Dabhol: Domestic lenders to buy out offshore debt
New Delhi: The Gas and Power Investment Company (GAPIC), a special purpose vehicle set up by the Indian lenders of the $3-billion Dabhol Power Company (DPC), may be close to buying out the project's foreign debt component of around $600 million.

The recently formed company would raise money by issuing bonds to pay off the project's offshore lenders, Government officials have said.

The Union Cabinet has already cleared a proposal to stand guarantee to the Indian lenders involved in restarting the project. Govt. officials have indicated that foreign lenders have agreed to sell their portion of DPC's debt to the Indian lenders and have also signalled their willingness to take a 25-per cent cut on the original loan amount.

The settlement of the debt owed to the offshore lenders, led by ABN Amro Holding NV and Bank of America, is expected to be the first step in an attempt to restart the project.

The equity claims of the General Electric (GE)-Bechtel combine still remain a big roadblock. GE and Bechtel together own 85 per cent of DPC, after the combine bought out Enron's 65-per cent stake in the project. With the 20-per cent stake that the GE-Bechtel combine held earlier, they had much less leveraging power, govt. officials said, but now with a controlling stake of 85-per cent stake lying with GE and Bechtel, the domestic lenders would have a stiff task trying to settle the combine's claims even after they buy out the offshore debt.

The Indian lenders have been talking to the GE-Bechtel combine and also with the Overseas Private Investment Corporation of the US to agree upon the equity claims made by the stakeholders, the officials said.

The Dabhol project has been lying idle since 2001. The project was being set up in two phases, with a 740-MW first phase and a 1,444-MW second phase. Following a commercial dispute between the Maharashtra Government and DPC over electricity tariffs, the Maharashtra State Electricity Board stopped buying power from the project.

Domestic lenders to the project, have an exposure of close to Rs5,500 crore in the embattled project.
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Qatar Emir's visit to strengthen trade and economic ties
New Delhi: Qatar is now looking at consolidating and strengthening its trade and economic ties with India during the three-day State visit of its Emir, Sheikh Hamad bin Khalifa Al-Thani. The country proposes to focus on sectors such as manufacturing, infrastructure, agriculture, retailing, tourism, civil aviation, IT, education and health.

Qatar wants to export liquefied natural gas (LNG) to India and is seeking investments by Indian firms in its hydrocarbon sector, including oil and gas exploration and production. Yousef Hassan Al-Sai, Qatar's Ambassador to India, told a press conference here that, "Qatar is looking at strengthening trade and economic links, including energy ties, with India during the three-day State visit of its Emir."

Currently, India is one of the biggest buyers of natural gas from Qatar, with the sale and purchase agreement for the supply of 7.5 million tonnes of LNG per year for 25 years.

Currently, India is importing 5 mt of LNG and negotiating for an extra 2.5 mt from Qatar. Qatar plans to boost annual LNG exports from 14.5 mt to 60 mt by 2010.
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Cabinet approves air services pact with US
New Delhi: The Cabinet has approved a new air services agreement between India and the United States.

After the agreement is signed, carriers from both the countries would be able to operate as many flights to as many destinations, Civil Aviation Minister Praful Patel told newspersons after the Cabinet meeting. The agreement replaces a pact dating from 1956. Under the revised agreement, the restrictions on points of call will be removed.

The new accord also seeks to remove the earlier restriction of code-share rights to any five points in the respective territories of both countries.
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India and UK sign MoU for increase of flights
New Delhi: India and the UK have signed a Memorandum of Understanding (MoU), according to which, the total number of flights between the two countries would increase from the existing 40 to 130 per week.

The Civil Aviation secretary Ajay Prasad and the Director of Trade and Investment in the British High Commission, Stephen Lillie, signed the MoU.

Under the MoU, Indian carriers can now operate 56 flights from Delhi and Mumbai to London's Heathrow airport and have unlimited flights from India to UK on all other routes.

The MoU will facilitate 56 flights per week from London to New Delhi and Mumbai, 14 flights per week connecting UK airports with Chennai and Bangalore and seven flights per week connecting the UK destinations with other international airports in India.
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IMF: India has scope to increase FDI flows
New Delhi: The International Monetary Fund (IMF) has asked India to improve its policy environment in order to stimulate private investments, including FDIs.

"India has scope to increase its share in FDI from the current level of 5 per cent of GDP," Andrew Berg, Chief of Development Issues, IMF told mediapersons from Washington through video-conferencing on the occasion of release of a report on Millennium Development Goals by IMF and the World Bank. India is already an attractive destination, rated second or third in the Asian region, in terms of attracting FDI, Berg said.

India attracted over $5 billion of FDI last year. Against FDI comprising 5 per cent of GDP in India, FDI in Thailand represents 30 per cent of GDP and 35 per cent in China.
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Maran: IT share in GDP to touch 4.1 per cent
New Delhi: The share of the information technology (IT) sector in the country's gross domestic product (GDP) is expected to touch 4.1 per cent during 2004-05.

"The success achieved by this sector can be gauged by the fact that its share of national economic output has nearly trebled from 1.2 per cent in 1997-98 to 3.5 per cent in 2003-04. It is estimated to grow at 30 per cent during 2004-05, accounting for about 4.1 per cent of the national gross domestic product," the IT and Communications Minister, Dayanidhi Maran, said after presenting the Dewang Mehta Award for innovation in IT to NIIT's Chief Scientist, Dr Sugata Mitra.

He said that double digit growth figures, which were now part of the software-ITES industry, helped the sector touch $22.7 billion in 2004-05, making it one of the high momentum and high potential segments within the Indian economy.

"The software and ITES sector has recorded a compounded annual growth rate of 32 per cent over the last five years," he added.

The award has been conferred on Dr Mitra in recognition of his achievement in the discovery of the pedagogy, science and technology of minimally invasive.
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Telegraph Act may be amended to enable cell operators entry in rural areas
New Delhi: The Government may amend the Telegraph Act in order to enable mobile operators to roll out networks in rural areas by sharing infrastructure that is funded by the Universal Service Obligation (USO) Fund.

"We have discussed the matter with the USO Fund Administrator and are working out the details. We are looking at Telegraph Act amendment to accommodate basic, cellular and other wireless technologies. The idea is to put towers in rural areas so cellular and CDMA lines can reach villages," the Communications and IT Minister, Mr Dayanidhi Maran, said here.

The aim is to take the telephone connectivity to villages, highways and rail lines, Maran said. So far, Rs1,841.50 crore has been made available to operators for rural telephony, of which, Rs1,341.50 crore has been provided during 2004-05. For 2005-06, a provision of Rs1,200 crore has been made for USO support.

Five per cent of the revenue share, given by telecom companies to the Government, currently goes towards USO Fund.
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Delhi exempts life-saving drugs from VAT
New Delhi: Chief Minister Sheila Dikshit has announced after a cabinet meeting that the Delhi Government has decided to exempt life-saving medicines from taxation under the VAT regime. She said several household items have also been exempted from value-added tax (VAT).

"In these 13 days since implementation of VAT, we got representations from various associations. Accordingly, we have corrected some of the lapses that there were there when it was implemented," she said. Further, Dikshit said the Government would approach the Empowered Committee for a rollback on sales tax on diesel, LPG, sweets and other items.
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VAT panel to meet on April 16 to review progress
New Delhi: The Empowered Committee of State Finance Ministers on value-added tax (VAT) will meet here on Saturday to discuss and review the "implementation issues" surrounding the introduction of State-level VAT from April 1.

The meeting assumes significance, as it would be for the first time that State finance ministers would come together to review the situation after the introduction of VAT in 20 States. VAT commissioners of various States would meet on April 15 to discuss various operational issues on VAT implementation.

The finance ministers of those States that had not implemented VAT would also participate in the VAT panel meeting. Tamil Nadu, Uttar Pradesh, Uttaranchal and the five BJP-ruled States of Rajasthan, Gujarat, Madhya Pradesh, Chhattisgarh and Jharkhand are yet to implement VAT.
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India has fifth largest telecom network in the world
New Delhi: Having crossed the 100-million telephone mark, India has become the fifth largest telecom network in the world after China, the US, Japan and Germany.

"We have visualised that by 2007, the country will have 250 million telephones and the teledensity will be about 22 per cent. By that time the entire country shall be carpeted by telecom network and all the villages connected by phone," the Minister for Communications and IT, Dayanidhi Maran, told a news conference here.

He said the potential to expand telecom network in India is immense as its teledensity is currently pegged at only about 9 per cent against over 100 per cent in the US, Japan and Germany. China has a teledensity of 55 per cent. "The demand has already saturated in the developed countries, and India is bound to surpass them in the next 4-5 years," Maran said.

Of the estimated 100.27 million total telephone connections in India as on April 13, 2005, close to 53.94 million are mobile connections and the remaining 46.33 million fixed line connections. With this, the number of phones (fixed and cellular) per 100 population stands at 9.13 per cent. In 2004, with 76.54 million telephone connections in the country, this figure stood at 7.08 per cent.

Maran said that Internet connections are expected increase to 18 million by 2007 from 5.45 million in December 2004. "By this time, broadband connections are targeted to be 9 million. To enable faster expansion of wireless telephony, and other services, the required spectrum shall be made available to the operators," Maran said, adding that increasing competition is expected to result in a further fall in tariffs thus benefiting the consumers at large.

Maran said that while India would target 150 million additional phone connections by 2007, state-owned BSNL and MTNL are expected to add 80 million lines during the period.
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