Tearful Engineers India staff protest privatisation

Vol 6, PW 5 (08 May 02) People & Policy

STAUNCHLY OPPOSED TO privatisation, oil minister Ram Naik must have rubbed his hands in glee when he received an emotional seven-page letter from the Engineers India Officers Association against plans to sell off the company.

In pompous and flowery prose, union head T. Agrawal lists why he is against privatisation: "Sale of EIL equity is like eating a goose that lays the golden eggs.

EIL has a wealth of data on all major refineries, petrochemical plants. Data is sensitive from a defence viewpoint.

The money the government may get out of disinvestment is likely to be less than the dividend and bonus paid by EIL in the next three years on government equity. EIL is the only second qualified bidder in India for projects having a value of over Rs250cr ($52m).

With 51% equity in the hands of a private player, there will be only one bidder or cartel in the market. This may result in return of the money earned through sale going back to the buyer through indirect route in just one year." Agrawal concludes with a flourish: "EIL is not merely an asset.

It is a living organisation with 3,300 employees. Private control may sound the death-knell for expertise and culture inducing large-scale exodus of talent.

New owners may drastically change areas of operation too. All this is a problem in national and social perspective." Agrawal said EIL has defied a 1997 prediction by the disinvestment commission that it will die in the next three years if it did not have a 'strategic' partner.

"EIL has increased its profit from Rs73cr ($15m) to Rs123cr ($25m) in the last five years (despite the) entry of several multinational consultants."

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