New Delhi, Nov 19 : With the transfer of the Baroda unit of Indian Petrochemicals Corporation Ltd (IPCL) to Indian Oil Corporation, divestment in IPCL will be facilitated, as hiving-off of the unit removes fears of monopoly in the domestic market.Speaking to The Indian Express, sources at the department of disinvestment (DoD) said that the sale of Baroda IPCL unit to IOC will prevent market dominance by a single player. In fact, DoD sources pointed out, there was never a great fear of monopoly in the case of IPCL divestment, as all the products manufactured by the public sector giant are on the OGL list. But the hiving-off of Baroda unit will help clear all conceivable apprehensions of monopoly.Bids for the restructured IPCL would be invited in the next two months, the sources said.It may be recalled that the erstwhile Disinvestment Commission, too, had expressed its doubts regarding monopoly in the case of IPCL privatisation. It had recommended that the government, "while retaining at least 26 per cent of equity stake in IPCL, should sell 25 per cent to a strategic buyer, with the transfer of management control on the basis of global competitive bids. However, care should be taken, while pre-qualifying bidders, to ensure that the strategic sale does not lead to market dominance by any single player."The ministry of chemicals & fertilisers supported the basic recommendations of the commission in regard to lowering of the government's stake to 26% and selling 25% to a strategic buyer. It was, however, suggested that for getting the best price for the government share, the bidding should be open to domestic and foreign parties alike. The CCD gave in-principle clearance to the divestment in December 1998. Bids were invited, the bidders completed the due diligence, and finally there were two bidders left, Reliance and the Chatterjee-Soros consortium.However, the government was still apprehensive about the rise of a dominant player. With the sale of Baroda unit to IOC, the government feels the issue of monopoly is finally resolved.
