IBP sell-off cleared; govt to ease procedures

NEW DELHI, OCT 6: The government today cleared privatisation of its oil marketing company IBP by reducing its stake to 26 per cent from 59...

NEW DELHI, OCT 6: The government today cleared privatisation of its oil marketing company IBP by reducing its stake to 26 per cent from 59.59 per cent as also of two major trading houses, MMTC and STC, while deciding to expedite the disinvestment process following Prime Minister Atal Bihari Vajpayeeacirc;euro;trade;s concern over delay in this regard.

acirc;euro;oelig;Union Petroleum Minister Ram Naik has fully endorsed the IBP privatisation proposal8230; In fact the Cabinet note was also prepared with the help of the ministry,acirc;euro; Disinvestment Minister Arun Shourie told reporters after the Cabinet Committee of Disinvestment CCD meeting headed by Vajpayee.

acirc;euro;oelig;We have decided to cut down the number of procedures from over 20 to a mere three by taking the proposal to the Committee of Secretaries and getting it back for approval of the cabinet,acirc;euro; Shourie said, adding the Group of Secretaries would be consulted again only in case of requirements such as fixing the value of shares.

The disinvestment in the oil PSU would be done through international competitive bidding and only those parties would be allowed to bid acirc;euro;oelig;who have invested or propose to invest Rs 2,000 crore in either exploration, refining or pipelines,acirc;euro; he said. Asked whether the process of disinvestment in case of IBP would be completed within the current financial year, Shourie said there was no such condition and that the acirc;euro;oelig;process was underway to complete it without delays though no such time plan has been fixed.

CCD also cleared privatisation of two trading houses MMTC and STC. During the meeting, Vajpayee expressed concern over the delay in firming up disinvestment measures on units in which divestment had already been cleared.

Shourie, however, refused to comment on the amount that would be mobilised during the current fiscal through disinvestment saying that valuation of shares of companies was yet to be done.

He also said that Department of Disinvestment DoD would adopt a practice of reporting state of progress to the CCD about all those PSUs which were cleared for disinvestment. In case of MMTC and STC, Shourie said eventually 10 per cent of equity would be given to employees of both trading houses at a concessional price to be determined at a later stage. Shourie justified the governmentacirc;euro;trade;s decision to retain 26 per cent against core groupacirc;euro;trade;s decision to divest entire 100 per cent stake in MMTC and STC saying there were still a few canalised items.

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Besides, the MMTC had a long-term contract with Japan and its Rs 1,500 crore steel plant was also nearing completion, he said. The Disinvestment Commission had earlier recommended upto 51 per cent disinvestment in these two trading houses, Shourie added.

On bidding, Shourie said that the disinvestment process must not end in the first round. acirc;euro;tilde;acirc;euro;tilde;The bids must be accompanied by the bank guarantees.acirc;euro;trade;acirc;euro;trade;

Speaking on disinvestment of the two public sector carriers, he said money will be mobilised from within the country while there would be only technical collaborations with foreign players. Meanwhile, public sector, HPCL said it would bid for the entire 34 per cent government stake being divested in oil marketing company IBP. acirc;euro;oelig;Of the three state-owned oil refining and marketing companies, IOC, Bharat Petroleum and HPCL, we are the only ones who have a larger refining capacity than its market share.