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Parliamentary panel criticises SCI privatisation

A parliamentary committee on Tuesday criticised the government's move to privatise Shipping Corporation of India at a time when the national flag carrier plans to invest about Rs 6.50 billion in fleet expansion.

"On one hand, the government has taken decision to go for divestment in SCI, whereas on the other, SCI has expansion plan for acquisition of vessels during 2002-03 involving Rs 6.48 billion as investment," Parliamentary Standing Committee on Shipping said in its report tabled in Parliament in New Delhi on Tuesday.

"The committee fails to understand as to why the decision for divestment of SCI has taken place when SCI is able to manage its activities through its own resources," the report said.

The government has decided to bring down its equity in SCI to 26 per cent through sale of 51 per cent stake, along with management control, to a strategic partner while divesting 3.12 per cent equity in favour of employees of the company.

SBI Caps and Lazard India Ltd have been appointed advisors for the privatisation of SCI.

SCI has government approval to place orders for two LR-II size crude oil tankers of 140,000 DWT (Dead Weight Tonnage) each, involving an investment of Rs 4.89 billion.

Besides, SCI also proposes to start new projects of acquiring VLCC, Aframax, LR-I Product tanker and Capsize bulk carrier during 2002-03 for which it has financial outlay of Rs 6.28 billion, the committee noted.

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