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Kolkata , Sept. 18

THE Supreme Court ruling on oil companies' disinvestment is not likely to affect the divestment programme of the West Bengal Government, according to the Chief Minister, Mr Buddhadeb Bhattacharya.

He told reporters at the State Secretariat that the oil companies were set up through an act of Parliament and that the Centre should not have gone in for large-scale privatisation of these PSUs.

Referring to the divestment programme of some State-level PSUs now on in West Bengal, Mr Bhattacharya said most of these companies were taken over by previous Governments without doing any feasibility studies. Burdened with technological obsolescence and huge manpower, these had become a huge drain on the State's economy, he said. Consequently, it was decided to divest the State's majority holding in these companies.

Earlier this month, the Public Enterprises Department of the State Government put on the block 10 loss-making companies in which the Government was willing to cede management control in favour of a strategic partner, with the stake being offered ranging between 51 per cent and 74 per cent.

The divestment would be made either through the sale of existing shares or through issue of fresh equity. Among the concessions that the Government was willing to offer to its prospective partners were waiver of outstanding financial liabilities and manpower restructuring. For companies having more than one product or business line, the Government was also willing to consider segregated offers.

Most of the companies on offer were engineering companies such as Shalimar Works Ltd, National Iron and Steel Neo Pipes, Apollo Zipper Company and Carter Pooler Engineering Company. The net losses of these companies ranged between Rs 2 crore and Rs 12 crore (for the period ended March 2002). Net losses often exceeded the year's turnover — as was found in the cases of Shalimar Works and National Iron and Steel.

Government sources said these companies were taken over by the State Government between 1979 and 1987. The manpower strength of these companies varied between 94 and 500. The Government has a total equity holding of about Rs 20 crore in these companies. But loan exposure is far more being in the region of Rs 50 crore and above in most of these units.

Till now, over 80 bids have been received for these companies. PricewaterhouseCoopers, which has been mandated to vet these proposals, is now examining the bids.

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