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DoD set to meet to discuss A-I sell-off

India's privatisation panel is due to meet later on Wednesday to thrash out key issues related to the sale of a slew of state-run firms and finalise the draft shareholders pact for stake-sale in long haul carrier Air India.

"The cabinet committee on divestment will meet at 1245 hrs (IST). The media will be briefed at 1500 hrs (IST)," a senior Divestment Department official, who did not want to be identified, told Reuters.

The panel headed by Prime Minister Atal Bihari Vajpayee decides on issues related to the privatisation of state-run firms.

The official said the panel was expected to discuss the progress in the stake-sales of state firms such as petroleum marketing firm IBP Co, computer firm CMC, Indian Tourism Development Corp and Hindustan Teleprinters.

He said the panel was also expected to approve the draft shareholders agreement for selling a 40 per cent controlling stake in money-losing national flag carrier Air India.

Only two bidders are in the race for Air India's privatisation, which is being viewed as a test case in the government's drive to privatise state-run firms.

Singapore Airlines, a major force in the Asian airline industry, has teamed up with the Tata group, India's second largest industrial group to put in its bid.

The second bidder is Madras-based bus and truck maker Ashok Leyland, which is controlled by the UK-based Hinduja brothers.

Divestment Minister Arun Shourie has said the government would proceed with the privatisation of Air India even if there was a single bidder left in the fray.

The panel is meeting after a long gap as a crippling strike against the privatisation of aluminium firm Balco and an arms bribery scandal forced the government to soft-peddle on plans to sell stakes in other state-run firms.

Nearly 7,000 workers of Bharat Aluminium Company staged a two-month strike from March to protest against the government's move to sell a controlling stake to private metals firm Sterlite Industries, India's first big-ticket privatisation in a decade of economic reforms.

Shortly after the government's reforms agenda was hit by a scandal over graft in the defence ministry, which broke when an Internet news portal went public with hours of secretly taped video footage.

The government plans to raise Rs 120 billion ($2.55 billion) through sale of stakes in state-run firms in the current financial year.

The government has consistently failed to meet its target in the past due to opposition from trade unions and political parties.

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