Govt. to renew IPCL disinvestment

By Our Special Correspondent

NEW DELHI, NOV. 13. The Central Government has decided to renew the process for disinvestment of Indian Petrochemicals Corporation (IPCL) by going in for sale of a 51 per equity stake within 90 days of which 26 per cent will go to a strategic partner. In addition, contracts have been awarded for the sell- off of five Ashok Hotels owned by the India Tourism Development Corporation as well as grant of a management lease for the Bangalore Ashok Hotel.

Disclosing this here today, the Disinvestment Minister, Mr. Arun Shourie, said bids had been received for leasing of the Delhi Ashoka Hotel due to some land revenue problems. There was also no response for the sale of the Hotel Ashok in Manali. The process for these two hotels would be revived in January, he said.

These decisions were taken at a meeting of the Cabinet Committee on Disinvestment (CCD) presided over by the Home Minister, Mr. L. K. Advani. The CCD decided that the balance 25 per cent equity in IPCL would be sold in the market later, giving the first right of refusal to the strategic partner.

Mr. Shourie told reporters that the five ITDC hotels would be sold for a total of about Rs. 16 crores. These include the Ashok Hotels at Agra, Madurai, Bodh Gaya, Hassan and Mamallapuram. The Hotel Ashok at Bangalore will be leased out for an initial payment of Rs. 39.41 crores as half of the projected turnover for the 30 year lease.

The Government would also get a minimum guaranteed annual payment, with a provision of 25 per cent increase every five years. In case the turnover is higher, he said the Government would get a 16.5 per cent share of total revenue instead of guarantee amount.

Regarding the interest of Indian Oil Corporation in IPCL bidding, he conceded that public sector enterprises had a handicap in keeping their financial bids under wrap. The CCD had thus decided to empower these corporations to take decisions without seeking Government clearance.

He said the Cabinet Secretary will review the process of authorisation of the bids by PSEs. This will enable IOC and other PSEs to maintain secrecy of their price bids. At the same time, Mr. Shourie was not in favour of giving Government stake to a PSE through a nominated or negotiated route. Since some PSEs especially in the oil sector were keen to acquire stake in others and felt this was the best way to consolidate, he said these companies had now been asked to come through the open market route by participating in the bid process.

Send this article to Friends by E-Mail

Section  : Business
Previous : Service tax to net Rs. 5,000 cr.
Next     : Cement stocks turn weak