Tuesday, December 10, 2002, Chandigarh, India

National Capital Region--Delhi


M A I N   N E W S

HPCL, BPCL to go on the block
Announcement marked by Oppn protest
Tribune News Service

New Delhi, December 9
Amid a walkout by Opposition members, Disinvestment Minister Arun Shourie today announced in the Lok Sabha the decision to offload the government's stake in HPCL through the strategic sale route and that of BPCL by issuing an initial public offer (IPO).

However in the Rajya Sabha, Mr Shourie was unable to complete his statement on the issue as members belonging to Left parties forced an adjournment by storming into the well of the House.

The minister, in his two-page suo motu statement, however, did not clarify how much the government equity in HPCL will be sold to a strategic partner and the size of the IPO of BPCL.

The government has also decided to earmark a specific proportion of shares of HPCL and BPCL to their employees at a discounted price, Mr Shourie said in the Lower House.

In the Rajya Sabha, the Leader of the Opposition, Dr Manmohan Singh, and senior Congress leader Pranab Mukherjee wanted to know how the government could offload the shares of the oil PSUs without repealing the two Acts coined between 1974 and 1976 to enable nationalisation of such companies.

"Without repealing the two Acts pertaining to nationalisation of the companies, these PSUs can't be divested or privatised," Dr Manmohan Singh contended and wanted a clarification of the minister before he read out the complete statement.

The Disinvestment Minister when tried to justify the move citing the disinvestment in Maruti, the entire Opposition started opposing it and wanted a specific answer from the government.

Mr Mukherjee then suggested that the government should first seek the opinion of the Attorney General of India on the issue and convey it to Parliament.

The Disinvestment Minister said a fund called the Disinvestment Proceeds Fund (DPF) will be constituted for utilising funds generated from the divesting government equity in the PSUs for developing social and infrastructure sectors.

"This fund will be used for financing fresh employment opportunities and investment and for retiring public debt", Mr Shourie said.

The detailed guidelines for disinvestment of these companies will be finalised by the Disinvestment Ministry and the Finance Ministry jointly. The Finance Ministry will also bring out a paper detailing the feasibility of setting up an asset management company for exclusively to hold, manage and dispose of the residual holdings of the companies from which the government has offloaded its majority stakeholding to a strategic partner. The paper will be put before the Cabinet Committee on Disinvestment (CCD) for consideration.

The minister sought to allay fears that divestment of the government equity did not result in massive private monopolies.

The objective of the disinvestment programme is to make optimal use of national resources, releasing the productive potential of PSUs, creating employment and new assets.

Earlier the entire Opposition members barring AIADMK staged a walkout and briefly stalled proceedings of the House protesting against the government's decision to disinvest HPCL and BPCL on grounds that it amounted to surrendering to the vested interests of multinational corporations.

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