Foreigners to fund up to 30 pct of Indian roads (Reuters)

(For other news from the Reuters India Infrastructure Summit, click on http://in.reuters.com/summit/IndiaInvestment10)

By Rajesh Kumar Singh

NEW DELHI (Reuters) - Foreign investors are likely to fund up to 30 percent of India's $18 billion road projects in the current fiscal year, a top official at the National Highways Authority of India (NHAI) said on Monday.

J.N. Singh, member finance at the authority, said Asian and European companies were participating as minority stakeholders in road projects and the appetite was good.

NHAI, which builds, maintains and manages highways, has awarded contracts to build 3,000 kms of road between April and August and looks to award another 6,000 kms before the fiscal year ends next March, he told in an interview for the Reuters India Investment Summit.

"Companies from Spain, the UK, Italy, Saudi Arabia, China, Russia and Malaysia are actively participating in the BOT mode of the national highway development programme," Singh said, referring to Build-Operate-Transfer partnership models.

India needs to invest $80 billion in the next two years to revamp highways and is expecting the private sector to fund half of the project costs, Transport Minister Kamal Nath had told Reuters last week.

But underdeveloped domestic bond markets and restrictions on investments of pension and insurance funds ensure the country's infrastructure developers rely mainly upon overstretched banks, which provide only short-term funds.

The government has announced a series of measures to boost funding for infrastructure. Last week, New Delhi lifted the cap on foreign investment in the debt market to address the long-term capital requirements for the sector.

The move comes on the heels of a plan to set up an $11 billion debt fund by next year. There is also a proposal to allow India's top state-run infrastructure finance company, IIFCL, to guarantee all infrastructure bonds, helping generate long-term funds for the sector.

"The policy changes made by the government have been quite good and are likely to have a positive impact," Singh said.

He also said NHAI plans to raise up to 55 billion rupees ($1.2 billion) this year via tax-free and taxable bonds, adding the firm also has plans to tap overseas debt market in the next fiscal year.

Officials have said bureaucratic and regulatory hassles keep foreigners from jumping into the fray on their own, and tend to look for joint venture partners.

India is currently building 13 kms of roads a day against a stated target of 20 kms. Singh attributed the delay to a slow bidding process in the past and said the target could be achieved by 2012.

"It takes at least two years to complete road projects after the actual construction work begins. If you had awarded fewer projects earlier, how could you achieve the desired results today?"

India's infrastructure deficit acts as a brake on the economy and is seen a drag on achieving a growth pace similar to China's double-digit economic expansion. Poor infrastructure is also partly responsible for high inflation.

A Planning Commission report showed the country missed its target for power sector and road additions in the last fiscal year.

(Editing by Ranjit Gangadharan)

(For more news, visit Reuters India)

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Yuan rise could worsen China's imbalance: central banker (Reuters)

BEIJING (Reuters) â€" A rise in the value of the yuan may intensify expectations for further increases and could lead to a worsening of China's international payments imbalance, a regional central bank official said in comments published on Monday.

The comments by Xu Nuojin, deputy head of the People's Bank of China (PBOC) Guangzhou, were published in the Financial News, a paper run by the central bank, and come amid growing pressure from Washington for faster yuan appreciation.

"Any efforts to address the international payments balance by adjusting the yuan exchange rate will achieve no results," Xu wrote in an opinion piece.

He did not elaborate on the currency issue, but he added that China has to boost consumption and investment to address the problem of high savings levels in the Chinese economy.

Many Chinese economists and officials, like Xu, have reiterated their view that the yuan, also known as the renminbi, is not undervalued and should not be blamed for China's trade and economic imbalances.

(Reporting by Zhou Xin and Kevin Yao; Editing by Ken Wills)

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India removes snakes, filth to ready Games village (Reuters)

NEW DELHI (Reuters) â€" Workers painted walls, drained out rain water and removed a snake at the Commonwealth Games Village as India raced on Sunday to address complaints of filth and hygiene a week before the start of the showpiece event.

The Games were supposed to enhance India's image of a rising power, but shoddy construction, filthy accommodation and security fears have underlined governance and accountability issues, hurting the runaway pride of Asia's third largest economy.

Several top athletes, including world champion sprinter Usain Bolt, have pulled out, taking away some of the shine from the event held every four years for former British colonies.

Two more Australian athletes, cyclist Travis Meyer and table tennis player Stephanie Sang, pulled out on Sunday. This comes a day after Britain's number one tennis player Elena Baltacha withdrew because of concerns about disease and hygiene.

On Sunday, Indian organising committee officials met to review the work at the Games Village where masons plastered walls while workers struggled to dry out the basement of the Village which sits on the flooded plains of the Yamuna river.

"All finishing work is going on in full swing," said Dalbir Singh, mayor of the Games Village where the athletes will stay.

"It's a world class facility with some minor issues and work is going on to fix those problems."

(For a slideshow: Countdown to Commonwealth Games, click http://in.reuters.com/news/pictures/slideshow?articleId=INRTR2HWG7)

Indeed, most of the 34 apartment blocs are gleaming and spacious and fitted with Italian marble. But much of what is good about the facility has been overshadowed by athletes' complaints of filth and unfinished work in some of the living quarters.

SNAKE, TOBACCO SPIT

South Africa's High Commissioner to India Harris Majeke told reporters a snake had been found in the room of an athlete at the Games village.

"That was really a threat to the lives of our athletes," he said, complaining of filth in the living quarters. "When everything is done, then we will ask our teams to come."

The Times Now news channel said about 150 rooms meant for athletes were unliveable. Indian boxer Akhil Kumar was in shock when his bed caved in on Saturday. It was found the mattress had just been placed on the bed frame without any support underneath.

"Labourers have done a very bad job. They had spit 'paan' (chewing tobacco) on the walls, stains of which are almost unremovable," Lalit Bhanot, secretary general of the Games organising committee, told Reuters.

"We are identifying rooms which are dirty and shutting them down. But we have adequate rooms so there is nothing to worry."

The Games are estimated to have cost $6 billion. India was awarded them in 2003 but did not begin proper preparations until two years ago. Michael Fennell, chief of Commonwealth Games Federation, has said India's image has taken a beating.

Athletes from 11 countries have arrived so far and contingents from seven more nations, including New Zealand and Canada which had delayed their arrival, are expected on Sunday.

The English team, which had checked into hotels because their accommodation was not ready, began moving some support staff into the Village on Sunday. The athletes will follow on Monday.

"Work is on track. About 66 flats will be handed over by tomorrow (Monday) and everything will be complete by Wednesday," Delhi Chief Minister Sheila Dikshit told reporters.

India had hoped to use the Games to display its growing global economic and political influence, rivalling neighbour China which put on a spectacular 2008 Beijing Summer Olympics.

Instead, they have become a major embarrassment for the world's largest democracy, where infrastructure projects have progressed slowly and are a drag on economic growth.

Desperate officials on Friday asked the Indian Army to build a temporary bridge to replace the $1.1 million footbridge that collapsed last week. The bridge, providing access to the main Jawaharlal Nehru stadium, should be finished within five days.

The bridge collapse and a suspected militant attack on two foreign visitors threw the Games into crisis. An outbreak of dengue has only compounded worries.

(Writing by Krittivas Mukherjee; Editing by Sanjeev Miglani)

(For more news visit Reuters India)

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Japan to "ease policy appropriately if necessary" (Reuters)

KOBE, Japan (Reuters) â€" Japan will ease monetary policy appropriately if necessary, while keeping an eye on the impact of the yen's rise on the economy, Bank of Japan Governor Masaaki Shirakawa said on Sunday.

Shirakawa, speaking at an event hosted by the Japan Society of Monetary Economics in Kobe, western Japan, also said the BOJ was watching the "downside risk" to the economy more closely.

He said the Japanese central bank had done the most aggressive easing in the world when looking at the size of its balance sheet in comparison with gross domestic product but that it did not mean he saw no need for further action.

"We'll respond (to the need of easing) timely and appropriately," Shirakawa told the seminar.

Tokyo intervened in the currency market on September 15 by selling yen for the first time in more than six years as the yen's surge to a 15-year high versus the dollar threatened to derail Japan's export-reliant recovery and worsen deflation.

The BOJ's next scheduled policy meeting is on October 4-5. Easing policy at this meeting cannot be ruled out, and options include increasing government bond purchases and expanding a cheap fund-supply tool, sources say.

(Reporting by Tetsushi Kajimoto; Editing by Nick Macfie)

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Govt says will review Kashmir security deployment (Reuters)

NEW DELHI (Reuters) â€" India will consider scaling back security in the disputed Kashmir region, the government said on Saturday, in a bid to calm public anger after months of anti-India protests that have killed more than 100 people.

Palaniappan Chidambaram also said the government will soon announce a team to begin a dialogue with a broad section of Kashmir, including political parties and groups.

The decisions are the latest effort by the government to reach out to Kashmir where an air of defiance unseen for years has threatened to undermine India's rule over a region also claimed by its rival and neighbour, Pakistan.

Prime Minister Manmohan Singh has been accused of not taking seriously enough the largest pro-independence protests in two decades in Kashmir this summer. Saturday's announcement comes after a delegation of Indian lawmakers visited the region this week and met separatist leaders.

"We will request the state government to immediately convene a meeting of the (security) Unified Command and to review the deployment of security forces in Kashmir valley, especially Srinagar," Chidambaram told reporters after a meeting of the Indian cabinet's committee on security.

He said the state government will look at the options for scaling down the number of bunkers and check points in Srinagar, Kashmir's summer capital, and other towns. Kashmir has been in a siege-like state since June with shops and offices closed and education institutions shut. Roads have remained empty.

Chidambaram, seeking to assuage popular anger over a law that gives security forces sweeping powers to shoot, arrest and search people, said the state will seek to limit the areas where the law operates.

Most of Kashmir has, for years, been declared as "disturbed", a necessary step for the application of the hated Armed Forces Special Powers Act.

"We will request the state government to review the notification (of the disturbed areas). They will decide which notifications have to be continued (and) which need not be continued," Chidambaram said.

"We think these steps should address the concerns of different sections of the people in Jammu and Kashmir, including the protesters."

Kashmiri separatists, who accuse the Indian army of large scale violation of human rights, want the armed forces law withdrawn.

Tens of thousands of people have been killed in Kashmir since an armed revolt erupted in 1989, but militancy has weakened over the years.

While a previous generation of Kashmiris often embraced the militancy, a new generation has used street protests, Facebook and mobile phones to spread revolt.

(Editing by Sanjeev Miglani)

(For more news, visit Reuters India)

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Japan refuses China demand for apology in boat row (Reuters)

TOKYO/BEIJING (Reuters) â€" Japan refused to apologize on Saturday for detaining a Chinese boat captain, showing no signs of softening in a dispute between the two economic powers after Japan gave ground and released him.

The fishing trawler captain, Zhan Qixiong, flew out of Japan to the coastal Chinese city of Fuzhou on Saturday.

The release followed the detention of four Japanese nationals on suspicion of violating Chinese law regarding the protection of military facilities, though Japanese Chief Cabinet Secretary Yoshito Sengoku has denied a link between the two incidents.

Japanese diplomats met the four on Saturday, Kyodo news agency reported. They have been under residential surveillance, meaning they were likely restricted at a hotel or lodging, it quoted an official at the Japanese Embassy in Beijing as saying.

China's Foreign Ministry said Beijing was angry at the detention of the captain, arrested by Japan over two weeks ago after his trawler collided with two Japanese patrol boats in waters near islands that both sides claim. It demanded an apology and compensation.

China said its claim to the islands -- which it calls the Diaoyu and Japan calls the Senkaku -- was "indisputable," but Japan did not agree.

"There is no territorial issue that needs to be resolved over the Senkaku," Japan's Foreign Ministry said in a statement. "China calling for apology or compensation is groundless and is absolutely not acceptable."

Katsuya Okada, who was Japan's foreign minister until a cabinet reshuffle on September 17, criticized China for demanding an apology and compensation, Kyodo reported.

"Everybody knows that China is not a democratic country, but (the latest demand) will make that explicit," Okada, who is now secretary-general of the ruling Democratic Party of Japan, was quoted as saying.

DIALOGUE

China's statement had said that the two countries should solve their disputes through dialogue. Japanese Prime Minister Naoto Kan also said it was time for Asia's two biggest economies to put relations back on a steady footing.

"I believe it is necessary for Japan and China to handle matters calmly," he said in New York, where he attended the U.N. General Assembly.

The dispute has underscored the brittleness of ties long troubled by Chinese memories of Japanese wartime occupation and territorial disputes over parts of the East China Sea that could hold rich reserves of gas.

Some Japanese newspapers decried Zhan's release as a backdown that would encourage Chinese assertiveness.

"There is a possibility that it has left an impression that Japan will cave in when pressured," a leading daily, Asahi Shimbun, said in an editorial.

Sun Cheng, an expert on relations between the two countries at the China University of Political Science and Law in Beijing, said it would take time for relations to improve.

"China will want to keep up its case over the Diaoyu islands. Whether Japan actually apologies or gives compensation is not so much the point as making it clear that China won't compromise on sovereignty," he said.

($1=85.15 Yen)

(Additional reporting by Yoko Nishikawa, Chikako Mogi and Charlotte Cooper in Tokyo and Andrew Quinn in Washington; Editing by Nick Macfie and Sanjeev Miglani)

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India, RIM working on glitches in email access - source (Reuters)

NEW DELHI (Reuters) â€" India and Research in Motion have hit technical glitches in their talks on access to corporate email, but access to the messenger services is satisfactory, a government source said on Friday.

"Messenger service is working fine, so far. We are getting manual reports, we are satisfied," the source said.

"Some technical glitches have come up, more than what we evaluated, on enterprise mail. Efforts (are) underway to solve it," the source said.

India, which along with several other countries has expressed concerns that BlackBerry services could be used to stir political or social instability, had threatened RIM with a ban if it were denied access to data.

(Reporting by Bappa Majumdar)

(For more news visit Reuters India)

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