Baja Electricals share soars 5% up at Rs183.10 in early trade Thursday as the company said it won three power distribution projects in Bihar worth Rs757 crore
Bajaj Electricals Ltd has said its engineering and project business unit had won power distribution projects worth Rs757 crore in Bihar under Rajiv Gandhi Gramin Vidyutikaran Yojna Scheme (RGGVY). Following a regulatory filing by the company, its share rose 5% to Rs183.1 on the BSE in early trade Thursday.
Bajaj Electricals said it won total three power distribution projects of three districts – Kishanganj (Rs213.43 crore), Purnia (Rs354.42 crore) and Bhojpur (Rs189.09 crore) Project.
The projects were awarded by North Bihar Power Distribution Company and South Bihar Power Distribution Company, which includes construction of new line, providing power supply to substations of district and to give connections in villages to BPL (Below Poverty Line) families.
At 12.45pm, Bajaj Electricals was trading 4.1% up at Rs178 on BSE while Benchmark S&P BSE Sensex was marginally up at 21,119.6.
While a few last minute approvals and clearances are expected shortly, NTPC is now set to get coal from its own captive mines at Pakri Barwadih coal block in Jharkhand, a major step in the right direction
NTPC is India's largest power generator whose coal requirement for 2013-14 is estimated at 178 million tonnes. Though the supplies from Coal India have been regular, in order to ensure that there are no interruptions in power generation and supplies, NTPC had to import 5% of its requirement in the first half this fiscal year, amounting to 7.3 million tonnes. At the end of the year, this may be close to 9% of its total requirement!
Roughly 85% of its fuel requirement is met by coal and for the balance, gas supplies from Reliance (D-6 block) was signed in 2009 and the Empowered Group of Ministers (eGoM) allocated 4.46 million standard cubic metres per day (mmscmd); of this, 2.30 mmscmd comes from Reliance. The current supply contract actually expires in March 2014 and NTPC has sought its continuance as it is essential to keep its power stations at Anta, Auriya, Dadri and Faridabad going. No firm commitment has been received, but Reliance is asking for changes to be made in the GSPA (gas sale and purchase agreement). This matter is now with the ministry to resolve the issue.
In the meantime, NTPC had received allocation of coal mine blocks for its own requirements. While a few last minute approvals and clearances are expected shortly, NTPC is now set to get coal from its own captive mines at Pakri Barwadih coal block in Jharkhand. This is a major step in the right direction.
Congratulations to NTPC for making this breakthrough. This is bound to generate serious efforts by others to follow suit.
Once final clearance is received, it is envisaged that this coal block could commence its mining operations almost immediately. NTPC hopes to obtain
3 million tonnes in the first year; raise it to 8 million in the next and reach the target of 15 million tonnes by the third. It will be a splendid achievement, if they can achieve these production targets.
However, because of the projected increase in the consumption of coal due to increased power generation planned, it is estimated that, despite captive coal mines, NTPC foresees the need to import 16 million tonnes of coal in 2013-14 and raise it to 22 million tonnes by 2015-16. By this time, as the captive mines are expected to be fully operative, import is likely to be reduced to 12 million tonnes by 2016-17.
Apart from Pakri Barawadih, NTPC has also received three other coal blocks
viz Kerandari, Chhatti Baritu and Chhati Bariatu II. On the top of these blocks, government has announced allocation of additional four blocks, two each in
Chhattisgarh (Banai and Bhalmula) and Odisha (Chanribila and Kudanali-
Laburi). These four blocks are estimated to hold coal reserves of about 2 billion tonnes.
Moneylife has been covering these coal-related issues on a regular basis. So far, statistical and geological data available indicates that India has proven coal reserves of over 60 billion tonnes and yet due to lack of a focussed approach to develop our own resources, we continue to import billions of dollars worth of coal from countries like Indonesia and Mozambique.
Imports are contingency measures but what we need is to actively and seriously work on our own mines rather than spend precious foreign exchange. It may be better to acquire sophisticated machinery and technology to dig into our own resources for safety. This could be also supplemented by divesting some of these mines to power generators and permit them to develop and increase the output of coal. We need to think of the box, or shall we say "outside the mines?"
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
In India, laws and regulations are in place but implementation is abysmal. The enforcement machinery is extremely toothless. The miniscule penalties that are levied are not at all commensurate with the offence and ill gotten gains
One fails to comprehend the soft peddling attitude of the market regulator Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA) that are adopting ‘kid gloved’ treatment to all kinds of insider trading and illegal activities so blatantly and overtly practiced by some of the big ticket operators here. On the other hand, the US authorities move toughly and succeed in nailing against the likes of SAC Capital that once reigned the hedge fund world (founder Steven A Cohen was listed by Forbes as being worth $8.8 billion), Rajat Gupta and Enron.
Earlier, Rajat Gupta, former director of Goldman Sachs was ordered by the court to pay a hefty $13.9 million fine along with a life time bar from associating with brokers, dealers and investment advisors, permanently enjoining him from future violations of the securities law and barring him from serving as director or officer of any public company. This was triple the benefit hedge-fund manager Raj Rajratnam had obtained from the tips Gupta allegedly passed on to him. He is already facing a $5 million fine and a two year prison sentence in a parallel criminal insider trading case.
This comes at a time when both the Justice Department as well as the Securities Exchange Commission (SEC) in the US have been acting really harshly on all the insider trading violators. In the case of SAC Capital, it became the first hedge fund to plead guilty to insider trading after an extensive six-year long dragnet by the regulators who issued stern warnings and imposed fines that totalled $1.8 billion. The Guardian & AP report says, “SAC has agreed to a passel of penalties, which follow a July indictment that ordered a $900 million fine and forfeiture of another $900 million to the federal government, though $616 million that the SAC companies have agreed to pay to settle parallel actions by the SEC… SAC also agreed to accept a 5-year probation period in which any employee seeking to start a new investing business would require government permission in addition to agree to shut down its advisory business that accepts money from outside investors”.
April Brooks, the head of the New York office of the Federal Bureau of Investigation (FBI) is quoted as calling the insider trading at SAC “substantial, pervasive and on a scale without known precedent... nothing short of institutional failure... a work culture at SAC that permitted, if not encouraged insider trading.” The evidence against SAC was so overwhelming and voluminous that it included electronic and instant messages, and court-ordered wiretaps and consensual recordings. She has gone on to indicate that US government regulators, including the Department of Justice, the FBI and the SEC plan to use SAC as a lesson to other fund managers, adding “How your employees make their money is just as important as how much they make.”
The prosecutors’ case is that SAC earned hundreds of millions illegally from 1999 through 2010 when its portfolio managers and analysts traded on inside information from at least 20 known public companies. Preet Bharara, the US attorney for the southern district of New York said, “SAS trafficked in inside information on a scale without precedent in the history of hedge funds”. Half of the about $15 billion in assets that SAC managed as of early this year is said to belong to Cohen and his employees and the rest clients’ money. The SEC, in a separate case, has sought to ban Cohen from the entire securities market for failure to prevent insider trading.
However, in India, the laws and regulations are in place, but implementation is abysmal. The enforcement machinery is extremely toothless. The miniscule penalties that are levied are not at all commensurate with the offence and ill gotten gains. The debarment mechanism is slow and ineffective. So far the biggest ticket Sensex biggies caught red handed have been dilly dallying to buy time when they ought to coughed up crores like the billions penalised by the US Regulators. It is time they bare their teeth a la SEC and US Justice Department.
(Nagesh Kini is a Mumbai-based chartered accountant turned activist.)