The Hindu : Divestment of HPCL, BPCL announced

Online edition of India's National Newspaper
Tuesday, Dec 10, 2002

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Divestment of HPCL, BPCL announced

By Our Special Correspondent

NEW DELHI Dec. 9. Amid uproar in both Houses of Parliament, the Disinvestment Minister, Arun Shourie, announced today that the Government was going ahead with the privatisation of public sector oil companies and the sale of equity in the Hindustan Petroleum Corporation Limited (HPCL) and the Bharat Petroleum Corporation Limited (BPCL). The compromise formula envisages the sale of HPCL to a strategic partner and a public offer in the case of the BPCL.

The decision to fine-tune the disinvestment policy was taken at an informal meeting on December 6, presided over by the Prime Minister, Atal Behari Vajpayee, Mr. Shourie said in a statement.

However, the Government would continue to ensure that "disinvestment does not result in the alienation of national assets, which, through the process of disinvestment, remain where they are. It will also ensure that disinvestment does not result in private monopolies,'' he said. A percentage of shares would be kept for employees of the two companies at a concessional one-third price.

As for the disinvestment of "natural asset companies,'' Mr. Shourie said that the Finance and Disinvestment Ministries would work out guidelines.

This is evidently a reference to companies dealing with natural resources such as coal and aluminium, and puts a question mark on the disinvestment process for the National Aluminium Corporation Limited (NALCO), which has been marked by controversy lately.

Mr. Shourie said a Disinvestment Proceeds Fund would be set up for financing fresh employment opportunities and investment, and for the retirement of public debt.

The controversy over the issue appeared all set to snowball as the Opposition forced an adjournment in the Rajya Sabha and staged a walk-out in the Lok Sabha.

The former Finance Ministers, Manmohan Singh and Pranab Mukherjee, said in the Rajya Sabha that the disinvestment proposals had no validity in the absence of legislative measures to repeal the nationalisation of the two oil companies.

The protests by the Opposition members, who rushed to the well of the House, led to an adjournment while the entire Opposition in the Lok Sabha walked out protesting the failure to have a full discussion on the issue.

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