Disinvestment panel against privatising Ennore Port, ECIL

NEW DELHI: Disinvestment Commission on Tuesday recommended against immediate privatisation of Ennore Port while favouring a public offer for Electronics Corporation arguing that time was not ripe for its privatisation.
In its 23rd report submitted to government here, the commission said that in case of Ennore Port disinvestment of government''s holding should be considered after a period of three years.
It observed that the undertaking incorporated as recently as 1999 was yet to acheive critical size with only 2 of the 22 berths being utilised.
"In view of this, it is felt that EPL should continue as a government company for a period of three years, by which time the operations are expected to attain critical size", it said.
The government currently holds 67 per cent stake in the company with Chennai Port holding the remainder which was developed as an alternative to Chennai port due to environmental and other reasons.
It felt that in case of any delay in project implementation, disinvestment may be considered after an appropriate regulatory framework is installed.
The report said 51 per cent of equity should be disinvested in favour of a strategic partner through competitive bidding route while balance shares may be disinvested five years thereafter.
In case of Electronics Corporation, a fully owned government entity under Atomic Energy Department, the commission said it should be allowed to continue as a government company for some time.
However, government should immediately disinvest a portion of its equity by way of initial public offering to ensure greater external scrutiny, it said adding Bharat Electronics model where government retained 76 per cent could be adopted.
It further suggested ECIL''s exit from high volume, low technology business where private sector participation exists in favour of strategic, low volume high tech areas.
It also asked government to withdraw a part of surplus cash before disinvestment and obtain exemption from government for not disclosing confidential and sensitive information.
The possibility of further disinvestment in ECIL, mandated to develop indigenous technology and self sufficiency in atomic energy programme and defence sector should be considered after a period of five years after a thorough assessment of the company role and progress of private sector in field of nuclear power generation.
ECIL set up in 1967, engages over 5,000 employees and has an authorised share capital of Rs 150 crore worth its head office at Hyderabad.