NHAI spent Rs53,000 crore on road projects in last three years

New Delhi: The government on Wednesday said that the National Highways Authority of India (NHAI) has spent over Rs53,202 crore on road projects during the last three financial years, reports PTI.

The NHAI incurred an expenditure of Rs17,490.48 crore, Rs17,756.37 crore and Rs17,955.57 crore in 2007-08, 2008-09 and 2009-2010, respectively, on 256 highways projects, minister of state for highways R P N Singh informed the Rajya Sabha.

"Out of the 256 projects, 82 projects have been completed during the last three years and the balance work is under implementation," the minister said.

In reply to another question, the minister informed the house that the NHAI has restructured 47 schemes under the National Highways Development Project (NHDP), mainly to increase their viability.

Mr Singh also said that the award of contracts for building 23,744 km roads under the NHDP by 2010-11 has been approved by the ministry.

"So far, contracts for a total length of 5,822 km have been awarded under Work Plans I and II," he said.

The road transport and highways ministry has plans to build 35,000 km of highways in five years.


Thursday’s Market Preview: Flat opening likely

The market is likely to open flat-to-positive on supportive global cues. Wall Street settled on a positive note as sales forecast from Target Corp eased worries about consumer demand. Markets in Asia were on a sound footing as speculations that a rise in consumer demand in the US would boost exporters. However, the SGX Nifty was down 7 points at 5,485.

The market witnessed a firm opening on Wednesday on the back of supportive global cues. The upmove was aided by stocks from the healthcare, auto and fast moving consumer goods sectors. There was some selling pressure and the indices gave up some of their gains by noon. The weak opening of the European markets pulled the market further down but later value-picking in select scrips resulted in the indices closing off their intraday highs. The Sensex ended 208 points (1.1%) higher at 18,257. The Nifty was up 65 points (1.2%) at 5,479, conquering the psychological level of 5,400 once again.

The US market ended higher on Wednesday as sales forecast from Target Corp eased worries about consumer demand. However, volumes remained low at the end of the earnings season. The Dow was up 9 points (0.09%) at 10,415. The S&P 500 was up 1 point (0.1%) at 1,094. The Nasdaq was up 6 points (0.3& at 2,215.

Markets in Asia were on a sound footing as speculations that a rise in consumer demand in the US would boost exporters. Shanghai Composite was up 0.08%, Hang Seng was up 0.3%, Jakarta Composite was up 0.3%, KLSE Composite was up 0.1%, Nikkei was up 1%, Straits Times was up 0.2% and Seoul Composite was up 0.8%. On the other hand, Taiwan Weighted was down 0.2%. The SGX Nifty was down 7 points at 5,485.

Market regulator Securities and Exchange Board of India (SEBI) on Wednesday proposed to double the investment limit for retail investors to Rs2 lakh in public issues, a move that will enable individuals to aggressively participate in primary issues of companies. The current limit of Rs1 lakh for retail investors was fixed over five years ago in March, 2005.

Giving justification for its proposal, SEBI said the limit for retail investors needed to be enhanced in view of the increase in inflation rate from 4% in 2005 to around 12% currently and rise in the BSE Sensex from 8,000 points to about 18,000 points during the same period.


ONGC may seek management control of Cairn's Rajasthan fields

New Delhi: State-run Oil and Natural Gas Corporation (ONGC) may seek management control of the giant Rajasthan oilfields in lieu of allowing UK's Cairn Energy to sell majority stake in its Indian arm that now operates the field, to a non-oil firm, Vedanta Resources for $8.48 billion, reports PTI.

Cairn India with 70% interest is the operator of the 6.5 billion barrels Rajasthan block that can produce 240,000 barrels of crude oil per day, equivalent to output from ONGC's prime Mumbai High fields.

ONGC holds 30% interest and pre-emption or right of first refusal (ROFR) in case Cairn was to exit Rajasthan assets.

Industry sources said today that though the Production Sharing Contract (PSC) for the Rajasthan block was silent on prior government approval in case of transfer of ownership of a company having stake in the block, ONGC believes its rights flow from joint operating agreement (JOA) for the field that provides for ROFR.

The oil ministry too is keen to protect the interest of ONGC, which currently is a net loser in the Rajasthan block as it has to pay Cairn's share of royalty on crude oil to the government.

Sources said petroleum minister Murli Deora and oil secretary S Sundareshan told Cairn Energy Plc chief executive Bill Gammell, who came here on a flying visit yesterday, that government approval was central to the Vedanta deal.

They told Mr Gammell that Cairn needs to apply in writing for approval and the government will decide on the case after studying provisions in the PSC and JOA of each of the 10 properties that Cairn India had.

Sources said the ministry was upset that so far only press statements issued by Cairn Energy and Vedanta Resources announcing the deal have been sent to it and no formal approach has been made for seeking clearance.

The ministry insists the deal, wherein Cairn Energy is selling up to 51% out of its 62.37% stake in Cairn India, needs explicit government approval and not just regulatory approvals as mentioned in the press releases.

Cairn maintains that the Vedanta deal was a controlling stake transfer and not an asset transfer, which would have triggered a government approval but the ministry maintains that since the PSCs for some of the Cairn blocks has provision for prior consent, the whole deal is contingent on government approval, sources said.

While ONGC is not keen on making a counter offer as it sees the Rs405 per share price being paid by Vedanta as too high, it getting operatorship of the Rajasthan fields together with the government compensating it for the royalty it pays on behalf of Cairn India would make the project viable for it.
Sources said Vedanta's deal was contingent on government approval, as Cairn's three producing oil and gas assets, including the giant Rajasthan fields and seven exploration blocks, either have explicit provisions for seeking prior approval before transfer of interest or gives pre-emption, or the right of first refusal (ROFR), to partners like ONGC.

The stake sale now offers the government an opportunity to settle the issue of the Rs14,000 crore loss that ONGC will incur over the life of the Rajasthan oil fields, as it has to pay statutory levies like cess and royalty on behalf of Cairn India.

ONGC has 30% interest in the Rajasthan fields, but has to pay cess and royalty on the entire production, thereby giving negative returns on its investments.

The Production Sharing Contract (PSC) for the Rajasthan field is silent on government approval for transfer of ownership, but the Joint Operating Agreement between Cairn India and ONGC gives the partners ROFR in case of stake sale.

The same is the case with gas discovery block CB-OS-2 and the eastern offshore Ravva oil and gas fields. But its seven exploration blocks, including the KG-DWN-98/2 block with ONGC, have explicit provisions for government approval in case of a change in control.

Cairn India and ONGC are to spend $2.67 billion in capital expenditure in the Rajasthan block and $1.52 billion in operating expenditure, besides $941 million towards the cost of a pipeline to transport crude oil.

ONGC's net present value (NPV) (the value today of anticipated future incomes and expenditures) works out to negative $1.435 billion and a negative $1.471 billion at a crude price of USD 60 and 70 per barrel, respectively, they said.

The negative NPV is a result of ONGC being made liable to pay 20% royalty on the entire crude oil production, while Cairn is exempt from payment of any levy.


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