AI wants Rs 17,500 cr more to clean books

To come out of the financial mess, Air India, in its turnaround plan, will be asking for one-time infusion of Rs 17,500 crore from the government. The turnaround plan has been vetted by financial advisory firm Delloite and will be taken up in a board meeting of the airline slated for next month. The matter will then be referred to the government.

“Air India is asking for Rs 17,500 crore to clean its books and start its finances afresh. This demand is huge considering the airline has not been able to perform in the past,” said a senior ministry official, who did not want to be identified.

This government support, which could be in the form of equity infusion and loan waiver, is set to clean Air India’s books, which has a debt of over Rs 40,000 crore on an equity base of Rs 2,145 crore — it received an equity infusion of Rs 800 crore in 2009-10 and Rs 1,200 crore in 2010-11. Out of the Rs 40,000 crore, working capital debt is at Rs 21,000 crore and the rest are loans taken to fund aircraft acquisition.

The national carrier had ordered 111 aircraft worth Rs 46,000 crore and taken deliveries of 80 aircraft till now.

Air India also has an annual interest payment of around Rs 1,800 crore and has accumulated losses of over Rs 15,000 crore. The carrier lost Rs 2,226 crore in 2007-08, Rs 7,189 crore in 2008-09, and Rs 5,551 crore in 2009-10.

The airline is also losing money on a daily basis. Out of the Rs 22 crore the national carrier earns every day, Rs 13.5 crore go to the oil companies and Rs 8 crore to the airport operator and ground handlers and spare-parts companies, leaving the airline with only Rs 50 lakh a day. This translates into only Rs 15 crore a month. The monthly wage bill and interest payment of the airline are about Rs 250 crore and Rs 150 crore.

The five-year turnaround plan also talks about Air India increasing domestic market share to over 30 per cent, operating a fleet of 280 aircraft and around 10 per cent of its employees retiring.

The national carrier with a fleet of 130 aircraft is consistently losing its market share in the domestic sector and flew only 15.4 per cent of the total passengers in January.

The report projects that around 2,600 employees of the airline will retire from the airline in the coming three-year period. Currently, Air India has around 30,000 employees and the airline also plans to shift people to these subsidiaries. It has created a ground-handling subsidiary called Air India-Singapore Airport Terminal Services and is awaiting Cabinet approval for an aircraft maintenance subsidiary called Air India Engineering Service.

Source:-http://www.business-standard.com/india/news/ai-wants-rs-17500-cr-more-to-clean-books/426480/

Bihar CM Nitish Kumar ready to introduce Right to Service Bill

Police verification report for passports in seven days, postmortem report in three days and caste certificate in a fortnight! And if there is a fault in your electricity connection, it will be repaired within four hours.

All this sounds unbelievable for an Indian state notorious for corruption and red tape over the years. But then, the Nitish Kumar government in Bihar is ready to introduce the Right to Service Bill during the Budget session of the assembly that began on Tuesday. The Bill seeks to weed out graft and bring about transparency in governance.

The draft Bill proposes to make it mandatory for state officials to get the work of the common man done within a specific timeframe or face a penalty of up to Rs 5,000.

The chief minister has already held two rounds of meetings over the draft Bill.

"Under its provisions, public utility services will be provided to the people within a stipulated timeframe," he said. "If government employees or officials fail to ensure that, they will have to pay penalty."

Nitish said people would no longer have to run around offices greasing the palms of employees to get their work done once the Right to Service Act was enacted in the state.

According to sources, the state government may also constitute a State Public Service Delivery Commission for achieving the objectives of the proposed Act. The draft Bill includes all those services for which people run from pillar to post for days.

The Bill proposes to impose a fine of Rs 250 per day that can go up to Rs 5,000, which will be deducted from the salaries of the defaulting employees.

The Bill also has provisions for the aggrieved party to go for appeal. Any person, whose application is rejected or who is not provided the service within the stipulated time limit, may file an appeal to the first appeal officer within 30 days.

The first appeal officer may order the designated officer to provide the service within the specified period or reject the appeal, after which the person can go for a second appeal.

Quick service

• 7 days police verification for passports
• 3 days postmortem report
• 30 days new electricity connection
• 4 hours electricity fault repair in urban areas
• 24 hours electricity fault repair in rural areas
• 30 days scholarships in academic institutions
• 30 days caste, income, residential certificates (15 days if recommended by employee)
• 30 days licence to open retail shop for seeds
• 30 days driving licence, renewal
• 60 days new ration card
• 45 days new holding tax

Source:-http://indiatoday.intoday.in/site/Story/130658/top-stories/bihar-cm-nitish-kumar-ready-to-introduce-right-to-service-bill.html

PMO favours joint mining by NTPC, RPower in Jharkhand

THE prime minister’s office has recommended that NTPC and Reliance Power should jointly mine adjacent coal blocks in Jharkhand to help them extract about 200 million tonnes of additional coal that would have been lost if the mines were delineated and drilled independently, government and company officials said. The proposal also has the backing of Parliament’s standing committee on coal. 

NTPC chairman and managing director Arup Roy Choudhury told ET that the company has found merit in the proposal. “It is a good proposal. But we have to examine it closely since we would start production much ahead of them. These evaluations would take some time,” he said. 

As per statutory norms, companies owning different blocks are required to maintain a “safety angle” between the blocks, reducing the amount of coal they can extract. 

A Reliance Power spokesperson confirmed the development and said: “This is the optimum way to mine coal for promoting coal conservation. We look forward to discussing with NTPC on how to co-ordinate mining operations.” 

Reliance Power had sought government’s approval for joint exploration of coal mines attached with Tilaiya ultra mega power project and NTPC’s Kerandari Aand Pakri Barwadih blocks. Tilaiya blocks – Kerandari B and Kerandari C – lie in between NTPC’s Kerandari A and Pakri Barwadih blocks. 

“The proposal has been recommended by PMO and the standing committee on coal. We have written to the power ministry seeking directions to NTPC for the same. The two companies should now be working toward a strategy to extract coal blocked in barriers and batters in their respective coalfields. They will have to get the strategy approved by the government,” a coal ministry official said.

Source: Article Window

A Rs 10,000cr kerosene black market killed Yeshwant Sonawane

NEW DELHI: A thriving black market in kerosene, estimated to be worth Rs 10,000 crore every year, killed additional collector Yeshwant Sonawane. A litre of kerosene sold at ration shops is often costlier than a bottle of packaged water. Most of this "poor man's fuel" is pilfered and sold in the black market for a price that's two or three times higher.

It's really money for jam. Sonawane tried to meddle with this lucrative illegality and paid with his life. Actually, most enforcement officers make peace with the fuel mafia and get some crumbs from the mafia. It would appear Sonawane didn't.

The oil ministry has tried to work out the maths of this black market. According to its estimates — said to be conservative — as much as 40% of the kerosene supplied for the poor is siphoned off by "organized gangs of mafia proportion". But even going by this estimate, the illegal trade is humungous.

Here's a quick calculation. State-run oil companies annually supply 9-10 million tonne of the fuel for sale through ration shops; 40% of that means almost 4 million tonne — or about 5200,000,000 litres of kerosene — is flowing into the parallel market. At around Rs 31 per litre in the open market, this trade is worth Rs 16,120 crore. That's why the official estimate (done in 2006) is said to be conservative.

"Even at the government-capped price, the value of this diverted kerosene will be huge. Add to that the money these fuel gangs would be making by selling it in the black market for more than twice the controlled price, and you will get a really large trade involving thousands of people," said a senior marketing executive of biggest fuel retailer IndianOil Corporation said.

An interim report by National Council of Applied Economic Research (NCAER) had in 2005-06 said nearly 4-5 million kilolitres of kerosene was being diverted every year. It had put the stakes at Rs 10,000 crore at the time when consumption levels were hovering a tad higher at 10-11 million tonne a year.

Around the same time, a study by National Institute of Public Finance and Planning (NIPFP) said government subsidy gave kerosene an undue price advantage against other fuels and created ground for diversion. The NIPFP study also said kerosene and cooking gas subsidies benefit semi-urban and urban consumers more, respectively, rather than the rural poor. "Decades of subsidies have failed to shift the fuel consumption patterns away from biomass in rural areas."

Oil company executives said about 20% of the total kerosene supplied to the ration shops are used for adulteration of diesel and lubricants used by truckers. Now a substantial quantity is smuggled to Bangladesh, Nepal and Bhutan as the fuel is priced much higher in those countries. "When the studies were being conducted, kerosene was even being smuggled to Sri Lanka. But it may not be the case now," the IOC executive said.

Oil company executives say that about a third of the diverted kerosene is used as fuel (no doubt, by the poor at a hefty premium). The remaining quantity is used for adulteration or is smuggled out of the country. Usually adulteration with diesel is done in the ratio of 30:70 but in cases it can go upto almost half. "It all depends on how quick a buck the adulterator wants to make or on the diesel supply position," one executive said.

Source:-http://timesofindia.indiatimes.com/india/A-Rs-10000cr-kerosene-black-market-killed-Yeshwant-Sonawane/articleshow/7368515.cms

Kiran Reddy avoids Jagan 'bait'

HYDERABAD: A day after his belligerent posturing against Jaganmohan Reddy, chief minister Kiran Kumar Reddy found himself in a tight corner. Having realised that his bravado of challenging the Jagan camp MLAs to resign and get themselves re-elected had backfired on him as it would reduce his government into a minority, the CM tried to buy peace by merely saying that his government's immediate focus is Rachchabanda and nothing else.

Making a quick somersault, the CM said on Sunday, "raat gayi, baat gayi (the issue is over and there's nothing to discuss)."

Kiran had earlier launched a broadside in Delhi on Jagan campers by asking them to quit the party and asserting that his government was not surviving at the mercy of any leader (read Jagan).

The CM was ill at ease here on Sunday while interacting with media personnel on the Rachchabanda programme, which was aimed at bringing the administration to the doorstep of the comman man. Refusing to entertain questions on his vituperative attack on Jagan and other issues, Kiran said: "Let us not talk about anything else other than Rachchabanda programme."

The CM even brushed aside queries on former minister and his bete noire Peddireddy Ramachandra Reddy who defiantly said that he would not allow Rachchabanda to be conducted in the CM's home turf of Chittoor district. " I am only appealing to all public representatives not to politicise the programme since it is aimed at bringing benefits to 1.25 crore people who are below the poverty line," the chief minister said. When asked whether he would stand by his challenge and what he said to the media in Delhi, he merely smiled and said, "raat gayi, baat gayi." While the import of his reply is anybody's guess as the CM is not in a position to dictate terms to any leader at this stage, minister for civil supplies D Sridhar Babu came to his rescue by saying that no motives should be attributed to the remark of the CM as it was made in a "different context."

Meanwhile, the CM listed out the various programmes that would be taken up during the Rachchabanda which would be launched from Srikakulam district on Monday and would continue till February 12. He said he would tour all districts including the 10 Telangana districts as part of the programme. He said the programme would cost the government Rs 2,500 crore and already Rs 1,200 crore has been released.

Source:-http://timesofindia.indiatimes.com/india/Kiran-Reddy-avoids-Jagan-bait/articleshow/7350573.cms