PM breaks HPCL, BPCL sell-off logjam

NEW DELHI: Prime Minister Atal Bihari Vajpayee broke the three-month long logjam over the disinvestment of HPCL and BPCL, deciding that the former should be put up for strategic sale, while the latter would be disinvested through the market route.
The breakthrough came at a meeting Mr Vajpayee held with his deputy LK Advani and other ministerial colleagues — defence minister George Fernandes, external affairs minister Yashwant Sinha, petroleum minister Ram Naik and disinvestment minister Arun Shourie.
The participants also cleared the proposal to create a special fund to store the disinvestment proceeds, which would be spent on schemes with high social appeal.
The disinvestment ministry, which mooted the proposal, pressed for the creation of the fund as execution of popular schemes with the proceeds could bring in the political support which has eluded the disinvestment programme.
Though the decision on HPCL-BPCL may appear like a 50:50 compromise between the rival factions, who battled over the disinvestment for 3 months, it is actually a major boost for the pro-disinvestment forces.
Despite continued resistance from Mr Fernandes, and to a lesser degree from Mr Naik, the decision was arrived at due to the forceful intervention of Mr Vajpayee.
The move also paved the way for early decisions on companies lined up for strategic sale like Nalco, National Fertlisers, Engineers India, HOCL and EPIL and is sure to bring buoyancy in the market by guaranteeing the launch of the long-delayed Maruti IPO.
Emerging from the meeting, a cautious disinvestment minister restricted himself to saying, "A unanimous view was arrived at and it was reported to the Prime Minister. The Prime Minister has directed me to inform the Parliament about the decisions."
The stress on unanimity, however, couldn''t mask the continuing disagreement in the Cabinet. The meeting was preceded by yet another attempt by Mr Fernandes to stall a decision.
The defence minister, who emerged as the chief stumbling block after the mellowing of the petroleum minister, fired off a letter last evening to the Prime Minister repeating his reservations.
The finance ministry also persevered with "run with pro-disinvestment sections and hunt with their rivals" strategy with the advisor to the finance minister, Vijay Kelkar, submitting a proposal for the liquidation of the disinvestment ministry.
Though Mr Kelkar''s work talked about the extension of the disinvestment programme to the banking and insurance sectors, it was coy on the dispute over the fate of the oil companies.