Merchant bankers await september 7 verdict

NEW DELHI: It may not be just about HPCL and BPCL disinvestment. The September 7 meeting of the Cabinet Committee on Disinvestment is seen as crucial for the direction the entire privatisation programme of the government would take in next few months.The disinvestment ministry and the merchant banking community feel the meeting will decide which way winds will blow for the entire privatisation programme.With several constituents of the ruling alliance as well as BJP ministers upping the ante against disinvestment, apprehensions of derailment of the ongoing disinvestment transactions are now being voiced by the merchant banking community.Some feel a negative decision or even a postponement of a decision on the oil companies could impact privatisation of Nalco. The government has already invited expression of interest from interested bidders.Nalco is seen as the next high profile divestment after completion of the Shipping Corporation of India transaction, and resistance to its privatisation has been voiced by Orissa government and state Congress party.Sources feel that new coal and mines minister Uma Bharti may queer the pitch by joining the anti-disinvestment bandwagon in the next few days.Unlike her predecessor Ram Vilas Paswan, Ms Bharti has made no statement opposing Nalco privatisation. But disinvestment watchers are not ruling out resistance by the minister to the privatisation of the aluminium company.Merchant banking sources also feel even a further postponement of a decision on privatisation as also preparation of a roadmap for disinvestment of the two oil companies would reflect negatively on the leadership, that is, the prime minister and his deputy, to take tough decisions on privatisation. Of course, many believe that the government would ultimately come around to taking a decision on privatising HPCL and BPCL.Privatisation has always been a difficult to implement even in countries such as the UK, but it took the will and drive of the then PM Margaret Thatcher to push the process through.Sources point out that with elections due in '04, delay in decision could upset plans to privatise the 2 companies. Normally, governments do not take decisions that have major implications in the election year.Since a disinvestment transaction can easily take a year, it would become imperative for the government to take decision on privatisation of the oil PSUs before end of this calendar year.

Merchant bankers await september 7 verdict

It may not be just about HPCL and BPCL disinvestment. The September 7 meeting of the Cabinet Committee on Disinvestment is seen as crucial for the direction the entire privatisation programme of the government would take in next few months.

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