Criticism scaring PSU bidders: Shourie

NEW DELHI, AUG. 24. The Government today warned that the ``avalanche'' of allegations against potential buyers of public sector undertakings was scaring them away and this had led international credit agencies to downgrade India as an investment destination.

``A factor that seems to be scaring away bidders is the din and the avalanche of allegations that descend on parties once it is known that they are in the race for a PSU,'' the Disinvestment Minister, Mr. Arun Shourie, told the Rajya Sabha.

Given the sort of charges hurled on some of the potential bidders, many concluded that by staying in the race they would only be persisting needlessly in a minefield, he said making a statement on a calling attention regarding PSU disinvestment. Such developments were among the factors that had led international rating agencies to downgrade India as an investment destination, he said referring to widespread criticism against the disinvestment process which was making PSU sale difficult.

Mr. Shourie said potential bidders were concluding that the condition of the enterprises was worse than they had assumed. ``The representative of a very important potential bidder for a flagship PSU eventually told me, Mr. Minister, we are not able to see why we should pay you to take over your headaches.''

However, the Government remained committed to disinvestment. ``We continue to believe that this is the one way to safeguard jobs in these enterprises, and the enterprises themselves,'' he said appealing to members to help create an atmosphere which would maximise the number of bidders in each transaction.

The two strategic sales conducted were testimony to this, he said adding in Modern Foods, bread sales in 2000-01 were 31 per cent higher than in the previous year. In the first four months of 2001, they were 80 per cent higher than in the corresponding period in 2000. Wages had increased on an average by Rs. 1,600 per employee per month, he said.

In BALCO, a 67-day strike by workers caused a staggering loss, Mr. Shourie said adding since the strike was called off, the new management made all efforts to increase production.

- PTI

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