New Delhi, December 27
No decision on the disinvestment in oil PSUs — the HPCL and BPCL — could be taken at the Cabinet Committee on Disinvestment (CCD) meeting today as the Disinvestment Ministry could not take the opinion of the Attorney-General, Mr Soli Sorabjee, on the issue.
The CCD, chaired by Mr Atal Behari Vajpayee, was to discuss the quantum and modalities of divestment in the two oil corporations after obtaining the Attorney-General’s view on the legality of sale of equity in the companies acquired and nationalised by government by the Acts of Parliament.
Briefing reporters after the meeting, Disinvestment Minister Arun Shourie said at the current pace of disinvestment, there was no question of achieving the target of Rs 12,000 crore this fiscal year.
But for Balmer Lawrie and one of the three units of a subsidiary of Instrumentation Limited, for which the CCD has decided to call for financial bids, the government could not make headway for disinvestment of any other company which was in the pipeline.
For most of these firms, including National Fertilisers Limited, FACT, Madras Fertiliser, NEPA, Hindustan Organic Chemicals Limited and Central Inland Water Transport Corporation, the government will have to go in for fresh bids for different reasons.
Mr Shourie said personally he believed that there was no need for the repeal of the original Acts under which the oil companies were nationalised for their disinvestment. He cited examples of Maruti Udyog Limited and earlier tranches of HPCL and BPCL disinvestment which were done without any approval from Parliament. However, the government had decided to refer the issue for the Attorney-General’s consent.
After remaining a bone of contention between the Disinvestment Ministry and the Petroleum Ministry for over three months since the September 7 CCD meeting, the issue was politically resolved by the December 5 meeting convened by the Prime Minister with senior colleagues.
The issue got further clarified when the government announced in Parliament that while the HPCL would be disinvested through a strategic route, the BPCL would go in for a public offer. This was seen as a compromise between the votaries of pro and anti-disinvestment within the government.
The CCD today approved a Rs 200-crore financial restructuring for the HOCL and decided to call for short
bids. For National Fertilisers, the government has decided to start the process all over again since the company’s valuation has improved because it benefitted by Rs 210 crore from the fertiliser policy and also recovered an outstanding loan of Rs 60 crore from Madras Fertilier. The minister said as an exception, cooperatives like Iffco and Kribhco would be allowed to bid for NFL and other Madras Fertiliser Company.
For HCI-owned Centaur Hotel and ChefAir,the CCD decided that it would not call for bids until the proposed joint venture of Delhi Airport was announced. For NEPA, the government has decided to reject the bid and start afresh.
However, on the positive side of the disinvestment programme was a decision to call for financial bids for Balmer Lawrie. Eleven parties had made their bids and the due diligence had been completed.
Likewise, bids for the Palghat unit of a subsidiary of Instrumentation Limited would be called for.
