Selloff: Draft guidelines for natural asset firms circulated

NEW DELHI: The Disinvestment Ministry has proposed that funds from sale of state undertakings should be set aside for development of backward areas under the draft guidelines circulated this week for natural asset companies.
Under the new draft circulated earlier this week, funds from privatisation would be earmarked for promoting development in backward areas, sources associated with the process said.
The ministry has also suggested incorporation of minimum value addition norms for prospective bidders to encourage diversification and future development.
However, sources admitted that the issue being contentious it would be left to the government to prescribe exact figures for the same.
Sources added that such norms should be best imposed at the initial bids stage rather then introduce them at a later stage.
Disinvestment Minister Arun Shoruie had last winter announced in Parliament that government would frame guidelines for natural asset companies as part of efforts to kickstart the disinvestment process which was virtually stalled in the wake of controversy over the oil PSUs.
The guidelines are supposed to cover companies engaged in extraction of natural resources particularly mineral based ores.
The guidelines would also stipulate stiffer labour norms for bidders who take over such companies.
However, on the issue of mining leases and environmental clearances the guidelines propose to firm up such issues on a best of effort basis.
This follows clarifications raised by concerned ministries on the issue which pertains largely to state governments.
An earlier attempt to firm up these guidelines failed to clear the secretaries'' panel after stakeholders sought clarifications on the matter.
The revised guidelines would also have to clear the same panel before going to cabinet for final clearance.