Monday, Jan 27, 2003
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By Sushma Ramachandran
Disclosing this here after a meeting of the Cabinet Committee on Disinvestment (CCD) convened as a special case on Republic Day, the Disinvestment Minister, Arun Shourie, stressed that the Government would definitely implement the project. In case the strategic partner was not interested, other options would be considered including involving public sector companies such as the Oil and Natural Gas Corporation (ONGC) or the Indian Oil Corporation (IOC). Briefing mediapersons on the meeting which had a single point agenda about the modalities of disinvestment in HPCL and BPCL, he said Government equity would be brought down to 12 per cent in HPCL and 26 per cent in BPCL. The Government shareholding would be divested to the extent of 34.01 per cent in HPCL and 35.2 per cent in BPCL with five per cent being offered to employees in both companies. The strategic sale of HPCL would also entail transfer of management to the strategic partner. In the case of BPCL, the disinvestment would be through public offers in both the overseas and domestic markets. He pointed out that the future of the Bina refinery project was no longer in doubt since BPCL would implement the project. As for the Rs. 9000 crore Bhatinda refinery project where an investment of Rs. 400 crores had been made, he sought to allay concerns expressed especially by the Punjab Government by reiterating that it would definitely be set up. The other major decision taken by the CCD was that public sector companies would not be allowed to bid for HPCL. This was bound to dash the hopes of the ONGC which was keen on bidding for HPCL to help it make a smooth transition towards becoming an integrated oil major. Regarding the timeframe for implementing the strategic sale, he said "as soon as possible''. The CCD meeting which was convened on Republic Day due to difficulty in finding a date convenient for all members was held in the absence of the Finance Minister, Jaswant Singh, who is in Davos. But the Finance Ministry had given written views on these issues to the CCD which have been taken into account, he said. Mr. Shourie said the opinion of the Attorney-General on the need for parliamentary approval of HPCL's and BPCL's disinvestment was circulated at the CCD meeting. Giving details of the Attorney-General's opinion, he said it was stated that there was no need for parliamentary approval since the two companies were incorporated under the Companies Act after being nationalised. So all activities were carried out in accordance with the provisions of the Act. The Attorney-General had also pointed out in some cases such as in coal and bank nationalisation, the relevant legislation had provided for parliamentary approval in case of privatisation. But this was not so in the acquisition legislation for HPCL and BPCL where the provisions are on the lines of legislation nationalising the Maruti Udyog Limited (MUL).
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