Power Ministry opposes privatisation of PFC

NEW DELHI: The Power Ministry has opposed any move to privatise Power Finance Corporation (PFC), pending reforms in the power sector.
The Ministry has communicated its views to the Disinvestment Commission which is currently finalising its recommendations on the company, official sources said.
It is of the view that a strategic sale of the company at this juncture would not yield any tangible benefit owing to the nature of the company''s business.
Sources added that the question of privatising the power lending major should be considered only after the present round of reforms, both legislative and administrative, are undertaken.
The government is currently in the process of introducing the Electricity Bill which would do away with the restrictions on entering the sector.
PFC was set up in 1986 as an Non Banking Finance Company to fund projects in the sector. It has a capital base of over Rs 1000 crore wholly owned by government.
The ministry further said that it would be futile to privatise the company under the current circumstances, particularly at a time when power utilities were losing money.
The Power Ministry is of the view that bringing in a strategic partner would not be advisable as it would not optimise revenue flows to the government.
Arguing that the present PFC establishment was ''lean,'' with a staff strength of around 250, the ministry is reported to have argued that bringing in a partner would not yield any benefits especially when new owners would not have much room to either infuse technology or capital given the current state of affairs.
PFC, incidentally, has mooted a proposal to launch a public offering of shares.
The company has sanctioned loans to the tune of Rs 10,091 crore during the first nine months of 2002 while disbursements stood at Rs 4,370 crore.