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Divestment will be a casualty if issues are not sorted: Baijal

Divestment ministry warned on Monday that government's sell-offt target could be a casualty in case issues related to it were not sorted out and said that there could be no domestic or international public offering in Nalco without strategic sale of government equity in the public sector alluminium company.

Speaking to reporters on the sidelines of India Economic Summit, divestment secretary Pradip Baijal said it would be difficult to attain the Rs 12,000 crore (Rs 120 billion) divestment target set for 2002-03 under the present circumstances.

Baijal's comments assume significance in the backdrop of increasing instances of bidders withdrawing from the race of government stake in various PSUs, which prompted Divestment Minister Arun Shourie to comment last week as to how long buyers would keep waiting before a closed shop.

Baijal, however, sought to justify the ongoing debate on divestment within the government saying that "rethinking is a part of democracy and it is very healthy that there is a debate,"

Commenting on the delay in the privatisation of Nalco and a temporary freeze on continuing the due-diligence exercise, Baijal said there could be no ADR or domestic issue without strategic sale as "the three phase divestments process in Nalco is interlinked.

The Nalco management had sought stoppage of plant visits by bidders for due-diligence following a hostile reception accorded to a team of officials from A V Birla Group's Hindalco, last month.

On divestment of oil PSUs, Hindutan Petroleum and Bharat Petroleum, Baijal said, "the cabinet has set a deadline of December 7 and let us see how it goes."

On the status of divestment in Shipping Corporation of India, Baijal said SCI was also held up because of a number of issues which have been raised by various people" but declined to comment on timeframe for divestment.

Earlier while addressing a session -- on economic reforms and financial sector scenario -- Baijal had come out strongly in favour of strategic sale as the mode for divesting government equity in PSUs and had said that a debate was necessary for putting in place a sustained coherent policy.

"The divestment policy has shown that strategic sale is good for India. In the last two years we have sold one per cent of public sector shares through strategic divestment and have been able to mop up Rs 10,000 crore (Rs 100 billion). If we sell 100 per cent, we may be able to get Rs 10,00,000 crore (Rs 1,000 billion)," Baijal had said.

Baijal said strategic divestment had led to a good price per earning ratio (P/E ratio).

"We have started to have a serious dialogue on privatisation and without this we can't have a sustained and coherent privatisation policy," he said.

Baijal said, "We have moved to a point where we have forced a more active debate and I am sure that this active debate would come to a logical conclusion," Baijal said.

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