Issue 166

WEEKLY MEDIA UPDATE 01 December, 2014 Monday

(This document comprises news clips from various media in which BalmerLawrie is mentioned, news related to GOI and PSEs, and news from the verticals that we do business in. This will be e-mailedon every Monday.)

Panel recommends formation of PSU disinvestment: Govt to auction company to revive sick PSUs: Govt rights

A government-appointed committee has The Government has decided to auction its recommended formation of a company to revive rights entitlement in public sector companies sick CPSEs. The Committee headed by NTPC tapping the capital market. The Industry Chairman Arup Roy Choudhury was to examine Ministry has decided to invite bids from the possibility of formation of a joint venture institutional investors to buy its rights company funded by seed equity from Maharatna entitlement in public offerings of PSUs. In the and other cash-rich central public sector process, the government has ensured that the enterprises (CPSEs) to administer and manage premiums offered on the renunciation will flow sick state-run enterprises that can be revived. to its kitty, and help bridge the budget deficit. The first instance where the government has "The Committee has submitted its report in decided to auction its rights entitlement is that October 2014. The report has given, inter alia, an of Bharat Earth Movers Ltd (BEML). analysis of sick CPSEs and recommended formation of a company to revive sick CPSEs," 60% cap for inter-corporate loans in new Co.s Union Heavy Industries & Public Enterprises Bill. The Department of Company Affairs has Minister Anant Geete informed the Lok Sabha in a incorporated several path-breaking proposals in written reply. the amended Companies Bill, 1993, such as - 25.11.2014 introduction of non-voting shares and a higher http://www.business-standard.com/article/pti- ceiling of 60 per cent for inter-corporate loans stories/panel-recommends-formation-of-company- and investments. to-revive-sick-psus-govt-114112501266_1.html Business Line - 26.11.2014 http://www.thehindubusinessline.com/opinion/ psu-disinvestment-govt-to-auction- rights/article6636773.ece

PSUs may have to buy 20 pc of Over 275 independent directorships requirements from MSMEs vacant at NSE-listed companies

The government is planning to make it mandatory As many as 277 independent directorship for all public sector units (PSUs) to purchase 20% positions have fallen vacant in NSE-listed firms of their requirements from micro, small and since February, when Sebi decided to restrict medium enterprises, MSME minister Kalraj Mishra the number of companies such directors can said on Sunday. Mishra also said that definition of serve. Further, six independent directorship MSME—in terms of turnover—would be amended positions need to be vacated in NSE-listed under a new policy that was in the offing. He companies to comply with Sebi norms. These made the announcements at an industrial position are currently occupied by 5 persons, exhibition organised by the Vadodara Chamber of as per the latest report by indianboards.com. Commerce and Industries. Under the market regulator's corporate The MSME ministry was also in talks with public governance norms, a person can serve as an sector banks to facilitate loans for the MSMEs at independent director on boards of a maximum base interest rates, he said, adding that he had seven listed companies. Besides, if an written to the finance minister Arun Jaitley in this individual is a whole-time director in a listed regard. “We have drawn up an ambitious plan to firm, he can serve as an independent director open incubation centres in 500 districts ... we in a maximum of three companies. According would also open 100 high-technology incubation to indianboards.com, a joint initiative of Prime centres. We want to instill confidence among Database and NSE, the Sebi norms have unemployed youth so that they can become resulted in as many as 277 independent independent,” said Mishra. directorship positions being vacated at the Live Mint - 30.11.2014 companies listed on the exchange since http://www.livemint.com/Industry/lBIySWFVKVrM February, when the capital markets regulator MhBioMLTrN/PSUs-may-have-to-buy-20-pc-of- first made this announcement. requirements-from-MSMEs.html Economic Times - 25.11.2014 http://articles.economictimes.indiatimes.com/2 014-11-25/news/56455231_1_sebi-norms-nse- listed-companies-directorship

CIL, ONGC disinvestment likely to be in 2 Government launches 'Swachh Bharat tranches Kosh' to channelise public funds

The government plans to offload a part of its stake The government today launched the 'Swachh in Coal and ONGC in two tranches to get a Bharat Kosh', a fund that will be utilised to fair value of the equity, official sources said. build toilets in schools, rural and urban areas to Dates for sale of its stake in Coal India and ONGC achieve the objective of cleanliness across the will be decided after studying the market country. The fund would seek "channelisation conditions, they added. of philanthropic contributions and Corporate Social Responsibility (CSR) funds", according to The Cabinet has approved 5 per cent stake sale in the guidelines issued by the government. ONGC, which could fetch an estimated Rs 11,477 "The Kosh will be used to achieve the objective crore to the exchequer. A 10 per cent divestment of improving cleanliness levels in rural and in Coal India could garner an estimated Rs 15,740 urban areas, including in schools. It may also crore. "Government may decide to split the share be enabled to bring out innovative/unique sale of Coal India and ONGC in tranches as prices projects and girl toilets will be the priority area are undervalued," official sources said.As regards to start with," the guidelines said. the date for stake sale, they said it will be decided The Economic Times- 25.11.2014 after taking into consideration market conditions. http://economictimes.indiatimes.com/news/eco Business Today - 25.11.2014 nomy/policy/government-launches-swachh- http://businesstoday.intoday.in/story/coal-india- bharat-kosh-to-channelise-public- divestment-dates-ongc/1/212696.html funds/articleshow/45271980.cms

Government Takes Steps to Increase Attorney general’s opinion sought on Coastal Movement of Cargo new tariff for old cargo handlers

The Minister of State for Shipping, Shri Pon. The shipping ministry has sought the opinion of Radhakrishnan informed the Lok Sabha today that the attorney general on migrating old cargo the following steps have been taken by the handlers to a new market-linked rate regime to increase the coastal announced in July 2013 for new projects. A movement of cargo in the country: critical issue in this exercise is how to deal with (i) A River-Sea Vessel (RSV) Notification for the surplus earned by these terminal operators moderating the technical and manning that’s Rs.2,000 crore more than what is requirements for such vessels operating within the permitted. Some 16 cargo-handling facilities Indian territorial waters was issued by the run by private firms including global entities Directorate General of Shipping on July 31, 2013. such as DP World Ltd, APM Terminals (ii) Directorate General of Shipping has issued an Management BV and PSA International Pte Ltd order declaring the Inland Vessel (IV) limits for are governed by tariff-setting guidelines facilitating coastal trade operations. (iii) Coastal framed by the ministry in 2005. The Shipping Rules for coastal vessels operating within government framed fresh tariff-setting norms 20 miles off the coast have been issued by the in July 2013 for projects bid out since that Directorate General of Shipping on March 4, 2014. date. This has led to demand from old private (iv) Green Channel facility is being provided at cargo handling firms to migrate to the new major ports for faster evacuation of coastal cargo. regime to create a level-playing field. The (v) Major ports have been directed to provide ministry has been discussing the migration priority berthing to coastal vessels to reduce terms with the private terminal operators for waiting times of such vessels at the major ports. many months without reaching a conclusion. Business Standard- 27.11.2014 Mint - 24.11.2014 http://www.business- http://www.livemint.com/Companies/1lyQOKm standard.com/article/government-press- zt30x1wPRpPSJKO/Attorney-generals-opinion- release/government-takes-steps-to-increase- sought-on-new-tariff-for-old-carg.html coastal-movement-of-cargo- 114112700645_1.html

Government revising British era rule to Multimodal transport: Don’t depend make docking cheaper for container solely on private investors, develop ships better network

India is overhauling a British era rule to make it Shipping and Road Transport Minister Nitin cheaper for container ships docking on Indian Gadkari recently said his ministry is working on ports and in the process enhance ease of doing a new multimodal transport policy. The basic business in the country. The government is idea, he said, is to have an integrated approach revising the norms for levying facilitation charges to the development of transport infrastructure. on shippers, which have had to pay light dues for It is risky to comment on a policy, the details navigational aids under the Light House Act 1927. of which are yet to be spelt out. Yet, flagging of The dues have so far been calculated by some relevant issues could help stakeholders measuring each ship's tonnage manually, which to ponder over and respond. The very purpose took a lot of time and increased transaction costs. of multimodal system – movement of goods by "Mother vessels were discouraged to call on our modes such as road, rail, air and water – is to coastline because of these charges, which would ensure seamless flow of passenger and cargo run into several lakhs of rupees at times and traffic. Policy initiatives- It also enables a single cause inordinate delays as well," a senior operator to undertake transport of goods by government official said. different modes from the origin (sender) to the The Economic Times - 27.11.2014 destination (receiver). http://economictimes.indiatimes.com/industry/tra The Hindi Business Line - 25.11.2014 nsportation/shipping-/-transport/government- http://www.thehindubusinessline.com/industry revising-british-era-rule-to-make-docking- -and-economy/logistics/multimodal-transport- cheaper-for- dont-depend-solely-on-private-investors- containerships/articleshow/45290457.cms develop-better-network/article6633527.ece

10 coastal economic zones to be New Mechanism of Collection of Light developed Dues for Container Ships

In its move to revive the NDA's flagship The Ministry of Shipping has adopted a new Sagarmala (string of ports) project, mechanism for collection of light dues for conceptualized during the Vajpayee regime, the container ships. It has now simplified the government will develop 10 Coastal Economic process of collection of light dues for container Regions (CERs) in the influence zone. The project vessels by adopting the unit of collection on would need Rs 5,000 crore in investment in the TEU (twenty feet equivalent unit) basis instead next five years, which will include modernization of net tonnage in respect of container ships. of ports and efficient evacuation besides Further, the State Bank of India has now been developing CERs. This will come from gross accredited to collect the light dues through budgetary support to create infrastructure and online banking. Both these initiatives will other facilities that would make these zones the facilitate faster clearance of ships and reduce hub for manufacturing and economic activities and detention time of vessels for payment of light to take such activities to the hinterland. dues.

While this will primarily focus on major and minor Ships docking at Indian Ports have been facing ports, government is also pushing its other longer detention times owing to the method agenda to attract private investment in the inland followed for determination of light dues. The waterway sector that can provide a competitive existing process involves taking certain alternative to road and rail network for cargo measurements of cargo on board the ships by transport. The shipping ministry on Wednesday Customs officials and determining the light said 17,300 km of inland waterways will involve dues. This procedure is time consuming and an investment of at least Rs 1 lakh crore in the adds to the transaction cost for the Trade next 5-10 years. While government will invest Business Standard- 27.11.2014 around Rs 20,000 crore, the rest will come from http://www.business- the private sector. standard.com/article/government-press- - 27.11.2014 release/new-mechanism-of-collection-of-light- http://timesofindia.indiatimes.com/india/10- dues-for-container-ships- coastal-economic-zones-to-be- 114112600476_1.html developed/articleshow/45290865.cms

India to renew exemption granted to Shipping reforms: Duty cuts, port vessel sharing pacts of container lines development on government agenda

India is set to renew the exemption granted to The government plans to remove the 25-30 vessel sharing agreements (VSAs) among percent customs duty levied on fuels used by container shipping lines from the provisions of the Indian ships and ease other logistical hurdles to country’s antitrust law. The initial exemption given push for more usage of the sea route for both for a one-year period ends on 10 December. A domestic and international cargo, official meeting held by the government with the sources said. The move follows Shipping stakeholders earlier this month to review the Minister ’s plans to develop the functioning of VSAs took note of the fact that sector that is seen as essential in providing the there were no complaints against such much-needed connectivity for Prime Minister agreements during the year-long exemption ’s ‘Make in India’ campaign to period. It did not put barriers for new entities into transport goods manufactured in India in a joining such agreements nor did it adversely cost-effective way. impact the existing shipping business and hurt competition. In fact, VSAs offer a realistic “We have managed to convince the finance prospect for small companies to emerge, operate ministry’s revenue department to relax the 25- and gain from tying up with larger lines. VSAs 30 percent tax on fuels used by trans-shipment promote free competition as most liner shipping ships sporting the Indian flag when they ferry firms render service under such agreements. In its items to and from Indian ports,” a senior absence, cargo will eventually be carried by only a official told IANS, not wishing to be named. few carriers in the liner shipping industry. “During a presentation we made recently, the Globally, such pacts seek to improve productivity prime minister apparently was surprised that and frequency of sailings and port calls, improve such a levy was being imposed. He was in scheduling through the use of more modern favour of removing such a tax, which is more vessels and other equipment, including port of an irritant than any revenue-generating facilities. proposition,” he said. Mint - 27.11.2014 The Hindu - 30.11.2014 http://www.livemint.com/Opinion/rWfrbAzCEbFFY http://www.thehindu.com/business/shipping- KoCiYBVaP/India-to-renew-exemption-granted-to- reforms-duty-cuts-port-development-on- vessel-sharing-pacts-of.html government-agenda/article6648743.ece

Indian Railways to hike container Building Railways to Ports: Why This haulage charges from December 5th is Priority for PM Modi

Mr Sachin Bhanushali, General Secretary of India is targeting up to $1 billion of private Association of Container Train Operators, said that investment by 2017 to build rail lines linking “The sharpest increase is proposed for containers ports and national networks to ease growing that carry 30 tonne and more, while movement of congestion, which has delayed coal imports for empty wagons, empty containers, and containers power plants and contributed to a power supply weighing up to 10 tonnes is set to go up by 41%.” crisis. Such investment would more than double the $400 million that the state-owned He is also the President of Gateway Rail Freight railways have attracted in the decade since Limited. The ACTO, which includes Container they allowed limited private participation and Corporation of India and Gateway Distriparks as help fund crucial "last mile" links to ports. its members, has already taken up the issue with the Railway Board. The Railways has also imposed The cash-starved British-built rail system has a 10% congestion surcharge on rail traffic added just 11,000 kilometres (6,800 miles) of originating in all ports. About 55% of container track in the 67 years since independence, and traffic originates in ports. If the operators were to the network has come to symbolise the poor pass on the hike with congestion surcharge to state of the country's infrastructure. China has customers, this would mean an increase of 30% to managed 14,000 km of new lines in the five 54% for all container imports using train services. years to 2011. Steel Guru - 30.11.2014 NDTV Profit - 24.11.2014 http://www.steelguru.com/indian_news/Indian_Ra http://profit.ndtv.com/news/economy/article- ilways_to_hike_container_haulage_charges_from_ building-railways-to-ports-why-this-is-priority- December_5th/353550.html for-pm-modi-702697

Upgradation of Railways’ E-Ticketing Two airline start-ups plan to launch in System summer 2015

A new State-of-the-Art Data Centre has been set Premier Airways Ltd, promoted by a non- up by Indian Railway Catering & Tourism resident Indian (NRI), and Air One Aviation Pvt. Corporation to improve the efficiency of the Ltd, founded by a former Air Sahara president, website for booking of e-tickets. Further, the e- are expected to take to the skies by summer ticketing system has been upgraded with the next year, joining over half-a-dozen Indian launch of the NextGeneration E-ticketing System airlines. The launch of the two new national (NGeT). This new e-ticketing system has an airlines, following that of another, Vistara, enhanced capacity of booking 7200 tickets in a promoted by Tata group and Singapore Airlines minute as against the capacity of 2000 tickets per Ltd, expected in a few weeks, and the minute of the old system. In the new system expansion of fledgling Air Asia India Pvt. Ltd 1,20,000 concurrent users can login at a time and could fuel another aviation boom in the simultaneously book e-tickets against the earlier country. It will lead to more flights, lower capacity of 40,000 concurrent users at a time. prices, demand for trained crew and ground This information was given by the Minister of staff, even an increase in finance and leasing State for Railways Shri Manoj Sinha in written activities. India’s new civil aviation minister, reply to a question in Lok Sabha yesterday Ashok Gajapathi Raju, gave six new airlines Pib.nic.in- 29.11.2014 permission to fly in July, overturning an pib.nic.in/newsite/PrintRelease.aspx?relid=111995 unwritten policy of his predecessors to limit such licences. Mint - 25.11.2014 http://www.livemint.com/Companies/tztRopalY n7p5US9xoY8GN/Two-airline-startups-plan-to- launch-in-summer-2015.html

Requests for qualification for airport Now, a dedicated air cargo service for privatisation scrapped Northeast

The NDA government has cancelled the requests The landlocked Northeast region of the country for qualification (RFQs) for privatisation of six is expected to get a dedicated air cargo service airports mooted by the erstwhile UPA regime, soon, to cater to the business community's Rajya Sabha was informed today. "The RFQs, needs for fast movement of goods to and fro. which were earlier issued for public-private Mumbai-based Sovika Aviation Services said on partnership (PPP) at six airports, have been Sunday it would launch a dedicated cargo cancelled," Minister of State for Civil Aviation airline service to cater to all major airports of Mahesh Sharma said in a written reply. The UPA-II the northeastern states from February 2015. government had early last year launched the PPP process for modernising six airports at Kolkata, Speaking to Business Standard, Hemant Chennai, Jaipur, Guwahati, Ahmedabad and Anand, vice-president of the company, said . However, Sharma said the government although there was huge movement of goods "intends to take up" development and to and from the Northeast at present, there modernisation of the airports at Ahmedabad and was no daily dedicated cargo airline service for Jaipur through the PPP mode, though the RFQs for the region. "Most likely by mid-February next them have "not been issued". year, we will be starting this cargo and freight service. We are very serious about this In-principle approvals have also been granted for business and have done our homework well," setting up 15 greenfield airports in the country, he said Anand. He was in the city to attend the said. To a question that some airports have been North East Connectivity Summit, organised by recently modernised but no flights operate there, the Federation of Indian Chambers of Sharma said there were ten such airports across Commerce and Industry. the country. Business Standard - 1.12.2014 Business Standard - 25.11.2014 http://www.business- http://www.business-standard.com/article/pti- standard.com/article/companies/now-a- stories/requests-for-qualification-for-airport- dedicated-air-cargo-service-for-northeast- privatisation-scrapped-114112500920_1.html 114120100056_1.html

Airlines eye tech partners to tap ATF price cut to help airlines save big customer data With state-owned marketing companies Airlines are seeking to work more closely with reducing the prices of aviation turbine fuel travel technology companies to mine customer (ATF) to Rs 59,943 a kilolitre from December 1 data for ways to generate more revenue beyond - 4.1 per cent lower than the previous month - ticket sales, emulating other industries already domestic airlines' fuel bill in the second half of using such methods. While retailers have 2014-15 is estimated to come down by a implemented ever more ingenious ways to make combined Rs 1,200 crore. ATF for domestic better use of customer data, both online and carriers has become 11.22 per cent cheaper since October and is expected to see more offline, many airlines have been slower off the price cuts in the next three months. According mark, only recently looking to harvest more to estimates by the Centre for Asia Pacific profitably wealth of information provided by their Aviation (Capa), fuel costs could fall by an frequent-flyer loyalty schemes. average 15 per cent in the January-March period. So, the average decline in fuel bill the "Revenue from the ticket is barely covering costs last six months of the financial year could be these days," Uwe Klenovsky, commercial director 12-13 per cent. Since ATF accounts for over 50 of Thomas Cook Airlines, said at the CAPA World per cent of domestic carriers' operating costs, Aviation Summit in Antwerp. The International Air this implies a substantial six per cent fall in Transport Association (IATA) forecasts that global their costs during the period. Airlines had airlines will achieve a net profit margin of only bought Rs 18,674 crore worth of ATF for 2.4% this year, higher than 2013 but a long way domestic flights last financial year. from the 10% margins in the 1960s. Business Standard - 1.12.2014 The Times of India - 24.11.2014 http://www.business- http://timesofindia.indiatimes.com/tech/it- standard.com/article/companies/atf-price-cut- services/Airlines-eye-tech-partners-to-tap- to-help-airlines-save-big- customer-data/articleshow/45256969.cms 114120100047_1.html

64-year old Planning Commission to be Three new secretaries appointed replaced by December The government has appointed three new Work has moved into top gear for finalising the secretaries in the Shipping, Overseas Indian name and structure for the new institution that Affairs and Corporate Affairs Ministry. Senior will replace the 64-year old Planning Commission IAS officers Rajive Kumar and Sunil Soni have and the same may be unveiled this December. been appointed as Secretary in Shipping and "The Prime Minister has convened a meeting of Overseas Indian Affairs Ministry respectively. the Chief Ministers on December 7 to seek their Anjuly Chib Duggal, a 1981 batch IAS officer of view points on the structure of the institution Punjab cadre, has also been appointed as which would ultimately replace the Planning Secretary in Corporate Affairs Ministry, an Commission," an official source said. order issued by the Department of Personnel Deccan Herald – 1.12.2014 and Training (DoPT) said. http://www.deccanherald.com/content/444722/pl Business Standard - 25.11.2014 anning-commission-replacement-likely-dec.html http://www.business-standard.com/article/pti- stories/three-new-secretaries-appointed- 114112500421_1.html

Government to clamp down on CSR Speedy reforms good for India's activities of tobacco companies; disallow sovereign rating: Moody's ads on mobile, Internet Rating agency Moody's Investors Service Tobacco companies, already in the frying pan Wednesday said the sovereign outlook for the because of an impending ban on the sale of loose country remains stable at Baa3, but future cigarettes, may be about to be tossed into the fire rating trends depend on the reform measures in the coming weeks with the government taken by the government. "Sovereign credit planning to bar them from using their social rating trends in 2015 will depend on the extent outreach activities to earn goodwill. to which the government addresses high fiscal expenditures, recurrent food price inflation, The government's planned new anti-tobacco and wide infrastructure deficit," Moody's said in legislation, news of which sent cigarette stocks a report. crashing on Tuesday, will discourage manufacturers from "earning goodwill" through All the three big international rating agencies their legally mandated Corporate Social such as S&P, Moody's and Fitch have BBB Responsibility (CSR) activities, officials familiar ratings on the country's sovereign with a stable with its drafting have told ET. This could choke off outlook. The current rating is closest to junk the few remaining outlets for earning societal status or below investment grade. The report goodwill for these firms, which have traditionally says the government's ability and willingness tended to publicise their social outreach efforts not to undertake structural reforms will have a least because of strict curbs on advertising and bearing on the credit rating outlook of the marketing their products. country. Economic Times - 27.11.2014 Zee News - 26.11.2014 http://articles.economictimes.indiatimes.com/201 http://zeenews.india.com/business/news/econo 4-11-27/news/56515321_1_tobacco-companies- my/speedy-reforms-good-for--sovereign- tobacco-consumption-tobacco-promotion rating-moodys_112793.html

E-governance in 2.5 lakh villages by Petrol price cut by 91 paise per litre, March 2016 diesel by 84 paise

Governance services offered over digital platforms Petrol price was cut by 91 paise a litre on will become operational across 250,000 gram Sunday, the seventh reduction since August, panchayats (village councils) by March 2016 as and diesel by 84 paise per litre, the third the National Optical Fibre Network (NOFN) project straight cut, as international oil rates continued is slated to be completed by then. Prime Minister’s to slump. Petrol and diesel price reduction will Office has asked the communications ministry to be effective midnight, Indian Oil Corp, the revise the NOFN’s deadline to connect 250,000 nation's largest fuel retailer, announced here. gram panchayats to March 2016 from December In Delhi, petrol price will cost Rs 63.33 a litre 2016 at present. NOFN is supposed to do e- as compared to Rs 64.24 per litre previously governance what the national highways did to while in Mumbai the reduction will be 96 paise road transport—connect remote villages, improve to Rs 70.95 per litre. Diesel will cost Rs 52.51 a access to healthcare, education and business litre in Delhi from Monday as against Rs 53.35 opportunities. The previous government missed its currently while in Mumbai the price will be cut March 2014 deadline to connect 100,000 gram by 93 paise to Rs 60.11 per litre. Rates differ panchayats and was only able to connect 60 gram from state to state due to differential local panchayats by optical fibre till May this year. sales tax or VAT rates. Hindustan Times - 26.11.2014 Times of India - 30.11.2014 http://www.hindustantimes.com/business- http://timesofindia.indiatimes.com/india/Petrol news/e-governance-in-2-5-lakh-villages-by- -price-cut-by-91-paise-per-litre-diesel-by-84- march-2016/article1-1290493.aspx paise/articleshow/45326295.cms