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3-year roadmap for disinvestment
By A Special Correspondent
In a bid to attain the ambitious 10th Plan target of mobilising Rs 80,000 crore from the sale of government equity in PSUs, the Disinvestment Ministry is preparing a three-year roadmap, that may include disinvestment in blue chip undertakings in telecom, power and oil sectors. After failing pathetically to meet its target last year and after a disappointing spell this year with a Rs 12,000-crore goal to achieve, the Department of Disinvestment (DoD) is aggressively pushing the disinvestment process.
With the 10th Plan setting a whopping Rs 80,000 crore accruals from disinvesting government stakes in PSUs, the names of big fishes such as IOC, ONGC, GAIL, BPCL and HPCL are being speculated among the potential companies that may be included in the disinvestment circuit.
But the setback to the disinvestment plans of Air-India and Indian Airlines in the face of widespread political resistance, both from the ruling and the opposition sides, would certainly serve as sufficient indication of the hidden traps and challenges that the DoD is constantly faced with.
Disinvestment Minister Arun Shourie is the worst critic of the system. Administration in India has degenerated into a system of endless correspondence and meetings as a substitute for action. The cumulative losses of state electricity boards today stand at nearly Rs 22,000 crore as compared to Rs 4,000 crore almost a decade ago. But what happens when a Chandrababu tries to hike power tariffs? The BJP and the Congress oppose him. Do you know that in India industrial users pay 2.5 times what householders do for electricity, while in industrialised countries they pay half what households do.
That's why industry can produce so efficiently abroad. We all know that China's agricultural productivity is much higher than ours. But do you know that almost all cotton in China is BT cotton from Monsanto? Well, we've thrown out Monsanto.
A lot of FDI could flow into the country through disinvestment. But nobody comes forward. Even the companies which have shown interest initially have gone back as in the case of Air-India by Singapore Airlines and Caltex, Exxon and Petronas in the case of IBP. The reaction is understandable-bureaucratic delays, charges of corruption, bribery and under-valuation.
However, Shourie's persistence started paying results. After the recent sale of CMC and HTL, the government has decided to invite price bids for Hindustan Zinc Ltd and 13 hotels of Indian Tourism Development Corporation and Hotel Corporation of India. While 26 per cent of the government's stake will be up for sale to a strategic partner in the case of HZL, a different strategy has been adopted in the case of ITDC and HCI properties. While two well-run ITDC hotels in Delhi and Bangalore are offered on a lease-cum-management basis, the remaining six hotels will be sold outright. The five hotels of HCI, barring the one at Srinagar, will also be sold outright and the proceeds used to set right Air-India's balance sheet.
In the case of IBP, the Cabinet Committee on Disinvestment has decided to do away with the irritant stipulation of a Rs 500-crore bank guarantee by the bidders. It has also relaxed the provision of Rs 2,000 crore post-sale investment by the buyer in the petroleum sector. This will enable more companies to participate making the bidding process competitive. Several foreign companies had withdrawn from the bidding because of this stipulation.
Besides IBP, ITDC and HCI hotels, the government plans to finalise the sale of eight other PSUs by the end of this fiscal. They include Maruti Udyog Ltd, VSNL, HCL, Jessop, NEPA, IPCL, Bharat Heavy Plates and Vessels Ltd and Instrumentation Control Valves.
(1/11/01)
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