• PAGE ONE
• INDEX
• HOME

DoD refers 4 PSUs to divestment panel

Shaji Vikraman

P. Manoj

NEW DELHI, Aug. 13

THE Disinvestment Commission headed by Dr R.H. Patil seems to be back in business, with the Department of Disinvestment (DoD) referring four public sector companies to it for a review of the status on disinvestment.

The erstwhile Disinvestment Commission had recommended that there was no need to disinvest in these state-owned companies.

The PSUs which have been referred to the reconstituted commission for its recommendations are the Neyveli Lignite Corporation Ltd (NLC), Rail India Technical & Economic Services Ltd (RITES), Manganese Ore India Ltd (MOIL) and Project and Equipment Corpor ation of India Ltd (PEC).

``While accepting the erstwhile Commission's suggestion not to go in for disinvestment in these four companies, the Union Government had taken the stand that it would review the situation at a later stage,'' DoD officials told Business Line.

These companies have been referred afresh to the new commission to find out whether the scenario has undergone a change to warrant taking up divestment in these companies and, if so, the modalities to be followed in each particular case, the official sta ted.

The Disinvestment Commission will take a fresh look at these companies, including the financial status and also obtain the views of the companies. The next set of recommendations will be made after the Commission is fully reconstituted by appointing four more members.

In its earlier report issued over three years ago, the commission had said that control of MOIL by private investors has the potential of destabilising the ferro alloy industry. Besides, taking into account the limited reserves of high grade manganese or e in the country, continued Government control over this company may be desirable to conserve this precious material for the steel industry.

``No public purpose will be served by converting what is almost a public monopoly to a private monopoly and therefore disinvestment beyond 49 per cent is not considered feasible. The issue can be reviewed once the situation changes in the future,'' the commission said in its recommendations.

In RITES also, the Commission had not recommended any disinvestment, as it was of the view the balance of advantage was in favour of the company continuing as public sector undertaking. For, RITES receives support from the Indian Railways in its operatio ns besides providing the cutting edge to the globalisation efforts of the railways.

In NLC, the recommendation of no disinvestment, was based on the assessment that the value enhancement of the company's share would be greater after resolving the issue of outstanding dues from the state electricity boards and tariff reforms.

The commission had said that in PEC, there was no urgency for proceeding with disinvestment of the Government equity as it was unlikely to fetch substantial revenue, given the size of the company.