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Shine restored to India's privatisation drive: Baijal

India's privatisation drive, long ignored by foreigners frustrated by its slow pace and political opposition, has begun attracting overseas players once again, a senior government official said on Wednesday.

Pradip Baijal, the senior-most bureaucrat in India's privatisation ministry, told a seminar that the government's recent successes in selling strategic stakes of several state-run companies had restored credibility to the decade-old programme.

"In the past, leave alone foreign, even Indian companies did not believe that we could ever close a deal," said Baijal, who along with Divestment Minister Arun Shourie is credited with galvanising the painfully slow privatisation exercise.

The government has notched up huge successes in its privatisation plan in the last fiscal year to March, during which it sold strategic stakes in several firms, notably telecoms giant VSNL, Hindustan Zinc and computer hardware and maintenance firm CMC.

The privatisation ministry has also wrapped up sales of a raft of smaller companies, many of them loss-making.

Foreign interest in the bidding for these companies has been scant, but analysts say the recent successes could inspire many foreign players to jump in the coming months.

SECOND PHASE

Baijal said he expected greater foreign interest this year during what he called the "second phase" of the privatisation exercise when the government plans to put many more state-run firms on the block.

It has listed strategic sales of refiners Bharat Petroleum and Hindustan Petroleum, petrochemicals firm IPCL, Shipping Corporation of India, carmaker Maruti and National Aluminium Company as a few of its big ticket sell-offs planned for this year.

Baijal said the sales of Maruti and Indian Petrochemicals Co Ltd would be wrapped up within a month.

Maruti is India's largest carmaker, in which the government and Japan's Suzuki Motor Corp hold 50 per cent each.

The two sides are in talks to determine the price for the transfer of management control to the Japanese small car giant.

The government, which holds a 59.75 per cent stake in IPCL, India's number two petrochemicals producer, plans to sell a 26 per cent strategic stake.

He added that the global adviser for the privatisation of Nalco would be decided in a week while those for BPCL and HPCL would be decided in 10 days.

French aluminium maker Pechiney has shown interest in Nalco while foreign oil majors Kuwait Petroleum and Royal Dutch/Shell are expected to bid for BPCL and HPCL.

The government has set a target of raising Rs 120 billion ($2.45 billion) from privatisation during the year to March 2003.

In the past, it has never realised targets, raising just Rs 267.38 billion since 1991/92 out of a targeted Rs 660 billion.

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