The Hindu Business Line : CCD pours cold water over oil cos' sell-off

IN what is seen as a victory for those constituents opposing disinvestment of PSUs, the Government today deferred by three months a decision to privatise oil refining companies HPCL and BPCL and minority stake sales in IOC, ONGC, NTPC and BSNL.

The decision, taken at a meeting of the Cabinet Committee on Disinvestment (CCD), would mean that the "in-principle" clearance granted by the CCD for strategic disinvestment in HPCL and BPCL in February would have no sanctity any more.

During today's meeting, the CCD also decided to ratify a proposal mooted by the Core Group of Secretaries on Disinvestment to ban all PSUs and co-operatives in which the Government holds majority stakes of 51 per cent and above from bidding for other PSUs slated for privatisation, the Disinvestment Minister, Mr Arun Shourie, said after the meeting.

This step to ban PSUs from bidding is seen as a shot in the arm for those advocating aggressive disinvestment. "If there are any exceptions to this general policy decision, the administrative Ministry concerned would have to move a note explaining the reasons for bidding by any PSU and seek a special approval from the CCD,'' Mr Shourie said.

The decision on public offerings in IOC, ONGC, NTPC, GAIL and BSNL was deferred at the suggestion of the Disinvestment Ministry which said that there was no point in going for such minority stake sales till a decision on HPCL and BPCL was taken.

"It would be beneficial if an integrated decision is taken of the whole oil sector,'' Mr Shourie said.

The Disinvestment Ministry's proposal to sell minority stakes in IOC, ONGC, BSNL and GAIL up to 25 per cent at the appropriate time was also contested by the Petroleum Ministry.

"All decisions in regard to these oil companies are off,'' Mr Shourie said.

According to him, the CCD decision would cast a shadow on not just the mode of divestment in HPCL and BPCL (whether strategic sale or public offering) but also whether there should be disinvestment at all in these oil companies.

With seven months having lapsed after the in-principle decision was taken by the CCD in February and a further deferment by another three months, Disinvestment Ministry officials said in confidence that the process was as "good as spiked'' for the time being.

A decision on disinvestment in HPCL and BPCL would now come before the Government around November when Parliament convenes for the winter session, and the possibility of a favourable decision during this time looks remote.

Undertaking on AMC

During the CCD meeting, the Finance Minister, Mr Jaswant Singh, gave an undertaking to move a note on setting up an Asset Management Company (AMC) to ensure speedy sell-off in PSUs.

"When a decision is taken to privatise a PSU, the management of all decisions and process relating to that PSU would go to the AMC which would be under the control of the Ministry of Disinvestment,'' Mr Shourie said.

The Defence Minister, Mr George Fernandes, attended the CCD meeting as a special invitee.

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CCD pours cold water over oil cos' sell-off — Bar on PSU, Govt co-op bids