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Kolkata Friday September 2, 2011
www.thebengalpost.com BUSINESS 13
Bids soon to deconstruct Santaldih units
Madhumita Mookerji
Kolkata: West Bengal Power Development
Corporation (WBPDCL) will soon float tenders
seeking proposals for deconstruction of
its existing four units of 80 mega watt (MW)
each at Santaldih to make space for the construction
of a single 800-MW super-critical
power plant.
A highly placed source in the West Bengal
power department told The Bengal Post: “We
will float tenders in one or two months, seeking
proposals for the deconstruction of the
four units.”
The source also said work on construction
of the new thermal power project is not
likely to start before at least one year.
Though WBPDCL had been exploring
options of squeezing in a second unit, the
amount of land that will be available will
only allow for a single unit at Santaldih. “The
decommissioning of the four units, along
with some additional land at WBPDCL’s disposal
will add up to around 500 acres, where
only one, 800 MW unit will be possible,” said
the source.
It will take around one year to empty out
the space through the deconstruction
process. Hence, construction work on the
800-MW unit is not likely to start at least
before one year.
WBPDCL is open to various formats – public-private
partnership, joint venture or even
a lease model, where an investor can put in
his money, set up the project and then exit
after 25 years. The sources said any model is
suitable as long as it is done efficiently with
the least possible cost.
Planning Ahead
� Planning Commission deputy chairman Montek Singh Ahluwalia (R) and PMEAC chairman C Rangarajan
releasing a report on efficient management of public expenditure, in New Delhi, on Thursday — PTI
OVL to invest
$1.5 billion
in Iraqi oil
block
New Delhi: ONGC Videsh,
the overseas arm of stateowned
Oil and Natural Gas
Corp (ONGC), is likely to
invest over $1.5 billion in an
Iraqi oil block that was
awarded to it by the erstwhile
Saddam Hussein
regime.
“We are nearing finality on
the contract for the block-8.
It is likely to be signed in the
next six months,” an official
said.
Block-8, located in the
western desert in southern
Iraq bordering Saudi Arabia
and Kuwait, was awarded to
OVL in November 2000 by
the Saddam Hussein government.
However, the government
formed after the US
invasion of Iraq, sought renegotiation
of the contract
which has now been concluded.
The current regime had
initially agreed to sign a production
sharing contract
(PSC), where OVL would
have got ownership of oil it
produced from Block-8. But
the success of post-war
licensing rounds, where
global majors committed to
develop oilfields for a small
fee, has seen Baghdad
change track and offer a
service contract to OVL.
The block already has
a discovery and is estimated
to hold 645 million barrels
of in-place reserves, of
which 54 million are
recoverable, the official
said, adding OVL has committed
investing $86 million
in two phases of exploration
and $1.45 billion in development
of the reserves thereafter.
The agreement will be a
service contract wherein
OVL will be paid about 18 per
cent rate of return on its
investment.
The company holds
100 per cent interest in the
block.
“We are currently agreeing
on finer details of the contract,”
he said.
The exploration and development
contract for Block-8
was signed by OVL and Oil
Exploration Company of Iraq
on November 28, 2000, in
New Delhi. — PTI
IT attrition to decline
despite low wage hike
Kailash Rajwadkar
Mumbai: Employees of IT
companies, who use to hop,
skip and jump from one
organisation to another, may
have to restrain themselves
in the next two years despite
a lower hike in salaries.
“Attrition rates are
expected to fall in FY12.We
do not expect a double-digit
salary hike in FY13 by Indian
IT vendors,” said Karan
Taurani, an analyst with
Khandwala Securities.
This will, however, provide
a cushion to the EBIT (earnings
before interest and tax)
margin of the companies.
“We expect a lower wage
hike for employees in FY13
as the demand in FY12 and
FY13 is not expected to be as
strong as in FY11,” Taurani
said.
In the past few years,
higher attrition was wit-
Factories falter as orders fade
London/Singapore: Factory activity
worldwide stalled last month as new
orders tumbled, a series of surveys
showed on Thursday, heightening fears
that the global economy may be heading
for another recession.
The purchasing managers’ indexes
showed manufacturing activity contracted
in the euro zone for the first
time in almost two years in August, a
similar trend had been witnessed in
South Korea and Taiwan earlier.
Britain’s manufacturing sector
shrank at its fastest pace in over two
years, hurt by a sharp drop in demand
for exports.
Although China’s official PMI
increased slightly, its first rise since
March, it also showed the effects of
slowing demand in Europe and the US.
HSBC’s PMI figure for China, which
relies heavily on private companies
than the large state-owned enterprises
that dominate the government’s PMI
report, showed factory activity contracted
for a second consecutive month.
“The key thing they show is that we
are not out of the woods. The
economies are very vulnerable to any
shock which at this moment in time
there are a few of,” said Jeavon Lolay at
Lloyds Banking Group.
“What is happening in the euro zone
is very important and in the US growth
has weakened markedly in the last two
nessed primarily on the back
of high demand for laterals
(experienced employees) as
a large number of transformational
deals were signed
by Indian IT vendors. Higher
demand for discretionary IT
spend also pushed attrition
rates. “As a result, going forward,
we expect attrition to
dip in near term on the back
of a moderate growth environment
and lower demand
for laterals,” Taurani said.
“In 2010, there was no
wage hike as companies
were recovering from the
global economic turmoil in
the preceding year. Hence,
the hike in 2011 was after a
gap of one year. As things
consolidate, wages are likely
to see a process of stabilisation,”
said Arun Jain, chairman
and CEO, Polaris
Software Lab.
Attrition surged in 2011
despite a high salary hike
quarters. There is a risk of a return to
recession.”
Markit’s euro zone manufacturing
PMI fell to 49.0 in August from 50.4 in
July, revised down from a preliminary
49.7, the first time since September
2009 that the index for the sector,
which drove a large part of the bloc’s
recovery, has fallen below the 50 mark
that divides growth from contraction.
In a worrying sign for policymakers,
the slowdown appears to be spreading.
German factories, which have been
supporting growth in the bloc, eased off
the accelerator and French manufacturing
contracted for the first time since
July 2009.
Around `4,400 crore of investment will be
required for a single 800-MW unit, computed
at the rate of `5.5 crore per mega watt.
Where the controversial Katwa power
given by all the top tier
Indian IT vendors since
demand had witnessed an
uptick, analysts said.
In the April-June period,
Tata Consultancy Services
witnessed an attrition rate of
14.8 per cent compared with
14.4 per cent in the preceding
quarter.
As fears of an economic
slowdown grows,
Khandwala Securities has
cut its revenue estimates for
2011-12 and 2012-13 by 5
per cent and 10 per cent,
respectively, for top IT vendors.
The company, however,
maintains a positive outlook
for the IT sector.
In August, the Bombay
Stock Exchange IT index was
down 13.6 per cent while the
Sensex was down 9.2 per
cent. The IT index has been
witnessing a fall since S&P
downgraded the US credit
rating.
Factory activity worldwide
stalled last month as new
orders tumbled, stoking
fears of another recession
WBPDCL is open to various
formats – public-private
partnership, joint venture
or even a lease model
JSPL open to
buy-outs to
“The West’s deteriorating growth
outlook is becoming an increasingly
heavy burden to bear,” said Donna
Kwok, an economist with HSBC, which
sponsors PMI reports in many Asian
countries.
Weak growth in the US and Europe
has revived worries they will slip back
into recession, which would deal a
heavy blow to Asia’s export-driven
economies.
Most advanced economies have
already cut interest rates to near zero,
and with government finances constrained,
policymakers have limited
options for spurring stronger growth.
The European Central Bank, the
Federal Reserve and the Bank of
England are all seen retaining their
ultra-loose monetary policy for at least
another year. That leaves the big emerging
economies as the best hope for
propping up global growth but they are
also struggling.
Brazil’s central bank slashed its key
interest rate to 12 per cent from 12.5 per
cent on Wednesday in a shock decision
that it said reflects a mounting global
slowdown as well as weaker growth in
Latin America’s largest economy.
“Asian growth is set to slow more
sharply than most expect over the coming
months,” Credit Suisse economist
Robert Prior-Wandesforde wrote in a
note to clients. — Reuters
project is concerned, the source said no decision
has been taken yet on the additional 500
acres that NTPC requires for setting up the
project.
NTPC, the country’s largest power producer,
is slated to develop the 1,600-MW
(800X2) thermal power plant at Katwa but it
has made it clear that it will go ahead only
after the entire quantum of land required for
the project is in place.
At present, around 600 acres are in possession
of the West Bengal Power Development
Corporation (WBPDC). However, about an
additional 500 acres are required, for which
talks are on with the state government. The
source said: “No decision has been taken on
the additional land but there’s an option that
NTPC itself could procure this additional
quantum.”
R-Cap, Nippon to
drive growth explore tie-up
Mumbai/Tokyo: Expanding
New Delhi: Naveen Jindalled
Jindal Steel and Power
(JSPL) on Thursday said it is
not averse to acquisitions to
drive growth even as its
$10.9-billion capacity expansion
plans are underway.
“Lot of expansions are
going on. However, we are
open to right kind of steel
plant for acquisition,” deputy
managing director Sushil
Maroo said when asked
whether JSPL would follow
suit of subsidiary Jindal
Power, which has recently
evinced interest for acquisition
in generation space.
Maroo, however, declined
to divulge if JSPL was currently
considering any steel
plant acquisition or has it
any war-chest ready for
making such a move.
JSPL was approached by
the then Ispat Industries of
Mittals, but it turned down
the offer when Naveen’s
elder brother Sajjan started
making serious efforts to buy
the firm.
JSPL had acquired Shadeed
Iron and Steel of Oman last
year. The company has also
got development rights for El
Mutun Iron Ore Reserves in
Bolivia, which has around 20
billion tonne reserve.
JSPL plans to set up a 1.7
mtpa steel plant in that
country.
JSPL operates a 3 mtpa
plant at Raigarh in
Chhattisgarh. — PTI
Sony eyes 30pc turnover growth
Our Correspondent
Kolkata: Sony India, a major
player in the consumer electronics
market, is aiming at a
30 per cent growth in
turnover in 2011-12. It also
expects to notch up business
worth around `2,000 crore
in the festive season with
nearly `245 crore likely to
come from the eastern
region.
“We expect our turnover
to grow 30 per cent, at
around `7,000 crore in the
current fiscal from `5,500
crore last year,” Sunil Nayyar,
its partnership with Nippon
Life, Reliance Capital on
Thursday signed a deal for
exploring stake sale in its
mutual fund and other businesses
to the Japanese major,
to which it has already sold
26 per cent equity in the life
insurance venture.
A memorandum of understanding
(MoU) was signed
on Thursday in Tokyo
between Reliance Capital (R-
Cap) chairman Anil Ambani
and Nippon Life president
Yoshinobu Tsutsui for
strengthening the business
relationship between the
two companies.
Earlier this year, Nippon
Life had signed a definitive
agreement for acquiring a 26
per cent stake in Reliance
Life Insurance for `3,062
crore. The deal is currently
awaiting regulatory and
other approvals.
The MoU would entail
Nippon Life evaluating various
collaboration opportunities,
including strategic partnership,
across all Reliance
Capital-promoted financial
businesses, including mutual
fund, the company said in a
statement.
After signing the MoU,
Anil Ambani said, “Nippon
Life has already agreed to be
our partner in the life insurance
business, and we see
great potential to work
together across our other
senior general manager,
sales, Sony India, said.
“Our national sales target
during the festive season
(August-October) is around
`2,000 crore, which will be a
growth of 35 per cent over
last year. With Durga Puja
round the corner, we hope to
garner sales of `245 crore
from the eastern region, a 48
per cent growth over the corresponding
period last year,”
Nayyar said, adding that
Durga Puja contributes
nearly 35 per cent of the
company’s total sales from
the eastern region.
financial services businesses.”
Nippon Life’s Yoshinobu
Tsutsui said, “We are
delighted to have an opportunity
to expand our relationship
with Reliance, one
of the most respected business
groups in India.”
Nippon Life is a 122-yearold
Fortune 100 company,
ranked as the seventh largest
life insurer in the world and
the single-largest private life
insurer in Asia and Japan.
Its deal with Reliance Life
pegged the total valuation of
the Indian insurer at about
`11,500 crore ($2.6 billion).
In addition to life insurance,
R-Cap, the financial
services arm of Anil Ambaniled
conglomerate, has interest
in an array of financial
sector businesses.
These include mutual
funds, general insurance,
commercial finance, broking,
investment banking, wealth
management, distribution of
financial products,
exchanges, private equity,
asset reconstruction, among
other financial services. — PTI
The company has laid out
a sales plan for the eastern
market, which contributes
nearly 12 per cent to its overall
sales. It plans to sell
around 60,000 units of
LCDs/LEDs, 70,000 units of
cameras and 15,000 units of
laptops in the eastern region
during the festivities.
With brands like Bravia,
Cyber-shot and Vaio under
its umbrella, Sony has a market
share of 40 per cent, 45
per cent and 15 per cent in
the TVs, cameras and laptop
segments, which it plans to
take up to 45 per cent, 47 per
Face Value
Oil retailers
slash jet
fuel prices
New Delhi: For the second
time in a month, stateowned
oil firms on Thursday
cut prices of jet fuel, or
ATF, in line with softening
of rates in the international
markets.
Aviation turbine fuel (ATF)
prices at Delhi’s T3 airport
was cut by `429 per kilolitre
(kl), or 0.75 per cent, to
`56,260 per kl, an official of
Indian Oil Corp, the nation’s
largest fuel retailer, said.
Prior to this, the companies
on August 16 cut jet fuel
rates by `1,156 per kl or
about 2 per cent.
Jet fuel makes up for 40
per cent of an airlines’ operating
cost.
ATF in Mumbai, home to
the nation’s busiest airport,
will cost `446 per kl less at
`56,978 per kl from
Thursday as against the old
price of `57,424 per kl.
No comment could be
immediately obtained from
airlines on the impact of the
price reduction on passenger
fares.
ATF prices vary from airport
to airport, depending on
the local sales tax or VAT.
IOC and its sister public
sector retailers, Hindustan
Petroleum Corp (HPCL) and
Bharat Petroleum Corp
(BPCL), revise jet fuel prices
on the 1st and 16th of every
month, based on the average
international price in the
preceding fortnight. — PTI
cent and 20 per cent, respectively,
during this peak
period.
“Over the same period last
year, from the eastern region
alone we expect a growth of
88 per cent in LCDs/LEDs, 62
per cent in cameras and a
100 per cent growth in laptops,”
Nayyar added.
The company has
increased its marketing
investment towards abovethe-line
(ATL) and belowthe-line
(BTL) activities during
Durga Puja to `15 crore
compared with `11 crore
spent last year.
� A model poses with Sony Tablet P (R) and S at a promotional event in Tokyo, on
Thursday. Sony’s new tablet computers failed to excite gadget reviewers and
analysts who criticised the pricing and quality of the devices, underscoring the
battle Sony faces regaining its consumer electronics crown — Reuters