Selloff: White elephants may sit pretty as populism rules

NEW DELHI: The players have changed and so have the rules of the game, but anti-privatisation noise is showing no signs of dying down.
Although the United Progressive Alliance and its Common Minimum Programme is not principally inclined towards privatisation and it has been stated in as many words, minister after minister in the new government has, in the last few days, openly opposed privatisation of PSUs. These include some sick PSUs.
One could almost conclude that the constituents of the new government are not completely convinced that privatisation has been abandoned, even for the short term. So Ram Naik, SS Dhindsa, Uma Bharti and Balasaheb Vikhe Patil of the NDA government have now been replaced by Ram Vilas Paswan, Shibu Soren and TR Baalu.
Given the dependence of the UPA on the allies as well as the Left, privatisation and even closure of the loss-making PSUs could turn out to be a challenge for the government.
Take for instance, Hindustan Copper. The PSU has been in the red for several years and NDA government made two attempts to privatise the corporation. The company could easily be a candidate for privatisation on the UPA government’s agenda too. But the new mines minister Shibu Soren has already sought to pre-empt the move on the grounds that it would not be in the workers interest. Mr Soren has also expressed reservation about privatising Mecon, another ailing PSU under his charge.

Chemicals, fertilisers & steel minister Ram Vilas Paswan too wants a review of loss-making PSUs before they are put on the privatisation block. On privatising the loss-making FACT, Mr Paswan has already stated that he would like to examine the case before he gives an opinion. Given his proclivity for populist measures, Mr Paswan could very well oppose privatisation of the PSU.
Significantly, Santosh Mohan Deb whose ministry controls the largest number of loss making public sector enterprises has not yet come out openly opposing any privatisation.
Ministers whose fiefdom includes profitable PSUs have very expectedly opposed privatisation of the enterprises and these include surface transport and shipping minister TR Baalu, telecommunications and information Dayanidhi Maran. Bihar strongman and RJD chief too has made anti-privatisation noises although none of the PSUs under his charge are on the disinvestment list.
Surface transport and shipping minister TR Baalu has gone on record to say he would be “mad“ to allow privatisation of Shipping Corporation of India. He has made noises on privatisation of the ports.

Mr Baalu would well have his way as the Shipping Corporation is one of the largest shipping services and fleet operator in the country. The two attempts at privatising the company yielded less than satisfactory results as the bidders for the 51% holding were smaller companies that did not have the financial muscle to raise resources on the strength of the balance sheet to buy the PSU. More importantly, the PSU is profitable and also of strategic interest.Mr Soren doesn’t want privatisation of Nalco and neither is Mr Maran willing to let go of BSNL and MTNL.