George writes to PM against oil PSUs' sell-off

NEW DELHI: Differences within the Vajpayee government over the strategic sale of HPCL and BPCL appeared to be deepening, with defence minister and NDA convenor George Fernandes going public with his opposition to the divestment process.In a move aimed at drumming up support in the NDA circles, the Fernandes camp released his letter to the prime minister, in which he called for a thorough review of the divestment policy, to the press today. The step taken by Mr Fernandes, who appears to be in the process of rediscovering his socialist roots, has warmed the cockles of those opposed to the strategic sale route, including the 'swadeshi' backers in the Sangh parivar. This is the second instance in recent times that Mr Fernandes, a senior member of the Union Cabinet, has struck a discordant note. Speaking from the Swadeshi Jagaran Manch platform a few months ago, the Samata veteran had gone public with his opposition to the Montek Singh Ahluwalia committee report on unemployment.The government was subsequently forced to disassociate itself from the report while constituting a new committee, headed by Planning Commission member SP Gupta, to look into the problem. Mr Fernandes, who is learnt to have threatened to resign from the Cabinet if the government okayed Cabinet Committee on Disinvestment (CCD)'s proposal for strategic sale of the two oil PSUs, is currently abroad. The defence minister's threat forced the government to put off the CCD meeting scheduled for August 28. It will now be held on September 7, after Mr Fernandes' return from his foreign tour. Even though he is not a member of the CCD, Mr Fernandes is learnt to have wrangled a special invitation for the next round of the Cabinet panel's meeting. The meeting, by all indications, is likely to be a stormy one, with both sides marshalling their resources in support of their contentions. A key figure of the NDA coalition, the Samata veteran's decision to oppose the strategic sale route has come as a shot in the arm to petroleum minister Ram Naik and his supporters in the Union Cabinet. In his letter, Mr Fernandes, while taking up cudgels on behalf of those favouring the alternative divestment route of share-offloading, asked the prime minister to be on guard against a policy that enabled the rich to get richer and facilitated the formation of private monopolies. Citing the case of divestment in state-run companies the world over, Mr Fernandes is believed to have questioned the current model of stake sale to a strategic partner and, instead, favoured offloading government equity to retail investors, as had been done in majority of the countries. Mr Fernandes is also understood to have called for a review of the disinvestment policy in strategic sectors like oil as complete privatisation could threaten the nation's oil security similar to the one experienced during the 1971 Indo-Pak war when the privatised oil sector refused to co-operate with the government. In an obvious reference to the sale of country's second largest petrochemical company, the Indian Petrochemicals Corporation (IPCL) to market leader Reliance Industries, Mr Fernandes is learnt to have questioned the policy that gives birth to monopolies. Disinvestment, he observed, should not lead to concentration of wealth in the hands of a few. A process which transforms public monopoly into private monopolies is dangerous. He also took exception to the disinvestment department's move to bar all PSUs from participating in the disinvestment process, maintaining that there should be equal opportunity for both private and public sector companies to bid for government stake. The government can realise maximum value for its investment when there is multiple competition. Narrowing the process to strategic sale only to private sector while keeping away PSUs and retail investors may not bring maximum realisation, he is reported to have stated.

George writes to PM against oil PSUs' sell-off

Differences within the Vajpayee government over the strategic sale of HPCL and BPCL appeared to be deepening, with defence minister and NDA convenor George Fernandes going public with his opposition to the divestment process.

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