Turkey cancels $5.7bn highway privatisation tender

ISTANBUL: Turkish Finance Minister Mehmet Simsek said on Friday the government had cancelled a $5.7 billion tender for the privatisation of toll roads and bridges, after Prime Minister Tayyip Erdogan earlier said the result had not met expectations.

Turkey’s Koc Holding and Gozde Girisim and Malaysia’s UEM Group Berhad had won the tender in December.

The Istanbul stock exchange was closed when Simsek made the statement.

Copyright Reuters, 2013


General Tyre invests Rs500m in motorcycle tyre plant

Compan­y to tap spare parts market in first phase.  “Due to unfair competition, it becomes extremely hard for us to expand and at the same time make only marginal profits of 2% to 2.5%,” says GT chairperson.

KARACHI: General Tyre (GT) has invested Rs500 million in motorcycle tyre production and plant enhancement, which will also create job opportunities, GT Chief Executive Shahid Hussain revealed during a press conference at the Sheraton hotel on Friday.

“Had this company not existed, the Government of Pakistan would have had to spend more than $200 million annually on the import of the number of tyres produced by GT alone,” GT Chairperson Lt Gen (retd) Ali Kuli Khan Khattak said in the ceremony.

“Importers would have taken advantage of the situation and wreaked further havoc on our country’s fragile economy,” he added.

He said that tyre manufacturing is an expensive and tedious process, which requires a lot of funds to continually expand. “Due to unfair competition, it becomes extremely hard for us to expand and at the same time make only marginal profits of 2% to 2.5%,” he said.

“Pakistan is passing through a critical phase, owing to which many industries have either been shut down or shifted to other countries. We, on the contrary, decided to break this trend and have invested a good amount of money in putting up an ultra-modern motorcycle tyre and tube manufacturing plant,” he added.

Hussain said the company will get into the large motorcycle parts replacement market in the first phase, and then approach selected assembly plants to be one of their suppliers in the next phase.

“We have ensured that grip, style and fuel economy is built into each tyre, as our survey revealed that grip was the most important factor motorcyclists care about. Our tyres have low rolling resistance, which means more kilometres per litre,” he said.

Dr W Flamm, a technical adviser to Continental AG, also spoke on the occasion and said Continental AG has a long term association with GT and will continue to support the company. He also said Continental AG is happy that GT is expanding and has now entered into this field.

Published in The Express Tribune, February 23rd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

India central bank chief endorses advisors on policy rate cut

MUMBAI: India’s central bank governor Duvvuri Subbarao endorsed the unanimous recommendation of all external members of the bank to cut its policy interest rate last month the first cut in 9 months minutes of the quarterly meeting released on Saturday showed.

Four of the six members suggested that the Reserve Bank of India (RBI) should reduce the policy rate by 25 basis points in the third quarter policy review as global conditions were favourable and marginal decline in WPI inflation provided room for some monetary easing.

On January 29 India’s central bank lowered its key policy repo rate by 25 basis points (bps) to 7.75 percent to help support an economy set to post its slowest annual growth rate in a decade.

It also unexpectedly reduced the cash reserve ration (CRR), the share of deposits banks must keep with the central bank, by 25 bps to 4.00 percent, to infuse an additional 180 billion rupees into the banking system.

The committee consists of seven external members, apart from the governor and the deputy governors.

The panel’s role is purely advisory, with the governor having the final say in deciding rates.

Two of the members felt that a 25 basis points reduction in the repo rate alone might not induce banks to reduce their lending rates and advised a cut in the banks’ cash reserve ratio (CRR) of 25 basis points to nudge the lending rates down was in order.

This would also enable loan rates to reduce more than deposit rates.

One of the other two members felt that the Reserve Bank should make use of open market operations (OMOs) to manage liquidity and keep the CRR unchanged.

These two members recommended a sharper reduction in the repo rate by 50 basis points and use of OMOs to manage liquidity.

Copyright Reuters, 2013

Indus Motor profits drop 44% as car sales fall

Compan­y announ­ces Rs6 per share interi­m divide­nd.  The company said the sluggish market demand forced it to shut down the plant for 53 days, but it did not lay off any workers.


After a robust fiscal year 2011-12, Indus Motor Company saw a considerable dip of 38% in car sales in first half (July-December) of current fiscal year, which brought down profit after tax by 44% to Rs0.98 billion compared to Rs1.77 billion in the same period of last year.

Sales of Toyota brand, both completely knocked down (CKD) and completely built units (CBU), were down 38% to 14,994 units compared to 24,341 units in the corresponding period last year.

Net sales revenue for the first half of 2012-13 decreased 26% to Rs24 billion compared to Rs33 billion in the corresponding period of previous year.

The company said the sluggish market demand forced it to shut down the plant for 53 days, but it did not lay off any workers.

Indus Motor is not the only car assembler which saw its sales plunge, other two car assemblers – Honda and Suzuki – also faced similar challenges in the first six months of FY13.

Atif Zafar, analyst at JS Global Capital, told The Express Tribune sales of Honda and Suzuki remained weak from July to December 2012. “However, with the obvious decline in import of used cars from January onwards, we must expect a sustained increase in sales of all three car assemblers,” he said.

Another plus point for these Japanese car assemblers was that the Japanese yen had been falling for the past couple of months, which would reduce the import cost of parts and components, he added.

Overall, the domestic auto industry endured a difficult period in the first half of FY13 with sales plunging 30%.

“The industry is thankful to the government for its decision to reduce the age limit of imported used cars from five to three years. This will ensure survival of the local auto industry. It is in the national interest that a stable policy environment is provided for the industry to play a meaningful role in economic development,” said Parvez Ghias, CEO of Indus Motor in a statement.

The board of directors declared an interim dividend of Rs6 per share for the half year compared to Rs8 per share in the same period last year.

Indus Motor said presence of used imported car models in the Corolla category impacted sales of the company and severely restricted its overall market share, which dropped to 25% compared to 30% in the corresponding period last year.

Published in The Express Tribune, February 23rd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Rothschild loses battle over Bumi

21 February 2013 Last updated at 18:43 GMT Nathaniel Rothschild Nathaniel Rothschild was hopeful of regaining control of Bumi, a company he helped found Financier Nathaniel Rothschild has lost his bid to oust the current board of coal mining giant Bumi, the company he helped to found.

Chairman Samin Tan survived a vote to remove him but informed the board he was stepping down.

Mr Rothschild had wanted to rejoin the company and expel 12 of the 14 board members, including the chief executive and chairman.

Shareholders rejected his attempts and voted to remove just two members.

Chief executive Nick von Schirnding also managed to keep his post, with more than 60% of votes cast in his favour at the London meeting.

Mr Tan, who received 57% of votes in favour of his retention, said he would resign once a new independent chairman was found.

The company said it would look for a new chairman “who has experience in, and is familiar to, the London market”, according to a statement.

The two members who were ousted were Jean-Marc Mizrahi and Nalinkant Rathod.

Mr Rothschild set up Bumi with the influential Bakrie family, part of Indonesia’s political and business elite, in 2011.

The deal was intended to offer international investors the chance to buy into natural resources assets in emerging markets while ensuring they were protected by UK market rules.

Fraud allegations

But the partnership, and relations with the Bakrie family, soured after Mr Rothschild called for a radical clean-up at the firm.

To make matters worse, he made allegations of potential misuse of development funds and other assets at the firm in September 2012.

Allegations of financial irregularities at Bumi’s key Indonesian operating subsidiary, PT Bumi Resources – in which it owns 29% alongside the Bakrie family – first emerged that month, after Mr Rothschild received information from a whistleblower.

However, an investigation by legal firm Macfarlanes, commissioned by the London-listed parent company, said the evidence provided to Mr Rothschild comprised emails that had been obtained illegally, something Mr Rothschild denies.

Macfarlane said the claims that money intended to finance development of coal mines had been misappropriated could not be substantiated, in large part due to “the unwillingness of key parties to be interviewed and provide information”.

Bumi’s management said that it had referred the matter to the relevant authorities, including the Indonesian financial services authority, and the UK Serious Fraud Office.

Mr Rothschild quit the board in October.

Bumi’s new chief executive, Mr Schirnding, has negotiated an amicable divorce with the Bakrie family, including the sale of the family’s stake in PT Bumi Resources for $580m (£370m), and the family’s divestment of its 24% in the London-listed company.

But the board warned that the deal would be scuppered if Mr Rothschild succeeded in retaking control of the company.

The company’s share price has slumped 60% since it listed in 2011.

Mineral sands miner Iluka to slash jobs

Updated February 21, 2013 13:44:03

The mineral sands miner Iluka Resources says its full-year profit has fallen by a third and it is planning on cutting up to 200 jobs.

The company made $363.2 million after tax last year.

That is down 33 per cent on its 2011 profit.

In an effort to reduce its production costs, the company says as many as 200 positions within its Australian operations will be made redundant.

Iluka’s managing director David Robb says staff were aware that job cuts were on the cards when prices for its products dropped last year.

He says job losses will mainly be felt by contractors and he is confident of getting the workers back when prices improve.

The company announced in January, that its mineral sands mine near Eneabba in the state’s mid west, will remain idle until economic conditions improve.

Iluka is the largest zircon producer in the world and the second biggest producer of the high grade titanium dioxide minerals.

The majority of the company’s production operations are within Australia, including WA, Victoria and South Australia.

It also has mining and processing operations in Virginia in the United States.

Topics: mineral-sands, company-news, wa

First posted February 21, 2013 12:07:38

UK loses top credit rating

Posted February 23, 2013 21:41:22

Ratings agency Moody has downgraded the UK’s credit rating from AAA to Aa1.

It is the first time since the 1970′s that Britain has not had the top rating…

The downgrade is a huge political blow for the government, especially chancellor George Osborne who said it was a stark reminder of the debt problems facing the country.

Moody’s said the government’s debt reduction program faced big challenges ahead as the British economy struggles with recession and unemployment.

The UK has enjoyed a AAA rating since 1978 and Moody’s said economic growth would remain sluggish, but added the country ‘s credit worthiness remains extremely high.

Shadow chancellor Ed Balls said it was a “humiliating blow” to the chancellor and the prime minister who had said the AAA rating was a mark of economic and political credibility.

Topics: world-politics, business-economics-and-finance, economic-trends, united-kingdom

NBN boss calls for study into broadband future

Updated February 23, 2013 12:53:09

The head of the National Broadband Network (NBN) wants an industry study to determine the best way to build the high-speed internet project.

Construction has been underway on the NBN for more than two years but there is still debate over which technology should be used.

The NBN Co is using a technology called ‘fibre to the premises’, which goes all the way to a home, to build most of the network.

But the Coalition wants to use ‘fibre to the node’. It says this method is faster and cheaper, but it will come with slower speeds.

NBN boss Mike Quigley is trying to bring an end to the debate in the lead up to the federal election.

He says he supports a proposed study by the Communications Alliance into the pros and cons of a range of technologies to see which is best.

“It gives them an opportunity to have a voice and give their opinion on what is the right way forward for the NBN,” he told PM.

“There is a lot of debate at the moment about what the right way forward is. Who’s better placed than the industry itself to have a view?”

But he says his support for the study does not mean he does not fully support the NBN.

“Having an open debate can only be a good thing for the country,” he said.

Opposition communication spokesman Malcolm Turnbull says the study should have been completed before the Government embarked on the NBN project.

“Mike Quigley’s statement today is a colossal admission of failure,” he told PM.

“It is admitting that the Government has made a hash of this … that there needs to be an examination of the different options and … that should have been done four years ago.”

“The question should have been asked: ‘we want everyone in Australia to have very fast broadband, what are the options to do so, let’s rank them in terms of time of deployment, cost of deployment, service delivery outcomes’.

“That’s what we’ve been begging the Government to do for four years, but they’ve embarked on this, they’ve arrogantly dismissed every request for this and now Mike Quigley himself is saying he’d like to see it done.”

Mr Turnbull says if the Coalition wins government, it will examine all aspects of the NBN and decide whether the rollout should continue.

“We will ensure there is produced a comprehensive analysis, totally transparent analysis, of what it will take in terms of dollars and time to complete the network on the plan of the current Government,” he said.

“We will then produce a similar analysis which shows the savings in dollars and time by burying it, by making changes, along the lines of the kind that we’ve proposed, using much more fibre to the node, which is consistent with the experience and practice in most other developed markets.

“We’ll also ensure there is done a cost benefit analysis by the Productivity Commission, and we will also conduct a very rigorous inquiry into the whole process relating to the NBN.

“I think Australians need to be told the truth about this project, they need to be told how it could possible have been embarked upon with so little analysis.”

The board of the Communications Alliance, which represents the telecommunications industry, has not yet decided whether it will go ahead with the study.

But its chief executive, John Stanton, says it is the right time to look at the technologies on offer.

“I guess the point is we’re not at a late stage of the rollout of the NBN, we’re in the very early stages of a nine year or more rollout,” he said.

“The nexus of the idea here is that technologies develop, things are learnt as you start to roll out a network like this, and it is logical and inevitable that over a multi-year rollout, there will be evolution and improvement of the way that the network is deployed.

“So it could make sense to have industry, which after all designed the original reference architecture for the NBN, continue to look at what could make sense.”

Mr Stanton says the debate over high-speed internet needs to be taken out of political hands.

“We need a rational, inclusive debate that sits above politics and simply looks at what might be sensible options in the national interest,” he said.

Major telco Optus does not agree that the study by the alliance would be effective.

It has issued a statement saying it would be better for individual companies to contribute to the debate on various broadband technologies rather than a Communications Alliance review.

The ABC asked Telstra for a response to Mr Quigley’s plan for a study, but it did not reply.

Topics: telecommunications, internet-technology, computers-and-technology, government-and-politics, federal-government, australia

First posted February 22, 2013 19:49:04

Microsoft says small number of its computers hacked

00-024SEATTLE: Microsoft Corp said on Friday a small number of its computers, including some in its Mac software business unit, were infected with malware, but there was no evidence of customer data being affected and it is continuing its investigation.

The world’s largest software company said the security intrusion was “similar” to recent ones reported by Apple Inc and Facebook Inc.

The incident, reported on one of the company’s public blogs happened “recently”, but Microsoft said it chose not to make any statement publicly while it gathered information about the attack.

“This type of cyberattack is no surprise to Microsoft and other companies that must grapple with determined and persistent adversaries,” said Matt Thomlinson, general manager of Trustworthy Computing Security at Microsoft, in the company’s blog post.

Over the past week or so, both Apple and Facebook said computers used by employees were attacked after visiting a software developer website infected with malicious software.

The attacks come at a time of broader concern about computer security.

Newspaper websites, including those of The New York Times , The Washington Post and The Wall Street Journal, have  been infiltrated recently. Earlier this month US President Barack Obama issued an executive order seeking better protection of the country’s critical infrastructure from cyber attacks.

Copyright Reuters, 2013

Qantas climbs back to profit

Updated February 21, 2013 20:02:09

Qantas has bounced back from a steep full-year loss last financial year, to post a $111 million half-year profit.

The airline’s net profit after tax for the six months to the end of December 2012 jumped 164 per cent on the same period a year earlier, and was up from a $287 million loss in the previous half-year.

Underlying profit before tax, which also excludes most one-off costs and gains, was up more than 10 per cent on the same period last year to $223 million.

However, both the underlying and statutory profits include $125 million in revenue from an agreement negotiated between Qantas and Boeing in August 2012 to restructure the airline’s order for B787 Dreamliners.

The airline’s chief executive, Alan Joyce says the cancellation of 35 Dreamliners and the sale of its half share in road-freight venture StarTrack is paying off.

“Today’s result includes $125 million of compensation income from Boeing,” he said.

“This compensation settlement, negotiated by Qantas management, recognises the opportunity cost to our business incurred by the delay in the delivery of the 787s, which affected Jetstar, Qantas International and Qantas domestic.”

The major difference between underlying and statutory profit was $136 million in one-off “transformation costs”, as the airline restructures some of its businesses.

The company says all parts of its business were profitable in the half, except Qantas International which posted a before tax loss of $91 million.

However, it noted that its international division cut its losses by 65 per cent in the half compared with a year earlier.

The airline’s chief executive Alan Joyce says Qantas is now starting to reap the benefits of its restructuring program, which resulted in large short-term costs when management grounded the airline in response to staff industrial action.

“In total, the group achieved $172 million in transformation benefits in the first half of 2013,” he noted in the report.

“The operating environment remains complex and volatile, but we are now beginning to realise the benefits of the tough decisions that we have made over the past 18 months.”

Despite this improvement, Qantas has warned its outlook for the current six months remains challenging and volatile, and has declined to provide profit guidance due to uncertainty around fuel costs, competition, exchange rates and the global economy.

The airline has elected not to pay an interim dividend, but investors are still happy with the result, pushing Qantas shares up 4 per cent to $1.68 by 10:32am (AEDT).

Topics: business-economics-and-finance, company-news, air-transport, australia

First posted February 21, 2013 09:20:00

Liberals to fast track mining approvals

Updated February 22, 2013 16:38:28

The WA Liberal party will spend $20-million to help fast track mining approvals if it is re-elected to govern in a fortnight.

The party plans to create a database of environmental and heritage information, which mining companies will be able to access online.

It will also expand an approvals tracking scheme it introduced during its current term of government that allows proponents to track the progress of their approval, regardless of which government department is doing the evaluation.

Mines and Petroleum Minister Norman Moore says the two policies will make it easier for mining companies to get their approvals processed.
“They’ll be able to see what work’s been done in the past,” he said.

“[They] can access that, and use it, and save having to repeat a lot of the approvals processes that they would have had to do if that information was not available.”

The State’s peak mining lobby has welcomed the pledge.

The Chamber of Minerals and Energy says both policies will encourage future growth and investment across the sector.

Topics: mining-industry, mining-environmental-issues, elections, liberals, wa, perth-6000

First posted February 22, 2013 16:24:23

Thousands affected by pole fires

Updated February 23, 2013 14:38:22

Firefighters across Perth were kept busy on Friday night with dozens of pole top fires caused by light rain.

Authorities say water combining with dust on the top of the poles sparked the fires.

Western Power says more than 20,000 properties lost power across the city.

The worst affected areas were Hamilton Hill, Balcatta, Bassendean, Atwell, Coolbellup and Eden Hill.

Topics: electricity-energy-and-utilities, industry, fires, perth-6000

First posted February 23, 2013 13:31:44

Drop in new homes prompts fears

21 February 2013 Last updated at 18:30 GMT Home under construction It is still a challenging environment for builders The government needs to act now to make sure enough affordable homes are being built, campaign groups have said, after figures showed the number of housing starts in England fell 11% in 2012.

Housing charity Shelter said the government faced a “housing crisis” unless immediate action was taken.

The National Housing Federation also said more needed to be done to meet the huge demand for affordable homes.

A spokesperson for the government said ministers were “far from complacent”.

The Home Builders Federation said it was “still a challenging environment” in which to build homes.

“A lack of mortgage finance is the most important short-term issue and if buyers can’t buy, builders can’t build.

“But we have seen a much more positive start to the new year with an easing in lending and schemes like the government’s NewBuy enabling people to get a 95% mortgage,” the group said.

‘Unlock finances’

Latest figures from the Department for Communities and Local Government (DCLG) showed the number of new builds started in England fell to 98,280 in 2012.

The number of housing starts peaked at 183,000 in the year ending March 2006, but fell sharply in the downturn to a low of 75,000 in the year ending June 2009.

Since then starts have recovered somewhat to about 110,000 per year, but DCLG said recent quarters had seen them slip back again.

However, the most recent quarter, ending in December, saw a 1% rise compared with the previous three months.

David Orr, chief executive of the National Housing Federation, said: “Despite the current tough economic environment, the small signs of increased house building are encouraging – but more needs to be done across the whole sector to meet the huge need for more affordable homes.

“We expect housing associations, who are dealing with a radically new investment framework and a huge cut in funding for affordable housing, to continue finding innovative new ways to meet that demand.”

Campbell Robb, chief executive of Shelter, urged the government to use next month’s Budget to unlock the finance to deliver more affordable family homes.

“Unless action is taken now, it’s hard to see our housing crisis improving any time soon,” he said.

A DCLG spokesman said the latest figures showed “steady improvement” compared with the previous quarter.

He said: “The government is far from complacent, which is why, despite the need to tackle the deficit, we’re investing £19.5bn public and private funding in an affordable housing programme set to deliver 170,000 homes, putting £1.3bn into unlocking stalled sites and building the infrastructure we need and making enough formerly used, surplus public sector land available to deliver 33,000 new homes.”

New boss plans better Port Arthur massacre explanation

Updated February 22, 2013 08:31:30

The new head of the Port Arthur Management Authority wants better recognition of the 1996 massacre at the historic site.

Sharon Sullivan has taken over the role from Barry Jones, who has stepped down after 12 years in the job.

Mr Jones oversaw the site’s elevation to World Heritage listing.

Her goals include restoring the Penitentiary which could cost up to $8 million.

Tasmania’s Heritage Minister Brian Wightman last year foreshadowed plans for greater recognition of the massacre and Ms Sullivan agrees it is important.

“There is nothing wrong with the way it’s interpreted now but ways of making it perhaps more explicit and explaining things to visitors better and we will be doing that through the community consultation forum that we have,” she said.

Topics: tourism, port-arthur-7182

First posted February 22, 2013 06:15:48

Tax dodgers named on HMRC list

21 February 2013 Last updated at 17:12 GMT Treasury Minister David Gauke says the move is aimed at deterring would-be tax evaders

Tax dodgers are being named on a list published by HM Revenue and Customs (HMRC) for the first time, as their affairs come under greater scrutiny.

The list highlights “deliberate defaulters” who were found during investigations by HMRC into affairs conducted after April 2010.

In these cases, the culprits had each not paid more than £25,000 of tax.

The naming and shaming exercise is part of a crackdown that includes larger fines and tracing previous evaders.

The first list features nine names, including a hairdresser, a coach operator and a knitwear manufacturer.

They received fines ranging from a few thousand pounds to £291,830. This was imposed on wine retailer The Trade Beverage Company Ltd of Mobberley in Cheshire.

Other businesses named were bar and club Southport Leisure, of Coronation Walk, Southport, Gatemain Contractors, of Wainscott in Rochester, Kent, and Menemis, trading as Unlimited Knits in Nottingham.

Individuals named were hairdresser Joseph Tyrrell, of Prescot Road in Liverpool, grocer Rafique Maroof Raja, of Thornton, Kirkcaldy, pipework specialist S Stewart, of Woolton in Liverpool, David Alan Jay, who trades in property maintenance in Cranham, Essex, and coach operator Brian Clifford Tattersall, of Bolton.

“The publication of these names sends a clear signal that cheating on tax is wrong and reassures people who pay their taxes – the vast majority – that there are consequences for those who refuse to tell HMRC about their full liability,” said Treasury Minister David Gauke.

“It also encourages defaulters to make a full and prompt disclosure and cooperate with HMRC to avoid being named.”

When added together, the tax owed amounted to less than £1m.

When asked why no large corporations appeared on the list, Mr Gauke said that HMRC was taking action to close legal loopholes, and those who promoted aggressive tax avoidance schemes were also being exposed.

A recent Commons public accounts committee report called for HMRC to publicly list promoters of tax avoidance schemes and those who used them.


Under the new plan, called the Managing Deliberate Defaulters (MDD) scheme, anyone who evades tax will also have their financial affairs watched closely for up to five years to make sure they do not re-offend.

Tax form The crackdown was aimed at deterring would-be tax evaders

It started with letters being sent to 900 known tax dodgers warning them they will stay in the Revenue’s sights for up to the next five years.

HMRC has said the programme was as much about deterring would-be tax evaders as punishing those who had already been found out.

Other measures include:

making announced or surprise inspections of books and recordsasking for additional information or documents to be sent in with the person’s tax returns carrying out in-depth compliance checks into all or any part of the person’s tax affairsobserving and recording the person’s business activities and cross-checking details in their accounts requiring more frequent VAT returns or cancelling certain favourable VAT schemes for miscreants.

Ordinarily, tax offenders can be fined up to 100% of the tax they have not paid, plus the payment of the back taxes plus interest.

Offenders who have been trying to evade tax in some offshore jurisdictions now face fines of up to 200% of their unpaid tax.

HMRC has the option of prosecuting the worst offenders, which can lead to them being sent to jail if convicted.

The list will be updated every three months.

In order for someone to be named on the website, they must have failed to fully disclose what they owed at the outset.

The taxman can only publish defaulters’ names for a year and within 12 months of the penalty becoming final. Details are published only once all appeal routes have been exhausted.

Chas Roy-Chowdhury, of the ACCA tax body, said this made the list “credible”.

Swan promises rigorous audit of election policies

Updated February 22, 2013 09:08:51

The Parliamentary Budget Office will be required to release a post-election audit of all election commitments within a month of polling day under changes announced by Treasurer Wayne Swan today.

In a speech to an Australian Business Economists forum this morning, Mr Swan has also promised to release a preliminary budget outcome for the current financial year well before the September 14 election.

Amid an increasingly personal debate with the Coalition over economic credibility, Mr Swan has committed to a funding boost for the Parliamentary Budget Office (PBO) to ensure it has the resources needed to prepare rigorous policy costings in the lead-up to the election.

“Transparency would be further enhanced if the PBO were to prepare a post-election audit of all political parties, publishing full costings of their election commitments and their budget bottom line 30 days after an election,” he said.

“We will introduce legislation for consideration by the Parliament to enable this reform.

“This will remove the capacity of any political party to try to mislead the Australian people and punish those that do.

“It will avoid a situation we saw last election, where the Liberal Party thought they could con the Australian people.

“As a result of the reforms I am announcing, their $11 billion black hole in the budget bottom line would have been uncovered regardless of the election outcome.”

After the 2010 election, Treasury analysis revealed a multi-billion-dollar shortfall in the Coalition’s election costings, although the Opposition described the figures as a “difference of opinion”.

The analysis was only made public because of the post-election negotiations between the independent MPs and the major parties.

Shadow treasurer Joe Hockey has welcomed Mr Swan’s move, saying the Coalition strongly supports the PBO.

“I cannot believe my luck in Wayne Swan calling for sunshine on budget numbers,” he said.

“I mean, he is just the gift that keeps giving in this regard.

“Every single number from the mining tax and the carbon tax through to the budget surplus that he claimed he was going to deliver, every number he’s got wrong and transparency only helps the Coalition.

“It seems as though Wayne Swan is actually trying to get more prepared for opposition than he is actually running the country. I mean, he’s almost declared the innings closed on Labor by going down this path.”

The Coalition has said it would not be able to finalise its policy costings for the 2013 election until the Pre-election Fiscal Outlook (PEFO) is released, which will occur after the official campaign begins in August.

Mr Swan has today pledged to release a preliminary budget outcome for the 2012-13 financial year as soon as he is given a “reliable figure”.

“Treasury and Finance officials last week were clear that a reliable estimate of the underlying cash balance could be made well before the election and we commit to releasing them,” he said.

“This means that the 2012-13 outcome of the underlying cash balance – the most important budget aggregate – will be there for everyone to see.

“There will be no fiscal surprises after the election.”

Both the Coalition and Labor have indicated the economy will be a key focus of its election pitch to voters, although the Government is still dealing with the fallout of walking away from its promise to deliver a surplus this financial year.

It is also coming under pressure to explain how it will pay for signature policies such as the National Disability Insurance Scheme and the overhaul of school funding.

“Inevitably, these reforms will involve very difficult decisions, but they will always be guided by our Labor values,” Mr Swan said.

Topics: federal-government, government-and-politics, budget, business-economics-and-finance, australia

First posted February 22, 2013 06:18:50

What keeps Victoria’s Avalon Airshow airborne?

Posted February 22, 2013 15:35:01

Say the word Airshow, and many will think of fatal fireballs and terrifyingly close calls as stunt pilots ply their trade.

Fingers’ crossed, a Royal Australian Air Force Hercules shooting fireworks-like flares next week is the closest the 2013 Avalon Airshow comes to that stereotype.

Rather, that is the “2013 Australian International Airshow and Aerospace & Defence Exposition.”

“The thing about Avalon is that it really is two concurrent events,” Airshow Chef Executive Ian Honnery tells the ABC.

He speaks in short bursts, interrupted by a commentator describing the airliner-like comforts of the McDonnell-Douglas C-17A Globemaster Military Transport plane that roars overhead.

Mr Honnery continues; “Avalon is a major public aviation spectacular, and at the same time, it’s an international aerospace and defence aviation exposition.”

Meanwhile, the commentator informs us that the C-17 has two bedrooms and fully functioning toilets onboard, in case you were wondering.

The behemoth plane, capable of carrying 70 tonnes of cargo, is undoubtedly impressive.

The commentator is joined by RAAF Air Commodore David Pietsch.

Air Commodore Pietsch regales the assembled crowd with a tale of how an American C-17A was able to land, fully laden with earthmoving equipment, on a rough, unprepared patch of desert in Afghanistan. It then disgorged its cargo, allowing the machines to then plough a smoother airstrip for future operations.

Quite a feat no doubt, although hardly the sort of acrobatics display that is likely to draw the punters to an airshow. So why are the assembled scribes being told this?

Back to CEO Ian Honnery, and his two-shows-in-one explanation. “On the exposition side of it, what you have is six days of trade exhibitions – 600 exhibitors from 21 countries, 75 military and commercial delegations, 21 conferences and symposiums,” he explains.

The flags adorning the numerous marquees surrounding the tarmac sport a number of the aviation and defence contractors: Boeing, Northrop Grumman & Thales to name a few.

The purpose, he says, is simple.

“It’s not so much the deals that get done at an event like this, it’s the introductions and the networking that takes place,” he says.

“It’s important that Australian companies in particular are introduced to the internationals, and this is a great opportunity to do that, without the expense of going overseas.”

Victoria’s Aviation Minister, Gordon Rich-Phillips, has been on stage spruiking the benefits of the airshow to the local economy including $150 million in 2011 and $20 million for Geelong.

He has also announced that the show’s tenure has been expended. It will now continue, every other year, until 2025.

But it has hardly been a positive few years for Australian manufacturing. If the defence industry is driving this show, how secure is its future?

“There’s an old saying,” Ian Honnery begins, when asked that question. “When times are good, you should promote yourself. When times are bad, you have to promote yourself.”

He delivers his final line with a polished pause that suggests he has reeled it off a few times before. “We take Australia to the world by bringing the world to Australia,” he smiles.

Next week at the airshow, there will be acrobats walking on the wings of flying planes, stunt pilots, fireworks and 300-plus planes on display.

All set then, to attract the expected 195,000 visitors. But by the time they arrive, the show’s real purpose will be largely complete.

Topics: air-transport, air-force, event, vic, geelong-3220

Short term shipping deal signed

Updated February 21, 2013 09:01:00

Tasmanian businesses have negotiated a short-term solution to the state’s international shipping crisis.

The Rio Tinto subsidiary, Pacific Aluminium, has struck an interim deal with Swire Shipping to export aluminium from its Bell Bay smelter to Asia.

There is likely to be capacity on the ship for several exporters.

The announcement will be made today, ending two years of uncertainty for businesses that have been paying more to send their goods via Melbourne.

The triple-A consortium abandoned its Bell Bay to Singapore run in 2011.

Late last year, Swire proposed a service every 18 days from Bell Bay to Townsville, Shanghai and Hong Kong.

It is understood there is no ongoing taxpayer funding involved in the deal.

It comes almost a week after the Tasmanian Opposition promised to spend $33 million to underwrite a shipping service if its wins government.

The Tasmanian Opposition says a short-term international shipping service will not resolve the crisis faced by exporters.

The Opposition says the deal does not address the broader international freight task.

Topics: sea-transport, business-economics-and-finance, tas

First posted February 21, 2013 05:34:06

NT push for gas pipeline link with Queensland

Updated February 22, 2013 11:08:46

Northern Territory Chief Minister Terry Mills says he will lobby the Federal Government and Opposition to guarantee support for the construction of a gas pipeline between the Territory and Queensland.

Mr Mills told the Legislative Assembly the pipeline should be built from Tennant Creek in the Territory to Mount Isa in north-west Queensland to encourage growth and investment.

He says the project is now on the COAG agenda, which is proof of its national significance.

“This is a big, bold plan, a very important plan,” he said.

“It is part of the Country Liberals’ DNA as to have these sorts of plans that are going to create a better future for the Northern Territory.”

The proposed pipeline would cost an estimated $500 million.

Topics: government-and-politics, oil-and-gas, tennant-creek-0860, nt, darwin-0800, mount-isa-4825

First posted February 22, 2013 11:04:23

French blast ‘ignorant’ US tyre boss

21 February 2013 Last updated at 15:41 GMT Morry Taylor Maurice Taylor is nicknamed “the Grizz” for his bear-like no-nonsense style A French minister has responded angrily to the boss of US tyremaker Titan who said he would have to be “stupid” to invest in the country.

Maurice Taylor made the claims in a letter to France’s minister for industrial recovery, Arnaud Montebourg.

On Thursday, Mr Montebourg replied that Mr Taylor’s “extreme” comments showed a “perfect ignorance of what our country is”.

He added that 20,000 foreign firms are in France, employing 2 million people.

Mr Taylor – a former candidate for the Republican presidential nomination in 1996 – was replying to a request for Titan to consider investing in a loss-making Goodyear plant in Amiens, north France.

“I have visited that factory a couple of times. The French workforce gets paid high wages but only works three hours,” Mr Taylor said in the letter, dated 8 February, and published by French business daily Les Echos on Wednesday.

“They get one hour for breaks and lunch, talk for three and work for three. I told this to the French union workers to their faces. They told me that’s the French way!”

On Thursday, he told Le Figaro: “I didn’t want to insult the French. I wanted to say that the union at the factory in Amiens has a screw loose.

“If the French workers work, they will be as competitive as the Germans, British or the Americans. The problem is that the French are too expensive because of their particular benefits.”

Mr Taylor is nicknamed “the Grizz” for his bear-like no-nonsense style. He added: “How stupid do you think we are?”

French unions had blasted the content of his letter.

The spat has been front page news in France and caused lots of discussion over “le French bashing” on social media over the past few days.

More spats

In his response, Mr Montebourg said: “May I point out that Titan, the company you lead, is 20 times smaller than Michelin, our French leader of international influence, and 35 times less profitable?”

The minister added that 4,200 subsidiaries of US firms employed more than 500,000 people in France and that some firms had been around since 1842.

He went on to praise the efforts of young US soldiers in World War II and the current efforts of President Barack Obama to stop deindustrialisation in the US.

This is not the first row that Mr Montebourg has been involved in since the Socialists took charge of the presidency last summer.

He accused steelmaker Arcelor Mittal of “lying” and “disrespecting” the country and said it was no longer welcome during a spat over the closure of two furnaces at its steel plant in Florange.

France has a 35-hour statutory working week, brought in by the Socialist Party in 2000, but critics say it is now stifling economic growth.

Last moves before elections: ECC likely to increase margins for OMCs, dealers

Ban on import of CNG cylind­ers and kits may be lifted.  Seven groups had imported 59 consignments of CNG kits and cylinders despite the restriction and now a summary was being tabled before the ECC for clearance of the cargo. PHOTO: FILE


The Economic Coordination Committee (ECC), which is meeting today (Friday), is likely to give the go-ahead to the proposal for increase in margins of oil marketing companies and dealers, leading to a slight rise in prices of petrol and diesel for consumers.

According to sources, the ECC in its meeting, to be chaired by new Finance Minister Saleem Mandviwalla, will discuss proposed increase of 12.5% (25 paisa per litre) in margin on petrol for OMCs and 17.2% (41 paisa) for dealers. For diesel, a 5.7% (10 paisa per litre) upward revision in margin has been proposed for OMCs, but no change has been sought in dealers’ margin.

At present, OMCs earn a margin of Rs1.98 on every litre of petrol and Rs1.76 on diesel. Dealers collect a margin of Rs2.37 on petrol and Rs2.2 on diesel.

Sources told The Express Tribune the Oil and Gas Regulatory Authority (Ogra) had resisted the upward revision in margins of OMCs and dealers and instead suggested an audit to determine how much profits they were making. The oil and gas regulator was of the view that OMCs and dealers were making hefty profits and any increase in their margins was unjustified.

CNG kits

The ECC is expected to lift the ban on import of compressed natural gas (CNG) cylinders and kits, providing leeway to seven powerful groups and an Italian firm.

Sources in the Ministry of Industries said the seven groups had imported 59 consignments of CNG kits and cylinders despite the restriction and now a summary was being tabled before the ECC for clearance of the cargo.

The Federal Board of Revenue (FBR) has said out of 59 consignments of cylinders, importers have furnished particulars of bills of lading and purchase orders for 26 consignments. Though the bank concerned has verified the bills of lading, no verification of purchase orders has been given.

Accordingly, it said, dates for letters of credit, bank contract or bank agreement for pending consignments of CNG cylinders were not available with the FBR.

The ECC will also take up the proposal calling for removing the restriction on Landi Renzo Pakistan, part of an Italian group, which imports CNG cylinders and kits for export. The company is engaged in the manufacture and assembly of CNG kits. It imports CNG cylinders and parts/components of cylinders and kits.

Nandipur power project

The ECC will take a decision on a summary, submitted by the Ministry of Water and Power, seeking government guarantees for borrowing Rs23 billion from domestic banks, which will be spent on the construction of 425-megawatt Nandipur power project.

The government is raising funds from domestic sources after Chinese banks refused financing for the project.

“Chinese contractor Dongfang Electric Corporation has expressed its willingness to implement the project if the government arranges financing from local resources,” an official of the water and power ministry said.

Total finances required for the combined-cycle power plant, to be installed in Nandipur near Gujranwala, is Rs57 billion.

Published in The Express Tribune, February 22nd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Fear of criticism: ECC scraps plan to deregulate oil freight margin

Allows Byco to charge 15 paisa as crude transp­ort cost from consum­ers. Rejecting the deregulation of freight margin, ECC members argued that the move would lead to varying oil prices in the country, which would spark criticism from political parties. DESIGN: SAMRA AMIR


The Economic Coordination Committee (ECC) of the cabinet has scrapped a plan to deregulate inland freight equalisation margin on petroleum products, meaning oil prices will stay uniform across the country.

According to sources, the ECC in its meeting held on Friday was asked to either deregulate freight margin on petroleum products or allow Byco Oil to charge 15 paisa per litre as crude transportation charges to recover the operational cost of Single Point Mooring from consumers.

Rejecting the deregulation of freight margin, ECC members argued that the move would lead to varying oil prices in the country, which would spark criticism from political parties.

However, the ECC gave the go-ahead to recovery of 15 paisa per litre as transportation charges only from the consumers, who would be paying an estimated Rs150 million per annum to Byco for taking delivery of crude oil through a 15km pipeline, sources said.

The ECC gave the approval despite opposition from the finance ministry and Federal Board of Revenue (FBR). The ministry argued that Byco was its defaulter as it had not deposited petroleum levy collected on sales of oil products. Therefore, it should not be allowed to impose transportation charges on consumers.

Finance secretary, supported by FBR chairman, asked the ECC to defer the matter until next meeting.

“The approval of transportation cost is going to open a Pandora’s Box as no other refinery depending on imported crude, except for Pak Arab Refinery (Parco), is enjoying this facility,” an official commented.

Parco is getting this facility because of being in the middle of the country where crude oil reaches through an 875km pipeline.

Sources said Attock Refinery Limited was also collecting crude transportation cost because it relied on domestic crude and had to get supplies from different fields.

Pakistan Refinery Limited and National Refinery Limited are processing imported crude and have pipelines spread over 20 km. “These refineries will also come up with a demand to allow collection of transportation charges from consumers,” the official said.

The Oil and Gas Regulatory Authority (Ogra) also opposed the transportation charges, stressing that commercial business should be fair and transparent. It argued that there should be no subsidy for a specific refinery and consumers should not be overburdened.

The ECC, in its meeting in April last year, had already granted seven and a half years of tax holiday to Byco despite its failure to start the refinery by the stipulated time of end-2011. Byco had sought a 20-year tax holiday.

The ECC also gave one-year extension, allowing Byco to complete the refinery by the end of 2012.

The management of Byco contended that it would receive imported crude oil at the Single Point Mooring installed 15 km into the sea along the coast of Balochistan, therefore, it would not be causing any additional burden on the exchequer.

Initially, Byco Petroleum Pakistan, formerly Bosicor Pakistan, had set up an oil refinery with a capacity of 35,000 barrels per day at Hub, Balochistan in 2004. Recently, Byco Oil Pakistan completed another refinery of 120,000 barrels per day, which is close to the earlier refinery at Hub.

Published in The Express Tribune, February 23rd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Shares in India’s Jet slide on Etihad deal worries

Jet-AirwaysMUMBAI: Shares in Jet Airways plunged nearly six percent Friday on concerns over whether India’s second largest private airline will clinch a stake sale to Abu Dhabi-based Etihad Airways.

Shares fell 6.19 percent before recovering slightly to close down 5.81 percent at 527.35 rupees as a media report said “fresh hurdles” had emerged in talks with the Gulf carrier over its plans to buy a stake in Jet.

“Etihad has put a host of conditions, including an option to buy up to 49 percent stake in Jet,” the Business Standard said on Friday, citing an unnamed source.

The Gulf airline also wants operational control and a representation on Jet’s board, the newspaper said. The Indian carrier declined to comment on the report.

Several Indian airlines have been in talks with foreign carriers after the government last year opened up the aviation sector further to allow non-Indian airlines to invest in their counterparts in the country.

Indian carriers need money to fund expansion and cut debt after years of losses caused by intense air-fare battles and rising fuel costs.

The Jet-Etihad development comes after Asia’s biggest low-cost airline, AirAsia, this week announced plans for a no-frills carrier in the country with India’s Tata conglomerate.

The venture awaits government and regulatory approval.

Copyright AFP (Agence France-Presse), 2013

Queenslanders face ‘huge’ power price hikes

Updated February 22, 2013 21:08:50

The Queensland Government says the latest electricity price rise is unacceptably high.

The average household power bill will rise by 21.4 per cent from July, or an extra $253 per year, with other household tariffs also going up by between 15 and 19 per cent.

Today’s announcement by the Queensland Competition Authority is only a draft, with a final decision due at the end of May.

The State Government froze the standard tariff for 12 months, but the competition regulator says higher network costs now have to be passed on

Treasurer Tim Nicholls says the Government is now looking at the draft ruling.

“What we’ve seen today in the draft determination by the Queensland Competition Authority is an unacceptably large price rise for electricity prices here in Queensland,” he said.

“This Government is determined to make sure that Queensland families are not kicked in the guts by this huge price rise.”

Treasurer Tim Nicholls blames an over-investment in infrastructure and “excessively generous” solar rebate and green energy schemes for the price rise.

He says he cannot do anything about it now, but can for the future.

The plan may include asking generators and distributors to absorb some of the increase.

“It’s particularly down to the Federal Government in relation to allowing their regulator to allow over investment in the network and not questioning the claims,” he said.

“Now we’ve started as a State Government questioning those claims and that’s why we’ve been able to remove from the Forward Estimates about $2 billion of costs from our companies – that will help in the future.”

Mr Nicholls says electricity network costs, which are regulated nationally, will account for about half of the price rise in Queensland.

He says spiralling network costs have not been brought under control.

“Network costs, which are regulated by the Australian Energy Regulator, will be about 50 per cent of the increase,” he said.

“This really just goes to show I think the failures over the last couple of years of the regulator to stop the gold-plating of networks and price-gouging of consumers.”

The Opposition’s Curtis Pitt says the LNP gave people “false hope” that they could bring electricity price rises under control.

“What we’ve seen today is another broken promise by the LNP,” he said.

“People have put their faith in them to address the cost of living. They said they were going to be able to handle these matters and quite simply they’ve made a promise they could never deliver on.”

Linda Parmenter from the Queensland Council of Social Service says low income earners will be hit hard.

“There’ll be more people who don’t pay their bills and end up being disconnected,” she said.

Topics: public-sector, electricity-energy-and-utilities, regulation, brisbane-4000, bundaberg-4670, cairns-4870, gladstone-4680, longreach-4730, mackay-4740, maroochydore-4558, mount-isa-4825, rockhampton-4700, southport-4215, toowoomba-4350, townsville-4810

First posted February 22, 2013 09:05:33

Nestle Nigeria to triple sales to $2.2bn in ten years: CFO

LAGOS: Nestle Nigeria plans to triple its revenues in Nigeria to 351 billion naira ($2.2 bln) over the next ten years, its chief financial officer told Reuters.

Martin Kruegel earlier said the food manufacturer would invest 100 billion naira over a ten year period to achieve its sales target.

“Our aim is to triple our Nigerian sales over the next ten years from 117 billion naira currently,” he said, adding that the additional investment would drive that target.

No skills shortage expected from FIFO recruitment drive

Posted February 21, 2013 14:12:01

Far north Queensland leaders say a new push to recruit fly-in, fly-out (FIFO) workers from the region is unlikely to create a local skills shortage.

The BHP Billiton Mitsubishi Alliance (BMA) will recruit 250 fly-in, fly-out workers from the Cairns region for its new Daunia and Caval Ridge coal mines in the Bowen Basin.

Cairns Mayor Bob Manning says the boost to the local economy outweighs his concerns about losing workers.

“In terms of attracting industry and diversification of the economy we’ve been out to lunch for a while,” he said.

“We’re back from lunch now.

“We’ll find the mining industry, because of the wages they pay, will attract people away but when men and women go to work on the mines they don’t intend to stay there for the rest of their lives.

“They’ll do two or three or four years there, they’ll get their back accounts nice and fat again and then they’ll come back to the coast again.”

Councillor Manning says there still are not enough job opportunities in the region.

“They don’t take people away forever,” he said.

“They go away, they’re away for awhile, they learn new skills, they come back and settle back into life on the coast, so I don’t see it as a great problem.

“The economy here hasn’t picked up pace yet. It’s starting to but it hasn’t picked up pace, so let’s just see what happens when we’re 12 months down the track.”

Meanwhile, BMA says salaries alone are expected to inject an estimated $40 million into the Cairns economy.

BMA asset president Stephen Dumble says the new workers will start at the mines in the second-half of the year.

“The company looked at Cairns because we’re looking to diversify where we draw our workforce from,” he said.

“We’ve said all along that fly-in, fly-out represents a good opportunity to spread the benefits of our growth and of our industry more broadly in the regions in Queensland and today’s announcement is a good recognition of that.”

Deputy Premier Jeff Seeney says it is good news for the Cairns economy.

“It’s 250 salaries that will be spent here on all of the service industries,” he said.

“All of the small businesses here in Cairns will benefit from having an extra 250 families earning a good wage in the central Queensland coalfields.”

Jo Pyne from Tropical North Queensland TAFE says it is looking at ways to plug potential skill gaps.

“I’m confident that we’ll be able to work with local industry to provide the skills that we need,” she said.

“We’ll be able to cope with the demand, I mean this isn’t a huge number that we’re talking about locally but we do need to be working very closely with industry to make sure we … don’t lose the skills that we need to keep industry running here.”

She says the company is looking for experienced mine workers and newcomers to the industry.

“We have been talking to them over the last 18 months really wanting to be quite clear about what their skills needs are so we can make sure that the training we’re delivering is providing skills to people who are interested in finding work in the mining industry,” she said.

Topics: mining-rural, mining-industry, activism-and-lobbying, community-development, regional, regional-development, work, cairns-4870, mackay-4740, rockhampton-4700

Lord it like Beckham

23 February 2013 Last updated at 00:02 GMT By Brian Milligan Personal Finance Reporter, BBC News Hotel Bristol The Beckhams will have access to the hotel spa (bottom right) when not in their suite (top right and middle) Having demonstrated his ability to say “bonjour” at press conferences, David Beckham will at least be able to greet his personal butler.

But thereafter advanced linguistic skills may not be essential, because pretty much everything at Le Bristol hotel in Paris will be done for him.

The Imperial Suite stretches more than 320 sq m (3,440 sq ft) and contains his own dining room, three bedrooms, a large dressing room and a huge bathroom of pink marble, complete with his and hers wash basins.

In all, enough space to entertain a dozen guests. And if you have to ask the price, it’s around £14,000 a night.

Possibly £500 less when the pound is having a good day.

Five-and-a-half bathrooms

Mr Beckham is staying in Paris after deciding to join Paris St-Germain for six months – and he is rich enough that he is playing for free while he’s there.

So what do you get for a world-famous footballer’s money in the UK? And if you are looking for something a shade cheaper, where can you find a bargain?

The priciest hotel suite we could find in London is at the Lanesborough, on Hyde Park Corner.

“A residence befitting royalty and visiting heads of state. For the most discerning guests,” boasts the website.

Here you will be able to relax in four bedrooms, and, especially indulgently, five-and-a-half bathrooms. There is a laptop in each room, a full-time butler, and a chauffeur who comes with his own Rolls Royce Phantom.

That’ll be £18,000 a night, sir. But don’t worry, that includes VAT.

Is a £14,000-a-night hotel suite worth it?

Breakfast not included

More modestly, the Ritz offers two suites in an 18th century house attached to the main hotel, and overlooking Green Park.

You will be brought here by the hotel’s customised Rolls Royce. (Typically clients will have landed by private jet at Northolt.)

As we enter the Royal Suite, my guide purrs discretely: “Anything that glitters in here is actually gold.”

A suite at the Ritz The Royal Suite at the Ritz has its own dining room

He is referring to the 23.9 karat gold leaf on the ceiling and chandeliers “handcrafted by the Ritz’s resident gilder”, he adds.

The champagne chilling in the bucket is from the hotel’s own vineyard, and of course the butler will always be on hand to pour it. The price here is £8,000 a night, or £10,200 a night for the Prince of Wales suite above.

“No sir, that doesn’t include breakfast,” my guide adds.

Value for money

But experts insist that’s still good value for the price.

“It is all about a personalised service,” says Simon Numphud of the AA hotel guide.

“If guests have got a favourite mineral water or wine, they’ll stock that. Likewise with magazines and newspapers. They’ll provide all of those extra niceties.”

He points out that many of these suites have 3,500 sq ft of space. That is ten times the amount in a standard 5-star hotel.

While Simon Numphud says the 5-star hotel market in the UK is booming, so too are the budget hotels springing up on roadsides and now on industrial estates all across the country.

The largest operator, Premier Inn, offers rooms from £29 a night outside London.

Travelodge says it offers rooms from as little as £19.

And Best Western is currently advertising a night for two near Tamworth for £39 a room.


Travellers would do well to remember that advertised rates are only that. They are, in effect, the price the hotel would like in an ideal world.

Off the record, one top hotel admitted to the BBC that the rooms market is “based on supply and demand”. In other words, they will often by happy to take much less than the rate they advertise.

“Sometimes they’re busy, sometimes they’re not very full,” says Martin Couchman of the British Hospitality Association. “If they’re not very full you may be able to do a deal, or you may be able to get dinner at a reduced rate, or breakfast might be included for example.”

Premier Inn If you don’t quite have the Beckhams’ wealth, experts advise you to haggle for your room

If you want a 5-star experience, but don’t want to pay for an expensive bedroom, he also recommends using the hotel facilities but not actually staying there.

“You could have afternoon tea or dinner, or use the spa facilities perhaps.”

Or perhaps you could make use of a suite that’s temporarily unoccupied.

After all, there is one in Paris that is likely to be vacant whenever Paris St-Germain are playing away from home.

Loan shark?: Despite past failure, World Bank offers another loan

Undete­rred by failur­e of first tax reform­s projec­t, agency propos­es anothe­r progra­mme.  Despite coming away empty-handed, the country is nonetheless paying a 3.5% mark-up on the borrowed amount. ILLUSTRATION: JAMAL KHURSHID


A team of World Bank ‘consultants’ has arrived in Pakistan to convince decision makers to avail a $300 million loan for a second phase of tax reforms. The group was also involved in the first phase of the same project, which the World Bank itself admitted was a “failed” one.

After the abortive $149 million Tax Administration Reforms Project, known as TARP-I, the World Bank has sent more or less the same team to devise a roadmap for TARP-II. Sources say that the project objectives will be more or less the same – enhancing tax revenues and introducing reforms in the tax machinery.

Michel Zarnowiecki, an expert in customs affairs, and William Mayville, an adviser on human resources training, are again in town to ‘tell’ how Pakistan can upgrade customs and border management in Pakistan and how it can strengthen its human resources base.

These two areas formed major components of the failed TARP-I initiative, which continued for almost seven years without achieving anything significant. Due to its disappointing outcomes, the World Bank, in diplomatic language, had admitted that the programme was “moderately unsatisfactory”, wherein the World Bank’s was “moderately unsatisfactory”, and the borrower’s performance was “unsatisfactory”.

Against the initial promise of $149 million, the World Bank’s actual disbursement was reduced to only $47.6 million. Despite coming away empty-handed, the country is nonetheless paying a 3.5% mark-up on the borrowed amount.

According to an official in the finance ministry, international lending agencies have been sucking the country dy. “Most of the money they give in the name of reforms is flown back to them as loan fees, consultant fees, and training and programme management fees,” he criticised.

The World Bank deducted $2.2 million (almost 5%) from the loan it earlier extended in the name of ‘capitalised charges’ and ‘loan origination fee’. Similarly, consultant services consumed $7.3 million, our sources said.

When Pakistan availed the TARP-I in 2004, its tax-to-GDP ratio was 11.5%. It slipped to a dismal 8.6% by the end of the first phase of the project. Another important objective – increasing electronic tax returns filers – remains an area where the Federal Board of Revenue’s (FBR) entire data is suspicious. As against 1.5 million supposed tax filers, the actual number was just above 800,000.  According to another objective, tax arrears were supposed to be reduced. Instead of a reduction, the actual figure shot upwards many times the baseline.

The TARP-I team forced Pakistan to implement a ‘voluntary compliance’ method, instead of letting tax authorities go after taxpayers. Voluntary compliance means taxpayers declare their own taxable assets, instead of the authorities going after their personal accounts. According to an FBR official, this was the biggest flaw in the first phase of the project, which was subsequently exploited by tax dodgers.

“Due to an ‘imported’ self assessment scheme, the FBR has failed to reintroduce audits despite making three separate efforts in the recent past,” an official said. “Every time the FBR wants to initiate an audit, taxpayers challenge it in court on the grounds of ‘self assessment’.”

The Washington-based lending agency has already given $3 million for a project preparation facility (PPF) for TARP-II. Most of that amount will be paid to the same consultants who designed the first (faulty) programme.

While defending the proposed programme, the FBR says the next phase of tax reforms will look at areas which were not visited in the earlier phase of reforms. FBR Chairman Ali Arshad Hakeem said the handling of the first phase was the main cause of failure.

The Planning Commission has already opposed TARP-II, our sources said.

Published in The Express Tribune, February 23rd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Hewlett-Packard sees sales fall 6%

21 February 2013 Last updated at 22:10 GMT Hewlett-Packard logo HP is in the middle of a turnaround plan The world’s largest maker of personal computers, Hewlett-Packard, has seen a 6% drop in first-quarter sales as demand for PCs continued to shrink.

Net sales in the three months to the end of January fell to $28.4bn (£15.3bn), while net profit fell 16% from the previous year to $1.2bn.

But the results beat forecasts and HP shares rose 6% in after-hours trading.

Chief executive Meg Whitman has said she will turn HP around but has warned it may take several years.

Earlier this week, rival PC maker Dell reported an 11% drop in revenue and a 31% fall in quarterly profit.

Both companies have struggled to grow sales as they battle the surge in popularity of smartphones and tablet computers.

‘Gaining traction’

In May last year, HP revealed plans to cut 27,000 jobs by the end of 2014.

It said this would reduce costs by up to $3.5bn a year.

“While there’s still a lot of work to do to generate the kind of growth we want to see, our turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation for HP’s future,” Ms Whitman said in a statement.

HP said it had returned $511m in cash to shareholders in the quarter through dividends and share buybacks.

It also said it had improved its net debt position for the fourth quarter in a row by over $1bn.

It forecast earnings per share of 80 to 82 cents in the second quarter, higher than the average Wall Street forecast of 77 cents.

“Our primary focus is to deliver on the full-year outlook, and I feel good about the rest of the year,” Ms Whitman said.

Shares unlikely to recover yesterday’s losses today

By finance reporter Rebecca HyamUpdated February 22, 2013 09:25:37

The Australian share market looks unlikely to bounce back straight after yesterday’s big fall, with more weak leads from overseas.

Signs of further weakness in Europe and lingering concerns about the latest US Federal Reserve minutes have hurt global share markets overnight.

A report on the euro area’s economy signalled the region is struggling to recover from a recession.

In the US, the Fed minutes released yesterday showed policy makers think the central bank should be ready to vary the pace of its $US85 billion in monthly bond purchases, fuelling concern stimulus will be curtailed.

In official economic news, US data showed jobless claims rose more than forecast, with applications for unemployment benefits rising by 20,000 last week to 362,000.

A separate report revealed Philadelphia-area manufacturing has shrunk unexpectedly.

The Dow Jones Industrial Average closed down 47 points to 13,881, the S&P 500 Index fell 0.6 per cent to 1,502, and the Nasdaq gave up 33 points, or just over 1 per cent, to 3,131.

Across the Atlantic, UK insurance firm Aviva recovered some of its losses from the previous session.

However, losses among mining stocks weighed on the broader market and, by the close, London’s FTSE 100 Index had fallen 104 points, or 1.6 per cent, to 6,291.

It is set to be a flat start on the Australian share market after yesterday’s 2.3 per cent slide, and in futures trading the Share Price Index 200 was down 6 points to 4,961.

The Australian dollar was also weak, and was worth 102.4 US cents around 9:00am (AEDT).

West Texas crude oil eased to $US92.85 a barrel, Tapis was also weaker at $US120.06.

However, spot gold was fighting back from recent weakness, trading at $US1,577 an ounce.

Topics: business-economics-and-finance, markets, currency, futures, stockmarket, australia, united-kingdom, united-states

First posted February 22, 2013 09:24:28

Fairfax profit rises on one-off gains

Updated February 21, 2013 15:32:33

Media group Fairfax has reported a huge surge in its half-year profit, but says weak demand in the advertising market is still restricting its earnings.

For the six months to the end of December, Fairfax has made $386.3 million.

That was up almost 300 per cent compared to its profit for the same period the year before.

However, the vast bulk of the profit ($312 million of it) came from discontinued operations, making much of it a one-off gain.

In fact, excluding significant one-off gains and losses, the company’s underlying profit fell from $136 million to $83 million.

Revenue was down from $1.18 billion to $1.1 billion, however the publisher’s expenses also fell by around $80 million as it slashed staff and moved to close major printing presses.

The company says its restructure and slimming down of the business contributed to its profit result, with a 10 per cent reduction in staff and a sell-off of some businesses which reduced debt from a around a billion dollars to $200 million.

Fairfax’s chief executive Greg Hywood says the company now has the strongest balance sheet in the industry, but there are more cost savings to be made.

“We are finding smarter ways to work that deliver us better outcomes and save us money,” he said.

“We are taking a fresh look at territories long considered sacred cows and smashing silos that long seemed untouchable. We are pursuing additional structural initiatives and cost savings beyond those currently envisaged.”

The company has cut its fully-franked interim dividend to 1 cent per share from 2 cents per share.

Fairfax shares were down 2.75 per cent to 53 cents by 10:25am (AEDT).

Topics: business-economics-and-finance, company-news, media, australia

First posted February 21, 2013 10:29:55

Bumi’s bitter boardroom battle

21 February 2013 Last updated at 19:40 GMT By Karishma Vaswani BBC News, Jakarta A boardroom battle for the control of an Indonesia coal firm is heating up ahead of a crucial shareholders’ meeting.

It was a financial battle that pitted one of Asia’s most powerful families against one of Europe’s oldest financial dynasties.

But it came to a close on Thursday when shareholders in Bumi decided in favour of the Bakrie family, part of Jakarta’s political and business elite, to control the London-listed coal mining firm.

Their main rival, Nat Rothschild, whose family have been in banking for centuries, was defeated in his attempt to oust Bumi’s board of directors, including the chairman and chief executive, and rejoin a company he had helped found.

The battle for Bumi, which controls coal mining assets in Indonesia, was played out across two continents, seen allegations of fraud and internet espionage, and cost shareholders and investors millions of dollars in lost returns.

For those of you who do not know the Bakries, their name is synonymous with power in Indonesia.

Aburizal Bakrie Aburizal Bakrie is running for president of Indonesia next year

The family-run company has some 200 holdings in businesses ranging from mining to media.

The current patriarch of the Bakrie clan, Aburzial Bakrie, is running for president in 2014 and has served in previous government cabinets. He is also the head of one of the biggest political parties in the country, Golkar, which former President Suharto also belonged to.

But while they wield significant influence, the Bakries have also had their fair share of controversy to deal with.

In recent weeks, the company has been criticised for the time it has taken to pay compensation to victims of a mud-flow disaster in Lapindo, East Java.

The group has also had to fight off allegations of tax evasion, and during the Asian Financial Crisis in 1997, there was even speculation that the group could collapse.

But each time, the Bakries have managed to emerge from their difficult times.

The beginning

The Bumi saga started in 2010 when Mr Rothschild saw an opportunity to create a company which would offer international investors the chance to buy into natural resources assets in emerging markets, but also ensure they were protected by UK market rules.

The terms of the deal were simple – the Bakries would hand over a stake in their coal assets in Indonesia, Mr Rothschild would roll them into a cash shell called Vallar, now known as Bumi Plc, and list the firm on the London Stock Exchange.

However, some were sceptical about the move right from the beginning.

Continue reading the main story
If we had done something wrong we would have been afraid of it coming out. We’re not afraid”

End Quote Chris Fong Bakrie Group “A lot of analysts and politicians actually saw it as an attempt by the Bakries to sell their assets to foreigners,” says Rendi Witular, the managing editor of the Jakarta Post who has covered the various twists and turns of story.

“And there was suspicion that a foreign entity might be able to take over Indonesia’s valuable resources.”

The turning points

When the deal was struck, Mr Rothschild or the Bakries congratulated each other on pulling together such a sophisticated, and what they thought, would be an immensely lucrative arrangement.

But then three things happened that changed everything.

First, coal prices slumped dramatically as a result of the global slowdown.

Second, it became increasingly apparent that the two sides had very different ways of conducting business.

And third, arguably the most damaging of the factors, Mr Rothschild issued a public letter late in 2011 in which he made damning allegations about “financial irregularities” in PT Bumi Resources, the Indonesian coal asset of the Bakries in which Bumi Plc owns a stake.

He called for a radical clean-up of the firm, something his Indonesian partners said was not necessary.

Bumi's Nathaniel Rothschild and Bakrie Brothers Chief Executive Officer Bobby Gafur Umar Relations between Mr Rothschild and the Bakrie group have soured since the deal was signed in 2010

“We didn’t do anything wrong,” Chris Fong, spokesman for the Bakrie group, tells the BBC.

“We knew London had a certain standard before we went into business with him [Mr Rothschild]. If we had done something wrong we would have been afraid of it coming out. We’re not afraid.”

Mr Fong also said that Nat Rothschild was playing games and trying to get publicity so as to oust the Bakries.

“He was making accusations about us and he knows who we are in Indonesia,” said Mr Fong. “He knows that this was going to get a lot of publicity, and that is what he wanted.”

The allegations Mr Rothschild made were that around a billion dollars worth of funds had gone unaccounted for at the Indonesian coal miner.

The Bakries have denied that there were any such financial irregularities.

Bumi was also keen to point out that “the unwillingness of key parties to be interviewed and provide information” meant it could not prove the allegations.

The way Mr Rothschild claimed to have learnt about the alleged irregularities was also significant.

Mr Rothschild said he had received the information from a whistleblower, but did not disclose the name of his source.

However, Bumi said that an investigation carried out on its behalf by London law firm Macfarlanes revealed that the information had been “obtained illegally by email hacking”.

Mr Rothschild, who stepped down from the Bumi board late last year, has denied any suggestions he acted illegally or unethically.

The final episode? Protestors hold banners against the Bakrie group outside their office The Bakrie group has seen its fair share of controversies over the past years

The saga has cast a shadow over Indonesia’s corporate image.

“It has made Indonesia look like a hostile place to do business in,” says Mr Witular of the Jakarta Post.

Mr Witular says that over the past few years, Indonesia has done a lot to eradicate the practice of cronyism that was rife during the reign of former Indonesian President Suharto, who ruled the country with an iron fist for more than three decades.

However, critics say that although Indonesia is now a vibrant and flourishing democracy, some big business tycoons still operate with a remarkable lack of transparency.

The fear is that the Bakrie saga may make some foreign investors nervous about doing business in Indonesia.

And that is something that does not bode well for any of the parties involved.

‘Pakistan should focus on long-term solutions’

US says Islama­bad should not go ahead with Iran-Pakist­an projec­t.  “We believe there are better ways and more secure ways, and more cost-efficient ways for Pakistan to get its power,” says Nuland. ILLUSTRATION: JAMAL KHURSHID

WASHINGTON: The United States said that there were “better and more cost-effective” ways for Pakistan to address its energy needs than projects like the Iran-Pakistan gas pipeline deal.

“We understand that Pakistan has significant energy needs and requirements, but there are other long-term solutions to Pakistan’s energy needs that we believe will have better potential for success and will better meet Pakistan’s needs than spending scarce resources on projects like this,” US State Department Spokesperson Victoria Nuland told reporters at the daily press briefing on Thursday.

She was responding to a question about press reports that Pakistan will face US sanctions if it went ahead with the IP pipeline project. “Let me just say broadly that we will continue our dialogue with Pakistan with regard to Iran,” Nuland said.

The United States, she added, was involved in many ways to help Pakistan address its energy needs, including ones that will add some 900 megawatts (MW) of power to the grid by 2013, enough power to supply an estimated two million households.

When asked if the proposed gas pipeline with Pakistan comes under the sanctionable items, Nuland said as these are being developed, she is not in a position to make that assessment. “But we believe there are better ways and more secure ways, and more cost-efficient ways for Pakistan to get its power,” she added.

Published in The Express Tribune, February 23rd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Jobs in doubt as transport company folds

Updated February 22, 2013 08:00:34

A Tasmanian courier and storage company is expected to stop trading this afternoon after 25 years in the business, with the loss of about 100 jobs.

Road Runners told its workers in Hobart, Devonport and Launceston on Thursday that it had gone into administration.

The company lost a major contract in January and administrator Paul Cook says it has been struggling to pay wages.

Mr Cook was in talks with a potential buyer last night.

The Workplace Relations Minister, David O’Byrne, says he hopes a deal can be secured to protect as many jobs as possible.

Michael Bailey from the Chamber of Commerce and Industry says it is a sign of the times.

“We seem to be taking one step forward in Tasmanian business and two steps back.”

“We’ll certainly be keeping a close eye on that and supporting any of our members that have been caught up in this and clearly it’s a very difficult situation for all people involved.”

Creditors will meet on March 4.

Topics: company-news, devonport-7310, launceston-7250

First posted February 21, 2013 15:15:12

AIG makes $4bn loss from unit sale

21 February 2013 Last updated at 21:56 GMT AIG logo AIG reported an operating profit of $290m, which excludes the sale of the leasing business American International Group (AIG) has reported a huge loss from the sale of its aircraft leasing business ILFC.

The insurer reported a net loss of $4bn (£2.6bn) for the last three months of 2012, due to the $4.4bn loss from the ILFC sale.

It had made a net profit of $21.5bn in the same period of 2011.

AIG also said Storm Sandy had been the second most expensive single catastrophic event for it in the US on record, costing $1.3bn after tax.

Despite that, it made an operating profit, which excludes the effects of the ILFC sale, of $290m, compared with $1.5bn in the last quarter of 2011.

“AIG’s operating profit this quarter shows the power and financial strength of our diverse global franchise,” said chief executive Robert Benmosche.

The results were better than had been expected and AIG shares rose 2.5% in after-hours trading.

The fourth quarter was a busy one for AIG, which sold its remaining stake in the Asian insurer AIA in December for $6.5bn.

Also during the quarter the US Treasury sold its remaining shares in AIG for about $7.6bn, repaying the last of its financial support to the insurer.

FIFO jobs deal ‘stupid’

Updated February 21, 2013 09:15:26

A central Queensland business leader says it is “stupid” that miners have to live more than 1,000 kilometres from where they work.

About 1,000 workers from south-east Queensland and Cairns in the far north are being sought to staff two BHP Billiton Mitsubishi Alliance mines on the Bowen Basin.

Deputy Premier Jeff Seeney will today open an upgrade to the airport at Moranban, south-west of Mackay, to support the fly-in, fly-out (FIFO) workforce.

Mr Seeney says the moves will boost the far northern economy to about $60 million a year.

However, the president of the Moranbah Traders Association, Peter Finlay, says local residents should have the opportunity to apply for jobs in their own community.

“It’s seven kilometres from the post office and if you want to work there you can’t have an address in Moranbah – how stupid is that?” he said.

“I’m sure somebody buys a hamburger now and then but the vast majority of wages are spent elsewhere.”

Isaac Mayor Anne Baker says the people of Moranbah are frustrated.

She says it will put more pressure on regional infrastructure.

“There are certainly critical impacts, for example the roads,” she said.

“It’s our goal to have strong and healthy communities and just not have expanding tarmacs for large mining companies.”

Councillor Baker says she supports a limited FIFO workforce.

Recruitment outside Moranbah is set to begin mid-year.

Meanwhile, a report into FIFO work practices was tabled in Federal Parliament last week.

The chairman of the Regional Australia Committee, federal independent MP Tony Windsor, says the resources boom is being wasted.

“Eighty 80 years ago they had to leave the country to find work in the cities – now we’ve got a phenomenon where this is work in the country,” he said.

“The city people are coming out to do the work, collect the wages and go home to where they want to be.

“If you look at Moranbah and a few other towns you’ll start to see some of the social issues and economic issues that FIFO delivers.”

He says he fears the practice could spread to other sectors.

“Why can’t the meat industry? Why can’t the medical industry?” he said.

“If that becomes the preferred option, that everyone can live in the city or on the coast and just go to the country for their wages, that will be detrimental to a lot of country communities, irrespective of whether they’re in the mining boom or not.”

Topics: mining-rural, community-development, federal—state-issues, activism-and-lobbying, mining-industry, regional-development, moranbah-4744, mackay-4740, cairns-4870, rockhampton-4700

First posted February 21, 2013 09:11:33

US pension fund to buy up border properties

Posted February 21, 2013 09:46:53

Some of the biggest properties on the Queensland-New South Wales border will soon be sold to a US pension fund.

The Toowoomba-based company Prime Ag is selling off its assets and delisting from the stock market.

In a deal worth $125 million, three farms in the Goondiwindi and Gunnedah districts are being sold to TIAA-CREF.

Prime AG chief executive officer Peter Corish says another 40 per cent of the company’s assets are still to be sold.

“We are currently involved in positive discussions and negotiations with a number of parties regarding the future of those properties,” he said.

“We are ensuring all our employees are well briefed on the situation and particularly those who are part of the transaction with TIAA-CREF.”

Topics: agribusiness, company-news, superannuation, toowoomba-4350, goondiwindi-4390

UK and China close to currency deal

22 February 2013 Last updated at 16:20 GMT Governor Zhou Xiaochuan and Governor Mervyn King Sir Mervyn met with Governor Zhou Xiaochuan in China The Bank of England is in negotiations with its Chinese counterpart on a deal likely to boost trade between the UK and China in the yuan.

The Bank and the People’s Bank of China are close to signing a three-year currency swap arrangement, governor Sir Mervyn King said.

The UK is looking to become a centre for the Chinese currency, also known as the renminbi.

Chancellor George Osborne welcomed the agreement as an “important step”.

Such agreements allow central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China’s currency is not fully convertible to other currencies.

Mr Osborne added that it “cements London as the Western hub for the fast-growing renminbi market”.

‘More liquidity’

UK banks hold 35bn yuan ($5.5bn; £3.5bn) worth of deposits in the Chinese currency,

Last year, the UK Treasury announced plans to make London – the world’s largest currency trading hub – the leading international centre for trading the yuan outside mainland China and Hong Kong.

“London is growing rapidly as a centre for renminbi business,” Sir Mervyn said on his visit to China.

“In the unlikely event that a generalised shortage of offshore renminbi liquidity emerges, the Bank will have the capability to provide renminbi liquidity to eligible institutions in the UK,” he said.

China has been gradually relaxing strict controls on the value of its currency and on flows of capital.

Beijing has been using these pacts as part of its push for a more global role for the yuan.

It has a swap agreement with Brazil worth $30bn and has also signed similar agreements with other trading partners such as Japan, Australia and Hong Kong.

Clean Seas reveals $34m loss

Posted February 21, 2013 12:13:54

South Australian-based Clean Seas Tuna has announced a $34 million statutory loss for the last half of 2012.

However, the Eyre Peninsula company says it is confident of improvements.

It is expecting further surplus asset sales and existing cash reserves will support it while it looks to revitalise its yellowtail kingfish business.

The company has told the ASX it has resolved substantive feed-related health problems and returned to normal yellowtail kingfish growth.

As a result, it says kingfish has the potential to deliver good returns.

It says the company has positioned its kingfish as a sashimi product, proving there is a sizeable market, with premium pricing, in Australia and overseas.

It has suspended its tuna propagation in the medium term, to focus on activities more likely to prove profitable.

Clean Seas has reported an underlying six-month loss of $4.4 million, down from $7 million for the same period the previous year.

Topics: company-news, food-and-beverage, fishing-aquaculture, port-lincoln-5606, sa

Fresh hopes for full shipping service

Updated February 21, 2013 20:19:50

The operator of a new international shipping service between Tasmania and Asia says it is unclear how many exporters will benefit.

The Singapore-based Swire Shipping has struck a deal with Pacific Aluminium to run a monthly service from Bell Bay to several Asian ports.

The ship will mostly carry aluminium from the Bell Bay smelter but there will be room for a small number of containers from other exporters.

Swire says it is too early to predict what the volumes will be.

The smelter’s general manager, Ray Mostogl, says the loss of international shipping in 2011 had increased costs, threatening Bell Bay’s viability.

Mr Mostogl says the shipping deal is a stepping stone towards a long term, sustainable service for Tasmanian exporters.

The Infrastructure Minister, David O’Byrne, has welcomed the deal but admits it is not a long term solution.

He says State and Federal Governments are still considering options for a more regular service for all exporters.

Topics: sea-transport, bell-bay-7253

First posted February 21, 2013 10:37:01

Nurses to walk off the job on Monday

Updated February 22, 2013 19:55:38

Nurses have voted to strike for 24 hours starting on Monday if they don’t receive a pay offer from the Government before then.

Earlier this week nurses voted to close one in five beds in public hospitals and cancel some surgeries in a bid to pressure the Government for a 20 per cent pay rise over three years.

The Australian Nursing Federation yesterday proposed to cancel the industrial action if the Health Department today agreed to a 12.75 per cent rise and no loss of conditions.

But that has not happened and nurses have now voted to walk off the job as well as revise their pay demands back up to 20 per cent.

The Health Department and the ANF have been locked in talks before the industrial relations umpire for the past two days but so far they have not been able to resolve the matter.

Chief medical officer for the Department, Gary Geelhoed, says a strike will lead to disaster.

“I think we can say quite clearly this may lead to deaths of patients,” he said.

“We know in research done in this state around the four-hour rule that the busier you are in emergency departments, the longer people wait in emergency departments, the higher the death rate goes.”

Earlier this morning the Premier Colin Barnett said he is prepared to meet with the ANF in an attempt to halt any more industrial action.

But he maintains a new deal cannot be signed while the Government is in caretaker mode.

He is urging nurses not to strike.

“I think my appeal to nurses is please don’t go out on strike,” Mr Barnett said.

“Don’t disrupt the operation of health care in the state for something which has still got months laid down for further negotiations if they’re required.

“If it would help avert industrial action I’m certainly happy or pleased to meet with Mark Olson.

“But again I stress, that will not mean that an agreement will be reached or that I would indeed formally negotiate an agreement.”

Topics: industrial-relations, perth-6000

First posted February 22, 2013 13:23:19

Regulator raps Big Four accountants

22 February 2013 Last updated at 11:09 GMT PWC’s Richard Sexton says there is no conflict of interest in auditing and being appointed by company management

Britain’s four biggest accountancy firms have been heavily criticised by the Competition Commission.

The regulator has accused PWC, Ernst & Young, Deloitte and KPMG of being too dominant and not always meeting a shareholder’s needs.

The four accountancy firms act as auditors for 90% of the UK’s stock-market listed big companies.

They have also been criticised in the past for not doing enough to warn of the financial crisis.

Critics say accountants failed to scrutinise the banks’ balance sheets properly, missing the warning signals that led to government bailouts.

The concern is that the relationship between auditors and company management becomes too comfortable with a “tendency for auditors to focus on satisfying management rather than shareholders’ needs”.

Continue reading the main story Review a company’s financial position for investorsHelp with tax complianceStructure business in a tax efficient wayHelp to detect fraudLook after companies when they go bustRestructure companies to stop them going bustHelp raise finance for company takeoversHelp companies to float on the stock exchange”It is clear that there is significant dissatisfaction amongst some institutional investors with the relevance and extent of reporting in audited financial reports,” said Laura Carstensen, chair of the Audit Investigation Group.

She added that “management may have incentives to present their accounts in the most favourable light, whereas shareholder interests can be quite different”.

“We have found that there can be benefits to companies and their shareholders from switching auditors, but too often, senior management at large companies are inclined to stick with what they know.”

The Competition Commission pointed out that companies do not tend to change their auditors – with almost a third of the FTSE 100 having used the same one for more than 20 years.

‘Gross underestimation’

She said her organisation was looking into different ways of encouraging competition in the industry. Mandatory rotation of audit firms is one idea being considered, as well as forcing companies to put the contract out to tender after a certain period.

The Big Four argue that the market is competitive and say many big clients doubt that smaller firms could build up their expertise fast enough.

“We are very clear that we report to the shareholders and engage with the Audit Committee as their representatives,” said PWC’s Richard Sexton.

Continue reading the main story

FTSE 100 firms

31% had same auditor for more than 20 years67% had same auditor for more than 10 years

FTSE 250 firms

20% had same auditor for more than 20 years52% had same auditor for more than 10 years

Source: Competition Commission

“We believe that the Competition Commission have grossly underestimated the critical role that Audit Committees play in protecting the interests of shareholders.”

‘Significant flaws’

This was echoed by Ernst and Young, who said that competition in the market was “healthy and robust”.

Ernst and Young’s Hywel Ball added that they would co-operate fully with the inquiry but states that he did not believe that mandatory audit firm rotation was in the public interest.

Deloitte said it did not believe that the current market led to high prices, as contended by the Competition Commission, and added: “We categorically disagree that auditors typically place the interests of management over shareholders.”

However, one of the smaller rivals to the Big Four, the BDO, said it was pleased that the report had confirmed “significant flaws” in the market.

“No one solution will achieve market correction, but rather a combination of tendering requirements, encouragement of transparency and dialogue between auditors, companies and investors, and reform of outdated exclusionary practices should provide a backdrop for a healthier FTSE 350 audit market,” said Simon Michaels, managing partner at BDO.

The report is a preliminary one, with the final version due to be published in October. No evidence of tacit collusion was found.

Europe and the US are also looking into new rules for accountants. US audit regulators are also considering forcing companies to change auditors at regular intervals.

The European Commission wants to break up the Big Four, splitting their audit and their consulting businesses. Any new division would have to use a different name.

ICBC Middle East 2012 profit jumps 69pc

RIYADH: The Middle East branch of Industrial and Commercial Bank of China, the world’s biggest lending bank, enjoyed surging profits and asset growth in 2012, it said on Saturday, underscoring increasingly close economic ties between Beijing and the Gulf.

The bank’s Middle East unit, based in Dubai, said pre-tax profit surged 69 percent in 2012 from 2011 to $54 million, while operating income jumped 47 percent to $72 million.

Total assets at end of 2012 were $3.96 billion, a rise of 29 percent over the same figure at the end of 2011, it said in an emailed statement.

Annual trade between China and the UAE grew fifteen-fold to $37 billion from 2000 to 2011, Hong Kong Monetary Authority chief executive Norman Chan told China’s official Xinhua news agency last month.

Most of that trade is conducted in dollars, but a growing proportion is also starting to be carried out in yuan.

Earlier this month, Dubai’s largest bank, Emirates NBD, said it had started offering yuan accounts.

Copyright Reuters, 2013

Pistorius contract suspended by Nike

21 February 2013 Last updated at 11:11 GMT Nike "I am the bullet in the chamber" ad campaign The Nike ad campaign featuring Oscar Pistorius was swiftly pulled after the crisis broke US sportswear giant Nike has suspended its contract with Oscar Pistorius, who is accused of murdering his girlfriend.

“We believe Oscar Pistorius should be afforded due process and we will continue to monitor the situation closely,” a Nike spokesman said.

It recently pulled ads that featured Mr Pistorius and the line, “I am the bullet in the chamber”.

He also has deals with BT, Oakley, and Ossur, the Icelandic firm that makes his carbon-fibre blades.

Mr Pistorius, a Paralympic champion, denies the premeditated murder of his girlfriend Reeva Steenkamp. He is in court in South Africa this week to press to be released on bail pending his trial.

On Wednesday, Clarins said that it would no longer run Thierry Mugler ads featuring Mr Pistorius “out of respect and compassion for the families involved”.

The Paralympian was chosen as the face of the fashion firm’s A*Men fragrance in 2011.

Another of Mr Pistorius’ sponsors, a South African pay TV channel, pulled its TV ad campaign featuring the athlete recently.

Mr Pistorius won gold medals at the 2004 Paralympic Games in Athens, in Beijing in 2008 and London in 2012.

In London he made history by becoming the first double-amputee to run in the Olympics, making the semi-final of the 400m.

Nike was recently forced to end its long relationship with Lance Armstrong, who has been stripped of his seven Tour de France titles and finally admitted to doping after years of denial.

It recently signed up Northern Irish golfer Rory McIlroy as a new brand ambassador, making him one of the highest paid sports stars in the world.

ACCC cracks down on dodgy retail practices

Updated February 21, 2013 19:04:20

The competition regulator has announced a crackdown on businesses making dodgy claims about products or services and exploiting customers.

The Australian Competition and Consumer Commission is targeting misleading claims including those about free-range eggs and the origin of meat.

Last week, the ACCC revealed that Coles and Woolworths are the subject of a probe into claims they are putting unlawful pressure on their suppliers.

The commission’s chairman Rod Sims has told the AM Program his organisation is also looking into several other cases of anti-competitive behaviour.

“We’ve got about 30 investigations underway which is, by our standards over the long haul, quite a lot,” he said.

“We’re looking at cartel conduct, misuse of market power, we’re looking at anti-competitive agreements. It’s quite broad, it’s in many areas of the economy.”

The latest crackdown by the competition watchdog will specifically target businesses making misleading claims about the origin and nature of products, including free-range eggs, meat and organic foods.

The Australian Competition and Consumer Commission says it has evidence of companies taking shortcuts or outright lying about certain products.

Mr Sims says consumers need to be able to trust the validity of claims about everyday goods.

“Country of origin claims, region of origin, like does meat come from King Island? We’ll be focusing on whether things are organic or free-range when they claim to be,” he explained.

“We’ve taken cases, and we’ll take more, on things like is the product what you’re getting – you think you’re getting extra virgin olive oil – are you? You think you’re buying wool – are you?”

Mr Sims says a recent case found a business misled consumers about its meat coming from King Island.

“When areas or goods have built up a particular reputation it’s just not right that others seek to take advantage of that reputation,” he added.

“People build up faith in their region, for example if you buy wine from the Margaret River, that means something to you. It’s important, therefore, that it does come from the Margaret River.”

You can follow Peter Ryan on Twitter @Peter_F_Ryan or on his blog.

Topics: business-economics-and-finance, consumer-protection, food-and-beverage, retail, australia

First posted February 21, 2013 09:04:29

Lennon delivers grim economic warning

Updated February 22, 2013 09:15:19

Former Labor Premier Paul Lennon is warning Tasmania’s unemployment rate could return to double-digit figures without a major development like a pulp mill.

Mr Lennon has returned to Parliament House after an absence of four years for the unveiling of his official portrait by Tasmanian artist, Geoff Dyer.

He told a ceremony to commemorate his tenure that he regrets leaving politics before the pulp mill project in the Tamar Valley was realised.

“And my goodness don’t we need it now,” he said.

“Back in the period 2006 to 2008, there were many people in Tasmania who thought we didn’t need any more development, we had enough, we were right for the rest of our lives.

“I think we’ve found out different now, that if we’re not careful we’ll be back where we were in 1998 very quickly.”

Mr Lennon says he has a simple message for Tasmanians, and that is to support the development of the pulp mill pioneered by the collapsed timber company Gunns.

“If we don’t I have great fear for manufacturing in this state and for our ability to attract ability from outside of the island,” he said.

The Premier, Lara Giddings, says her most pressing concern is the threat of a Tony Abbott Government and his plans to redistribute the goods and services tax.

“Let me say, we’re not where we were in 1998.”

The Premier says Labor still supports the pulp mill.

Topics: state-parliament, business-economics-and-finance, unemployment, hobart-7000, launceston-7250, tas

First posted February 21, 2013 21:24:11

Real estate industry fights move to drop licences

Updated February 21, 2013 11:25:08

The Real Estate Institute of WA has described as absurd a Federal Government proposal to drop a requirement for commercial real estate agents to hold a licence.

Earlier this week, a man was fined in the Perth Magistrate’s Court for selling properties without holding a current licence.

The real estate industry is fighting the Federal Government’s move and REIWA president David Airey says it is vital high licensing and professional standards are maintained

“Because they want to make it simplistic and easy; they want to drop away the licensing of commercial real estate people, commercial real estate property managers and delete or reduce and not have at all continuing professional development standards as we have in Western Australia, Queensland, New South Wales and South Australia,” he said.

Topics: consumer-protection, perth-6000

First posted February 21, 2013 11:18:23

Aurora merger jobs toll still unclear

Updated February 22, 2013 21:35:10

It is still unclear how many jobs will be shed under plans to merge Aurora Energy’s poles and wires business and Transend.

The Tasmanian Government is amalgamating the state-owned energy companies to allow for the sell-off of Aurora’s retail business.

The move will give all Tasmanian’s a choice of power provider.

The Energy Minister, Bryan Green, says he is appointing a new board to oversee the amalgamation.

It will include an independent chairman and two board members each from the existing Aurora and Transend boards.

Mr Green says the overhaul of Tasmania’s energy market is running to schedule but he can not say what the jobs toll will be.

“I don’t have a figure on that specifically but…we are doing everything we possible can to ensure that we minimise job losses,” he said.

“We’re looking to utilise the fact that we do have a retail business through Hydro in Momentum to utilise those people.

“Already some people have come across as a result of the call centre being established here in Hobart.”

The Opposition fears the overhaul of the state’s energy industry is becoming a “bureaucratic tangle”.

The Deputy Opposition Leader Jeremy Rockliff is against the creation of the board.

“[It's] another layer of bureaucracy when really all we want, all consumers want, is to see their power prices reduced.”

Mr Green says the board is needed.

“Most smart people would believe that it’s best to have a new board working on the issues of transition.”

He says the amalgamation will save taxpayers $8 million a year.

Topics: electricity-energy-and-utilities, states-and-territories, tas, hobart-7000, launceston-7250

First posted February 22, 2013 13:53:30

Ratings cut humiliating, says Labour

23 February 2013 Last updated at 10:52 GMT Ed Balls: “Our debts are getting bigger because there’s no growth in the economy”

Labour has attacked the government’s economic policy after the UK lost its AAA credit rating, but the coalition says it is “making progress”.

Shadow chancellor Ed Balls said the downgrade was a “humiliating blow” for the chancellor, urging him to act fast to “kick-start our flatlining economy”.

But chief secretary to the Treasury Danny Alexander said the government was getting Britain “back on track”.

Ratings agency Moody’s cut the UK’s top rate to Aa1.

The agency, which is the first to downgrade the country’s rating since 1978, said it had done so due to expectations that growth will “remain sluggish over the next few years”.

It said the government’s debt reduction programme faced significant “challenges”.

Chancellor George Osborne said the decision was “a stark reminder of the debt problems facing our country” and did not mean the government should change course.

‘Flatlining economy’ Continue reading the main story image of Hugh Pym Hugh Pym Chief economics correspondent, BBC News

It was a question of not if, but when.

Financial markets knew a downgrade of the UK’s sovereign rating was just a matter of time.

Even so, the announcement by Moody’s was a big jolt to the ongoing economic debate.

There is no shame in losing the AAA rating at a time when most leading economies are struggling with the burden of rising debt and lack of growth.

The UK is following the experience of the US and France in 2011.

Their borrowing costs actually fell after the downgrades.

But the symbolism of Britain losing the gold-plated rating for the first time since the 1970s cant be ignored.

George Osborne will have to work hard to explain why, having set great store by retaining the AAA when he arrived at the Treasury, he has now seen it stripped away.

And it seems likely Moody’s rival agencies will deliver their own verdicts soon.

However, speaking on BBC Radio 4′s Today programme, Mr Balls said: “This credit rating downgrade is a humiliating blow to a prime minister and chancellor who said keeping our AAA rating was the test of their economic and political credibility.

“I have always said… that you should not set your policy by the credit ratings agencies. They have got things wrong in the past.

“But what matters is the underlying economic reality and what has happened is the credit rating agencies have caught up with the facts.

“There has been no growth now for two years, our deficit is getting bigger… the plan has not worked. This is why the chancellor is fast running out of credibility.”

Mr Balls added: “In the budget, the government must urgently take action to kick-start our flatlining economy and realise that we need growth to get the deficit down.”

Pressed on whether he would increase borrowing at the moment, he said: “I would slow the pace of deficit reduction. I would have an immediate stimulus in the economy.”

‘Utter failure’

Responding to the comments, Lib Dem minister Mr Alexander told BBC News that losing the AAA rating was not a devastating blow.

“I would say this is disappointing news and that the credit rating agencies are one benchmark amongst many in terms of the economy, but actually our credibility as a country is tested every day in the financial markets.”

“We continue to command very low interest rates and also this country is continuing, despite all the difficulties and despite the fact that growth has been much slower than was originally forecast… to create jobs – a million jobs since we came into office.”

Mr Alexander insisted the government was trying to “deal with huge financial problems we inherited from Ed Balls and his colleagues and get the country back on track”.

He added: “Or course it’s been slower than expected, but I think we are making progress down the right road.”

BBC political correspondent Alan Soady said the cut carried symbolism because, even in opposition, Mr Osborne had talked about the importance of reserving the UK’s AAA rating, and protecting it was one justification for his deficit reduction plan.

The downgrade would therefore provide ammunition to the government’s opponents, our correspondent said.

Scottish finance secretary John Swinney said the cut proved the UK’s “vigorous austerity programme” was not working.

“The decision to downgrade the UK’s credit rating confirms the utter failure of the UK government’s economic strategy,” he said.

In announcing the ratings cut, Moody’s cited the “challenges that subdued medium-term growth prospects pose to the government’s fiscal consolidation programme, which will now extend well into the next parliament”.

It said the UK’s huge debts were unlikely to reverse until 2016, but added its outlook was “stable” – meaning it sees no further downgrades in the near future – and its creditworthiness remained “extremely high”.

The UK’s net sovereign debt was the equivalent of 68% of the country’s annual economic output, or GDP, at the end of last year.

The country has experienced a double-dip recession since 2008. It grew in the third quarter of last year – boosted by the impact of the Olympics, but shrunk again by 0.3% in the last three months of 2012.

Continue reading the main story Private-sector firms that assign credit ratings for issuers of debtA credit rating takes into account the debt issuer’s ability to pay back its loan That in turn affects the interest rate applied to the security (eg a bond) being issuedA credit downgrade can make it more expensive for a government to borrow moneyAAA-rating is the best credit rating that can be given to a borrower’s debts, indicating that the risk of borrowing defaulting is minuscule.In his Autumn Statement in December, Mr Osborne acknowledged public finances were taking longer to rectify than planned, and admitted he would be forced to extend austerity measures by at least another year.

And earlier this month, the Organisation for Economic Co-operation and Development said the Bank of England should be ready to inject more money into the economy to boost growth.

All three major credit agencies last year put the UK on “negative outlook”, meaning they could downgrade its rating if performance deteriorates.

Germany and Canada are the only major economies to currently have a top AAA rating – as much of the world has been shaken by the financial crisis of 2008 and its subsequent debt crises.

The credibility of ratings agencies have also come under attack. S&P is being sued by the US government over ratings it gave to some mortgage-backed assets in the run-up to the global financial crisis in 2007, which subsequently fell dramatically in value.

Shale gas ‘fracking’ fractures views in Top End

Posted February 21, 2013 18:23:57

The head of an anti-fracking community group based in the eastern states has warned against the development of the shale gas industry in the Northern Territory.

Farming, fishing, pastoral and environmental groups were among those represented at a Darwin meeting to discuss the controversial underground mining technique known as hydraulic fracturing, or fracking.

Lock the Gate Alliance president urged Territorians to carefully consider the environmental impact.

“In many ways, it’s an uncontrolled experiment on the Australian environment,” he said.

“They simply don’t know what the impacts are likely to be … especially on underground water and people’s health.

“It is such an aggressive, powerful industry that governments simply let them have their way.

“It has only been a mobilised and organised community that has in anyway kept them under control.”

The Northern Territory Cattleman’s Association wants to scrutinise opportunities for gas shale mining in the Territory.

Association executive director Luke Bowen says the industry could provide considerable benefits.

“I think we acknowledge that the world needs energy,” he said.

“Shale is another frontier and we have to ensure that where it is exploited, it is done in the right way.”

But Mr Bowen says land-holders have to be given a stronger position to negotiate from.

Aboriginal land owners have the power to veto mining, while owners of land such as cattle stations do not.

Arnhem Land traditional owner Eddie (Blahchini) Mason is opposed to fracking on his lands.

“If you are going to come over there and try to do this, you are trespassing on my land,” he told the meeting.

“So stay away and leave us in peace.

“(Fracking) might pollute my waters, my sacred site area.

“Fracturing they call it; that’s where you blow the thing down there and the gas comes up.

“It will destroy everything.”

The meeting was told that about 80 per cent of Territory land and 90 per cent of its coastline are subject to mining exploration applications of some kind.

Meanwhile, the Territory Government has made 26 recommendations to a Productivity Commission inquiry into mineral resource exploration.

The recommendations all relate to the mining provisions of the Territory Aboriginal Land Rights Act.

The Government says they are all aimed at streamlining the negotiation and consent process for exploration and mining on Aboriginal land.

They cover definitions, processes and consultation.

None of the recommendations relate to the Aboriginal right to veto mining.

Topics: regional, oil-and-gas, mining-rural, environmental-impact, nt

Social tech ventures going global

22 February 2013 Last updated at 07:47 GMT By Saira Syed Business reporter, BBC News, on board the Explorer MV Explorer As it approaches midnight out at sea, somewhere between Ho Chi Minh City and Singapore, the MV Explorer takes on the look of an abandoned ghost ship.

In a cluttered room that serves as a make-shift office onboard, Tendekayi Katsiga, a technology entrepreneur, is one of a few people still awake.

Typing away on his computer, he is putting together a presentation for potential investors and partners.

His company, Solar Ear, manufactures affordable, solar rechargeable hearing aids in Botswana and distributes them to other parts of Africa.

His is one of 11 technology-based social ventures that have come aboard this ship going around the world, hoping to scale up their businesses and have a big social impact.

They are joined by mentors, including Nobel Peace Prize winner Desmond Tutu, who will be using their experience and contacts to give them an advantage.

Mr Katsiga has another seven hours before the ship reaches Singapore. If his presentation goes well, he could be one step closer to his aim: taking Solar Ear global.

“There are 525 million people with hearing loss and 70% of them live in developing countries. So it’s a big market, the market is so huge and impact is so profound,” he explains, his fatigue suddenly fading as he outlines his plans.

“Our goal is to scale our output from 10,000 to 50,000 units per year….We’ve only covered 1% of the market.”

Networking effect

The 105 day boat voyage was dreamed up by Daniel Epstein from the Unreasonable Institute, a social-venture incubator based in Boulder, Colorado, and George Kembel from Stanford University’s Institute of Design.

The Explorer, a converted cruise-liner, left from San Diego and will stop in 11 countries in Asia and Africa before ending its journey in Barcelona.

At each port of call there are events, pitch sessions and meetings set up for the companies to show off their wares.

Solar Ear The affordable rechargeable hearing aid comes with two batteries that use solar energy

“The motivation to put Unreasonable at Sea together, and the one question that everyone whose involved in it was asking, is: how do you go global?” says Mr Kembel, a former venture capitalist.

And that question is all the more pertinent for social enterprises for whom conquering more markets could mean wider impact on the lives of more people.

The companies on board are all trying to tackle social and environmental problems on a large scale and their businesses include ways of cleaning the world’s oceans, creating affordable medical devices and developing a non-intrusive technology that allows blind people to see.

And many of them are hoping that the networks of the mentors, including Silicon Valley heavyweights like Megan Smith and Tom Chi of Google, will be able to put them in touch with the right people in each market they visit.

“It’s about finding the right connections,” says Solar Ear’s Mr Katsiga, adding that he’s already been hooked with a number of potential partners.

Booze cruise?

But while business is important to the people on board the Explorer, the emphasis is also very much about learning. The ship belongs to the Semester at Sea program, which takes university students around the world as they complete their degrees and qualifications on board.

It makes for an interesting mix of conversations at lunch in the shared cafeterias, with critiques of English literature bouncing off ideas about manufacturing facilities in China.

Workroom Mentors help guide the firms on all aspects of business and put them in touch with contacts

As fun as it seems, however, this is no booze cruise. The entrepreneurs have the smallest cabins on the ship near the bow with no windows, formerly used by the ship’s crew.

Organiser Mr Epstein calls it the dungeon and says he deliberately asked for that accommodation because he did not want the entrepreneurs to think it was a holiday.

And despite the students lounging around the pool, or shooting hoops on the basketball court in between classes, the entrepreneurs are not taking this trip lightly.

Each new market they stop at brings with it an opportunity to learn and adapt their product or business models, and none of them want to squander it.

“In Tokyo, we found engineers ready to work with us for product development,” says Mr Katsiga. “In Shanghai, we learned how their distribution models works, so we can apply it on the African continent.”

‘Double bottom line’

During the day, the atmosphere on board the ship is vibrant and hopeful; the energy of lots of young people who feel as if they can change the world.

Continue reading the main story

A typical day for the entrepreneurs starts with breakfast between 7am and 8:30am in one of the ships’ two canteens, followed by a 90-minute mentor-led workshop.

Workshops cover a range of topics from brand creation and marketing through to rapid prototyping exercises led by Tom Chi, Google’s “Rapid Prototyping Genius”.

For the rest of the day the majority of startups work at perfecting, tweaking, and adjusting their business models and products before arrival in the next port, or guest lecturing in Semester at Sea classes.

Students also get the opportunity to hear from the Unreasonable at Sea startups and mentors.

“Fireside chats” are held in the evenings while the ship is at sea giving students the opportunity to hear stories of success – and failure – first-hand from leading innovators and entrepreneurs.

Workshops and guest lectures also give the students the once-in-a-lifetime opportunity to interact and work directly with them.

But once on land, the entrepreneurs will have to deal with the harsh realities of funding the expansion of their businesses.

Securing an investment can take months of back and forth in the hope of reaching terms that are agreeable to both parties.

And given the social nature of their enterprises, finding the right kind of funding could still prove a challenge, says Vinnie Lauria, a founding partner at Golden Gate Ventures, an incubator for early stage startups in Southeast Asia that is based securely on terra firma.

“They should be sure they are working with incubators or investors who show that they care about more than the financial bottom line,” says Mr Lauria.

That means tracking down investors who think more of the “double bottom line”, meaning they are willing to give up some financial returns for the sake of impact.

While that is a growing trend, with wealthy people looking at a broader range of investments, it is by no means widespread, especially in developing countries, says Royston Braganza of Grameen Capital India, which helps raise money for micro-finance institutions.

Mr Braganza goes on to warn the budding businesses that they should not be hasty in agreeing to deals, especially as they only have a few days at each port.

“It’s not about raising ‘X’ amount of money, it’s about raising the right kind of capital from the right kind of investor at the right time.”

Walk the plank?

Before he gets to those choices, Mr Katsiga has another decision to make on board the Explorer, and it is one that could mean giving up a stake in his company.

The entrepreneurs are almost half way through their journey and when the ship reaches its next stop, Burma, they can choose to opt out of the program.

In a rare move for an incubator, Mr Epstein says if the entrepreneurs feel they are not getting enough value out of the voyage they can disembark for good, even though the Unreasonable Institute has spent $100,000 (£65,000) on each company.

If they decide to continue though, Unreasonable takes a stake in the company of between 1% to 6%, or strikes a revenue-sharing deal.

Mr Katsiga says he will most likely stay on board.

After a successful presentation in Singapore, he walked away with yet another stack of business cards, something that makes him hopeful for the company’s future.

£645m in lost bank cash returned

23 February 2013 Last updated at 10:47 GMT Pound coins Around 580,000 search applications have been made since 2008 Up to £645m in forgotten funds in bank accounts has been returned over the past five years through a free tracing service run by the financial industry.

Around 315,000 people have used My Lost Account since the scheme was launched in 2008, its operators said.

And 580,000 search applications have been made, they added.

Users can find lost cash sitting in dormant accounts in banks, building societies and National Savings and Investments.

NS&I alone has reunited customers with more than £445m through its tracing service and My Lost Account, which is run by NS&I, British Bankers’ Association and the Building Societies Association.

“Even small amounts of money can help with the costs of day-to-day living, so it’s important people keep a track of their savings,” said NS&I’s retail customer director John Prout.

The BBA and BSA both had pre-existing schemes but still received 400,000 applications between them, returning £200m to customers.

The BSA’s head of savings Brian Morris said: “During these tough economic times every penny counts and as such, we fully understand the importance of the scheme and will do all we can to ensure as many people as possible become aware of this free and easy to use service.”

Unused cash in bank accounts that had been dormant for more than 15 years can be used to fund social investment under the the Dormant Bank and Building Society Accounts Act from 2011.

Alcatel picks Combes for new recovery bid

: Loss-making telecom equipment maker Alcatel-Lucent has picked Michel Combes, the Frenchman who steered Vodafone’s European business through the financial crisis, to spearhead the turnaround that has eluded it for years.

Combes, 51, and a former finance chief at France Telecom , will take over as chief executive on April 1 from Ben Verwaayen, who has led Alcatel-Lucent for five years but failed to deliver a long-promised recovery despite deep cost cuts.

The Franco-American group, which plunged to a net loss of 1.37 billion euros ($1.8 billion) in 2012, has been hit hard by the rise of low-cost Chinese competitors in the past decade and trails market leaders Sweden’s Ericsson and China’s Huawei in size and market share in mobile equipment.

Combes had been picked last year to head Vivendi’s SFR, France’s second-biggest mobile operator and another business seen as needing a revamp. But that appointment was aborted after a management shake-up at the parent company.

Analysts said Combes’ experience tackling a struggling business at mobile phone operator Vodafone, as well as his time at partly state-owned France Telecom, would stand him in good stead for a job likely to involve deep cost cutting in France, where the Socialist government has been critical of lay-offs.

However, his task will not be easy.

“Combes is a good choice since he has a 20 year track record in telecoms, and knows the French political establishment well,” said Alexander Peterc, analyst at Exane BNP Paribas.

“He has experience managing difficult situation like the recession that hit southern Europe when he was at Vodafone. But the challenges at Alcatel are of a different magnitude: everything easy has already been tried and nothing has worked.”

At Vodafone from 2008 to 2012, Combes undertook a 2-billion-pound ($3 billion) programme of cuts in staff, marketing, and procurement to cope with a slump in consumer spending in recession-hit countries like Spain and Italy.

“After Combes took over at Vodafone Europe, it improved its competitive position in Europe, stopped losing market share and demonstrated strong cost control, though net cost reduction was limited,” Goldman Sachs analysts wrote in a research note.

As a board member at Vodafone, he was also seen internally as a logical, dispassionate voice, unafraid to dissent in debates on thorny strategic problems, such as mobile pricing and keeping discounts on smartphones at the expense of margins.

But after years as an lieutenant to Vodafone Chief Executive Vittorio Colao, Combes was eager for a chief executive role.

Alcatel-Lucent shares rose as much as 3 percent before falling back to trade down 0.7 percent at 1.13 euros by 1055 GMT. France’s benchmark stock index was up 1.3 percent.


Since it was formed in a merger in 2006, Alcatel-Lucent has gone through two chief executives and not been able to reach sustainable profitability or cash flows despite cost cutting and paring its product portfolio.

The group has strong technology in fixed broadband, optical transmission gear in the backbone of networks, and fourth generation (4G) mobile, but has suffered from the costs of maintaining a broad product portfolio.

The US market, which is essentially closed to Chinese competitors and where operators have invested heavily in 4G, has saved it in recent years as it lost share in Europe and Asia.

The challenges facing Combes, who will be Alcatel-Lucent’s first French chief executive since its 2006 formation, will be to continue cutting costs and making the company smaller, while not falling behind rivals in research and development.

He’ll also have to contend with the political fallout of restructuring in France.

Here, his experience at France Telecom could help, where Combes oversaw restructuring alongside then CEO Thierry Breton, although he irked some investors with a capital increase to fund a costly mobile expansion in Spain.

Alcatel-Lucent also named Jean C. Monty as vice-chairman of the board, effective immediately. Monty, 64, is a former chairman and chief executive of Bell Canada Enterprises.

Monty cut his teeth as boss from 1993 to 1997 of Nortel Networks, and was credited with saving it after a financial crisis.

But Nortel later became a casualty of many of the same forces of international competition now buffeting Alcatel-Lucent it filed for bankruptcy in 2009.

Philippe Camus, Alcatel-Lucent’s current chairman, will likely stay on since he has requested another three-year mandate, said a spokesman for the company. The mandate must be approved at the next shareholders’ meeting

Alcatel-Lucent is in the middle of a 1.25-billion-euro cost-cutting plan including 5,500 layoffs and exiting unprofitable contracts and countries.

In January it finalised a 2-billion-euro financing package, using its portfolio of 29,000 patents as collateral to assuage lenders concerned about its viability.

Copyright Reuters, 2013

Drop in workplace pension savers

22 February 2013 Last updated at 14:55 GMT Pension file Changes mean that people will increasingly be signed up automatically to a pension The number of workers saving in an occupational pension has continued to fall, official figures show.

Some 46% of staff were saving in a workplace pension last year, the lowest on current records, the Office for National Statistics (ONS) said.

But with people now increasingly being automatically enrolled into a workplace pension scheme, the numbers are likely to rise.

This is mainly designed to increase saving in the private sector.

Only 32% of private sector employees had a workplace pension scheme in 2012, compared with 83% in the public sector, the ONS statistics showed.

The figures show that 91% of public sector employees with a workplace pension were in a defined benefit – often a final-salary – scheme in 2012, compared with 26% in the private sector.

Automatic pension saving

The proportion of all workers saving into a workplace pension scheme is the lowest since this series of ONS records began in 1997, when 55% were in a scheme.

Continue reading the main story Final-salary scheme: Guaranteed pension based on earnings at end of your career and length of service. Also known as defined benefit schemes Career average scheme: Guaranteed pension based on your average pay over your careerDefined contribution scheme: Determined by contributions and investment returns. Usually worth less than final-salary pensionsBut some pensions experts suggest that this will be the trough in numbers.

“It is unnerving and unsustainable that only a third of the private sector workforce is saving into a pension,” said Joanne Segars, chief executive of the National Association of Pension Funds.

“This is storing up huge problems for our society. People simply will not be able to retire in comfort, and will lean more heavily on the state.

“We hope that this is the worst things will get. Millions will be automatically put into a pension in the coming years.”

Many workers in the UK will gradually see a slice of their pay packet being automatically diverted to a savings pot for their pension through the automatic enrolment system.

Employers are obliged to pay in as well, with the government adding a little extra through tax relief.

The system is being introduced in stages over six years, with the first workers working for the biggest businesses signed up in October last year.

Those who already save in a workplace pension scheme or are self-employed are not being signed up.

Despite the changes, some suggest that more needs to be done to encourage people to save for a pension.

“The early signs from the government’s workplace pension auto-enrolment programme largely directed at the private sector are promising,” said Malcolm McLean, consultant to actuaries Barnett Waddingham.

“However, these may not be enough in terms of the numbers and levels of pensions eventually produced to sufficiently arrest the decline and further measures to reinvigorate pension saving are likely to be required – sooner rather than later.”

The TUC also called for employers to ensure that they were making a decent contribution to their employees’ pensions.

Eurozone recession ‘to persist’

22 February 2013 Last updated at 13:38 GMT Anti-cuts protestors in Madrid earlier in February The scale of Spain’s spending cuts has been unpopular, but it will have to go further if it is to meet EU targets The eurozone recession will persist into 2013, the European Commission has conceded in its latest forecast.

Governments face an uphill battle to rein in their overspending, with Spain, France and Portugal all failing to cut their deficits to agreed targets.

Spain’s deficit, at 10.2% of GDP in 2012, was well above its 6.3% target, and would stay above target into 2014.

The eurozone economy would shrink 0.3% in 2013, the Commission said, making the governments’ task even harder.

Previously, the Commission had expected the 17 economies in the eurozone to collectively enjoy 0.1% positive growth this year. In 2012 the economy is estimated to have shrunk 0.6%.

Delivering its winter forecast, Commission Vice-President Olli Rehn said that unemployment across the single currency area expected to continue rising to 12.2% this year as the recession lingers. Last year’s jobless rate was 11.4%.

However, he said the eurozone was expected to rebound in the last three months of this year, registering 0.7% growth in the fourth quarter.

The forecast appears somewhat more pessimistic than the European Central Bank President Mario Draghi, who last month said he believed the eurozone would begin recovering in the second half of this year.

The Commission’s acknowledgement that the eurozone is in worse economic shape than previously mirrors a change in the International Monetary Fund’s thinking. The IMF said in January that it expected the eurozone to experience a “mild recession” in 2013, having previously predicted growth.

Plea for more time

The austerity measures being implemented by eurozone governments are widely blamed by economists as a major contributor towards the Continent’s economic woes, although there is disagreement among economists as to whether governments should therefore go easy on the spending cuts.

Spain, which has one of the biggest budget deficits, made the least headway in bringing its finances back under control, and faces one of the nastiest recessions.

Of its 10.2% deficit in 2012, 3.2 percentage points was due to the cost of cleaning up its banking system, which has been decimated by loans made to property developers and speculators during the last decade’s housing bubble that have since proved unrepayable.

More worryingly, the Commission does not expect Spain to improve greatly over the next two years. Its deficit is forecast to be 6.7% this year, compared with a 4.5% target, and 7.2% in 2014, compared with a 2.8% target.

Spain cannot simply blame its weak economy for this outcome, the Commission implied. Madrid’s structural deficit – which strips out the effect of the recession – fell only by 1.4% of GDP last year, barely half the 2.7% target set by the Commission.

However, overspending by governments across the eurozone as a whole is still expected to fall on average this year. That is despite the persistent economic downturn, which typically reduces governments’ tax revenues and increases their benefit bills.

2012 estimate 2013 forecast 2012 estimate 2013 forecast

The Commission said that the aggregate deficits of the 17 eurozone governments would fall from 3.5% of economic output or GDP last year, to 2.8% this year.

Meanwhile, the Commission was concerned about a “surprise” fall in Portugal’s economy, which shrank 3.2% in 2012 and is forecast to contract by another 1.9% in 2013.

The country may need to be granted an extra year to bring its deficit within the long-term target of 3% of GDP from an expected 4.9% this year, Prime Minister Pedro Passos said, at a specially-called press conference.

‘Problem child’

The Commission is also considering giving France one more year, until 2014, to get its finances under control, according to Mr Rehn. Paris is expected to record a 3.7% deficit this year, well above the 3% target.

Earlier on Friday, France had been dubbed a “problem child” by Michael Fuchs, a senior member of German Chancellor Angela Merkel’s CDU political party.

“The French need to do their homework – they’re very, very behind other countries and that is alarming because France is the second biggest economy in Europe,” Mr Fuchs told Germany’s Deutschlandfunk radio.

The French government is under pressure to loosen up labour market rules – including the ditching of its 35-hour week – in order to regain international competitiveness.

Meanwhile, the Commission told the British government that it would need to take additional austerity measures.

The Commission said the UK was also not on target with its deficit reduction, with government overspending expecting to increase to 7.4% of GDP this year, the worst in the European Union, from 6.3% in 2012.

The UK economy was predicted grow 1% in 2013, compared with the 1.1% previously forecast.

Lenders getting more personal data

22 February 2013 Last updated at 14:52 GMT Credit report generic Credit reports are used by lenders to judge whether applicants would make loan repayments Growing amounts of detail about individuals’ financial lives are being used to judge whether applicants are given loans and mortgages.

Yorkshire Water has become the first water supplier to share information on customers’ payment habits with credit reference firm Experian.

Firms such as Experian use this data to build up people’s credit histories.

Now they are seeking agreement with more utility and energy firms on whether customers pay bills on time.

This history is then put into a credit report which is used by lenders to decide whether loan applicants are likely to make repayments in the future and whether they are a safe bet to lend money to.

Loan applications

The three credit reference agencies in the UK are Experian, Equifax and Callcredit. They use a range of data, from the register of voters to credit card payments, to build up reports on individuals. Everyone has the statutory right to see their report, usually for a £2 fee.

Continue reading the main story Information from electoral rollCredit accounts, such as credit cardsCounty Court judgementsCredit checks by lenders in the previous 12 monthsJoint accounts or other shared financial commitmentsCurrent account overdraft balanceHome repossessions

Source: Equifax

In a report, the credit history lists credit accounts, the date they were opened, the credit limit or loan amount, and whether the individual has missed any payments. Account details from after 1994 are included, and remain on a report for six years after being closed.

These agencies are continually trying to increase the amount of detail these reports hold, to allow lenders to make a more considered decision on loan applications.

There is no “blacklist” of people who will not be given credit – each lender analyses the information according to its own rules, so applicants may be turned down by one company but accepted by another.

‘Treated fairly’

Information about credit cards, bank accounts and mobile phone contracts is regularly shared with these agencies.

Some water and energy companies already tell credit reference agencies whether customers miss paying, or are late paying, bills more than three times.

Continue reading the main story Credit accounts from before 1994Student loansInformation about third parties, such as loved onesSavings accounts, fines, Child Support Agency details, medical history, criminal records

Source: Equifax

Now Yorkshire Water is sharing key data about all of its five million customers with Experian – whether they have paid bills on time or not.

“By sharing information on all customers, including those who may be experiencing difficulties, it will not only reduce bad debt but ensure that customers are treated fairly and responsibly,” said Paul Vescovi of Experian.

“Of course, because the vast majority of people pay their water bills on time, most Yorkshire Water customers will see their credit histories strengthened by this development, potentially giving their credit ratings a helpful boost.”

Jonathan Harding of Yorkshire Water said that in return, the company would receive an early warning about customers who might potentially get into financial difficulty.

New access

James Jones of Experian said that the agency was seeking deals with other providers in the water industry and elsewhere.

This included the energy sector, as well as companies that provided landline telephone and television contracts.

Continue reading the main story
Part of the problem with credit scoring is that it does not take into account enough good information”

End Quote Ray Boulger Mortgage broker He said that people who wanted to build up a credit history quite quickly would benefit from increased information, such as people moving into the UK after some time overseas and who wanted to apply for credit in the near future.

Equifax said it shared information with certain water companies. The water firms, including Severn Trent, sent details of those who regularly defaulted on bills, which lenders could then see in the credit report.

It stressed that a considerable amount of detail was not included in a credit report, including student loans, savings accounts and medical records.

However, Ray Boulger, of mortgage broker John Charcol, called for more “positive” information to be included on credit reports. For example, details of a savings account could build a picture of somebody who had successfully put money aside on a regular basis.

“Part of the problem with credit scoring is that it does not take into account enough good information,” he said.

Sometimes, he argued, this was trumped by missed credit repayments in the past.

Graham Lund, managing director at Callcredit, said: “We do work with a number of utilities companies, such as telecoms and energy suppliers, who share data with us.

“We believe that there is potential for the sharing of account performance data from utilities companies to have a positive effect on a consumers credit file. This could help to provide some people with better access to mainstream, lower-cost credit facilities and services.

“The sharing of data enables lenders to make informed decisions and supports responsible lending; we therefore anticipate and welcome future growth in this area.”

McGowan offers nurse dispute solution

Updated February 23, 2013 12:22:53

The State Opposition Leader, Mark McGowan, says he is willing to work with the government to resolve a pay dispute with nurses.

The Australian Nursing Federation is pushing for a 20 per cent increase over three years and members have threatened to strike for 24-hours on Monday if they do not get an offer from the Health Department.

The Industrial Relations Commission last night ordered nurses to cease industrial action but ANF secretary Mark Olson says they have refused to comply.

“The beds will remain closed and the industrial action will go ahead on Monday,” he said.

The Department maintains it can not make a pay offer while the government is in caretaker mode before the election.

Mr McGowan has told the ABC’s 730WA says the government can make a decision if it has the Opposition’s approval.

“The Caretaker Conventions allow for the government to work out solutions to these problems during the caretaker period if the Opposition Leader is involved,” he said.

“So I’ll sit down with them, let them work out a solution and I’m happy to be bound by whatever that solution is if I’m successful at the election.

“This is a bipartisan approach, it’s allowed under the caretaker convention, it’s up to Mr Barnett whether he wants to accept it, or not.”

Topics: business-economics-and-finance, government-and-politics, industrial-relations, perth-6000

First posted February 23, 2013 12:15:47

Japanese tycoon quits Wynn board

22 February 2013 Last updated at 02:58 GMT Steve Wynn (left) and Kazuo Okada Allegations of illegal payments have hurt Mr Okada’s relations with Mr Wynn In the latest twist to the ongoing saga at Wynn Resorts, Japanese tycoon Kazuo Okada has quit the company’s board.

His resignation comes a day ahead of a shareholders’ meeting, which was widely expected to vote for his removal.

Relations between Steve Wynn, chief executive of the firm, and Mr Okada have soured amid allegations of illegal payments to regulators by the latter.

Mr Okada has denied the allegations, but his appeal to block the shareholder meeting was rejected by a US judge.

“I no longer believe it is appropriate for me to serve on the board of directors of a company that is behaving in a manner that I deeply believe to be unethical,” Mr Okada said in a statement.

He added that the board, “has refused my reasonable requests to promptly investigate what appears to me to be misconduct by Steve Wynn, and thus is under the dictatorship of Mr Wynn and fails to fulfil its original function”.

Legal tussles Continue reading the main story
My resignation from the Wynn Resorts Board will not impede me from protecting my good name and reputation”

End Quote Kazuo Okada Former board member, Wynn Resorts Last year, Wynn resorts filed a lawsuit against Mr Okada in which the firm claimed that he made at least $110,000 (£70,000) in unauthorised payments to two gaming officials in the Philippines.

The firm also tried to buy out Mr Okada’s 20% stake in Wynn Resorts for $1.9bn, a 30% discount to its market value at the time.

It was followed by an attempt by the Macau unit of Wynn Resorts, Wynn Macau, to remove Mr Okada from its board.

Mr Okada has started legal proceedings of his own to contest the buyout of his shareholding. He said that he would continue to fight the case.

“I remain determined to fight Steve Wynn’s involuntary redemption of my nearly 20% stake in Wynn Resorts at a 30% discount,” he said.

“My resignation from the Wynn Resorts Board will not impede me from protecting my good name and reputation.”

Meanwhile, Mr Okada has also questioned a $135m donation a unit of Wynn made to the University of Macau.

He has alleged that he was not allowed to access company records and so was essentially barred from investigating the matter.

Motorcycle industry: Dawood Yamaha to set up factory in Afghanistan

The motorc­ycle indust­ry in Afghan­istan expect­s a strong growth.  The agreement will strengthen the already close cooperation between DYL and EAL, as both were engaged since 2009 in the motorcycle industry in Afghanistan. PHOTO: dyl.com.pk


Dawood Yamaha Motorcycles (DYL), Pakistan and Ehsanullah Afghan (EAL), Afghanistan today signed an agreement to establish a motorcycle manufacturing facility in Afghanistan.

The agreement will strengthen the already close cooperation between DYL and EAL, as both were engaged since 2009 in the motorcycle industry in Afghanistan. The motorcycle industry in Afghanistan expects a strong growth and a new technical collaboration agreement will further enhance the business of EAL in Afghanistan in providing affordable and high-quality motorcycles in Afghanistan.

DYL group is renowned name in the manufacturing and marketing of motorcycles/lube and parts. EAL has a strong base of marketing channels in Afghanistan. The agreement will allow EAL to establish strong footing in manufacturing side as well. The venture marks a significant milestone in collaboration between the two companies as it cements an already excellent cooperation between the two partners.

Published in The Express Tribune, February 23rd, 2013.

Like Business on Facebook to stay informed and join in the conversation.

View the original article here

Wal-Mart warns of sluggish sales

21 February 2013 Last updated at 22:31 GMT Walmart Wal-Mart is the world’s largest retailer Wal-Mart said sales were slow at the start of the month and warned they would remain sluggish throughout the February to April quarter.

The caution came as it posted a rise in fourth-quarter profits, after reaping the benefit of US tax credits.

Shares in the retailer closed up 1.5% as it hiked its dividend payout for the current financial year by 18%.

Net income rose 8.7% to $5.88bn (£3.85bn) in the three-month period ending 31 January.

Wal-Mart’s UK subsidiary Asda posted flat like-for-like sales excluding petrol in the same period.

Wal-Mart in its earnings statement said: “Due to the slower sales rate in the first few weeks of this year’s first quarter, we are forecasting comparative sales for the 13-week period from 26 January to 26 April 2013 to be around flat.”

The expiration of payroll tax cuts and a delay in processing tax returns are thought to have held back consumption in February.

Last week, leaked emails from executives described February sales figures as a “total disaster”.

Continue reading the main story “In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, wrote in a 12 February email to other executives, referring to month-to-date sales.

“The worst start to a month I have seen in my seven years with the company,” he added.

In the fourth quarter, sales at Wal-Mart rose 3.9% to $128bn. Over the full fiscal year, revenues rose 5% to $469bn from the previous year and net income rose 8.4% to $17.7bn.

Overall, Wal-Mart US sales grew 2.6% in the fourth quarter to $75bn, while its international sales grew 6.9% to $37.9bn.

UK Christmas

Meanwhile, Wal-Mart president Doug McMillon said that Asda had had its strongest online Christmas season.

He said that more than half of its online general merchandise customer base regularly shopped at Asda, with total online sales increasing 18.8% in the three months to 31 January compared with a year earlier.

Asda is expected to expand delivery capability of its George clothing in Europe this year and will be fully operational in 24 countries by the end of the third quarter, the company said.

But Asda’s chief executive Andy Clarke warned: “This is no time to be complacent. It’s likely to be a challenging and uncertain year ahead and so we will continue to focus on the customer and adapt the business to their needs.”

Buyer found for transport business

Updated February 22, 2013 21:32:53

A buyer has been found for a Tasmanian courier and storage company which went into administration this week, and it is expected about 50 workers will keep their jobs.

Road Runners had planned to stop trading this afternoon, with the loss of about 100 jobs in Hobart, Devonport and Launceston.

But the administrator Paul Cook has announced the company is being sold to Chas Kelly Transport which will run it as a stand-alone business.

Mr Cook says the sale means a number of workers will keep their jobs, but others will be made redundant.

“There are still some loose ends to tie up of course, but in principle we’ve reached a sale position.

“In any event the company was overstaffed for the customer base that it had,” he said.

Chas Kelly says about 30 jobs will have to go if the business is to be financially viable.

“Fortunately we’re financially secure, and moving into the future Road Runners will have a good solid financial base.

“The brand remains the same, Road Runners, and the livery will stay the same, you know, I’m confident about the future of the company,” Mr Kelly said.

Administrators say they are still calculating Road Runners’ debts to its creditors.

Topics: company-news, hobart-7000, launceston-7250, devonport-7310

First posted February 22, 2013 18:46:44

Origin lays off 850 staff to counter profit fall

Updated February 21, 2013 14:43:12

Origin Energy has confirmed that it will axe a total of 850 jobs by the end of the year.

Around 500 of those positions have already gone, as the company sharpens its focus on containing costs.

The announcement came as the energy retailer and gas producer posted a half-year profit slump of 34 per cent, to $524 million.

Origin expects its full-year profit to fall by 10 to 15 per cent.

The company will pay its shareholders an interim, fully franked dividend of 25 cents per share.

Origin Energy shares slumped 8.6 per cent on the result to $11.32 by 12:44pm (AEDT).

Topics: business-economics-and-finance, company-news, electricity-energy-and-utilities, oil-and-gas, unemployment, australia, qld

First posted February 21, 2013 12:51:20

Train passengers trapped in wild weather for 17hrs

Posted February 23, 2013 14:52:57

About 100 passengers were trapped on a train in wild weather for nearly 17 hours in northern New South Wales.

A destructive low pressure system has dumped heavy rain on the region and whipped up strong winds.

The Countrylink XPT service from Sydney to Casino was interrupted overnight at Coramba, about 10 kilometres north of Coffs Harbour, by fallen trees on the railway line.

Railway workers removed the blockage, but the train encountered floodwater about 30 kilometres north near Glenreagh.

As it reversed back to Coffs Harbour it was stopped for a third time by a landslide.

The site was too remote for buses to reach.

An excavator eventually cleared the debris and weary travellers arrived in Coffs Harbour just before midday today (AEDT).

Some passengers say trees fell on three carriages scaring occupants inside.

A large number of small children and elderly people were onboard the train.

Passengers have praised the crew for keeping spirits high by providing complimentary food and regular updates.

However some say they received mixed messages and the food eventually ran out.

Topics: rail-transport, storm-disaster, storm-event, coramba-2450, coffs-harbour-2450, glenreagh-2450, casino-2470, sydney-2000

Santos shares rise despite profit dip

Posted February 22, 2013 15:51:05

Rising development costs have dragged down profits for oil and gas producer Santos.

The company has reported a 31 per cent slide in full-year profit to $519 million.

In response, Santos says it is focused on reducing costs and cut its workforce by more than 100 staff over the year.

Santos chief financial officer Andrew Seaton says development costs should start to fall soon.

“The 2012 result was lower than we envisaged due to timing of expenditure across the broader portfolio,” he said.

“Our forecast 2013 spend of circa $4 billion will represent the peak year of capex ahead of the start up of PNG LNG in 2014 and GLNG [Gladstone LNG] in 2015.”

Santos says the New South Wales Government’s legislation against coal seam gas exploration in some areas does not affect its plans.

This week the New South Wales Government announced a two kilometre coal seam gas exclusion zone around current and planned residential areas.

The company’s chief executive David Knox says the changes to exploration rules will not change the company’s plans.

“The area we really want to start developing is in the Pilliga Forest, and that area is unaffected by the two kilometre zone,” he said.

“What we are intending to do is start basically doing an evaluation and appraisal wells into that area.”

Topics: business-economics-and-finance, company-news, oil-and-gas, australia, sa

Market falls sharply, below 5,000

Updated February 22, 2013 09:25:37

Around $35 billion was wiped off the share market today as it posted its biggest one-day loss in more than nine months for both major indices to finish below 5,000 points.

Major markets around the region have slipped between 1 and 2 per cent on Chinese moves to curb property speculation and US Federal Reserve minutes that showed some members are advocating for more flexibility in, and perhaps a reduction of, the bank’s stimulus program.

Around 4:30pm (AEDT), Tokyo’s benchmark Nikkei share index was down 1.3 per cent and Hong Kong’s Hang Seng was off 1.8 per cent.

Locally, the All Ordinaries index slid 2.3 per cent to 4,999 at the close, while the ASX 200 dropped 119 points to 4,980.

It would only take one international fund to make some small asset allocation change … which would create this sort of day.

That was comfortably the biggest one-day loss for the benchmark Australian share index since May 18 last year when the ASX 200 lost 2.7 per cent.

The main drag was the resources sector, with BHP Billiton down another 3.8 per cent after yesterday reporting a steep fall in first-half profits and the retirement of its CEO.

Rio Tinto was also down steeply, falling 3 per cent to $67.30, while Fortescue was down 2.4 per cent.

Woodside gave up gains it made after its profit report yesterday, falling 2.9 per cent today to $37.95, while fellow oil and gas producer Santos was off 6.2 per cent to $11.90.

Stockbroker Marcus Padley, author of the Marcus Today newsletter, told PM the commodities sector had possibly been hit by rumours of a US hedge fund ditching assets because it was in trouble.

“One of the stories going around is that there’s a commodities hedge fund in the US that has gone belly-up or something like that and is having to liquidate positions in all sorts of commodity-orientated investments, which include, apparently, Australian equities,” he said.

However, the mining sector was not the only significant segment of the market to post large falls.

The major banks were also recording steep losses, with NAB down 3.4 per cent, ANZ down 2.9 per cent, the Commonwealth Bank down 2.8 per cent and Westpac also 2.8 per cent lower at $29.49.

Mr Padley says that may be a sign that a major investment bank decided to cash in some of the substantial share gains that have been made over the past few months.

“It would only take one international fund to make some small asset allocation change that would include $1 billion being sold in the Australian market, something like that, which would create this sort of day,” he said.

Some companies were also hit by weak profit reports; Origin Energy was down 8.5 per cent to $11.33 and Fairfax was down 2.8 per cent to 53 cents.

The companies performing best were those outside the cyclical sectors and not as exposed to the global economy, but even they generally got sold down.

Wesfarmers was off 0.6 per cent to $39.40 and blood products maker CSL was off just 0.5 per cent.

Retailers also held up relatively well; Myer was down 0.4 per cent, David Jones finished flat at $2.68 and JB Hi-Fi was up 0.4 per cent to $12.40.

Some companies also defied the downward trend through better-than-expected earnings reports; Qantas closed up 2.8 per cent to $1.66 and Insurance Australia Group rose 2.8 per cent to $5.57.

The Australian dollar also dropped sharply, falling more than a cent from around 103.6 US cents yesterday afternoon to 102.35 US cents by 4:38pm (AEDT) today.

Topics: business-economics-and-finance, markets, currency, stockmarket, australia

First posted February 21, 2013 15:20:33

Labor calls on O’Farrell to scrap deputy pay rise

Updated February 23, 2013 10:10:24

The New South Wales Opposition has demanded the State Government reverse a pay rise given to Deputy Premier Andrew Stoner whenever he fills in for the Premier.

A regulation from Premier Barry O’Farrell granting the pay rise was published yesterday, but his office has referred questions about it to Mr Stoner.

A spokesman for Mr Stoner says the pay rise recognises the significant extra responsibility of acting as Premier.

Mr Stoner has declined to be interviewed.

Opposition spokesman Walt Secord says it is the first time a New South Wales Premier has granted such a perk.

“It’s extraordinary that on a Friday afternoon the Premier – with a stroke of the pen – creates a $1,000 a week pay rise for his Deputy Premier,” he said.

“It comes at a time when the O’Farrell Government has cut 15,000 Government employees, slashed $1.5 billion from education, $1.2 billion from health.

“We’re calling on him to immediately scrap this pay rise.”

Greens MP John Kaye says Mr Stoner’s base salary of nearly $290,000 is enough.

“Part of that salary ought to cover when he’s acting for the Premier, after all that is the only official function of the Deputy Premier,” he said.

Topics: industrial-relations, states-and-territories, state-parliament, sydney-2000

First posted February 23, 2013 09:33:27

Bundaberg Rum sinks $250K into flood recovery

Posted February 21, 2013 09:22:24

One of Bundaberg’s best known businesses, Bundaberg Rum, has donated $250,000 to help reboot tourism in the flood-ravaged southern Queensland city.

Bundaberg Rum says it is important the corporate sector pitches in to help with the flood recovery and is encouraging other big businesses to do the same.

The Member for Hinkler, Paul Neville, says corporate businesses need to step up after natural disasters.

“After you’ve had a bad flood, there’s a reluctance for a few months for tourists to want to go to that area,” he said.

“Bundaberg’s [a] very resilient place and it’s back on its feet and what the company wants to do is boost things like the motels, the restaurants, the caravan parks the petrol stations and give tourism a kickstart.

He says the move is a good precedent.

“They’re a big corporate citizen in Bundaberg – they’re showing the way,” he said.

“I’m sure other major companies that are based here will possibly take the lead and do something similar.

“It’s a precedent to tell people we’re resilient, we’re coming out of this flood, we’re inviting people back to the community and we’re going to boost the economy of the town.”

Topics: rural-tourism, community-development, emergency-incidents, floods, regional, regional-development, bundaberg-4670

Billabong profits wiped out by write-downs

By finance reporter Rebecca HyamUpdated February 22, 2013 15:35:01

Troubled surfwear retailer Billabong has reported a $536.6 million half-year loss on massive write-downs.

In the six months to the end of December, Billabong reported an after-tax loss of $536.6 million, which compares to the company’s $16.1 million profit during the same period the year before.

The net result takes into account $567 million in one-off write-downs in the value of many of Billabong’s brands and assets.

The company’s underlying half-year profit, excluding these write-downs, roughly halved from $38.3 million to $19.2 million.

The company has downgraded its expected underlying earnings for the full-year, from its previous guidance of $85-92 million, to between $74-85 million.

The company has also admitted it is in breach of its debt covenants, because of the write-downs.

Billabong’s chief executive, Launa Inman says the result is a huge wake-up call.

“If anyone within or outside of Billabong still believes we don’t need to radically change the way we run this business, today’s half-year results end that illusion,” she said.

“Billabong is undergoing significant structural change. To unlock the opportunities within the group, it must be transparent and directly address and learn from the events of the past.”

Launa Inman says it is an “unacceptable” result, despite retail conditions still being extremely challenging, particularly in Europe, where Billabong’s earnings before interest and tax are down 78 per cent.

However, she also says there are a number of strategies in place to save money.

“Costs are being reduced, in particular through the store closure program, with 119 stores already closed,” Launa Inman added.

Billabong says it is still negotiating with the two parties that currently have tentative takeover bids for the company on the table.

Topics: business-economics-and-finance, company-news, retail, textiles, australia

First posted February 22, 2013 15:23:54

Q&A: Why are fuel prices rising?

22 February 2013 Last updated at 16:15 GMT By Emily Young BBC News Man filling up petrol tank Yorkshire and Humberside and the north of England are the cheapest regions for fuel The Automobile Association (AA) is warning that rising petrol prices are forcing drivers off the road.

The group is calling on the chancellor to cancel a planned rise on duty in September.

What’s happening with fuel prices in the UK?

They’re going up. The average price of unleaded petrol has risen five pence over the past month and is now at 138.32p a litre. Diesel has gone up 4.78p from mid-January to the current average of 145.10p.

However, data from the fuel price monitor Experian Catalist shows that prices have been higher in the past year. Last April unleaded petrol peaked at 142.48p while diesel rose as high as 147.93p.

Why are prices so high?

There’s a combination of reasons.

The single most important factor driving up prices is the weakening pound, according to Basil Shrourou from fuelpriceonline.com. Sterling recently touched a two-and-a-half-year low against the dollar. Crude oil and refined products are traded in dollars and therefore become more expensive for British companies when the pound falls.

The other factor is the rising price of oil on the international market, which influences the petrol price. There is no clear reason for the increase. Usually prices rise if supply is tight, such as if there were production outage due to bad weather, but that is not the case at the moment.

They would also rise if demand was up – but that is also not happening. In fact, January figures show that petrol consumption has fallen in the UK.

Petrol prices over the past year Will they go up further?

In the short-term the answer is probably yes, although much depends on oil prices and the pound.

Arthur Renshaw from Experian Capital reckons “there is another 2p increase coming through the system”.

That is because recent rises in crude oil have not yet fed through to prices at the pumps. The AA warns that they could reach a record by Easter time.

The current government has not raised fuel duty for two years, in fact it cut duty by 1p in March 2011. But a rise is due to come into effect in September – a move that the AA would like to see cancelled.

Chancellor George Osborne pointed out that his government’s actions have made it 10p a litre cheaper than it could otherwise have been.

About 60% of the price you pay at the pump goes into the chancellor’s pocket, points out Mr Renshaw.

Labour has called for a temporary cut in VAT, saying it would take 3p off the price of a litre of fuel.

It feels like prices are quick to go up and slow to come down. Is that true?

No – not according to the competition regulator the Office of Fair Trading. It launched an investigation into whether petrol companies were too slow to pass on price cuts and found that this was not the case.

Indeed it claimed that the reverse was often true because of competition between forecourts.

Scrutiny of poll candidates: SC to decide fate of defaulters says SBP Governor

Challe­nges exist but foreig­n curren­cy reserv­es suffic­ient, assure­s SBP govern­or.  Says SBP will only provide the most recent data on defaulters to the Election Commission of Pakistan for scrutiny of candidates. PHOTO: MOHAMMAD NOMAN/EXPRESS


The fate of bank loan defaulters in the past four decades will be decided by the Supreme Court, SBP Governor Yaseen Anwar revealed on Thursday.

The State Bank of Pakistan (SBP) will only provide the most recent data on defaulters to the Election Commission of Pakistan for scrutiny of candidates, Anwar said while briefing the Senate Standing Committee on Finance over the SBP’s role in the verification of candidates’ data before the upcoming polls.

He went on to add that the country’s central bank will only provide information about those defaulters whose names appear on the Central Information Bureau list, which is regularly updated by inputs from all other banks.

He, however, added that some of the banks, for instance the National Bank of Pakistan, were not online, which may cause delays in the provision of timely information sharing.

Anwar said the matter of past loan defaulters lay with the Supreme Court completely and the SBP was keen to study recommendations of the Justice Jamshed Ali Commission on past loan defaulters.

The apex court had formed the commission in March 2011 after taking suo motu notice of borrowers who had taken loans but later managed to get them waived off.

On Wednesday, the parliamentary panel issued directives to make the Justice Jamshed Commission report public, which pertains to those who got their banks and financial institutions to waive off loans from 1971-2010.

The ECP is in the process of disqualifying those who failed to meet their financial obligations in the past and has vowed to stop them from taking part in upcoming general elections.

However, Anwar clarified that if a bank enters into a resettlement with a borrower, this will not be classified as default. The write-offs under various revival packages and the ones endorsed by the Board of Directors of the banks will also be decided by the apex court in light of the Justice Jamshaid Commission Report, he added.

Economic conditions

While speaking on the current economic conditions, the SBP governor said the country was facing many challenges due to uncertainty on political and economic fronts.

However, he gave assurances that the foreign currency reserves were sufficient to return the International Monetary Fund’s (IMF) loans till June this year. He claimed despite the upcoming $400 million payment to the IMF, there will not be additional pressure on the reserves as the central bank was making efforts to keep the reserves at reasonable levels.

He said to offset the pressure on reserves there was a need to review the possibility of controlling unnecessary imports. Anwar said more than one-thirds of the imports were of oil and a change of $5 in crude oil price results into $750 million additional annual payments. He said, “According to our assessment, oil prices will remain stable in the short-term”.

The central bank governor said the SBP has tightened currency speculators but the rupee was still under pressure due to lower interest rates, depleting foreign currency reserves and higher inflation.

“There cannot be lower interest rates and strong currency at the same time. It’s a trade off between the both,” he explained. “If the interest rates are increased by 3% today, the rupee will be strengthened (against the US dollar).”

Published in The Express Tribune, February 22nd, 2013.

View the original article here

Ten board sacks Warburton as chief

Updated February 23, 2013 12:03:28

In a new crisis for the Ten Network, James Warburton has been sacked as chief executive.

The troubled television network says Mr Warburton, who was controversially recruited from rival Seven Network, has been “given notice of termination”.

He will be replaced by News Corporation executive Hamish McLennan, who will join Ten next month.

Mr Warburton was recruited from Seven amid fanfare and legal action that delayed his appointment until January 2012.

He was forced to take “gardening leave” after a non-compete clause in his Seven contract was enforced, meaning his Ten career rivalled his time between jobs.

Mr Warburton’s tenure at Ten was dragged down by a weak advertising market, poor ratings and full year loss of $12.9 million in October last year.

Ten has also suffered a share price plunge from $1.44 per share in April 2010 to 29 cents at the close of trade on Friday.

Mr Warburton’s appointment drew anger from Seven chairman Kerry Stokes and then chief executive David Leckie

Despite the brutal nature of the sacking, Ten chairman Lachlan Murdoch praised the man he lured.

“The Board would like to thank James Warburton for his hard work and contribution during what has been a difficult period for the company and for the broader media sector,” Mr Murdoch said in a statement.

“He steps down with Ten’s best wishes.”

Mr Murdoch signalled he is putting hopes of a turnaround in the hands of Mr McLennan.

“The Board is delighted to have been able to attract a world class CEO with a strong track record to lead Ten,” Mr Murdoch said.

Ten’s executive general manager Russel Howcroft will act as chief executive until Mr McLennan assumes the top job.

You can follow Peter Ryan’s updates on Twitter and his blog.

Topics: media, industry, business-economics-and-finance, company-news, australia

First posted February 22, 2013 21:14:33

Pentagon grounds F-35 fighter jet fleet

Updated February 23, 2013 16:56:19

The Pentagon has grounded its F-35 fighter jets after discovering a crack in one of the aircraft’s engines.

It has suspended all flights operated by the fleet of 51 jets while the turbine blade crack is investigated.

The fault was discovered during a routine check of one of the planes at Edwards Air Force Base in California.

It is the second time in two months the fleet has been grounded.

Pentagon spokeswoman Kyra Hawn says it is not known how long the planes will be out of service for this time.

“We’re talking about analysis of one blade in one turbine,” she said.

“We have to find out through structural tests whether or not this is an isolated incident or whether they will have a more far reaching impact on the F-35 fleet.”

The F-35 is the Pentagon’s biggest weapons program, known as the Joint Strike Fighter (JSF) program, but it has been dogged by delays and cost increased.

Australia has delayed its order of the fighter jets after originally indicating it would buy 100.

Former defence minister Joel Fitzgibbon has sharply criticised top Australian military officials over what he calls their “obsession” with the F-35 fighters.

Mr Fitzgibbon, now the Federal Government’s chief whip, says a fixation on the purchase has led to an ad hoc approach to Australia’s air capability.

“I think there is an almost obsession with the JSF within the uniformed ranks – this is their brand new toy,” he said.

“They were determined to secure four squadrons of the JSF and they were fond of running interference on anything that might threaten their capacity to secure those four squadrons.”

Topics: unrest-conflict-and-war, trade, defence-and-aerospace-industries, united-states

First posted February 23, 2013 13:04:45

Boeing ‘set to offer 787 fixes’

22 February 2013 Last updated at 14:06 GMT Boeing 787 Dreamliner on the production line Battery fears have forced airliners to scupper the 787′s flight schedules Boeing is expected to offer ways to fix the 787′s battery problems at a meeting with the US Federal Aviation Administration on Friday.

Ray Conner, a Boeing executive, will explain measures to prevent future battery failures, according to reports.

Flights could resume by April if US authorities accept the proposed plan, they said.

But Transport Secretary Ray LaHood has warned 787s will not fly again until he is “1,000% sure” they are safe.

Fears about battery safety emerged after a lithium-ion battery in a 787 operated by All Nippon Airways overheated, forcing an emergency landing in western Japan in mid-January and a worldwide grounding of the Dreamliner fleet.

The measures include a battery box aimed at insulating lithium-ion cells from one another in order to prevent their overheating, as well as a venting mechanism for fumes, according to officials who spoke on condition of anonymity.

“The gaps between cells will be bigger. I think that’s why there was overheating,” one person told Reuters news agency. Boeing declined to comment.

Other faults identified

Meanwhile, on Friday, Japan’s transport ministry identified the causes of two fuel leaks on a Dreamliner operated by Japan Airlines, pointing to a coating around the mechanism that controls fuel movement between tanks. That led to a switch not working properly.

Officials also found that faulty taping led to cracks in cockpit glass, while problems with a part led to braking difficulties.

Earlier this week, a separate investigation found faulty wiring of the lithium-ion battery in an ANA Dreamliner jet.

Officials found that the battery for the aircraft’s auxiliary power unit was incorrectly connected to the main battery that overheated.

JAL and ANA are the biggest customers of the Dreamliner, with ANA owning 17 of the jets and JAL having seven.

But the fixes presented by Boeing on Friday will not be conclusive, as airline safety inspectors have found no faults with the battery used in the 787. The problems could come from defects in the parts and systems connected to the battery, experts have said.

Japanese authorities in January said they had found no major quality or technical problem with the lithium-ion batteries, which are manufactured by Kyoto-based GS Yuasa.

‘Reluctant’ to approve

“It’s one thing to rule out possible causes [at Friday's meeting] but they need to do more until it is clear what the problem was,” said airline analyst Douglas McNeill at Charles Stanley.

“Until it’s crystal clear what went wrong, the FAA will be reluctant to let the 787s resume,” he added.

All 50 of the 787 jets in service around the world have been grounded since 16 January, after ANA’s emergency landing in Japan. Earlier last month, a second battery caught fire in a Japan Airlines 787 parked in Boston.

United Airlines on Thursday removed the grounded Boeing 787 from its flight schedules at least until 5 June and postponed its new Denver-to-Tokyo flights.

LOT Polish Airlines has said it will keep its 787s grounded till October.

Meanwhile, Airbus has scrapped plans to use the batteries in its A350 passenger jet.

Japan’s Toshiba to promote VP Tanaka to top job

TOKYO: Japan’s Toshiba Corp will appoint Corporate Senior Executive Vice President Hisao Tanaka as company president in June, sources familiar with the matter told Reuters on Saturday.

Incumbent President Norio Sasaki, 63, will become Vice Chairman, a position to be created at the company for the first time, the sources said.

Chairman Atsutoshi Nishida, 69, will stay in his post with the electronics firm.

The appointments are expected to be officially approved by the board in June.

Toshiba declined to comment.

Tanaka, 62, joined the company in 1973. Sasaki is a member of the Council on Economic and Fiscal Policy, the government top economic panel, and is also expected to made a vice chairman of Japan’s biggest business lobby, Keidanren, in June.

Copyright Reuters, 2013

Libor fines to fund forces charities

23 February 2013 Last updated at 06:00 GMT Chancellor George Osborne at Fisher House in Birmingham George Osborne said he wanted to support those who personified the best of British values Three military charities are to share £1.3m from fines imposed on banks that had rigged interest rates, Chancellor George Osborne has announced.

The three charities support injured soldiers, provide tickets to events and pay for breaks for bomb disposal teams.

Mr Osborne made the announcement at a project in the West Midlands that has already benefited from the fund.

The Libor scandal surfaced last June when Barclays was fined £290m for fixing the inter-bank interest rate.

Since then, Swiss bank UBS and the Royal Bank of Scotland have been fined hundreds of millions of pounds for rigging the rate, which is used to set a range of financial deals.

During a visit to Fisher House, near Birmingham’s Queen Elizabeth Hospital, the chancellor said he wanted to help those who personified the best of British values.

‘Best in society’

“I wanted to take money that was paid in fines by people who, frankly, demonstrated the worst of the values in our society and help support those who demonstrate the very best values in our society – and those are the soldiers and sailors and airmen who fight on our behalf,” Mr Osborne told BBC Breakfast.

The £4.2m cost of building Fisher House, an 18-room facility where families of injured servicemen and women can stay while their relatives are treated at the hospital, was mostly funded by charities but the government contributed £1m in December from Libor fines.

It is due to open at the end of March.

The three charities set to benefit from Saturday’s announcement are:

The Soldiers, Sailors, Airmen and Families Association will get £1.1m to fund support groups for families of service personnel who have been killed or injuredThe Felix Fund will get £65,000 to provide breaks for all 32 bomb disposal teams expected to return from Afghanistan in the next 12 monthsTickets for Troops will get £160,000 to provide tickets to musical, sporting, entertainment and cultural events for service personnel and those who have been medically discharged

Guardsman David Watson, who is being treated in Birmingham for injuries caused by an improvised explosive device in Afghanistan three years ago, described the announcement as “fantastic”.

“It will help us get what we need and help the families get what they want,” said the triple amputee, who met Mr Osborne during his visit.

The government announced plans to distribute £35m in fines for Libor manipulation to help service personnel and their families in October.

The Treasury said the rest of the fund would be allocated over the next two years.

Russia ‘losing billions illegally’

21 February 2013 Last updated at 11:59 GMT Sergei Ignatiev The illegal capital flight was organised by a select group of individuals, said Mr Ignatiev Russia’s central bank governor Sergei Ignatiev has said that $49bn (£33bn) left the country illegally last year.

The capital flight, some 2.5% of Russia’s annual economic output, was controlled by “one well-organised group of individuals.”

Mr Ignatiev told a Russian newspaper that the money transfers could have been used to pay for supplies of narcotics, bribes and avoiding taxes.

But a government spokesman said the figure was “highly exaggerated”.

“You get the impression that they are all controlled by one well organised group of people,” Mr Ignatiev told local newspaper Vedomosti, although he declined to name the individuals.

“With a serious concentration of efforts by law enforcement agencies, I think it is possible to find these people,” he added.

Mr Ignatiev said the $49bn figure was drawn from a central bank study that showed more than half the flows were made up of “dubious” capital transfers, “payments made by Russian organisations to non-residents, the stated aims of which are clearly false”.

“It can be payment for narcotics… illegal imports… bribes and kickbacks to officials (and) managers making large-scale purchases. It can be schemes to avoid tax,” he added.

Mr Ignatiev, who is expected to step down in June after 11 years at the helm of the central bank, also highlighted the prevalence of what are known in Russia as “one-day companies” used as conduits for money transfers that then vanish before paying taxes.

They are “the bane of our economy”, he said.

But Dmitry Peskov, spokesman for President Vladimir Putin, dismissed the central bank’s findings, saying the figure was “highly exaggerated”.

A study by Washington-based Global Financial Integrity found that an average of $62bn in income earned from corruption, weapons smuggling, human trafficking, and other illicit activities has entered or left Russia each year since 2004.

Alexander Lebedev, who owns The Independent and Evening Standard newspapers and is a frequent critic of the Kremlin, wrote in a blog that Mr Ignatiev’s comments were long overdue.

“Let’s hope the next head of the central bank heeds these words,” he said.

However, Mr Ignatiev did not refer to the subject when he testified in front of Russia’s upper house of parliament on Wednesday.

Italians demand a radical change

22 February 2013 Last updated at 12:05 GMT By Nigel Cassidy Europe business correspondent, BBC News Romano Prodi Crime, tax evasion, and red tape all need addressing, says former prime minister Romano Prodi Northern Italians don’t like this season of the year at the best of times. These days, the chill winds and rain are made worse by austerity. Repeated tax hikes and rising unemployment really do make it feel like economic winter has set in.

The wind whistles down Bologna’s near-deserted arcades, where a shop displays racks of unsold three-euro dresses. Even drinks in some hotel mini-bars are half price, to try and maintain some cashflow.

Yet, this is one of Italy’s most prosperous cities. It is the country’s seventh largest city, and the centre of the region producing Parma ham, Parmesan cheese and balsamic vinegar. It can still boast a wide range of industries, financial service companies and a large exhibition centre. Just a short drive from the city is the headquarters of Ferrari, arguably Italy’s most prestigious brand.

Strangely, though, days before the polling stations open their doors, not a single general election poster or candidate is visible on the main streets. Even the politicians appear to have lost their enthusiasm. Maybe that’s because there are few votes in publicly supporting yet more austerity measures.

Voters seems cynical about party promises to put money back into their pockets, or reverse the emergency austerity policies which got Italy off the hook with its international investors.

Crime and tax evasion Renzo Rosso Renzo Rosso says Italy’s leaders are still focussing their efforts on protecting the old order

Romano Prodi is one of the big figures of Italian politics. Mr Prodi, who has offices in the city centre, served two terms as prime minister, with a spell as president of the European Commission sandwiched in the middle.

He has direct and bittersweet experience of trying to revive Italy’s stuttering economy. In his view, the priority for the next government is to step up the fight against red tape and corruption.

“Foreign investors have so many [investment] choices. They’re not going to choose Italy if they have to fight against criminality. Then we must tackle tax evasion. And we need to do far more about bureaucracy, like all the building restrictions facing businesses. But its not all about changing the law, it’s about changing behaviour,” he said.

Mr Prodi isn’t the only one who thinks entrenched attitudes could be part of Italy’s problem. Just outside the city centre, the co-founder of a business start up, Hivejobs, says that in his experience, traditional family employers are often reluctant to make room for highly qualified young knowledge workers.

Employment rules do make it hard to take on new workers. Yet Alesandria Raguseo says the issue runs deeper. He cites the case of a highly-qualified young IT worker who was clearly the best candidate to join a family firm.

But the potential employer was worried because the jobseeker in question had worked at a string of companies in his short career. So the worker was not offered the position “because he wouldn’t be loyal”. By the time the employer had changed his mind, the worker had found another post.

Mr Raguseo says another priority for the new government is to act on Italy’s “digital divide”. He said: “There has to be investment when you consider that some regions in Italy still have the connectivity of the 1990s. This is not good in business when Italian firms have to look beyond the local market to find customers globally.”

Forgotten generation

A typical user of the Hivejobs site is 31-year-old Antonia Caserta. She has a masters degree qualification, and has worked in the US. Yet she’s been job-hunting for three months without success.

She said: “I think young people are upset with politicians at the moment. They see them and the government as the reason why there aren’t a lot of jobs for young people. The politicians invest a lot in the older generations, but tend to forget about the ones in their ’20s and ’30s, the generation that’s going to make Italy grow.”

Family companies are also finding that as the banking system is cleaned up and bank mergers take place, loan decisions tend to be supervised higher up the chain, at regional level. This leaves local enterprises unable to trade on their traditional relationships with managers they used to know well.

Antonia Caserta Antonia Caserta says politicians have forgotten the young people are the country’s future

One locally-based business leader with a deep understanding of the credit worthiness of Italy’s companies is Silvia Ghielmetti, general manager for CRIF Decision Solutions. Her company operates on four continents and provides data to more than 2,400 financial institutions. She says that if Italy wants to create more wealth, then its family companies have to break out of the mould and start merging.

“Italian businesses need to be aware that they must be big enough to reach international markets. So, smaller companies have to find a way to aggregate. Economic policy should incentivise them to do just that, and also help to create a management culture.”

Just under two hours drive north of Bologna is Breganze, a tiny town in the Veneto. It’s in this unlikely setting, seemingly in the middle of nowhere, that a spanking new and architect-designed building rises out of the winter mists. It’s the nerve-centre of a company which many still don’t even realise is Italian.

‘Too much corruption’ This is the vast designer-HQ of Only the Brave, a collective of fashion brands best known for its Diesel jeans. It’s the house that Renzo Rosso built. It all began in 1970, Mr Rosso made his first pair of bell-bottom denims, stitched at home on his mother’s Singer sewing machine.

Now his company employs 6,000 people worldwide and the Breganze headquarters is populated with energetic young people, scurrying around to create and market each season’s new collections.

What does the man behind one of Italy’s most successful businesses think of the line-up of politicians standing for office this weekend. Not much. Mr Rosso says Italy’s leaders are still focussing their efforts on protecting the old order, and give too little encouragement to the rising generation of potential wealth-creators.

“This country needs to change a lot. There’s too much corruption, politicians just think about how to cover the present situation and make small adjustments. One says more tax, another tries to give it back . But they don’t have the vision. They are the old generation and you don’t feel any of them is a man or woman who is going to change Italy”.

It’s quite an indictment of the current political classes. But it comes from a man whose businesses were constantly growing when Italy’s business economy was heading fast in the opposite direction.

What’s more, it’s a judgement widely shared in his country.

Air France-KLM posts big loss

22 February 2013 Last updated at 09:20 GMT Air France Airbus A330-200 Air France-KLM has been struggling to reduce its debt mountain in the face of high fuel costs Air France-KLM, the Franco-Dutch airline, says it made a big loss in 2012, blaming sharply rising fuel costs and trouble with its cargo business.

Net losses increased 47% to 1.19bn euros (£1bn; $1.57bn), after a 471m-euro restructuring charge and a 890m-euro increase in its fuel bill.

But operating losses fell to 300m euros, from 353m euros the year before.

Revenues rose 5.2% to 25.6bn euros, thanks in part to increased prices on its North Atlantic routes.

Debt fell from 6.51bn to 5.97bn euros after sell-offs and spending cuts – the company plans to reduce its net debt by 2bn euros by the end of 2014.

Chief executive Jean-Cyril Spinetta said in a statement: “The year 2012 was characterised by a slowdown in global growth and recession in Europe, but nevertheless saw a sharp increase in the fuel price.

“In 2013, we will maintain strict discipline in terms of capacity management, investments and costs.”

Air France-KLM is renegotiating pay and conditions with its staff and cutting more than 5,000 jobs, as high fuel costs and competition from low-cost airlines take their toll on the debt-laden company.

The airline managed to increase filled capacity on its flights to more than 83% as demand for long-haul trips rose, but its cargo business continues to struggle.

Search for men after Red Centre tourists attacked

Posted February 21, 2013 16:04:47

Northern Territory Police are looking for four men who allegedly attacked two German tourists overnight.

The tourists, a man and a woman aged 49 and 51, were camping at Ellery Creek Big Hole, about 80 kilometres west of Alice Springs.

Police say the men threw rocks and smashed windows in the tourists’ campervan after being refused water.

They say the men also stole some items from the campervan.

Topics: police, rural-tourism, tourism, alice-springs-0870

iiNet records jump in half-year profits

Updated February 21, 2013 16:28:00

The Perth-based internet service provider iiNet has reported a big increase in its half-year profit.

In the six months to the end of December, the company has made $31.9 million.

That is a 122 per cent increase on its profit from the same period the year before.

The company has attributed the good result to higher revenues and better margins, after the acquisition of Internode and TransACT last year.

Topics: company-news, telecommunications, perth-6000

First posted February 21, 2013 16:26:20