Pumpgate hits big-ticket divestment

As it is, the two ministries have differences over the sell-off issue. Raking up the issue while the petrol pump scam is hot will not only lead to acrimonious confrontation between the two ministries but may also have the ripple effect in the political sphere. And since the scam does not seem to subside fast enough, ministry of disinvestment may have to wait for some more time to trigger off privatisation in the oil sector, officials said.

This also means a setback to the privatisation process, as currently ministry of disinvestment is involved primarily in the sale of smaller public sector undertakings (PSUs). Process is on only for one big-ticket divestment, in Shipping Corporation of India. Then there are a couple of medium-sized public sector undertakings, Engineers India Ltd and National Fertilisers Ltd, whose privatisation is in advanced stages. Others are smaller public sector undertakings like Hindustan Organic Chemicals Ltd, Hindustan Cables Ltd and Engineering Projects India Ltd.

It is only the oil sector that can help ministry of disinvestment achieve the Rs 80,000-crore divestment target for the Tenth Five Year Plan (2002-07). Since the Tenth Plan has started, ministry of disinvestment wanted to start privatisation in the oil sector in right earnest.

The ministry of disinvestment has high expectations from the Finance Minister Jaswant Singh. That is the reason it had started working in concert with his ministry right from the beginning. The ministry of disinvestment and the ministry of finance are in the process of preparing a paper to expedite the sell-off process.

At a press conference about a month ago, disinvestment minister Arun Shourie had said the two ministries would prepare a proposal for setting up an asset management company (AMC) to take care of the entire government equity in the Central public sector undertakings.

The two ministries would take the paper on asset management company to the cabinet committee on disinvestment at its first meeting after the Monsoon session. The session ends August 14.

However, the petrol pump scam has dampened the spirits of ministry of disinvestment as much as those of the ministry of petroleum. Both ministries seem to be unanimous on only one point: the sooner the scam dies down, the better.