Maharashtra govt not to honour guarantee to DPC
Mumbai: Despite the arbitration notice served on the Centre, the Maharashtra government has decided not to honour the state government guarantee invoked by the Dabhol Power Company (DPC) towards the payment of the Rs 111 crore bill for January 2001.

This is round about the same time that the Union government has refused to honour the counter-guarantee invoked for the December 2000 bill of Rs 102 crore.
Senior Maharashtra State Electricity Board officials said, "We will write to DPC tomorrow that we do not intend to honour the state government guarantee. Instead, they should adjust the amount against the claim of Rs 400 crore slapped on it by the Maharashtra State Electricity Board."
Implying that DPC is employing pressure tactics the officials said that the timing of the invocation of the state government guarantee was significant in as much as the January bill became due on February 25, 2001. DPC waited for more than a month before invoking the state guarantee and at the same time, has slapped a notice of arbitration and conciliation on the Centre for the December 2000 bill, they added.
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Arbitration to begin in India
New Delhi: Arbitration proceedings between Dabhol Power Company, (DPC) and the Union government over the disputed Rs 102 crore bill for December 2000 will commence in India and not in London as was earlier understood. This is for the reason that both sides want the dispute to be resolved as early as possible and the entire process may take up to eight months if it ends up in the London Court of Arbitration (LCA).
Initially, a committee will be formed comprising of representatives from both sides. This committee will try to resolve the dispute within 60 days in India. Only if this fails will proceedings commence in the LCA.
At the LCA, both sides will nominate a mutually acceptable member.
A third member from a neutral country will then be co-opted into the panel and only then will proceedings commence.
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Consignment of cheap Chinese bikes arrives
New Delhi: Domestic manufacturers of many products are a worried lot these days. With the lifting of quantitative restrictions from April 1,2001 the country is expected to be flooded with imported goods which may be cheaper/of better quality than Indian products.
Motorbike manufacturers have greater reason to worry as within a week of the lifting of QRs, the first consignment of Chinese motorcycles has arrived in the country.
Though it is a small consignment, consisting of only 140 motorcycle kits, the fear is that it might be the beginning of a deluge of motorcycles from China.

A relatively unknown Rajasthan-based company, Monto Motors, has imported these kits in semi-knocked down condition from one of the top four motorcycle manufacturers in China. The landed price of these motorcycles (after payment of 65 per cent customs duty) is Rs 22,000 each.
Monto Motors plans to launch three models — 72 cc, 125 cc and 250 cc — in June, starting from the northern markets. The price strategy will be aggressive in a bid to lure customers away from domestically produced bikes.

Get this: a 72-cc motorbike will cost a customer around Rs 27,000 on the road, a 125-cc Rs 33,000 and a 250-cc motorcycle Rs 36,000. This is cheap compared to some of the existing models in the market manufactured by domestic companies. At present, a moped costs around Rs 22,000; a 100-cc motorbike costs around Rs 40,000-Rs 45,000 and a 125 cc motorcycle costs Rs 50,000.

According to Rr Chibber, general manager sales and marketing Monto Motors, the Chinese motorcycles give a fuel efficiency of 88 km per litre against the average of 55 to 60 in most Indian bikes. At present, testing is going on at ARAI, Pune, while the company is also conducting test trials and the motorcycles are run around 350 km on different tracks. The company plans to sell 36,000 units in the first year. Monto Motors has invested Rs 30 crore in the venture and plans to do part assembly of motorcycles at its Alwar plant.
The company plans to start an advertising campaign in May which will include roadshows and displays at dealerships said Mr Chibber..

Though the Exim policy has laid down various non-tariff barriers which would make the import of cars difficult, in the case of two-wheelers there are no such blocks," a company executive from a leading two wheeler manufacturer said. Domestic players have decided to wait and watch for the time being.
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Cement manufacturers may cut output
Mumbai: In order to support current cement prices cement in view of the stagnant demand, cement companies are contemplating cutting down production by 15-20 percent.

There seems to be the unique case of over supply in cement, which threatens to pull down prices in the markets of Western India including Mumbai.
Thus retail prices in these markets are back to Rs 180 per bag while prices for non-trade (bulk customers) are at Rs 160-170 per bag.
This is after an abortive attempt by manufacturers to hike retail and bulk cement prices by Rs 3-5 per bag earlier this week.
However, manufacturers maintain there are no immediate plans to cut production. Says a senior L&T official, "The manufacturers produce what they can sell. We do not have any plans to cut production at this stage."
It may be recalled that cement prices had flared up by Rs 35-55 per bag across major markets late last year after manufacturers cut production to boost prices.
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