Impatience at delay in Rs2,000cr clarification for IBP

Vol 5, PW 8 (06 Jun 01) Midstream & Downstream

Interested bidders in the government's 33.59% stake in IBP Petroleum are growing impatient at the government's delay in announcing the exact nature of the mandatory Rs2,000cr ($440m) investment in the infrastructure sector.

"The government was meant to issue the clarification in mid-May," one company tells this report. It is now mid-June.

Contacted by Petrowatch, a source close to the disinvestment said bidders must wait a bit longer before getting clarification. He said the guidelines, particularly regarding the "time-frame" of the Rs2,000cr investment, can only be ratified by one authority: the cabinet, headed by prime minister Atal Behari Vajpayee.

"We know this is a crucial issue and we know it has to be resolved soon," he tells us. But will it Vajpayee and the cabinet is today preoccupied with Pakistan and the imminent visit of General Pervez Musharraf.

Is there time to discuss economic issues We'll know soon. On 1st June IBP opened a 'Dataroom' at its headquarters in Calcutta.

Bidders can now visit and begin due diligence. This could last for the whole of June and July.

Many will also visit a sample of IBP's 1,500 petrol pumps across India. But is it worth the trouble Many bidders must now be asking why undertake due diligence if they don't meet the bidding criteria! Clarity on this issue is clearly needed fast.