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China: Ties with Lanka based on ‘equal-footed consultation’

“We were never to give control of the port to China; that was a mistake,” President Rajapaksa said, pointing out the decision was made by the previous administration.

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Sri Lanka Hambantota Port

Colombo, Nov 30 : Days after Sri Lanka’s new President Gotabaya Rajapaksa called the Hambantota Port lease agreement with China a “mistake” and said it should be renegotiated, China in a statement said the cooperation between the two countries was based on “equal-footed consultation and win-win spirit”.

Responding to an email query by the Daily Mirror, the Chinese Foreign Ministry said, “Our cooperation, including the project of Hambantota Port, is based on equal-footed consultation and win-win spirit. It aims to help Sri Lanka to leverage the country’s own advantage for better development.

“China would like to work with Sri Lanka to build the Hambantota Port into a new shipping hub in the Indian Ocean, which will further boost local economic and social development.”

A spokesperson from the Chinese Embassy in Colombo, Luo Chong, told the Daily Mirror that the Hambantota Port was “totally owned and controlled” by Sri Lanka and any approvals and decisions regarding the port were to be taken by the Sri Lankan side.

“It is a joint venture and any approvals, including calling of ships at the Hambantota Port, is entirely Sri Lanka’s decision,” Luo said, the newspaper reported.

President Rajapaksa, in his first interview since taking office, said that while he remained committed to close ties with both China and India, he would re-negotiate the Hambantota Port lease agreement with China, terming it a “mistake” and calling on the Chinese company to be open to the move.

“We were never to give control of the port to China; that was a mistake,” President Rajapaksa said, pointing out the decision was made by the previous administration.

“The previous government gave it on a 99-year lease, and even though China is a good friend of ours and we need their assistance for development, I am not afraid to say that was a mistake.”

The President stated he would request the Chinese to renegotiate the joint venture and come with a better deal to assist Sri Lanka.

In July 2017, the Sri Lanka Ports Authority entered into a partnership with China Merchants Port Holdings (CM Port) to develop and manage the port.

Former Prime Minister Ranil Wickremesinghe in 2017 agreed to lease the port for 99 years to a venture led by China Merchants Port Holdings Co. in return for $1.1 billion.

Business

Vodafone Idea condition extremely precarious: Citi

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IDEA VODAFONE

New delhi, Feb 20 : Vodafone Idea’s situation remains extremely precarious given its net debt/EBITDA of 20 times, analyst firm Citi has said in a report.

The company has admitted that its ability to continue as a going concern remains at risk in the absence of relief on its over $6billion AGR liability. While some green shoots were visible in 3Q (+2 per cent qoq revenue growth, 4G sub adds accelerated, tariff hike benefits to be visible from 4Q), this could come to naught without any relief.

The company has, for now, announced that it intends to make a part-payment towards its dues shortly (quantum still being assessed), the report said.

The deleveraging depends on Relief on the company’s AGR liability, either in terms of quantum or in payment terms, further relief measures from the government which could reduce levies and improve the balance sheet and cash flows and better than expected execution on synergy extraction and better than expected pace of 4G subscriber additions.

The risks Vodaofne Idea currently faces are that the company being made to bear the entire AGR liability, depressed India mobile revenues resulting from competitive intensity worsening and increase in subscriber churn and lower than expected pace of 4G subscriber additions.

We struggle to see what the next recourse could be for VIL with most legal options appearing to be exhausted. While it may still be possible for the government to offer relief perhaps via some legislative/policy action if it so chooses, we are yet to see any such indication or willingness from the government. Given the heightened uncertainty, Potential market share gains on further industry consolidation could drive upsides for Airtel & RIL while further tenancy exits could create downside risks for Infratel (Neutral). We keep our estimates unchanged for the moment as the situation remains extremely fluid and uncertain.

The report said Airtel has begun clearing its dues following the strong and unforgiving stance that SC has adopted. Airtel has made a partial payment of $1.4billion of its $5billion dues and will pay the balance well before the next date of hearing on March 17 post self-assessment. Following its $3billion capital raise in Jan and $2+billion of cash on books as of Dec, this should not be a stretch for the company.

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Kanpur tanneries asked to shut down again

Aftab Alam, a leather exporter, said the closure order would not only damage the business image of tanneries but would affect leather export too.

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UP tanneries Business

Kanpur, Feb 17 : The Regional Pollution Control Board of Uttar Pradesh has ordered 248 tanneries in Jajmau area of Kanpur to stop their operations from February 19 till further orders, without assigning any reason.

The tanneries, which remained closed for a period of 13 months on the charge of polluting Ganga, were allowed to start production on December 20 for two months only.

S.B. Franklin, regional pollution control board officer, said the time limit of two months is expiring on February 19.

Feroz Alam of Small Tanners’ Association said that on December 20 last year, the government, while granting permission to run the units with half capacity, had also stated that the tanners would be allowed to run their units till next year if they followed the necessary norms and standards fixed by the pollution control board.

He said, “During the last two months, not a single notice was issued to any tannery by the regional pollution control board because the tanneries did not flout the norms set by it.”

He said that the UP Pollution Control Board (UPPCB) had not given any reason for the closure order now.

Aftab Alam, a leather exporter, said the closure order would not only damage the business image of tanneries but would affect leather export too.

He said the tanneries which have got orders from foreign companies would suffer if they failed to supply the goods in time.

The tanners would also face problems in getting new orders in future, he added.

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Business

Sugar production dips 22.67% in crushing season as on Feb 15

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import duty on sugar

New Delhi, Feb 19 : Sugar production in the country has declined 22.67 per cent so far in the current sugar season 2019-20 (October-September) as compared to the last year.

Indian sugar mills have produced 169.85 lakh tonnes of sugar as on February 15, 2020 in the ongoing season as compared to 219.66 lakh tonnes produced on the corresponding date of last year, said Indian Sugar Mills Association (ISMA) in a release on Tuesday.

As per market reports, about 16 lakh tonnes of sugar have been exported from India and about 32 lakh tonnes of contracts have been signed for exports, said the apex sugar Industry body.

According to ISMA, out of 449 sugar mills which had started crushing for 2019-20, 23 sugar mills have stopped crushing operation due to non-availability of sugarcane. Last year, 521 sugar mills had operated, out of which 19 had stopped crushing on the same corresponding date last year.

Sugar production has decreased considerably in Maharashtra, the second largest producer of sweetener in the country.

As per the data compiled by ISMA, Maharashtra’s mills have produced 43-38 lakh tonnes of sugar this year while they had produced 82.98 lakh tonnes in the corresponding period last year.

Out of 143 mills which operated this season, eight sugar mills have stopped their crushing. Last year 193 mills had operated i.e. 50 sugar mills remained closed in Maharashtra due to less canes this year.

However, sugar production has increased in Uttar Pradesh, the largest producer of sweetener in the country.

In UP, 119 sugar mills which are in operation have produced 66.34 lakh tonnes of sugar till February 15, compared with 63.93 lakh tonnes produced by 117 mills on the corresponding date of last year.

In case of Karnataka, till February 15, 63 sugar mills had commenced operations and they have produced 30.80 lakh tonnes, as compared to 38.74 lakh tonnes produced by 66 sugar mills last year same period. Out of 63 sugar mills which went for crushing this season, 13 sugar mills have stopped crushing as on February 15.

In case of Tamil Nadu, 21 sugar mills commenced their crushing operations so far for 2019-20 and they produced 2.60 lakh tonnes of sugar, as compared to 3.85 lakh tonnes produced by 32 sugar mills in 2018-19 on the corresponding date.

Gujarat has produced 5.95 lakh tonnes of sugar till February 15 with 15 sugar mills in operation. Last year, 16 sugar mills were in operation and they had produced 7.78 lakh tonnes of sugar till February 15.

In Andhra Pradesh and Telangana, 18 sugar mills have produced 3.06 lakh tonnes as on February 15, as compared to 4.50 lakh tonnes produced by 25 mills on the corresponding date last season. Two out of 18 sugar mills which operated this season have ended their crushing on February 15.

In Bihar, Uttarakhand, Punjab, Haryana and Madhya Pradesh and Chhattisgarh, sugar production till February 15 has been in the order of 5.08 lakh tonnes, 2.41 lakh tonnes, 3.72 lakh tonnes, 3.51 lakh tonnes and 2.76 lakh tonnes, respectively.

Ex-mill sugar prices in the Southern and Western parts of the country are ruling in the range of Rs 3,100-3,200 per quintal and in Northern parts the same are in the range of Rs 3,200-3,300 per quintal, said ISMA.

As per the government’s decision, 20 per cent of export quotas of mills which have not contracted for 25 per cent of their MAEQ by end of January 2020, will be withdrawn and reallocated amongst the others who have exported most of the MAEQ and are willing to export beyond their original MAEQ. It is understood that this process of reallocation is under active consideration and would be announced shortly.

As per experts in the international trade, there is an estimated deficit of 8 to 9 million tonnes in 2019-20 in the global market and that the Thailand’s exports are likely to be down by 3-4 million tonnes due to lower production therein.

Global sugar prices for raw and white sugar are currently prevailing at 20-25 per cent more than the price which prevailed three months ago when India started its exports against the 6 million tonnes of the MAEQ.

Accordingly, Indian sugar exports may get accelerated in the coming months, and could achieve more than 5 million tonnes of the MAEQ in the whole season.

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