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Thursday, Oct 10, 2002

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Smaller PSUs being lined up for divestment

P. Manoj

The Ministry will soon approach the Core Group on Disinvestment with proposals to privatise Hindustan Shipyard, Cochin Shipyard, Central Inland Water Transport Corporation and Ircon.


AS the debate over the privatisation of oil majors HPCL and BPCL continues, the Disinvestment Ministry is taking up cases of relatively small PSUs such as Hindustan Shipyard Ltd (HSL), Cochin Shipyard Ltd (CSL), Central Inland Water Transport Corporation Ltd (CIWTC) and Ircon International Ltd for privatisation through strategic sale.

Out of these four, only Ircon International is a listed company while the other three are wholly-owned by the Government.

The Disinvestment Ministry will soon approach the Core Group on Disinvestment (CGD) with proposals to privatise HSL, CSL, CIWTC and Ircon International as per the recommendations made by the Disinvestment Commission, officials said.

The Disinvestment Commission, headed by Dr R.H. Patil, had in its second report submitted to the Union Government on September 26 recommended strategic sales of these four companies in the transport infrastructure sector.

The core group proposals will first be sent to the administrative Ministries for their comments.

The Disinvestment Ministry is not anticipating any opposition on the strategic sale of HSL, CSL and CIWTC, which comes under the administrative control of the Shipping Ministry, but there could be a problem in the case of Ircon International Ltd in the form of Railway Minister, Mr Nitish Kumar.

The Union Minister of Shipping, Mr V.P. Goyal, had endorsed the disinvestment of HSL, CSL and CIWTC. In fact, Mr Goyal had earlier cleared the files for referring HSL, CSL and CIWTC to the Disinvestment Commission for its recommendations as per a suggestion made by the Expenditure Reforms Commission (ERC) headed by Mr K.P. Geethakrishnan.

The ERC has recommended that there was no rationale in keeping HSL, CSL and CIWTC under the public sector fold and they should be privatised.

Mr Goyal felt that Indian yards should tie up with reputed private strategic partners to compete with top-class Korean and Japanese yards that are ruling the world shipbuilding industry.

The Shipping Secretary, Mr M.P. Pinto, told Business Line recently that the Shipping Ministry was in favour of privatising the loss-making public sector shipbuilding yards. "Let's privatise those companies from which the Government should really exit, particularly the loss-making ones '', Mr Pinto had said.

While CSL has been earning profits averaging Rs 25-30 crore over the past five years, both HSL and CIWTC have been incurring heavy losses and are dependent on financial support for their survival.

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