Due diligence process for Nalco called off

With political opposition to the Nalco privatisation gathering more momentum and the reluctance of the PMO to give an assurance to resolve the impasse, ministry of divestment has called off due diligence by bidders at the aluminium PSU''s plants in Orissa.
The due diligence exercise is unlikely to be resumed in the short term, unless of course, specific assurances are extended by the Prime Minister''s Office to the bidders.
Sources said that disinvestment ministry has sought specific instructions to be sent out from the PMO on Nalco divestment, but so far none has been forthcoming. The PM is away in Cambodia to attend the ASE-AN meet. He''s be back later this week.
The disinvestment ministry has written to its advisors ABN Amro-Rothschild-Enam to cancel the schedule for due diligence. Ministry sources said the due diligence was scheduled to have been restarted next week.
It is now expected that the process may be restarted after Gujarat elections. This would mean that the process would restart in mid-January, when the western world returns to work after a long Christmas break.
The disinvestment ministry had put the due diligence process on hold last week after a team from Hindalco and ABN Amro-Rothschild-Enam was roughed up at the Nalco facilities.
More importantly, with Nalco''s privatisation schedule being altered, the government will not meet is budget target to realising Rs 12,000 crore from privatisation this fiscal.
It was generally felt that with a cloud hanging over privatisation of Hindustan Petroleum Corporation and Bharat Petroleum Corporation, Nalco divestment would be pushed through to salvage government''s credibility to carry through its disinvestment agenda.
It now appears that the government will manage to complete privatisation of only a handful PSUs such as SCI , STC and EIL this fiscal.
The development could be viewed as a major victory for the anti-privatisation lobby of the Sangh parivar, albeit temporary and of course, for the mines minister Uma Bharati who had wanted the strategic sale of stake to delayed for at least a year.