BALCO divestment may be hit by SC judgement

Stating that some of the Balco mines were located in the tribal areas of Madhya Pradesh, sources said that the issue could affect the pricing but added that in privatisation process the government was not seeking to transfer the land.

"We are only transfering the stake in favour of strategic partner and the lease would continue to be in the name of Balco and the above aid judgement should not make a material difference," they added.

Government has initiated the process of divesting 51 per cent of its 100 per cent holding in the aluminium company to a strategic partner during the current fiscal as part of measures to achieve the Rs 10,000 crore disinvestment target.

The issue came up for discussion at a recent meeting ofE inter-ministerial group (IMG) on Balco divestment where it was decided that the impact of the judgement would be thoroughly examined.

BALCO has, at present, mines located at two locations inMadhya Pradesh. The company acquired a mining lease for its Manipat mine located in Sarguja district on a twenty year lease from the state government in 1992.

It has also acquired another mine, Bodai-Daldlai inKawarha district of MP for a period of twenty years in 1997.The two mines together have a total estimated reserves of 13.11 million tonnes.

The appointment of public relations agencies forconducting the public relations exercise for the purpose of facilitating the disinvestment process also came in for sharp criticism at the meeting of the IMG.

The IMG is believed to have discussed the issuethreadbare and come to the decision that the public relations agencies had misreably failed in carrying out their task.

The government had appointed Perfect Relations and Crisilin 1999 to carry out this exercise. The total cost of this exercise has been estimated to cost around thirty five lakh Rupees.

It also blamed the two agencies for their failure tocheck the disinformation campaign launched by the local media in the recent past. It took particular note of the fact that newspaper reports had stated that BALCO was to be sold earlier this year.