IIT Bombay, inviting them to visit their campus for recruitments.
Placements on the IIT campuses across the country, which began in January, have suffered due to the economic slowdown, with even IIT Bombay, a much sought-after institute among most companies, seeing lukewarm response from the private corporate world so far. The trend is evident with placement dates being extended till April. Earlier, the placement process at the IIT Bombay used to get over within two to three days.
A student placement coordinator from IIT Bombay told ET ," We are hoping on PSUs as many of them haven't yet visited the campus. We are hoping that remaining students will be absorbed by these public sector companies." Student placement coordinators are busy making presentations to top public sector units.
Already 20 days into their placement period, IIT Bombay has received a weak response from the corporate world. This year out of the 72 students who are up for final placement at the campus, only 40 students have managed to get placements so far. Till now the average salary offered was in the range of Rs 10 to 12 lakhs per annum.
The institute, which boasts of a strong alumni such as Infosys' so-founder Nandan Nilekani, also taps into past students to help students find jobs.
9 Feb 2009, 1450 hrs IST, Abhijit Deb, ET Bureau
MUMBAI: In order to cushion the blow that the economic slowdown has on final campus placements this year, placement co-coordinators at IIT Bombay
are banking on navratna companies or public sector units to bail them out.
Seeing the poor response by traditional recruiters in the first month of placement, public sector units such as IOC, ONGC, GAIL, BPCL, HPCL, BHEL, MTNL, NTPC and SAIL are being contacted by the student placement cell of IIT Bombay, inviting them to visit their campus for recruitments.
Placements on the IIT campuses across the country, which began in January, have suffered due to the economic slowdown, with even IIT Bombay, a much sought-after institute among most companies, seeing lukewarm response from the private corporate world so far. The trend is evident with placement dates being extended till April. Earlier, the placement process at the IIT Bombay used to get over within two to three days.
A student placement coordinator from IIT Bombay told ET ," We are hoping on PSUs as many of them haven't yet visited the campus. We are hoping that remaining students will be absorbed by these public sector companies." Student placement coordinators are busy making presentations to top public sector units.
Already 20 days into their placement period, IIT Bombay has received a weak response from the corporate world. This year out of the 72 students who are up for final placement at the campus, only 40 students have managed to get placements so far. Till now the average salary offered was in the range of Rs 10 to 12 lakhs per annum.
The institute, which boasts of a strong alumni such as Infosys' so-founder Nandan Nilekani, also taps into past students to help students find jobs.
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