The Hindu Business Line : More in IOC-ONGC bid than meets the eye?

ONGC's decision to submit a joint bid along with IOC for Indian Petrochemicals Corporation Ltd (IPCL) is seen as a "test case" by the Ministry of Disinvestment on IOC making a back-door entry for bidding in HPCL and BPCL.

Following its acquisition of IBP & Co Ltd, the Cabinet Committee on Disinvestment (CCD) banned IOC from bidding for HPCL and BPCL citing monopoly reasons.

The Disinvestment Ministry has said that the composition of consortium partners can be altered before the price bids are submitted subject to the prior approval from the Government. "The rules permit that," the sources said.

IOC, which had entered the bidding process in IPCL alone, now plans to take ONGC on board to pool in resources to finance the acquisition.

The Disinvestment Ministry now fears that IOC may resort to this clause and enter the bidding process for HPCL and BPCL at the last stage by joining hands with either ONGC or GAIL. Stating that PSUs and their senior officers were blatantly flouting the decisions taken by the Cabinet, the sources said that the Government would now have to take a firm stand on PSUs bidding for other PSUs as this would lead to squandering away of public money and curtailing competition.

The acquisition of one PSU by another in the oil sector would create monopolies, which would be difficult to manage. "Even the Soviets couldn't manage Stalinist companies," they said.

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