Few details in announcement of BPCL and HPCL sale

Vol 6, PW 21 (18 Dec 02) People & Policy

PRIVATISATION IS BACK on the agenda but the timing couldn't be worse.

"Making an announcement of this kind at this time of year is not the best way to elicit international interest," reveals one global oil major source. "Most oil company offices will be windingdown for the two weeks over Christmas and the New Year." Yet this minor detail was clearly not uppermost in the mind of disinvestment minister Arun Shourie when he made his surprise 5th December announcement that the government is again considering the sale of a stake in Bharat Petroleum and Hindustan Petroleum.

Shourie released few details: we still don't know if his ministry has prepared a timetable or how much will be on offer. Or who is eligible to bid, or crucially, whether Indian PSUs will be barred from the sale.

In a statement to parliament days later all Shourie would reveal is that the BPCL sale would be carried out first, through an IPO and by implication restricted to stock market investors, while HPCL would be sold later to a "strategic investor" - raising the possibility of foreign companies bidding. His announcement has been hailed as a compromise between the anti-privatisation oil ministry and thepro-privatisation disinvestment ministry.

In truth it is a personal victory for Shourie in his battle with Naik. Until now Naik had successfully scuppered any plan to strip him of the power that a sale of BPCL or HPCL would clearly result in.

On 14th December disinvestment secretary Pradip Baijal said cabinet would discuss the matter again this week. We wait in anticipation.