Carbon Tax: India, US and others to decide on retaliatory measures

Over 30 countries would meet in Moscow on 21st and 22nd February to take a decision on what retaliatory measures could be taken against EU if it insists on imposing the carbon tax on non-EU flights as there was a “growing agreement” on the matter

New Delhi: India, Russia, the United States, China and other countries would meet in Moscow later this month to decide on whether to take retaliatory measures against the European Union (EU) on its ‘unilateral’ decision to impose carbon tax on air travel.

A strong message was learnt to have been delivered to an EU delegation led by Commissioner for Climate Action Connie Hedegaard on Friday, in which the Indian side is understood to have taken a hard posture on the issue.

The EU has imposed the tax with effect from 1st January, but 26 countries, including India, Russia, China and US, had jointly opposed the move saying it was “inconsistent with the international legal regimes”.

Official sources said over 30 countries would meet in Moscow on 21st and 22nd February to take a decision on what retaliatory measures could be taken against EU if it insists on imposing the carbon tax on non-EU flights as there was a “growing agreement” on the matter.

“Even if only India, Russia and China decide to start charging for over-flights by European carriers or decide to restrict the number of flights being operated by them citing emission concerns, it could have a devastating effect on the European airline industry,” the sources said.

A ‘Delhi Declaration’ was unanimously adopted at the meeting of International Civil Aviation Organization (ICAO) Council and other non-EU Member States here last September.

The declaration had opposed EU’s plan to include all flights by non-EU carriers to and from an airport in the EU territory in its emissions trading system, saying it was inconsistent with applicable international law. It had called upon the EU not to include these flights in its emissions trading system.

Justifying the EU carbon law, Ms Hedegaard said, “It is not just a wild idea” and it entered into force after it was “tried years and years and years to get a global regulation” on carbon emission by airlines.

Interacting with media after a meeting with India’s civil aviation minister Ajit Singh here, she also indicated that EU was willing to consider any global consensus adopted on the European Union Emission Trading System (EU-ETS) issue.

“Basically, my approach, the European approach is to say to our Indian and other counterparts that....(if) you would not like, it will be much more interesting to know what is actually your proposal, your initiatives to get a global way of doing that,” she said.

“That is what we are looking for so many years and (we) need more parties actually to engage,” Ms Hedegaard said.

At Friday’s meeting, the Indian side made it clear that India and many other nations globally had the option of either accepting the new European law or imposing retaliatory measures as the EU was being ‘intransigent’ in its stand, the official sources said.

Maintaining that the EU law “offends Indian sovereignty”, the sources said Indian carriers, which submitted their emission data to the EU in December, have now been told by the government not to do so individually as such data would be, from now on, furnished only by it and only if necessary.

They said the ICAO members and other non-EU nations have decided to continue to work together to oppose the imposition of the EU-ETS on their airlines.

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TRAI begins process for 2G spectrum auction

“Keeping in view the decision taken by the central government in 2011, TRAI shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 service areas by auction,” principal advisor at TRAI, Sudhir Gupta said

New Delhi: Following the Supreme Court order, the Telecom Regulatory Authority of India (TRAI) on Friday started the process of auction of second generation (2G) spectrum and issued a pre-consultation paper on the same seeking views of all stakeholders, reports PTI.

The apex court, in its verdict on Thursday, had asked TRAI to adhere to the central government’s focus on allocation of spectrum only through auction.

“Keeping in view the decision taken by the central government in 2011, TRAI shall make fresh recommendations for grant of licence and allocation of spectrum in 2G band in 22 service areas by auction, as was done for allocation of spectrum in 3G band,” principal advisor at TRAI, Sudhir Gupta, said in a statement.

The Supreme Court in its order on cancellation of 122 2G telecom licenses has asked the government to seek fresh recommendations from TRAI on allocation of licences and spectrum by way of auction. The apex court has given the government a time-frame of four months to complete the process.

It is estimated that 536 Mhz of 2G spectrum will be freed following the cancellation of the 122 licenses.

Almost a year ago, TRAI had recommended fixing the price for 6.2 Mhz of pan-India start-up 2G spectrum at Rs10,972.45 crore, more than six times the cost of Rs1,658 crore at which the spectrum was allocated to new players whose licences have been ordered to be cancelled by the Supreme Court.

The recommended spectrum price varied from circle to circle.

In case of contracted limit, the price ranges from Rs7.60 crore per Mhz in Jammu & Kashmir to Rs187.38 crore per Mhz in Tamil Nadu.

For the additional spectrum, the range is Rs22.89 crore in Jammu & Kashmir to Rs431.95 crore in Andhra Pradesh.

Mr Gupta cited that TRAI has already recommended that all future licences should be unified licences under ‘Spectrum Management and Licensing Framework’ guidelines of May 2010.

Also, it has said that spectrum should be delinked from licence.

“Pursuant to this recommendation, ‘Draft Guidelines for Unified Licensing Regime’ were also placed on TRAI website,” Mr Gupta said.

On the issue of ‘Allocation of spectrum in 2G band in 22 service areas by auction’, TRAI has requested stakeholders to send their comments and suggestions on the issues involved by 15th February.

“Keeping in view the time-bound nature of exercise, no extension of time will be given,” Mr Gupta said.

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PSU banks’ exposure to telecom cos over Rs14,000 crore

Financial services secretary DK Mittal said that though the total funds provided by PSU banks to telecom companies hit by the Supreme Court order was Rs14,345 crore, the amount involved in 122 cases was limited to Rs3,299 crore and it is not a matter of concern

New Delhi: The government on Friday said public sector banks have a total exposure of over Rs14,000 crore to telecom companies whose licences have been cancelled by the Supreme Court though a bulk of the amount is backed by securities, reports PTI.

Out of the total exposure of Rs14,345 crore, only Rs2,888 crore given to big companies, including Idea Cellular, Tata Telecom, Uninor and Videocon, is unsecured.

“Rs14,345 crore is total exposure to telecom companies... Out of this Rs2,888 is to big companies Idea, Tata Telecom, Uninor and Videocon which does not have security except telecom licence and assets created by these companies,” financial services secretary DK Mittal told PTI.

He further said that though the total funds provided by PSU banks to telecom companies hit by the Supreme Court order was Rs14,345 crore, the amount involved in 122 cases was limited to Rs3,299 crore and it is not a matter of concern.

“Public sector banks have no exposure which is totally uncovered,” he added.

The Supreme Court on Thursday cancelled 122 second generation (2G) spectrum licences granted by former telecom minister A Raja on the ground that they were issued in a “totally arbitrary and unconstitutional” manner.

Many of these large companies will not go out of operations following the Supreme Court order as they have valid licences in other circles, he said.

In the case of Tata Teleservices, which has a pan-India presence, only three licences were cancelled. The number of cancelled licenses was nine in the case of Idea Cellular and 22 in case of Datacom Solution promoted by Videocon.

Punjab National Bank (PNB) said its exposure for roll-out under 2G is limited to Rs508 crore. However, the bank did not give any loan for seeking licence.

PNB has total exposure of Rs10,923 crore to the telecom sector. Of this, the bank’s exposure to the government sector is Rs1,016 crore, the bank said.

“I don’t think we will be affected much by the verdict.

We have a fund-based exposure of Rs1,100 crore in five accounts, while another Rs3,400 crore are non-fund based, which is based on a guarantee of roll-out. Now that the licences are cancelled, that guarantee is not fulfilled,” SBI deputy managing director (DMD) Santosh Nair had said on Thursday.

Another state-owned lender, Corporation Bank, said it has exposure of Rs146 crore in one of the telecom companies hit by the order.

“We have Rs146 crore exposure to Videocon Mobile. Though it is a secured funding, we are a bit worried as to how it will pan out post the Supreme Court verdict,” Corporation Bank chairman and managing director Ajay Kumar had said.

Even Oriental Bank of Commerce (OBC) said the bank had disbursed loans to telecom companies whose licences have been cancelled.

Loans have been given to all leading players. However, there are some concerns on the loans given, a senior official of OBC said.

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