Fernandes for letting PSUs bid for HPCL

NEW DELHI: A day ahead of a crucial meeting of the Cabinet Committee on Disinvestment, Defence Minister George Fernandes on Thursday favoured PSUs like ONGC being allowed to bid for oil company HPCL, a view that Disinvestment Ministry opposes.
Asked about the reported move of the Disinvestment Ministry to keep PSUs at bay from HPCL and BPCL divestment, Fernandes told PTI, "The understanding is that PSUs can also bid for oil companies."
He answered in the affirmative when queried if the understanding was reached at the informal meeting held by Prime Minister Atal Bihari Vajpayee with senior Cabinet colleagues on December 5 to resolve the imbroglio over divestment in the oil PSUs.
"There is no harm in it (PSU bidding for other PSU) if a company is in position to pay the price (for government equity put on the block)," Fernandes said.
On the other hand, the Disinvestment Ministry is believed to have suggested in its note circulated ahead of tomorrow''s CCD to keep out PSUs from the divestment process of HPCL.
Fernandes'' position is expected to help Petroleum Minister Ram Naik who is understood to be making a case for allowing ONGC to bid for HPCL, where government may offer 34 per cent equity to a strategic partner.
Emphasising that there was no harm if PSUs buy out state-owned sister firms through the government''s disinvestment process, Fernandes said, "Your assets remain where it is, workforce remains where it is, management remains where it is and above all you receive the price fixed for the assets and therefore get liquidity which will be used to create new infrastructure."
The objective of disinvestment policy is to raise resources for investment in new infrastructure like national highways, rural connectivity, power generation and for social welfare activities like hospitals, school and educational institutions, he said.
However, Fernandes was of the view that disinvestment process should not result in creation of private monopolies as "they mean the loot of the consumers�.
"(In) any area of economic activity, monopoly will be the means to loot the consumers," he said when asked if monopoly was only a threat only in retail sector and not manufacturing as had been the view of Disinvestment Ministry.
Part of the proceeds of disinvestment, he said, would go to pay debt of the government and the remaining in creating infrastructure and welfare of the social sector.