The ministry of petroleum has asked the finance ministry to clear ONGC’s investment in MRPL without going through the public investment board (PIB) route. Petroleum ministry officials disclosed that a letter in this respect has already been written by Petroleum Minister Ram Naik to Finance Minister Jaswant Singh. Officials said the PIB route does not apply to ONGC’s investment of Rs 59.40 crore in MRPL, which is way below the mandatory Rs 200 crore. With a view to provide greater functional autonomy to PSUs, the government had formulated policy guidelines as per which, “PSUs falling under navaratna categories shall have no ceiling on investments for their own projects but when it comes to investing in a joint venture company, there will be a ceiling of Rs 200 crore”.When contacted, ONGC chairman and managing director Subir Raha said: “We are not establishing a new joint venture but an equity investment in an existing JV. This lies within the delegated powers of the navaratna board. ONGC’s board, which has representations from the government, has cleared this proposal only after detailed financial, technical and legal approvals and so now there is no need for any further project appraisal.”Agreeing with Raha’s contention, a senior petroleum ministry official said, “MRPL is an existing joint venture company, which was constituted by the government as signatory to the tripartite agreement between the Birla’s, HPCL and the government of India in 1987. ONGC is just buying out equity of a promoter, who has desired to exit, with a view to revive the company, on the verge of becoming an NPA. A DRP has been worked out with the lenders as part of which, ONGC has to invest Rs 600 crore additional equity. This can be done only after the existing tri-partite agreement is cancelled.”The official added that there is no need for PIB appraisal in this case as the entire project has already been appraised twice by PIB besides independent agencies and boards of a dozen FIs, which have representations from the ministries of petroleum and finance. A further appraisal by PIB will only result in delays in the financial restructuring package worked out by the lenders and ONGC,” he said.
