‘Expansion of smart cities list to evenly distribute benefits’
Real estate industry experts today welcomed the addition of 13 cities to the list of smart cities, saying it will distribute the benefits of urban development more evenly across the country and drive growth. The Union Government today announced the names of 13 new cities which will be developed under the Smart City Mission. It includes Lucknow in poll-bound Uttar Pradesh, Warangal in Telangana and Dharamsala in Himachal Pradesh. “This is a welcome development as the government has allowed more states and cities to participate in the Smart Cities initiative. It is encouraging to note the participation of more tier-II and III cities, which means that the benefits of urban development and infrastructure creation will be evenly spread across the country,” CBRE South Asia Chairman and Managing Director Anshuman Magazine said. “The release of the list of the next 13 smart cities today brings up the credibility of the government in pushing forth with the smart cities program in a time-bound manner. “The initiative will significantly benefit the economy and the people and help build demand for the industry,” KPMG (India) Partner-Infrastructure and Government Services Jaijit Bhattacharya said. Deloitte India Senior Director Arindam Guha also said the additions are expected to make distribution of smart cities across the states more balanced. “What is more important is what kind of models individual cities will adopt for procurement and implementation,” he said. Dwayne Allen Jersey
Slump in LNG prices delays production at Mozambique gas field
Production at the Mozambique gas field, in which Indian state firms have 30% interest, will get delayed by about three years with the first output likely only in 2021, as plunging gas prices cast a shadow on investment decisions and make buyers scarce. “It’s aclassic chicken and egg situation,” said a source with direct knowledge of the matter. “Gas purchase agreements can’t be finalised quickly as the final investment decision (FID) hasn’t been made, and an FID can’t be made because there is no visibility on who will buy the gas.” At the heart of this complex situation is the massive three-fourths drop in liquefied natural gas (LNG) prices in two years. A supply glut has brought down spot LNG prices to about $4.25 per unit, upending the market rules and leaving buyers and sellers with little pricing certainty with which to strike long-term deals. Many of those caught in long-term expensive deals prefer spot cargoes these days. The Mozambique project, however, is not unique in this as many other projects globally face the same stress brought on by the price crash. To be sure, the Mozambique project has entered into preliminary agreements with several buyers for its natural gas. But those agreements haven’t entered the final, binding stage since, according to a source, buyers first want to see investment commitment from the promoters of the Mozambique field. Another source said the investors in the project are hesitant in committing to long-term deals at current prices and are therefore delaying the project. The FID for the project is now expected only by the end of 2016, according to the source. The output would start only in 2021, he said. The first LNG from the project was expected by 2018, Oil and Natural Gas Corporation ( ONGC) had said while announcing its first stake buy in the project in June 2013. ONGC and Oil IndiaBSE -0.31 % had jointly agreed to purchase 10% participating interest from VideoconBSE 0.63 % Mauritius Energy Ltd for $2,475 million in Rovuma Area-1block in Mozambique with an estimated recoverable reserves of 35 to 65 trillion cubic feet. Just two months later, ONGC agreed to buy additional 10% stake from Anadarko for $2,640 million. Bharat Petroleum CorporationBSE 0.85 % had entered the project in 2008 with a 10% stake. Anadarko Petroleum Corporation, with its 26.5% interest, is the operator of the block. According to the source quoted above, $5-6 billion has already been invested in the Mozambique project and another $25 billion is further needed. Marcus Gilbert Authentic Jersey
FSSAI to remove potassium bromate from food additives list
After a CSE study claimed that bread contains cancer-causing chemicals, Food regulator FSSAI today said it has decided to remove potassium bromate from the list of permitted additives while it is examining evidence against potassium iodate before restricting its use. A report by NGO Centre for Science and Environment (CSE) said that nearly 84 per cent of 38 commonly available brands of pre-packaged breads, including pav and buns, tested positive for potassium bromate and potassium iodate, banned in many countries as they are listed as “hazardous” for public health. “A scientific panel had recommended removal of potassium bromate from the list of additives. So we have already decided to take it out from the list. Soon it will be notified,” Food Safety and Standards Authority of India (FSSAI) CEO Pawan Kumar Agarwal told . “As far as potassium iodate is concerned, we are examining the evidence and soon a decision will be taken,” he added. According to sources, in January FSSAI had decided to remove potassiun bromate from food additives list and had even issued a draft notification. According to CSE, potassium bromate typically increases dough strength, leads to higher rising and uniform finish to baked products, while potassium iodate is a flour treatment agent. CSE has also urged food regulator FSSAI to ban the use of potassium bromate and potassium iodate with immediate effect and prevent their routine exposure to Indian population. Reacting to the CSE report, Health Minister J P Nadda said, “We are seized of the matter. I have told my officials to report to me on an urgent basis. There is no need to panic. Very soon we will come out with the (probe) report.” In its report, CSE claimed that while one of the chemicals is a category 2B carcinogen (possibly carcinogenic to humans), the other could trigger thyroid disorders but India has not banned their use. Quoting Food Safety and Standards (Food Product Standards and Additives) Regulations, 2011, CSE said the maximum level of use of potassium bromate and/or iodate in bread is set at 50 ppm. The maximum level of use of potassium bromate in flour for bakery is 20 ppm, while that of potassium bromate is 20 ppm in maida (refined wheat flour), if used for bakery. Jimmie Foxx Authentic Jersey
Govt to soon decide on Apple’s single brand retail proposal
Government will soon take a call on the proposal of iPhone and iPad maker Apple for setting up single brand retail stores in the country. “We are looking at the proposal and will soon decide about Apple’s proposal for setting up of single brand retail,” a senior government official said. The company has sought exemption from the local sourcing norms as the US-based giant makes state-of-the-art and cutting edge technology products for which local sourcing is not possible. The proposal is being considered by the Finance Ministry as to whether the company can be provided exemption from 30 per cent local sourcing norms for undertaking single brand retailing of products having state-of-the-art and cutting edge technology, the official added. Single brand retailers are also allowed to take e-commerce route for such trading. At present, 100 per cent FDI is permitted in the sector. But beyond 49 per cent, the Foreign Investment Promotion Board’s (FIPB) permission is required. The company sells its products through Apple-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro. In January, Apple had filed proposal seeking permission for single-brand retailing and sell products online but due to certain gaps in the application, Department of Industrial Policy and Promotion (DIPP) had sought more information from the US-based technology giant. As a result, the company again resubmitted its application in March. Chris Carson Jersey
More challenges than cheer for Apple chief Tim Cook on Asia tour
With slowing iPhone sales in China, Apple Inc is having to take India more seriously, but investors hoping for a stock price fillip from CEO Tim Cook’s week-long Asia trip instead were given a taste of the daunting challenges that lie ahead. The second leg of Cook’s trip, to India, the world’s third-largest smartphone market, comes at a crucial time as Apple battles slowing growth in China, its second-biggest market. But the challenges suggest it will be years before India is anything close to a major earnings pillar for the US tech giant. “With China saturating, everybody has no choice but to look at India, and Apple’s rivals have been strengthening there in the last two years. Apple is playing catch-up,” said Ville-Petteri Ukonaho, a senior analyst at Strategy Analytics. While the numbers in India suggest huge potential – fewer than two in every 10 of the country’s 1.3 billion people have a smartphone – the world’s fastest growing major market operates differently to other markets where Apple has enjoyed stellar growth and high margins. Apple’s traditional model is to sell its phones at full price to local telecoms carriers, which then discount them to users in exchange for charging them for data as part of a multi-month contract. Not so in India. “In India, carriers in general sell virtually no phones and it is out in retail – and retail is many, many different small shops,” Cook told analysts recently. “Because smartphones there are low-end, primarily because of the network and the economics, the market potential has not been as great,” added Cook, likening India to the Chinese market 7-10 years ago. In meetings with India’s two largest carriers, Bharti Airtel and Vodafone, Cook discussed ways to work more closely to sell iPhones, including whether a contract pricing model could work in India. He said Apple sees opportunities to expand in the market as operators roll out 4G services. “The trip was more about understanding the Indian market, but was also about signaling to the world that Apple has arrived in India,” said Vishal Tripathi, research director at Gartner. PRICE SENSITIVE Another challenge for Apple is how to be a premium-end player in a low-income market. “In India, incomes are so low that not many customers appreciate the full value of the Apple ecosystem, and it will take a lot more effort for Apple to sell the Macs and iPads in Indian stores compared to China,” said Strategy Analytics’ Ukonaho. India is a more price sensitive market than China, and Apple’s relatively expensive iPhones are out of reach to most Indians, who on average live on less than $3.10 a day according to World Bank data. With per capita income of $1,570 as of 2014 and the average smartphone selling for less than $90, a third of the global average, India’s market growth is predominantly led by cheaper phones. High-end smartphones – costing from $300 – make up only 6 percent of the market, or just 6 million units, according to Morgan Stanley. Rebuffed by India’s government in its plan to import and sell used, refurbished iPhones, Apple has seen only slow growth in a market dominated by Samsung Electronics and Chinese brands. That issue was not resolved in talks with Indian Prime Minister Narendra Modi – which a Modi aide called “extremely successful” – and government officials have pressed Apple to set up manufacturing facilities in India, said officials involved in discussions, a move that would create jobs and boost Modi’s “Make in India” initiative. “Now it’s for Apple to talk about their plans,” the Modi aide said. Apple declined to comment on what Cook achieved on his Asia trip. MORE MARKETING Apple’s brand awareness ranks 10th in India, trailing Samsung, Sony, Blackberry and some local rivals. Almost half of respondents in a Morgan Stanley survey said they do not know Apple. While Apple is likely to double its share in the $400-plus segment to 40 percent, it “has to significantly increase its store presence, ramp up marketing, and add local content,” the brokerage said in a recent note. A first Apple retail store in India is unlikely to open its doors until next year at the earliest. In internal meetings, Cook stressed how Apple wants to increase its retail operations in India and work with re-sellers to make its products available more widely. “We’ve been hiring for India retail and distribution for the last few months, and Tim’s message was that we need to double down on that,” said an Apple official in India. In China, where iPhone sales slumped in January-March and some online entertainment services were suspended, Cook also had little to cheer investors. At meetings with Chinese officials, Cook emphasized Apple’s contributions to China’s economy – creating jobs, generating revenue and paying taxes – said people familiar with the matter. His visit came just days after Apple announced a $1 billion investment in a local ride-hailing app firm, a move Cook says will help Apple better understand China. But when he asked about the shutdown of online services and emphasized that Apple had followed procedures in establishing those services, he was told only that China would look into it, the people said. Kevin Johnson Womens Jersey
IIM-A asks Flipkart to guarantee jobs of recruits, says Rs 1.5 lakh compensation for late joining unaccepatable
Days after Flipkart told new campus recruits it was deferring their joining dates to December from June due to a restructuring exercise, the Indian Institute of Management, Ahmedabad, sent a strongly worded email to the company urging Chief Executive Officer Binny Bansal to guarantee that the candidates do indeed have a job when the date of joining is finalised. The letter was addressed to Bansal, Chief People Officer Nitin Seth and Executive Chairman Sachin Bansal among others. The email, a copy of which ET has, suggested that the delay should be shortened and said the compensation of Rs 1.5 lakh offered by Flipkart was “utterly unacceptable.” Compensation should be in the form of a monthly payment starting June and not as a lump sum as joining bonus or arrears, it said. IIM-Ahmedabad placement committee Chairperson Asha Kaul asked the Flipkart management to schedule a conference call in the next few days, “where all the relevant stakeholders can engage to reach a mutually acceptable solution”. Flipkart told ET that it has written to Kaul saying that it’s taking on all the students it has hired but it wouldn’t be able to increase the compensation while pointing out that this isn’t the first time campuses have faced such a situation. To be sure, while Flipkart may be the biggest ecommerce campus recruiter to postpone joining dates, B-schools and engineering colleges have seen others in this space deferring or even withdrawing offers of late. The IIM email pointed out that students need to repay loans and had turned away “multiple opportunities that the campus had to offer”, adding that most students had chosen Flipkart over other well-reputed recruiters because of the strength of its brand. “The decision to defer the date of joining, coming as it does so close to the earlier promised date of June 2016, is sure to make this talent pool regret their decision of joining your company. Talented students fresh out of campus, on the eve of starting successful careers, feel cheated,” it said. While restructuring calls for tough decisions in an organisation, “the matter of campus hiring could have been handled much better with campuses forewarned well in advance and engaged as partners in this decision making”. This is likely to have an impact on future campus hiring drives. “Future engagement of Flipkart with B-school campuses is bound to get affected as a relationship based on mistrust and lack of transparency can never be mutually beneficial,” the email said. The letter has been forwarded to placement cells at several other B-schools including IIMCalcutta, IIM-Bangalore, IIM-Indore, Faculty of Management Studies, Delhi, TA Pai Management Institute and Tata Institute of Social Sciences, asking them if they would be interested in joining the call. The move comes as Flipkart tries to contain its burn rate, even looking to trim fixed costs, of which employee compensation forms a significant chunk. Also, profitability is now taking precedence over last year’s mantra of growth at any cost, for which it needed to recruit in droves. The company has already put high-profile hires on the backburner and is not aggressively looking to add more executives to its ranks, relying more on existing staff to fill senior roles. “We have hired a lot in the last 18 months. There are a few critical positions opened on the hiring side based on specific needs we have which we continue to do. What we have is great internal talent,” Binny Bansal told ET on Monday when asked about recruitment plans. Flipkart told placement cells and campus hires on Friday that the company has been restructuring its businesses in the past few months. In line with this, the new recruits will start working toward larger company goals from “day one”. But change of this scale meant time and effort, which is why it was delaying the joining date, Flipkart said. The move came as a shock to students, who’d been expecting to start work next month at typically high wage levels. “For some roles, Flipkart was paying a Rs 20 lakh-plus (annual) package (and) joining in December means losing out on over Rs 10 lakh,” said a B-school placement team member. “A joining bonus of Rs 1.5 lakh can’t make up for it.” When asked whether Flipkart had responded to the email, Kaul said: “We would not like to comment at all at this stage.” Other B-schools said they would be getting in touch with the company and decide on the course of action. “Some students may want to look for alternatives,” said the placement head of another top IIM. Hires from the Indian Institutes of Technology have also received the same communication deferring joining dates. “We will understand the company’s point of view and then take a collective decision,” said an IITDelhi placement official. Stanley Cup Authentic Jersey
Another Valley hire quits, this time at Snapdeal
Anand Chandrasekaran, Snapdeal’s chief product officer, on Tuesday joined the growing tribe of prized Silicon Valley hires who quit Indian unicorns within a year of signing up. Chandrasekaran had joined Snapdeal from telecom major Airtel but it was his stint at Yahoo, US that was the attraction for the Delhi-based online marketplace when he was brought on board. Roping in Chandrasekaran was also seen as Snapdeal’s answer to Flipkart hiring ex-Googler Punit Soni as CPO three months earlier (in June last year). Soni recently left Flipkart after the company could not provide him a clear role after its senior-level management reshuffle. “Anand has decided to move out of Snapdeal and pursue entrepreneurial interests. Anand has done some stellar work on the product side at Snapdeal. His insights and attention to detail have helped us traverse quickly towards launching and improving products at Snapdeal. We wish Anand the very best for his entrepreneurial journey ahead,” a Snapdeal spokesperson told TOI in an emailed response. Over the last one year, leading ecommerce companies like Flipkart, Snapdeal, Zomato scouted for tech talent in the Valley, luring them to India with fat pay cheques. Peeyush Ranjan, head of engineering, and Soni hogged the limelight when they joined Flipkart, while Zomato roped in former Facebook employee Namita Gupta as CPO. Gupta too left after spending less than a year at Zomato in July last year. Tanmay Saxsena, who replaced Gupta at Zomato after spending over a decade in the Valley, has also left the online restaurant discovery platform to join healthcare startup 1mg. “There are two key reasons for Valley talent to leave after short stints: First, this is a different environment than Valley and there are cultural differences. Second, all of them are overpriced for the role they were hired for. Scenario a year back was different but now the companies are tightening their spends as funding crunch is a reality,” Kris Lakshmikanth, CMD at Head Hunters India, said. Chandrasekaran was heading the product division for Snapdeal, Freecharge, Shopo, Exclusively, among others. His exit adds to the continuous churn at Snapdeal, which saw many top-level exits over the past year, including Srinivas Murthy, senior VP marketing; Rajan Kant who headed strategy; Aakash Moondhra, CFO; Amitabh Misra, chief technology officer, among others. In fact, earlier this month Rahul Taneja, who was vice-president and head of category management at Snapdeal, resigned to join rival Jabong. Meanwhile, Freecharge elevated its COO Govind Rajan as CEO while the incumbent, Kunal Shah, will take over the role of chairman.
Punjab and Haryana HC summons secretary of Civil Aviation Ministry, AAI chairman
IRKED WITH the repeated failure of the Central government authorities to make it clear to the court the exact date of starting international flights from Chandigarh International Airport, the Punjab and Haryana High Court has summoned the secretary of Civil Aviation Ministry and chairman of the Airports Authority of India. Directing both the officers to remain present in the court at 10 am on May 30, a division bench comprising Justices S S Saron and Gurmit Ram remarked, “You are under misconception that we are begging you to start international flights. Just make a statement that [international] flights cannot be started. Each time you come and make fool of everyone.” The court was addressing Assistant Solicitor General of India Chetan Mittal. “We are just bothered that public money [spent on construction of international airport] should not be wasted,” the court said. Prime Minister Narendra Modi had on September 11, 2015, inaugurated the Chandigarh International Airport on which around Rs 1,400 crore had been spent but no international flight is operational from Chandigarh so far. Raising a serious question, Punjab’s Advocate General Ashok Aggarwal alleged a “serious nexus” in Delhi resulting in delay of starting of international flights from Chandigarh. “Entire issue is being stage-managed by some person from Delhi. We know who is affected. It is a time-table game in airlines industry. A gentleman at Delhi says if you start flights from Chandigarh, XYZ is affected. Everyone knows it,” submitted Aggarwal. The Advocate General submitted that the Punjab government has spent a huge amount on construction of the international airport and Delhi airport caters to around 40 per cent of the international passengers from Punjab, Haryana, Himachal Pradesh and even Jammu and Kashmir. He said if the international operations are started from Chandigarh airport, it would also reduce huge traffic from Delhi roads every day. Petitioner Mohali Industries Association’s senior counsel Puneet Bali argued, “It needs to be probed by a high- level independent authority like the CBI or the CVC. Somebody is taking calls somewhere. It really needs inquiry.” He added, “Rs 1,400 crore has been spent on international airport and now every airline is coming here saying we can’t fly. Have they (central government authorities) not done homework earlier?” Addressing the Assistant Solicitor General of India, who informed that the proposal for relaxing the rules for the domestic airlines to start international operations is with the Cabinet but even then private airlines are not showing interest, the court said, “We are damn bothered about what airlines are doing.” During the arguments, the counsel appearing for the IndiGo airlines submitted that though they have got the customs clearance from Punjab, customs authorities in Delhi have not given them clearance to uplift duty-free liquor since March 29. The two airlines that have applied to the authorities and could start international operations in near future from Chandigarh are Air India and IndiGo. Jet Airways and Spice Jet have made it clear that as of now they have no plans to mount international flights from the Chandigarh airport. However, Go Air, Air Asia (India) and Vistara have submitted that they are not eligible to fly on international routes as per the existing rules. Jet Airways has also submitted that the cost of operation of international flights is very high and for Chandigarh-Canada-Chandigarh, it would be approximately Rs 2.6 crore for a round trip. “As passenger load is very less, it is not commercially viable,” it has submitted. Jet Airways has also raised various issues regarding operational constraints at Chandigarh airport like CAT-III Instrument Landing System for operations during foggy season, unavailability of Approach Landing System, closing of operations at airport between 8 pm and 7.30 am. Jarrett Allen Jersey
Scoot launches flight operations in India
Scoot, the long-haul budget arm of Singapore Airlines, today launched its operations in India with flight services to Chennai and Amritsar from Singapore. The airline will operate a daily direct service to the Tamil Nadu Capital from Singapore with a 335-seater Boeing 787-800 aircraft while Amritsar would have three-times-a-week operations service with a 375-seater B787-900 plane. Besides, it has already announced to launch services from Jaipur from October this year. On the Chennai-Singapore route, Scoot will take place of SIA’s another subsidiary airline Tigerair which has been operating 12 flights a week with narrow-body aircraft. “India is one of the fastest growing aviation markets in the world. Guests from India can now fly to amazing destinations in our Asia-Pacific network through the Singapore hub, as well as onward with Singapore Airlines, SilkAir and Tigerair in the SIA Group portfolio,” Chief Commercial Officer for Scoot and Tigerair, Leslie Thng said. Scoot also plans to scale up frequency from Amritsar to four times a week, starting July 2. Jeremy Hellickson Authentic Jersey
VRL Logistics chairman Vijay Sankeshwar plans to start air carrier from Bengaluru
Vijay Sankeshwar, chairman of VRL Logistics, is finalising plans to start a regional air carrier from BENGALURU, which may result in the birth of a second airline from the city after the launch of the now-defunct Air Deccan 13 years ago. Sankeshwar and his son Anand Sankeshwar will invest about Rs 1,300 crore in the airline venture over the next three years, putting in Rs 300 crore in equity and raising debt for the balance amount. They will run it independent of VRL Logistics. “We currently hold 69% in VRL Logistics. (We) will dilute 8-10% and use that money to invest in the aviation business,” Vijay Sankeshwar told ET. The Union Cabinet is expected to clear the national civil aviation policy on Wednesday , which is likely to offer a slew of sops to regional airlines in the form of exemptions such as airport charges, service tax on tickets, and excise duty on aviation fuel. Vijay Sankeshwar said he was looking at having a fleet of 8-10 aircraft and that he had not yet decided on the type of aircraft or pricing. “We are still working things out and have to get regulatory approvals. We have not yet started negotiation with manufacturers,” he said. The businessman said he saw huge potential in the regional aviation business as air connectivity in southern India is sparse. “There is no proper air connectivity to places such as Hubballi or Belagavi. We may introduce services like BengaluruChennai, Bengaluru-Tirupathi, Chennai-Coimbatore, etc. We will limit our operations to the 2-3 neighbouring states,” he said. VRL Group, founded 40 years ago in Gadag in North Karnataka, is a formidable player in the logistics space with a pan-India presence. The company owns a fleet of 4,253 vehicles and caters to both the logistics and passenger service markets. The group also publishes a Kannada daily. India’s low-cost aviation pioneer GR Gopinath hailed Sankeshwar’s plans to start a regional airline, saying having more carriers would do a world of good for air travellers. But he also said that despite the huge potential that exists for regional airlines in India, the industry needs sweeping reforms. “Our fundamental aviation regulations date back to 1930s, and, as a result, only about 70 million domestic tickets are sold, translating to 30 million fliers. We have several airports in India without any flight service,” Gopinath said. Sankeshwar’s announcement turned investors in VRL Logistics nervous on Tuesday and several rushed to sell their holdings in the firm. The stock lost 20% of its value and hit the lower circuit on BSE and NSE on a day when the benchmark Sensex index closed up 75 points. VRL Logistics chief financial officer Sunil Nalavadi clarified to the stock exchanges that the company had no plans to commence an airline and that the promoters would float a separate company in their individual capacities for their aviation business. The airline will be run by a professional chief executive. Tom Seaver Authentic Jersey