IA, A-I taken off sell-off list, other PSUs targetted

NEW DELHI: The government on Tuesday gave a formal burial to plans for privatisation of Air India and Indian Airlines by striking them off the disinvestment list even as it decided to privatise profit making Rashtriya Chemicals and Fertilisers.
The decisions were taken at the meeting of the Cabinet Committee on Disinvestment, chaired by Prime Minister Atal Bihari Vajpayee, which also decided on fresh bids for Shipping Corporation to attract foreign entities besides setting the guidelines for workers to participate in the privatisation process.
Announcing the decisions, Disinvestment Minister Arun Shourie told reporters that the two airlines were taken off the disinvestment process to enable fleet expansion on a proposal from the Civil Aviation Minister Shahnawaz Hussain backed by the Finance Minister.
"Civil Aviation Minister (Shahnawaz Hussain) proposed that IA and AI should be taken off the disinvestment list and the Finance Ministry has also suggested it to enable fleet expansion in the two carrier," Shourie told reporters, adding that the proposal was accepted as his ministry was not doing any work on these PSUs.
Heeding to the long pending demand from workers of PSUs that are being privatised, the government announced guidelines for employees to bid for the companies put on the block which among other things stipulated that such bids could be considered only if these are within 10 per cent of the highest bid.
Stating that such a demand was first made in case of Air India where the Pilot''s Guild sought to take over the airline, Shourie said employees could now form a consortium or a special purpose vehicle, along with a bank, venture capitalist or a financial institution for bidding for government equity in a public sector firm.
"However, employees will not be permitted to form consorta with other companies," he said.
On the Shipping Corporation, he said though there were two bidders - Essar and Sterlite - still in the race, the CCD decided to seek fresh bids for 51 per cent stake in the company for which any foreign company could participate in line with 100 per FDI allowed in the shipping sector.
The CCD also approved sale of Instrumentation Control Valves, which is a subsidiary of Instrumentation, Kota, to Larson & Toubro for a consideration of Rs 16.20 crore against a reserve price of Rs 10.5 crore.
The government would now approach the Board of Industrial and Financial Reconstruction (BIFR) recommending induction of a strategic partner for their approval.
CCD also decided to sell 74 per cent stake in National Buildings Construction Company (NBCC) to a strategic partner, in line with recommendation of the Disinvestment Commission.
Three items relating to disinvestment of Tide Water Oil Company, Hoogly Printing and Hindustan Newsprint could not be taken up on Tuesday in the absence of the Heavy Industry Minister and these would be considered in the next meeting.
The Disinvestment Ministry would pursue privatisation of hotel Jammu Ashok in deference to the proposal of the state government to take over the hotel and convert it into an MLA hostel.
The Ministry also returned 10 disinvestment cases back to the administrative ministry. These include Scooters India, Praga Tools, Bharat Leather, Hindustan Pre-fab and Hindustan Cables.
On CCD decision to go for fresh bids for SCI, Shourie said the process would be done "swiftly."
Government would further divest its residual equity in SCI through a public offering to ensure continued listing of the company.
CCD also decided to offer 7 ITDC hotels as joint ventures with state Governments to the host state after proper valuation, Shourie said adding in case the concerned state was not willing to take up the offer, the hotels would be sold in the market.
He said 75 per cent of the sale proceeds would be taken as land value and the same would be transferred to the concerned state after deducting the price paid by ITDC for the land.