New Delhi, June 3
THE Finance Ministry's plan to sell 20 per cent Government holding in National Aluminium Company Ltd (Nalco) has again hit a roadblock with the Minister for Mines, Mr Sis Ram Ola, saying that his Ministry is opposed to disinvestment in Nalco as the UPA Government is against disinvestment in profitable public sector units.
Incidentally, the 20-per cent disinvestment will not alter the Government ownership of Nalco.
The Government currently owns 87.15-per cent stake in the company.
However, Mr Ola admitted there was nothing wrong in selling some shares of a profit-making PSU to the public.
The idea of selling Government stake in Nalco had been originally mooted by the erstwhile National Democratic Alliance Government but was put off after several attempts because of political opposition at the State level.
The original plan was to sell a 29.15-per cent stake in the company and hand over management control to a strategic buyer. There had been plans to sell a further 10 per cent to domestic investors, 20 per cent through an American depository receipt issue and 2 per cent to employees.
The Finance Ministry again revived the proposal and wrote to the Ministry of Mines to consider selling off 20 per cent Government stake in Nalco. The Ministry of Mines is yet to officially respond to it.
"Every Ministry is entitled to have its own views on an issue. The Finance Ministry supports disinvestment but we do not agree. We have so far not responded to it but when we do so, we will express our opinion against it,'' Mr Ola said.
Pointing out that Nalco has posted its highest ever net profit of Rs 1,222.43 crore in fiscal 2004-05, marking a 66-per cent growth against Rs 737.37 crore in 2003-04, the Minister said the company has already moved ahead with its second phase of expansion.
Nalco is raising its bauxite mines capacity from 48 lakh tonnes per annum to 63 lakh tonnes, alumina capacity from 15.75 lakh tonnes to 21 lakh tonnes and aluminium production capacity from 3.45 lakh tonnes to 4.60 lakh tonnes annually.
The Government has approved the company's expansion plans at a cost of Rs 4,091.51 crore and they will be completed in 50 months, by the end of 2008. Out of this, 50 per cent will be generated by the company and the Centre will bear the rest, the Minister said. The expansion plans also include increasing the company's captive power plant capacity from 960 MW to 1,200 MW.
Mr Ola reviewed the performance of the PSUs under the Ministry of Mines.
The Minister said Hindustan Copper Ltd, which had been running at a loss for the past seven-and-a-half years, made a turnaround in 2004-05 and posted a net profit of Rs 52.07 crore, against a projected loss of Rs 67.67 crore.
Mineral Exploration Corporation Ltd too achieved a net profit of Rs 244 lakh after 14 years during the last fiscal, Mr Ola said.