The Hindu : Cabinet to discuss divestment of petroleum firms by month-end

Online edition of India's National Newspaper
Monday, Aug 19, 2002

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Cabinet to discuss divestment of petroleum firms by month-end

By Our Staff Reporter

KOLKATA AUG. 18. The Cabinet Committee on Disinvestment is scheduled to discuss the proposal for disinvestment in Hindustan Petroleum Limited and Bharat Petroleum at its next meeting this month-end, according to the Union Minister for Disinvestment, Arun Shourie.

He told reporters here on the sidelines of a meeting with the Indian Chamber of Commerce that the committee would also discuss proposals put forward by his department to hasten the disinvestments process in a time-bound manner. On NALCO, he said the Government was in the process of getting the company listed at the New York Stock Exchange before inviting bids.

He said that the controversy over the allotment of petrol pumps and their subsequent cancellation would not slow down the divestment process.

Dwelling on privatisation, Mr. Shourie said that the Government was not going to wait for consensus. Blaming the Opposition for pursuing disinvestment at the State level and objecting to the same at the Central level, he said the Government had earned Rs. 11,000 crores by sale of PSU equity worth Rs. 850 crores in 31 transactions. Two-thirds of the companies sold were loss-making. Emphasising that poorly-managed, loss-making PSUs were a drag on the economy, he said a recent assessment had found that the Unit Trust of India (UTI) had lost not less than Rs. 600 crores in opportunity cost for its exposure in a host of PSUs. The cost was measured in terms of the investment and the returns it would have enjoyed if deposited in a bank. Such investments were partly responsible for UTI's woes today.

Referring the Chhattisgarh Government's strong criticism of BALCO privatisation, he said, "today the same State has signed an MoU with Sterlite for an additional investment plan of Rs. 5000 crores."

Contrary to the fears expressed by trade unions, the basic pay of BALCO employees had gone up by 20 per cent while that of Paradip Phosphates, another CPSU disinvested in Orissa, had gone up by 90 per cent.

While Madhya Pradesh had put Optec — an optic fibre cable manufacturing company — on sale, Karnataka had initiated a move to either disinvest or close down State-run PSUs.

Quoting the latest CAG report, Mr. Shourie accused West Bengal of borrowing through Government undertakings to meet its huge current account deficit.

Of the Rs. 4,000 crores raised by the West Bengal Infrastructure Development Corporation, only Rs. 300 crores was used for infrastructure development.

The CAG had also referred to widespread mismanagement of State-run PSUs some of which did not close accounts for the last 10 years.

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