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TCIL stake in Kenyan co cleared

Our Bureau

NEW DELHI, Sept. 23

THE Union Cabinet today granted approval to Telecommunications Consultants India Ltd (TCIL) for acquiring a 30 per cent stake in Airtel (Communications) Kenya Ltd entailing an investment of $ 21.9 million.

The joint venture would operate basic telecom services in Kenya. The Kenyan Government had floated a global tender in February for awarding eight regional licences. TCIL has bagged five of them and each licence will be valid for 15 years. The licence per iod can also be extended by another 10 years. The Kenyan Government allows a maximum foreign equity of 40 per cent for operation of basic telecom services.

DA hike approved: The Cabinet approved a three per cent hike in the dearness allowance of Central Government employees from 38 per cent to 41 per cent. The hike, which will be effective from July 1, will entail an additional annual outgo of Rs 888.96 cro re.

Along with the hike in dearness relief to pensioners, the extra cost to the exchequer in the current fiscal works out to Rs 796.62 crore (Rs 592.62 crore on additional DA and Rs 204 crore on extra dearness relief).

SPV for Gujarat-Pipavav project: The formation of a special purpose vehicle (SPV) between the Railway Ministry and its PSUs and Gujarat Pipavav Pvt Ltd and their associates to execute a gauge conversion project from Surendranagar to Rajula and constructi on of a new 14 km line from Rajula city to Pipavav was also cleared by the Cabinet.

The estimated capital cost of the project is Rs 294 crore and will be financed with a debt equity of 1:2 with both the Railway Ministry and Gujarat Pipavav holding 50 per cent equity stake in the SPV.

The freight traffic movement on this section is projected to increase from three million tonnes to 10 million tonnes in the next five years.

Ordinance to amend Nabard Act: Approval was given to promulgate an Ordinance to amend Section 19 of the Nabard Act 1981 to empower the institution to issue financial instruments that will be eligible for tax breaks under Section 54 EC of the Income-Tax A ct 1961.

While the Finance Act 2000 had permitted tax breaks on capital gains invested in bonds issued by Nabard, the institution was not in a position to issue instruments till the requisite amendment was made in the Act.

On promulgation of the Ordinance, Nabard can issue financial instruments even prior to September 30, to facilitate investments of capital gains realised by investors after April 1, this year.

NTC retirement age rolled back: The Cabinet approved a roll back in the retirement age of board level and below board level employees of the National Textiles Corporation and its nine subsidiaries from 60 to 58 years with immediate effect. This will resu lt in superannuation of 4,370 employees and an annual savings of around Rs 62 crore.

Revised PLB for Railways: The Cabinet also cleared a modified formula for working out the productivity-linked bonus (PLB) for the Railways to enhance the productivity levels and maintain good industrial relations. The modified formula will be effective f rom financial 1998-99.

In the input side, capital in the form of increase in tractive effort, wagon capacity and coach capacity will now be factored in with suitable weights which will be reckoned on a regular basis. The revised formula will also take into account the staff st rength of all non-gazetted employees, who are actually eligible for payment of PLB.

Group C, D & B non-gazetted employees will be eligible for a 54-day bonus on the back of a 10 per cent increase in productivity, eight per cent growth in freight traffic and inclusion of non-suburban traffic in revised PLB formula.

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