2,000 acres for airport in Aranmula cancelled

The Oommen Chandy Government has cancelled a notification issued by the previous government demarcating a stretch in Aranmula as industrial area so as to facilitate the setting up of a private airport.

While the LDF government had notified altogether 2,500 acres as industrial area, the present government effected the cancellation over a 2,000-acre stretch and left out 500 acres.

Chief minister Oommen Chandy stated this in the assembly on Thursday, while replying to a notice for adjournment moved by Mullakara Ratnakaran of CPI on the Cabinet decision to treat paddyfields and wet lands reclaimed before 2005 as dry land. He said industry minister P.K. Kunhalikutty had already signed the order of cancellation.

The notification was issued by the Achuthanandan government in violation of the rules and procedures, the assembly was told.

Chandy also placed before the assembly records showing that it was Achuthanandan who issued the orders for expediting the handing over of the land for the airport.

However, Achuthanandan clarified that there was no need for an airport at Aranmula in Pathanamthitta.

Meanwhile, following the recommendation by the assembly panel that the promoters of the airport had encroached Kozhithodu, a water source in the area, the government has initiated steps to reclaim six acres.

Earlier, while replying to the motion, revenue minister Adoor Prakash said the decision to treat reclaimed paddyfields and wet lands as dry land was taken by the previous LDF government.

http://www.deccanchronicle.com/channels/cities/thiruvananthapuram/2000-acres-airport-aranmula-cancelled-144

DLF has no credible plans to deleverage balance sheet: Veritas

ET Now: If I take the clock back, last year in September you had raised concerns regardingKingfisher Airlines and you believed that the airlines was heading towards bankruptcy. The recent media reports indicate that the lenders are looking to sell non-core assets. So, what is your view on Kingfisher Airlines and do think it is a matter of time that Kingfisher Airlines will actually shut down?

In an interview with ET Now, Neeraj Monga, EVP & HoR,Veritas Investment Research, shares his views on Kingfisher Airlines, RComm and DLF. Excerpts:

Neeraj Monga: All the issues that we had raised in our Kingfisher report of September 2011 have actually come to pass in the marketplace... and it is interesting. It is a small airline carrier, with very little market capitalisation. So I do not believe that the company can survive. Lenders are already signalling their intent by deciding to sell the fixed assets of the company. What is going to be interesting to see is what will be the recoverability on these loans. Meanwhile, the company continues to shrink and I believe sooner or later, it will shut down.

ET Now: You had also raised concerns regarding corporate governance and accounting practices of RComm. What is your view on telecom companies? Will they meet similar fate as KFA?

Neeraj Monga: I do not believe Reliance Communications is going to meet the same fate as Kingfisher Airlines. That has never been the intent of our research, and we have never positioned it as such. The questions we have raised regarding Reliance Communications have to do with aggressive accounting, misrepresentation of financials and the fact that the company has reported book activity which may not be as trustworthy as some people would like to believe it to be... and that perhaps there are a lot of conjectures surrounding the businesses of the organisation.

The market has been focused on the asset divestiture strategy at Reliance Communications and our research suggests the valuation being according to the assets that are most likely to be sold i.e. its Reliance Infra tower business. We have not included the optical fibre cable assets into those businesses or the IPO being considered for the sub-sea cable asset in Singapore. Both these assets we believe are unlikely to get the valuation in the market up. Our valuation of the tower assets is somewhere between Rs 12500 and 15000 crore and our valuation of the sub-sea cable asset is approximately -- in a best case scenario -- $800 million. In both the cases, the market will eventually find out that Reliance Communications' deleveraging strategy is not going to come through as expected; and therefore, the stock is overvalued. That being said, I do not believe Reliance Communications is going to meet the same fate as that of Kingfisher Airlines.

ET Now: At DLF, you now believe that the best case valuation for the company is about Rs 100 per share. That is what you mentioned in your last report on DLF. However, now that the company has started monetising some of their non-core assets, do you think DLF deserves a short term re-rating?

Neeraj Monga: My view on DLF is unlikely to change in the short term, given the significant corporate governance issues that we have already raised about the company. We can also not ignore the fact that the company is in deep financial distress, in terms of the debt that it has on its balance sheet and the cash flow obligations of approximately Rs 3500 crore -- to meet its interest obligations and the preferred and common dividend obligations on its books. We believe that the company has no credible plans to deleverage its balance sheet. If you look at the results reported by the company on May 30th 2012 -- in spite of selling approximately Rs 1750 crores worth of other assets, the company's net debt declined by approximately Rs 33 crores over a 3-quarter period. This suggests that all these asset sales were not able to help the organisation deliver. Currently, the market is anticipating the sale of additional assets, including the wind power assets. Our valuation of Rs 100 a share already incorporates all the valuation of these assets. However, adjusted book value for the company is in a range of Rs 100 to Rs 110 per share, which is a fair value for the company.

ET Now: So do you believe that with the Prime Minister taking over the Finance Ministry, investors globally are expecting some action on the reforms and policy front?

Neeraj Monga: Investors globally are unsure of who is in charge in India and unsure about who will make these decisions that are going to propel the country forward and launch the next phase of reforms. The fact that the Prime Minister has taken charge of the Finance Ministry, it is neither here nor there... because every time a decision is made in India, it is either in West Bengal or in Gujarat or some other state where there is a powerful chief minister -- who actually stands up and talks about it or against it. In terms of a coalition government, where everybody is trying to make all stakeholders happy, nothing ever gets done. So this policy paralysis -- which continues to take place in India -- is detrimental to India's perception as an investment destination, and it is even more detrimental for the people of India who actually have to live there and make a living on a daily basis.

http://articles.economictimes.indiatimes.com/2012-07-06/news/32566314_1_kingfisher-airlines-tower-assets-reliance-communications

SBI says it is not for winding up of Kingfisher

Airline owes Rs 7,500 crore and accumulated interest to the 17-bank consortium, led by SBI

SB

I, the lead lender to Kingfisher Airlines, today said it is not for shutting down of the cash-strapped carrier but the lenders needed to take measures to recover loans given to it.

"We do not like shutting down of Kingfisher, but we also need to take measures as taken in the last couple of weeks. We have asked Kingfisher to start the process of valuation of non-core assets so that we know how much we could get if they were disposed off," SBI Managing Director A Krishna Kumar said.

The cash-strapped airline owes Rs 7,500 crore and accumulated interest from January to the 17-bank consortium, led by the State Bank of India (SBI) which alone has an exposure of Rs 1,400 crore.

On July 5, the consortium had a meeting with the airline management, after which the lenders said they had hired HDFC Securities to do a valuation of Kingfisher properties and come up with a report within 15 days.

Asked how much the lenders could raise from these properties, Kumar said, "At the moment I do not know. Once the valuation is done, we will have the correct estimate."

After the meeting, the airline had said in a statement, "As far as Kingfisher House is concerned, this property is now vacant following the move to The Qube. This property is intended for sale and once again, the consortium was voluntarily approached for permission to sell with the proceeds being paid to the banks."

It had also said the meeting with the bank consortium was convened in the "normal course with a properly circulated agenda. There was no discussion on loan recovery or forced sale of any collateral."

http://business-standard.com/india/news/sbi-says-it-is-not-for-winding-upkingfisher/178470/on

nEW DELHI: Former Director General of Civil Aviation (DGCA) Bharat Bhushan's unceremonious ouster by the civil aviation ministry has put the airline regulator in a tenuous position - its top two officials have a direct conflict of interest. 

The new acting DGCA Prashant Sukul is on the Air India board, while the joint DGCA Anil Srivastava is also the CMD of Pawan Hans Helicopters.

DGCA regulates Air India, Pawan Hans and all their competitors. This is the second time in a fortnight that the aviation ministry has refused to comply with the diktat of the Appointments Committee of the Cabinet (ACC). 

A week before, the ACC decided to extend Bhushan's tenure on July 4 - it had asked the aviation ministry to relieve Srivastava from his Pawan Hans' job as it constituted an obvious conflict of interest. Even this hasn't been complied with. Srivastava, who took charge at Pawan Hans in March this year, continues to hold both the positions. 

"Headed by the prime minister, the ACC is the government's apex body for such high-level appointments," said a senior government official. "If ministers can routinely refuse to obey its decisions, it undermines the authority of the cabinet panel and, therefore, the highest office in the country," he explained. Incidentally, last year, the civil aviation ministry had abruptly removed the then Air India CMD, who was also appointed by the ACC with a fixed tenure. 

In a separate development, aviation minister Ajit Singh is learnt to have gone one step further and informed the cabinet secretary Ajit Seth that he is not keen on retaining Bhushan in the ministry.

http://economictimes.indiatimes.com/news/news-by-industry/transportation/airlines-/-aviation/dgca-officials-face-conflict-of-interest/articleshow/14857449.cms

Nod for airport: panel picks holes

The Department of Industries had not conducted a geographical and environment impact assessment or held any discussions with allied departments before granting clearance in principle for setting up an airport at Aranmula, the Assembly Committee on Environment has observed.

After tabling the report in the Assembly on Thursday, committee chairman C.P. Mohammed and member P.C. Vishnunath told reporters that it was improper to go ahead with the project before conducting such studies. Such studies should be made compulsory before granting clearance for such projects in future. The committee expressed dissent in implementing a project destroying huge extent of paddy fields, drinking water sources, and the ecosystem. It recommended conducting such studies before going ahead with the project.

Of the 350 acres of land purchased by K.G.S. Group for setting up the airport, there was a water course and revenue ‘puramboke’ land. Though there was no provision for transferring ‘puramboke’ and water course to private individuals, no action had been taken against those who reclaimed the land and the stream. This should be probed. Departmental action should be initiated against those responsible for such acts. Certain individuals had moved the High Court against reclamation of paddy fields and secured a verdict for resuming it. No action had been taken in this score. It should be implemented and action taken against the officials who committed such lapses.

The committee recommended to remove the earth deposited in Kozhithodu for reviving its natural flow. This was the water source for paddy fields in the vicinity. Following the disruption of flow, the fields were reclaimed. Hence, the committee recommended removal of the earth and resume the water flow and also the cultivation in the fields.

Since the airport has not been recognised as an industry and the nodal department for airports in the State being the Transport Department, the Industries Department’s notification declaring Aranmula as a heritage village and its neighbourhood Mallapuzhassery as an industrial zone have given way to doubts. Hence, the decision should be reconsidered.

http://www.thehindu.com/todays-paper/tp-national/tp-kerala/article3634085.ece

Private airlines may have to pay 35% more for using new Kolkata terminal

Kolkata, July 12:  

Private airlines operating from the Kolkata airport are likely to fork out 35-40 per cent more for using facilities at the new terminal building. The new building is expected to be operational in October.

Netaji Subhas Chandra Bose International Airport, under the Airports Authority of India, proposes to hike rentals for ticket counters and other space (provided to airlines) inside the terminal building. Rent includes payments for air-conditioned and non-air-conditioned space, ticket counters, and VIP lounge facilities.

The airport Director, Mr B.P. Sharma, did not comment on the matter. Calls and messages to him did not elicit any response. Airlines too did not say if there would be a hike in rentals.

However, Captain Sarvesh Gupta, Chairman of the Airlines Operating Committee (at Kolkata airport), confirmed talks of increasing rentals for those using the new facilities.

The Airlines Operating Committee is an association of all the airlines (16, now) operating from the NSC Bose International Airport.

Proposed rates

The increase in rentals, according to AAI sources, will be based on a proportion of the Rs 5,000 crore modernisation programme of the facilities at the airport.

Rentals in Delhi and Bangalore inched up substantially after modernisation was taken up at these airports. Hikes are likely to be as high as 40 per cent in some cases, they said.

According to AAI, the rent for “air-conditioned space” at the new terminal building is likely to be raised to Rs 1,250/sq. metre/month; for non air-conditioned space, the rate will be Rs 700/sq. m/month.

New charges imposed by the authorities include a monthly charge of Rs 2,250 for ticket counters; while another Rs 3,500/sq. m/month will be charged for providing ‘Executive Lounge/VIP lounge’ facilities.

This apart, a 25 per cent levy might come up on the total rent to be paid by airlines as ‘space utilisation cost’.

Currently, airlines pay Rs 1,000/sq. m/month for air-conditioned space inside the airport.

This included ticket counter charges. Non air-conditioned spaces come at Rs 670/sq. m/month.

abhishek.l@thehindu.co.in

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The increase in rentals, according to AAI sources, will be based on a proportion of the Rs 5,000 crore modernisation programme of the facilities at the airport.

http://www.thehindubusinessline.com/todays-paper/tp-logistics/article3632776.ece