NEW DELHI: India's largest private airline Jet Airways has reduced the monthly salary of its trainee co-pilots by almost 60% from about Rs 1.3 lakh to Rs 50,000 in the New Year. The decision was conveyed to its trainee co-pilots in last week and is among a series of steps that the airline is taking to cut costs and survive the life-threatening phase that Indian carriers are passing through due to a mix of high operating cost environment at home and a slowing down economy.
"The company is going through turbulent times as a result of low fares, ever-rising crude oil process, high airport levies, rupee devaluation and a recessionary economic scenario... we are reducing costs through re-negotiation of all contracts with our vendors, service providers and curtailing expenditure. As a part of the austerity measures effective January 1, 2012, it is proposed that you would continue to draw Rs 50,000 per month till you are released to fly online on the fleet..." the letter sent by S B Srivastava, Jet's V-P (HR), to the trainee first officer says, while adding that other terms of their employment remain unchanged.
During the last slowdown also Jet had reduced salaries of its employees to survive the tough economic conditions and then restored them to pre-cut levels when the environment improved. Its two full service peers - Air India and Kingfisher - have been unable to pay salaries to employees in time for months now. "We last got paid in first week of November and have got nothing since then. Now our five months' salary and allowances are due. There is no light at the end of this tunnel and it seems the government expects us to work without pay. How long can this continue? Our stress levels is dangerously high as the topic of conversation is mainly unpaid bills and EMIs in cockpit of any stressed airline like AI or Kingfisher," said an agitated Air India commander.
While AI and Kingfisher are drowning under the weight of their losses and debt, Jet has also run into losses due to the high cost environment. In the quarter ended September 30, 2011, it posted a loss of Rs 713.6 crore versus a profit of Rs 12.4 crore in same period last year.
Trainee co-pilots join an airline after getting type rated (certified) to fly a particular aircraft. They are first trained to fly by being seated on the co-pilot's seat with a commander and a co-pilot on the third seat in the cockpit (called jump seat).
Success in my Habit
Wednesday, January 4, 2012
Air India may cut salaries of 5,000 employees
NEW DELHI: The debt-ridden Air India may slash salaries of about 5,000 of its employees, including pilots and engineers, following a rationalisation of wages.
A committee constituted to look into issues of integration of the national airline with the state-owned domestic carrier Indian Airlines is likely to recommend wage cuts in its report due by the end of the month.
"Almost 85% of the employees won't see a change in their pay, but 15%, including licensed categories and some flying staff, would," Justice DM Dharmadhikari, a retired judge of the Supreme Court who heads the committee set up last April, told ET. "We are trying to bring the wage structure of the organisation strictly under legal parameters, so that it conforms with the guidelines of the Department of Public Enterprises."
Air India, saddled with a debt of Rs 43,000 crore, has not been able to pay its 33,000 employees for the past three months.
Another member, who did not wish to be named, said that since several pilots have quit Air India due to delayed payment of salaries, the committee will have to ensure that salaries of this group remain competitive. A senior member of a pilots union, however, said on the condition of anonymity that the pilots could cooperate if there is a sound rationale and the proposed salary cuts are marginal.
Even five years after the merger of the two airlines, there is much heartburn among the staff over the lack of uniformity in pay scales and career progression paths. Pilots of the domestic operations of the erstwhile Indian Airlines had resorted to a 10-day strike shortly after the constitution of the Dharmadhikari committee, demanding parity with the commanders on international flights.
The national auditor, Comptroller and Auditor General, in its report on Air India, observed that the airline did not follow any set procedure for pay revision or for fixing performance linked incentives. "Audit observed that allowances and PLI ranged from 62% to 919% of the Basic Pay against the maximum of 5% as per Department of Public Enterprises guidelines and the company made excess payment of allowances and PLI amounting to Rs 315.78 crore during the years 2007-08 and 2008-09," the CAG said in its report.
The CAG also found Air India Board guilty of approving an increase in various allowances, including PLIs, by up to 50% with effect from January 2005, even though the airline was dependant on loans for working capital.
A committee constituted to look into issues of integration of the national airline with the state-owned domestic carrier Indian Airlines is likely to recommend wage cuts in its report due by the end of the month.
"Almost 85% of the employees won't see a change in their pay, but 15%, including licensed categories and some flying staff, would," Justice DM Dharmadhikari, a retired judge of the Supreme Court who heads the committee set up last April, told ET. "We are trying to bring the wage structure of the organisation strictly under legal parameters, so that it conforms with the guidelines of the Department of Public Enterprises."
Air India, saddled with a debt of Rs 43,000 crore, has not been able to pay its 33,000 employees for the past three months.
Another member, who did not wish to be named, said that since several pilots have quit Air India due to delayed payment of salaries, the committee will have to ensure that salaries of this group remain competitive. A senior member of a pilots union, however, said on the condition of anonymity that the pilots could cooperate if there is a sound rationale and the proposed salary cuts are marginal.
Even five years after the merger of the two airlines, there is much heartburn among the staff over the lack of uniformity in pay scales and career progression paths. Pilots of the domestic operations of the erstwhile Indian Airlines had resorted to a 10-day strike shortly after the constitution of the Dharmadhikari committee, demanding parity with the commanders on international flights.
The national auditor, Comptroller and Auditor General, in its report on Air India, observed that the airline did not follow any set procedure for pay revision or for fixing performance linked incentives. "Audit observed that allowances and PLI ranged from 62% to 919% of the Basic Pay against the maximum of 5% as per Department of Public Enterprises guidelines and the company made excess payment of allowances and PLI amounting to Rs 315.78 crore during the years 2007-08 and 2008-09," the CAG said in its report.
The CAG also found Air India Board guilty of approving an increase in various allowances, including PLIs, by up to 50% with effect from January 2005, even though the airline was dependant on loans for working capital.
Reliance Industries to invest over Rs 1,500 crore in TV18 Group
MUMBAI: Reliance Industries is embarking on a major diversification into the media and entertainment sector with the Mukesh Ambani firm agreeing to fund a transaction that will result in a sizeable stake for itself in a company controlling two of the industry's largest businesses, the Network18 Group and the Eenadu Group of channels run by the Hyderabad-based Ramoji Rao.
People close to the transaction, which has a number of stages, told ET that an RIL subsidiary will help the promoter group of Network18 fund the rights issues of its two listed entities, Network18 Media and Investments, which runs the portal moneycontrol.com, and TV18 Broadcast Ltd, which operates a number of business and general news channels, notably CNBC TV18 and CNN-IBN.
ET was not able to independently verify the amount to be invested by RIL, but people with direct knowledge of the transaction estimated it to be more than Rs 1,500 crore. The money from RIL will help Raghav Bahl, the promoter of the TV18 Group, subscribe to the rights issues of both the listed companies, Network18 and TV18. The full amount expected to be raised through the rights issues is estimated at over Rs 3,500 crore.
The boards of TV18 Broadcast and Network18 Media will meet on Tuesday to discuss plans for a rights issue. Raghav Bahl did not respond to an email questionnaire; a Reliance group spokesperson also remained silent, while B Sai Kumar, the CEO of Network18, declined comment.
Times NOW and ET NOW, owned by Bennett, Coleman & Co. Ltd, the publisher of this paper, compete with some of the television channels owned by Bahl. The strategic investment by RIL will be used by the Network18 Group to retire debt and eventually buy out RIL's stake in Eenadu, the pan-India vernacular language channels owned by Ramoji Rao.
RIL sources said they had invested Rs 2,600 crore in the Eenadu Group through a subsidiary giving it ownership of all businesses apart from its Telugu channel, in which it owns 49%. The transaction, once complete, will result in RIL recovering most of its investments in Eenadu. Messages and an email sent after business hours to the office of Ch Kiron, the managing director of Ushodaya Enterprises, the holding company of the Eenadu Group, did not elicit any response.
By its own admission before the Andhra Pradesh High Court, Reliance Industries has said it has invested Rs 2,600 crore in entities of Nimesh Kampani-led JM Financial Group, which in turn had invested in Ushodaya Enterprises. The AP High Court is hearing a petition alleging the investment was a payoff to N Chandrababu Naidu, the former chief minister of Andhra Pradesh, an allegation RIL has denied in its affidavit. RIL's deal with Bahl, likely to be announced on Tuesday, is expected to create a powerful national news and entertainment company spanning several regional languages as well as English and Hindi.
RIL to get Exclusive Rights to Content
RIL, people close to the transaction said, is expected to hold an economic interest equivalent to a 30% stake in the promoter group of companies, with the original promoter Bahl owning 51% and all voting rights.
Further, RIL will have exclusive rights to content from 30 channels and web properties of the two media houses, which will lend a competitive edge to its broadband services to be rolled out later this year.
RIL is laying the groundwork for national 4G broadband services expected to be launched sometime this year. Content for broadband services is generally outsourced, but RIL will have an advantage over others with this transaction which will give its subscribers a wide variety of channels ranging from general entertainment to news and movies.
Earlier on Monday, Sai Kumar, in a letter to all employees of TV18, hinted at a solution to the group's debt problems. "Let me also take this opportunity to tell you that we are very close to addressing our debt levels and related issues which have been reported by various media in the last few weeks. We will learn the details from Raghav pretty soon," said Sai Kumar, who took over as CEO after the sudden resignation recently of long-time CEO Haresh Chawla.
The money is likely to be invested directly in companies controlled by Raghav Bahl, such as RB Holding Pvt Ltd and RB Investments Pvt Ltd. These companies own 30.34% stake in Network18 Media while Bahl holds 9.03% in his name. Network18, in turn, is the main shareholder in TV18 Broadcast with a 49.98% stake. The two companies have suffered heavily in the downturn triggered by the financial crisis of 2008-09. While revenue growth has been strong, profits have plummeted and borrowings have soared.
At the end of March 2011, Network18 had debt of Rs 1,777.89 crore. Its profit for that year fell 87.27%. TV18's debt stood at Rs 550.54 crore while profit fell 17.40%. The markets have punished the two companies. Network18' s market cap is down 171.57% since January 5, 2009 while TV18's has fallen 560.23% in the same period. Bahl's companies also have a distribution joint venture with the Chennai-based Sun Group, called Sun18. It is not known if Sun's channels, among the strongest in the south, are a part of this arrangement. American giant Viacom too has a joint venture with Bahl for producing movies.
People close to the transaction, which has a number of stages, told ET that an RIL subsidiary will help the promoter group of Network18 fund the rights issues of its two listed entities, Network18 Media and Investments, which runs the portal moneycontrol.com, and TV18 Broadcast Ltd, which operates a number of business and general news channels, notably CNBC TV18 and CNN-IBN.
ET was not able to independently verify the amount to be invested by RIL, but people with direct knowledge of the transaction estimated it to be more than Rs 1,500 crore. The money from RIL will help Raghav Bahl, the promoter of the TV18 Group, subscribe to the rights issues of both the listed companies, Network18 and TV18. The full amount expected to be raised through the rights issues is estimated at over Rs 3,500 crore.
The boards of TV18 Broadcast and Network18 Media will meet on Tuesday to discuss plans for a rights issue. Raghav Bahl did not respond to an email questionnaire; a Reliance group spokesperson also remained silent, while B Sai Kumar, the CEO of Network18, declined comment.
Times NOW and ET NOW, owned by Bennett, Coleman & Co. Ltd, the publisher of this paper, compete with some of the television channels owned by Bahl. The strategic investment by RIL will be used by the Network18 Group to retire debt and eventually buy out RIL's stake in Eenadu, the pan-India vernacular language channels owned by Ramoji Rao.
RIL sources said they had invested Rs 2,600 crore in the Eenadu Group through a subsidiary giving it ownership of all businesses apart from its Telugu channel, in which it owns 49%. The transaction, once complete, will result in RIL recovering most of its investments in Eenadu. Messages and an email sent after business hours to the office of Ch Kiron, the managing director of Ushodaya Enterprises, the holding company of the Eenadu Group, did not elicit any response.
By its own admission before the Andhra Pradesh High Court, Reliance Industries has said it has invested Rs 2,600 crore in entities of Nimesh Kampani-led JM Financial Group, which in turn had invested in Ushodaya Enterprises. The AP High Court is hearing a petition alleging the investment was a payoff to N Chandrababu Naidu, the former chief minister of Andhra Pradesh, an allegation RIL has denied in its affidavit. RIL's deal with Bahl, likely to be announced on Tuesday, is expected to create a powerful national news and entertainment company spanning several regional languages as well as English and Hindi.
RIL to get Exclusive Rights to Content
RIL, people close to the transaction said, is expected to hold an economic interest equivalent to a 30% stake in the promoter group of companies, with the original promoter Bahl owning 51% and all voting rights.
Further, RIL will have exclusive rights to content from 30 channels and web properties of the two media houses, which will lend a competitive edge to its broadband services to be rolled out later this year.
RIL is laying the groundwork for national 4G broadband services expected to be launched sometime this year. Content for broadband services is generally outsourced, but RIL will have an advantage over others with this transaction which will give its subscribers a wide variety of channels ranging from general entertainment to news and movies.
Earlier on Monday, Sai Kumar, in a letter to all employees of TV18, hinted at a solution to the group's debt problems. "Let me also take this opportunity to tell you that we are very close to addressing our debt levels and related issues which have been reported by various media in the last few weeks. We will learn the details from Raghav pretty soon," said Sai Kumar, who took over as CEO after the sudden resignation recently of long-time CEO Haresh Chawla.
The money is likely to be invested directly in companies controlled by Raghav Bahl, such as RB Holding Pvt Ltd and RB Investments Pvt Ltd. These companies own 30.34% stake in Network18 Media while Bahl holds 9.03% in his name. Network18, in turn, is the main shareholder in TV18 Broadcast with a 49.98% stake. The two companies have suffered heavily in the downturn triggered by the financial crisis of 2008-09. While revenue growth has been strong, profits have plummeted and borrowings have soared.
At the end of March 2011, Network18 had debt of Rs 1,777.89 crore. Its profit for that year fell 87.27%. TV18's debt stood at Rs 550.54 crore while profit fell 17.40%. The markets have punished the two companies. Network18' s market cap is down 171.57% since January 5, 2009 while TV18's has fallen 560.23% in the same period. Bahl's companies also have a distribution joint venture with the Chennai-based Sun Group, called Sun18. It is not known if Sun's channels, among the strongest in the south, are a part of this arrangement. American giant Viacom too has a joint venture with Bahl for producing movies.
Andhra Pradesh government seeks tie-up with Tesco, Bharti-Walmart
HYDERABAD: The Andhra Pradesh government is drawing up plans to open swanky supermarkets, venturing into the multi-brand retail territory that multinational retailers such as Walmart and Tesco are desperate to enter but forbidden from doing so.
It is also seeking partnerships with the wholesale units of Germany's Metro AG and Walmart, a minister said, to create a hybrid retail model that combines the best attributes of the public and private sectors.
The first store will open by the end of March in an upmarket area in Andhra Pradesh's capital Hyderabad. Eventually, the Congress government will spend some Rs 2,000 crore to set up a retail chain that covers all the main towns and cities in India's fourth-largest state.
"Our retail stores will look like any other supermarket, with hygiene assured. We will offer quality packaged food products at reasonable rates," state Food and Consumer Affairs Minister D Sridhar Babu told ET, adding the main aim of the stores is to provide succour from inflation to the middle and lower-middle classes.
The stores will begin by stocking everyday staples such as rice, pulses and commodities before adding a broad range of consumer goods. The outlets will be operated by the government at wafer-thin profit margins so that prices are kept low.
In November, the Congress-led United Progressive Alliance government at the Centre gave permission to foreign companies to invest up to 51% in India's $450-billion multi-brand retail sector but backtracked in the face of protests by traders and many political parties.
Other states such as Tamil Nadu, Kerala and Maharashtra have opened retail stores to sell food products, but with little expertise in the area, these businesses ran into severe losses. Maharashtra had to sell its ailing Sahakari Bhandar outlets in Mumbai to Reliance Retail.
Andhra Pradesh, the minister said, wants to learn from the mistakes of other states. That is why it wants to partner with the likes of Metro and Bharti-Walmart that have expertise the government lacks in areas such as procurement and logistics.
India allows 100% FDI in wholesale trade, where Metro and Bharti-Walmart operate. AP has started talks with the two for tie-ups, Babu said.
A 'Revolutionary' Idea Faces Challenges
Metro declined comment while Bharti Walmart said it is not in talks at present with the Andhra Pradesh government. "However, we will be happy to partner with the government on such an initiative, if invited," the cash and carry JV between Bharti Enterprises and Walmart said in a statement. The Andhra Pradesh government led by Kiran Kumar Reddy has been under pressure dealing with a separatist agitation in the Telangana region and a rebellion by the son of the late former chief minister YS Rajasekhara Reddy.
To win back public support the government recently said it will provide rice to the poor at Rs a kg, a populist move it said was necessary to ease the burden of rising food prices. Kumar Rajagopalan, the chief executive of the Retailers' Association of India, described Andhra Pradesh's supermarket store idea as 'revolutionary' but was sceptical about its chances of success.
While governments have expertise running the public distribution system, their abilities in areas such as procurement, logistics and retailing are limited, posing a big challenge to Andhra Pradesh's plan, he said. But Babu was confident the hybrid model, which will also incorporate lessons from the failures of other states, would work well. The government has some inherent advantages that it can make use of to keep costs low, he said.
It is also seeking partnerships with the wholesale units of Germany's Metro AG and Walmart, a minister said, to create a hybrid retail model that combines the best attributes of the public and private sectors.
The first store will open by the end of March in an upmarket area in Andhra Pradesh's capital Hyderabad. Eventually, the Congress government will spend some Rs 2,000 crore to set up a retail chain that covers all the main towns and cities in India's fourth-largest state.
"Our retail stores will look like any other supermarket, with hygiene assured. We will offer quality packaged food products at reasonable rates," state Food and Consumer Affairs Minister D Sridhar Babu told ET, adding the main aim of the stores is to provide succour from inflation to the middle and lower-middle classes.
The stores will begin by stocking everyday staples such as rice, pulses and commodities before adding a broad range of consumer goods. The outlets will be operated by the government at wafer-thin profit margins so that prices are kept low.
In November, the Congress-led United Progressive Alliance government at the Centre gave permission to foreign companies to invest up to 51% in India's $450-billion multi-brand retail sector but backtracked in the face of protests by traders and many political parties.
Other states such as Tamil Nadu, Kerala and Maharashtra have opened retail stores to sell food products, but with little expertise in the area, these businesses ran into severe losses. Maharashtra had to sell its ailing Sahakari Bhandar outlets in Mumbai to Reliance Retail.
Andhra Pradesh, the minister said, wants to learn from the mistakes of other states. That is why it wants to partner with the likes of Metro and Bharti-Walmart that have expertise the government lacks in areas such as procurement and logistics.
India allows 100% FDI in wholesale trade, where Metro and Bharti-Walmart operate. AP has started talks with the two for tie-ups, Babu said.
A 'Revolutionary' Idea Faces Challenges
Metro declined comment while Bharti Walmart said it is not in talks at present with the Andhra Pradesh government. "However, we will be happy to partner with the government on such an initiative, if invited," the cash and carry JV between Bharti Enterprises and Walmart said in a statement. The Andhra Pradesh government led by Kiran Kumar Reddy has been under pressure dealing with a separatist agitation in the Telangana region and a rebellion by the son of the late former chief minister YS Rajasekhara Reddy.
To win back public support the government recently said it will provide rice to the poor at Rs a kg, a populist move it said was necessary to ease the burden of rising food prices. Kumar Rajagopalan, the chief executive of the Retailers' Association of India, described Andhra Pradesh's supermarket store idea as 'revolutionary' but was sceptical about its chances of success.
While governments have expertise running the public distribution system, their abilities in areas such as procurement, logistics and retailing are limited, posing a big challenge to Andhra Pradesh's plan, he said. But Babu was confident the hybrid model, which will also incorporate lessons from the failures of other states, would work well. The government has some inherent advantages that it can make use of to keep costs low, he said.
Tata seeks extension of lease for Taj Mansingh; NDMC asks IDFC to chart private-public partnership of hotel
NEW DELHI: New Delhi's municipal body has appointed a financial advisor to select a partner for operating a hotel on the property that currently houses the iconic Taj Mahal Hotel in the heart of the city even as the Tatas have sought a long-term extension of their licence agreement to manage the hotel.
The Tata-owned Indian Hotels has been in charge of the marquee property on Mansingh Road since 1978 under a 33-year agreement with the New Delhi Municipal Council (NDMC), the body that owns both the land as well as the building. The lease expired in October 2011 and was renewed in favour of Indian Hotels on a short-term basis.
"The Indian Hotels Company Ltd has sought an extension of the collaboration agreement and licence deed between NDMC and IHCL in respect of the Taj Mahal Hotel. IHCL has enjoyed a cordial and beneficial association with NDMC over the past three decades. They look forward to continuing this business relationship in a mutually beneficial manner," said a person close to the Tatas.
NDMC has tasked the Mumbai-based Infrastructure Development Finance Company (IDFC) with the responsibility of developing a private-public partnership structure that would optimise revenues for the municipal body and assist it in finalising a private sector partner.
An IDFC spokesman said it was yet to start formal work on its mandate and it would be premature to comment on the process it would follow. "Best practices would ensure maximising both competition and transparency in the bidding for selection of the O&M (operation & maintenance) partner," said the spokesman.
The eventual outcome of this process is far from clear. The Taj Mansingh, as it is popularly known, is arguably Indian Hotels' most prized possession after the fabled Taj Mahal Hotel in Mumbai and the company is expected to try its best to retain it. A person close to the company said Indian Hotels had enjoyed excellent relations with NDMC and hoped to renew the agreement.
A government official, who did not wish to be named, said NDMC had the right to renew Indian Hotels' licence but could not give it the right of first refusal in case of an auction.
NDMC Chairman Archana Arora said the municipality had extended the agreement with Indian Hotels for one year. "We had appointed advisers for the property after the contract with Taj was renewed in October. We will explore the future course of action later," she said.
Another person close to the Tata Group said its hotel arm would be willing to participate in the bidding process if one were to take place.
Under the current agreement, Indian Hotels pays 10.5% of its annual gross revenues to NDMC as revenue share. The eventual outcome could be that this figure would go up substantially, industry officials said.
"In case this property goes for bidding on a revenue-share model, the operators may bid upward of 40% share for the government," said Kishor Ostwal, CMD of CNI Research, pointing to Delhi's Indira Gandhi International Airport, where GMR Infrastructure agreed to a gross revenue share of 45.99%.
Taj Mansingh is one of the capital's top hotels and an auction, if one were to take place, is likely to attract bids.
The Tata-owned Indian Hotels has been in charge of the marquee property on Mansingh Road since 1978 under a 33-year agreement with the New Delhi Municipal Council (NDMC), the body that owns both the land as well as the building. The lease expired in October 2011 and was renewed in favour of Indian Hotels on a short-term basis.
"The Indian Hotels Company Ltd has sought an extension of the collaboration agreement and licence deed between NDMC and IHCL in respect of the Taj Mahal Hotel. IHCL has enjoyed a cordial and beneficial association with NDMC over the past three decades. They look forward to continuing this business relationship in a mutually beneficial manner," said a person close to the Tatas.
NDMC has tasked the Mumbai-based Infrastructure Development Finance Company (IDFC) with the responsibility of developing a private-public partnership structure that would optimise revenues for the municipal body and assist it in finalising a private sector partner.
An IDFC spokesman said it was yet to start formal work on its mandate and it would be premature to comment on the process it would follow. "Best practices would ensure maximising both competition and transparency in the bidding for selection of the O&M (operation & maintenance) partner," said the spokesman.
The eventual outcome of this process is far from clear. The Taj Mansingh, as it is popularly known, is arguably Indian Hotels' most prized possession after the fabled Taj Mahal Hotel in Mumbai and the company is expected to try its best to retain it. A person close to the company said Indian Hotels had enjoyed excellent relations with NDMC and hoped to renew the agreement.
A government official, who did not wish to be named, said NDMC had the right to renew Indian Hotels' licence but could not give it the right of first refusal in case of an auction.
NDMC Chairman Archana Arora said the municipality had extended the agreement with Indian Hotels for one year. "We had appointed advisers for the property after the contract with Taj was renewed in October. We will explore the future course of action later," she said.
Another person close to the Tata Group said its hotel arm would be willing to participate in the bidding process if one were to take place.
Under the current agreement, Indian Hotels pays 10.5% of its annual gross revenues to NDMC as revenue share. The eventual outcome could be that this figure would go up substantially, industry officials said.
"In case this property goes for bidding on a revenue-share model, the operators may bid upward of 40% share for the government," said Kishor Ostwal, CMD of CNI Research, pointing to Delhi's Indira Gandhi International Airport, where GMR Infrastructure agreed to a gross revenue share of 45.99%.
Taj Mansingh is one of the capital's top hotels and an auction, if one were to take place, is likely to attract bids.
Delhi schools to mint Rs 1,200 cr through nursery form sales: Assocham
NEW DELHI: Leading public schools in Delhi are likely to earn a revenue of over Rs 1,200 crore through the sale of nursery admission forms this year, industry body Assocham said in a report today.
Last year, the schools earned Rs 1,000 crore from the sale of nursery admission forms, it said.
"Parents these days maintain a budget of about Rs 15,000-20,000 only for applying in leading schools," the report, titled, 'Nursery Admission: Nightmare for parents?', said.
Nursery admission have become an anxiety-ridden experience for parents seeking to secure a seat for their tiny tots in reputed pubic schools due to the limited number of days for sale of admission forms, Assocham Secretary General D S Rawat said.
There are over 3,000 public schools in Delhi that normally sell prospectuses containing details about admission processes in their respective schools for a sum of Rs 800-1,000.
"The cost of a prospectus for nursery admission in metro centres has spiked by nearly ten times during the course of the past decade," it said, adding that the price of a prospectus for nurseries and KGs is costlier than that of Delhi University, the IIMs, IICA and IICS.
Parents are bound to buy the prospectus as these contain important details about the admission procedure along with the admission forms, it added.
"The soaring price of admission forms in most of private schools in metros has disturbed the budget of even well-to-do families. Education is being run like a commercial business enterprise these days," Rawat said.
Last year, the schools earned Rs 1,000 crore from the sale of nursery admission forms, it said.
"Parents these days maintain a budget of about Rs 15,000-20,000 only for applying in leading schools," the report, titled, 'Nursery Admission: Nightmare for parents?', said.
Nursery admission have become an anxiety-ridden experience for parents seeking to secure a seat for their tiny tots in reputed pubic schools due to the limited number of days for sale of admission forms, Assocham Secretary General D S Rawat said.
There are over 3,000 public schools in Delhi that normally sell prospectuses containing details about admission processes in their respective schools for a sum of Rs 800-1,000.
"The cost of a prospectus for nursery admission in metro centres has spiked by nearly ten times during the course of the past decade," it said, adding that the price of a prospectus for nurseries and KGs is costlier than that of Delhi University, the IIMs, IICA and IICS.
Parents are bound to buy the prospectus as these contain important details about the admission procedure along with the admission forms, it added.
"The soaring price of admission forms in most of private schools in metros has disturbed the budget of even well-to-do families. Education is being run like a commercial business enterprise these days," Rawat said.
IRB Infrastructure to seek Rs 70 crore compensation from NHAI
MUMBAI: IRB Infrastructure Developers plans to claim a compensation of around Rs 60-70 crore from the National Highway Authority of India for terminating its contract for a Goa road project after the latter could not acquire land for it.
Road projects have faced delays due to issues relating to land acquisition, environmental clearances and right of way but this is only the second instance in the last two years where a project has been cancelled due to NHAI's inability to acquire land.
"We haven't yet received a compensation claim from IRB. But if this happens, it would be the first time where a developer seeks compensation for a project cancelled due to land acquisition problem. We will have to examine our liability in the case," a senior NHAI official told ET.
On December 23, IRB said that NHAI has cancelled the Goa road project that it had won in January 2010. Although IRB had written off the project from its order book in the quarter ended September in view of the inordinate delay in the project, the cancellation news had a negative impact on the shares of the company.
IRB shares have shed almost 10% on the Bombay Stock Exchange since the announcement as against a 1.4% decline in the benchmark index Sensex in the same period. Analysts said that the news of a compensation would only be a minor relief for the investors.
"The contract allows us to claim 150% of the equity investment of Rs 34 crore in the project. We may also claim compensation for the Rs 10-15 crore we spent on the financial closure and other work related to the project," IRB's Chief Financial Officer Anil Yadav said.
IRB had formed a special purpose vehicle, IRB Goa Tollway Pvt, to execute the project, which will claim the compensation for the project which entailed four-laning of the Panaji- Goa stretch of Goa -Karnataka Border road. At the time of winning the project, the company had said that it would cost Rs 800 crore, of which Rs 186.30 crore would be the grant from government.
Typically, at the time of awarding a project NHAI owns almost 80% of the land required for it while it acquires the balance within six months. According to NHAI, land acquisition has been most difficult in Goa, Kerala and West Bengal.
Road projects have faced delays due to issues relating to land acquisition, environmental clearances and right of way but this is only the second instance in the last two years where a project has been cancelled due to NHAI's inability to acquire land.
"We haven't yet received a compensation claim from IRB. But if this happens, it would be the first time where a developer seeks compensation for a project cancelled due to land acquisition problem. We will have to examine our liability in the case," a senior NHAI official told ET.
On December 23, IRB said that NHAI has cancelled the Goa road project that it had won in January 2010. Although IRB had written off the project from its order book in the quarter ended September in view of the inordinate delay in the project, the cancellation news had a negative impact on the shares of the company.
IRB shares have shed almost 10% on the Bombay Stock Exchange since the announcement as against a 1.4% decline in the benchmark index Sensex in the same period. Analysts said that the news of a compensation would only be a minor relief for the investors.
"The contract allows us to claim 150% of the equity investment of Rs 34 crore in the project. We may also claim compensation for the Rs 10-15 crore we spent on the financial closure and other work related to the project," IRB's Chief Financial Officer Anil Yadav said.
IRB had formed a special purpose vehicle, IRB Goa Tollway Pvt, to execute the project, which will claim the compensation for the project which entailed four-laning of the Panaji- Goa stretch of Goa -Karnataka Border road. At the time of winning the project, the company had said that it would cost Rs 800 crore, of which Rs 186.30 crore would be the grant from government.
Typically, at the time of awarding a project NHAI owns almost 80% of the land required for it while it acquires the balance within six months. According to NHAI, land acquisition has been most difficult in Goa, Kerala and West Bengal.
L&T Construction bags orders worth Rs 2,056 cr
NEW DELHI: L&T Construction today said it has bagged new projects worth Rs 2,056 crore across various categories in the last month.
Of these projects, two orders worth Rs 1,262 crore in the water and effluent treatment segment was bagged by the company, L&T Construction said in a statement.
"One order has been secured from the Tamil Nadu Water Supply and Drainage Board for combined water supply scheme at various locations in Madurai, Sivagangai and Vellore districts in Tamil Nadu," it said.
Another order was received from Raipur Vikas Pradhikaran by the firm for constructing water pipelines, water supply and other associated works at Raipur, it added.
In the buildings and factories category, a Rs 388-crore project was bagged by L&T Construction for constructing residential towers.
"In the rail infrastructure segment, new orders, including additional orders aggregating Rs 406 crore has been grabbed form various clients. This include a major order for construction of a viaduct...from Rail Vikas Nigam Ltd," the statement said.
Of these projects, two orders worth Rs 1,262 crore in the water and effluent treatment segment was bagged by the company, L&T Construction said in a statement.
"One order has been secured from the Tamil Nadu Water Supply and Drainage Board for combined water supply scheme at various locations in Madurai, Sivagangai and Vellore districts in Tamil Nadu," it said.
Another order was received from Raipur Vikas Pradhikaran by the firm for constructing water pipelines, water supply and other associated works at Raipur, it added.
In the buildings and factories category, a Rs 388-crore project was bagged by L&T Construction for constructing residential towers.
"In the rail infrastructure segment, new orders, including additional orders aggregating Rs 406 crore has been grabbed form various clients. This include a major order for construction of a viaduct...from Rail Vikas Nigam Ltd," the statement said.
GMR may team up with Brazilian construction company Queiroz Galvao for Sao Paulo airport bid
GMR may rope in Brazilian construction giant Queiroz Galvao as a partner to bolster its bid to carry out airport modernization projects at some of Brazil's busiest airports, two people directly familiar with the company's bidding plans said.
Queiroz Galvao is one of the largest privately held construction conglomerates in Brazil and had revenues of over $4 billion in 2010 as per details available in the company's annual report. The company also has operations in the areas of real estate development and oil and gas exploration.
GMR may finally bid only for the Guarulhos airport expansion project at Sao Paulo as it is the most lucrative and busiest airport in Brazil, according to one of the people quoted above. The projected capex for the airport modernization project at Guarulhos alone could be close to $8 billion, according to the same person. Brazil's government will also auction off concessions at Viracopos airport in Sao Paulo and the airport in the capital city of Brasilia to bidders selected through an auction process.
GMR has also been in talks with other large Latin American construction companies and will look to finalize a partner within the next two weeks. The company had earlier decided to bid for the projects alone but now believes that a partner with local market knowledge and experience will help it strengthen its proposed bid and also bring in much needed capital as project costs run into billions of dollars and bidding is likely to be very competitive. The company is also in talks to put together a consortium of banks to fund its bid.
The deadline for submitting technical and financial bids for the airport projects has been set at 30th January.
Brazil's government has put in place a plan to modernize airports ahead of the 2014 soccer World Cup and 2016 Olympics that it will host at Rio de Janeiro. Domestic air traffic in Brazil has been growing at double digit rates and airports are frequently overcrowded making the expansion drive necessary to cope with the projected increase in passenger traffic due to these mega sporting events.
A spokesperson for GMR did not respond to emailed queries. Queiroz Galvao could not be reached for comment.
Other large global airport operators including Aeroports de Paris (ADP) which manages the Charles de Gaulle international airport in Paris as well as big investors such as Brazilian billionaire Eike Batista are expected to participate in the auction being conducted for the award of the airport concessions.
Brazil's aviation authority put out stringent conditions for bidders interested in carrying out expansion projects at the airports in October last year. One of such conditions is that Brazil's state-owned airports company Infraero will own 49% of the capital stock of any joint venture that eventually gains the right to re-develop and operate the airports. The conditions also provide Infraero veto rights over "strategic and relevant issues" despite being a minority partner in the proposed joint ventures that will be awarded concessions.
Queiroz Galvao is one of the largest privately held construction conglomerates in Brazil and had revenues of over $4 billion in 2010 as per details available in the company's annual report. The company also has operations in the areas of real estate development and oil and gas exploration.
GMR may finally bid only for the Guarulhos airport expansion project at Sao Paulo as it is the most lucrative and busiest airport in Brazil, according to one of the people quoted above. The projected capex for the airport modernization project at Guarulhos alone could be close to $8 billion, according to the same person. Brazil's government will also auction off concessions at Viracopos airport in Sao Paulo and the airport in the capital city of Brasilia to bidders selected through an auction process.
GMR has also been in talks with other large Latin American construction companies and will look to finalize a partner within the next two weeks. The company had earlier decided to bid for the projects alone but now believes that a partner with local market knowledge and experience will help it strengthen its proposed bid and also bring in much needed capital as project costs run into billions of dollars and bidding is likely to be very competitive. The company is also in talks to put together a consortium of banks to fund its bid.
The deadline for submitting technical and financial bids for the airport projects has been set at 30th January.
Brazil's government has put in place a plan to modernize airports ahead of the 2014 soccer World Cup and 2016 Olympics that it will host at Rio de Janeiro. Domestic air traffic in Brazil has been growing at double digit rates and airports are frequently overcrowded making the expansion drive necessary to cope with the projected increase in passenger traffic due to these mega sporting events.
A spokesperson for GMR did not respond to emailed queries. Queiroz Galvao could not be reached for comment.
Other large global airport operators including Aeroports de Paris (ADP) which manages the Charles de Gaulle international airport in Paris as well as big investors such as Brazilian billionaire Eike Batista are expected to participate in the auction being conducted for the award of the airport concessions.
Brazil's aviation authority put out stringent conditions for bidders interested in carrying out expansion projects at the airports in October last year. One of such conditions is that Brazil's state-owned airports company Infraero will own 49% of the capital stock of any joint venture that eventually gains the right to re-develop and operate the airports. The conditions also provide Infraero veto rights over "strategic and relevant issues" despite being a minority partner in the proposed joint ventures that will be awarded concessions.
Chinese manufacturers "faking" products of Dabur, ITC; undermining the legitimacy of brands
NEW DELHI: Chinese manufacturers are increasingly "faking" popular Indian products of consumer goods giants such as Dabur and ITC, undermining the legitimacy of brands and causing losses worth as much as $5 billion annually, officials said.
"A lot of counterfeit Dabur products are made in China. We have conducted at least 20 raids in China but no proper action has been taken by the Chinese," said Ashok Jain, general manager of finance at Dabur India, the country's fourth-largest FMCG firm. He said such fake products manufactured in China with "Made-in-India" tag are supplied across the world, mostly in India and African countries.
"It causes huge damage to the brand. Those fake products are obviously not up to our standards and supplied at very low prices," Jain told media.
Dabur, which has nearly $4 billion market capitalisation, operates in key consumer product categories like healthcare, skin care, hair care and oral care. The company's revenue last fiscal was $910 million.
Pradeep Dixit, a senior official of ITC, a $33-billion conglomerate, said the popular FMCG brands of the company were counterfeited by unscrupulous firms and supplied in domestic as well as foreign markets.
"Our popular cigarette brand is faked and supplied widely in the states like Chhattisgarh, Bihar and Uttar Pradesh," he said.
"China is a big problem everybody is facing," said S.K. Goel, chairman of the Central Board of Excise and Customs, told IANS. Goel said the big international brands like Nokia, Adidas, Reebok and Nivea were also widely counterfeited in China and supplied in India and other parts of the world. Chinese manufacturers are also faking drugs, endangering lives of patients.
Fake drugs, carrying "Made in India" tags, supplied from China were recently detained in Nigeria and other African countries.
KK Vyas, Delhi's deputy commissioner of police (crime), said the police have seized and confiscated a lot of fake and counterfeited products of popular brands in the national capital recently. Vyas emphasised on the need for enhancing punishment for unscrupulous manufacturers and importers. "Punishment needs to be enhanced. Also there is need that judiciary addresses these issues quickly."
"Counterfeiting is a big menace. It is hurting everybody - consumers, industry and the exchequer," said Anil Rajput, chairman of the anti-smuggling and anti-counterfeiting committee of Federation of Indian Chambers of Commerce and Industry (FICCI).
Recently, FICCI formed a panel called "FICCI-Cascade" that expands into a committee on anti-smuggling and counterfeiting activities destroying the economy.
According to a report by think tank Indiaforensic Research Foundation, the total loss to the economy annually due to crimes such as counterfeiting, commercial fraud, smuggling, drug trafficking, bank fraud, tax evasion and graft is estimated at Rs 22,528 crore.
"A lot of counterfeit Dabur products are made in China. We have conducted at least 20 raids in China but no proper action has been taken by the Chinese," said Ashok Jain, general manager of finance at Dabur India, the country's fourth-largest FMCG firm. He said such fake products manufactured in China with "Made-in-India" tag are supplied across the world, mostly in India and African countries.
"It causes huge damage to the brand. Those fake products are obviously not up to our standards and supplied at very low prices," Jain told media.
Dabur, which has nearly $4 billion market capitalisation, operates in key consumer product categories like healthcare, skin care, hair care and oral care. The company's revenue last fiscal was $910 million.
Pradeep Dixit, a senior official of ITC, a $33-billion conglomerate, said the popular FMCG brands of the company were counterfeited by unscrupulous firms and supplied in domestic as well as foreign markets.
"Our popular cigarette brand is faked and supplied widely in the states like Chhattisgarh, Bihar and Uttar Pradesh," he said.
"China is a big problem everybody is facing," said S.K. Goel, chairman of the Central Board of Excise and Customs, told IANS. Goel said the big international brands like Nokia, Adidas, Reebok and Nivea were also widely counterfeited in China and supplied in India and other parts of the world. Chinese manufacturers are also faking drugs, endangering lives of patients.
Fake drugs, carrying "Made in India" tags, supplied from China were recently detained in Nigeria and other African countries.
KK Vyas, Delhi's deputy commissioner of police (crime), said the police have seized and confiscated a lot of fake and counterfeited products of popular brands in the national capital recently. Vyas emphasised on the need for enhancing punishment for unscrupulous manufacturers and importers. "Punishment needs to be enhanced. Also there is need that judiciary addresses these issues quickly."
"Counterfeiting is a big menace. It is hurting everybody - consumers, industry and the exchequer," said Anil Rajput, chairman of the anti-smuggling and anti-counterfeiting committee of Federation of Indian Chambers of Commerce and Industry (FICCI).
Recently, FICCI formed a panel called "FICCI-Cascade" that expands into a committee on anti-smuggling and counterfeiting activities destroying the economy.
According to a report by think tank Indiaforensic Research Foundation, the total loss to the economy annually due to crimes such as counterfeiting, commercial fraud, smuggling, drug trafficking, bank fraud, tax evasion and graft is estimated at Rs 22,528 crore.
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