Cabinet gives nod to RITES' Tanzania foray

The Cabinet yesterday approved a RITES Ltd plan to invest in Tanzania, cleared an investment pact with the Slovak Republic and accepted a recommendation for winding up state-owned Bharat Ophthalmic Glass.

RITES Ltd has been allowed to invest up to $8 million, its equity stake of 51 per cent, in a strategic company for execution of a Tanzania Railway Corporation project.

The project involves rehabilitation of the Tanzanian railways and its operation and management for 25 years. The Cabinet gave the go-ahead to an investment promotion and protection agreement with the Slovak Republic. India has signed such agreements with 58 countries.

The Cabinet accepted the recommendation of the Board for Reconstruction of Public Sector Enterprises for winding up Bharat Opthalmic Glass. A budgetary provision of Rs 9.80 crore would meet the employees' dues.

It also approved signing of the International Convention for Supression of Acts of Nuclear Terrorism which was adopted by the UN General Assembly in April 2005.

The Cabinet Committee on Economic Affairs, which met today, approved the strengthening of the power grid between the eastern and western regions, increased the outlay for a social sector programme and provided financial relief to the beleaguered Mazagon Dock Ltd.

Briefing the media after the committee's (CCEA) meeting, Defence Minister Pranab Mukherjee said the implementation of the Rs 803.70-crore east-west transmission corridor strengthening scheme of the Power Grid Corporation has been cleared. The project is to be commissioned within three years of the date-of-investment approval.

The CCEA also cleared a move to hike the Centre's contribution to the centrally sponsored national programme on the mid-day meal scheme.

Central assistance to states and Union territories for meeting the cooking cost for mid-day meals has been hiked to Rs 1.50 per child per school day from the existing Re 1.

The CCEA decided to clear a proposal to reschedule the dates for redemption of preference shares of Mazagon Dock Limited (MDL) from the original date of 1999-2000 to 2007-08.

MDL's performance had been adversely impacted for a few years when orders from the Navy and ONGC dried up, Mukherjee said at the briefing. Since then, the situation had changed for the better, he added.

Consequently, the CCEA had granted an extension to MDL to redeem its outstanding preference shares of Rs 98.98 crore in four equal installments, beginning 2007-08. MDL will have to start paying the dividend on the outstanding preference shares from the current financial year.