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Bidders to resume survey in Nalco soon

Surojit Gupta in New Delhi

India expects bidders to resume due diligence soon in the sale of state-run National Aluminium Co once the government can provide enough security to protect potential buyers, a top official said on Wednesday.

Divestment secretary Pradip Baijal told Reuters the government hoped to complete the sale by early next year and was not worried by protests against privatisation.

Due diligence for Nalco ground to a halt on Tuesday after workers opposing privatisation of India's second-biggest aluminium maker stopped a team of potential bidders from inspecting its main plant in Orissa.

"I hope to have proper security at the site in a day or two and then the due diligence process can start," Baijal said.

Baijal said Nalco workers heckled the team from Hindalco, the country's largest aluminium-maker, and deflated their car tyres while security workers looked on.

The incident came amid mounting domestic opposition to the Nalco sale.

The coalition government's privatisation programme has stumbled amid bitter wrangling over the pace of state sell-offs.

The Nalco sale has become a particularly controversial issue with a key ally of the Bharatiya Janata Party, which heads the central coalition demanding that the government abandon plans to privatise the company.

Political parties and trade unions in Orissa have launched a protest campaign against sale of the company, saying it will mean job losses in the economically struggling state.

The government plans to first sell a 29.15-per cent chunk of Nalco and management control. Afterwards, it wants to cut its stake to 26 per cent through stake sales of 10 per cent to domestic investors, 20 per cent through ADRs and two per cent to employees.

"We hope to complete the transaction in Nalco by January-February. We had much bigger opposition to the Bharat Aluminium Co sale but we completed it," said Baijal.

Baijal was referring to a 67-day strike against a stake sale in Balco, the country's third-largest aluminium maker in the central Chhattisgarh state, to private metals firm Sterlite.

Nalco is the next big-ticket privatisation after the government deferred stake sales last month in two oil firms for three months because of a cabinet rift over the sell-ff drive.

The budget set a target of raising Rs 12,000 crore (Rs 120 billion) through stake sales in state-run firms in the year to March 2003. But the government has said it will fall short after delaying the stake sales in Hindustan Petroleum Corp and Bharat Petroleum Corp.

Baijal said the government was in the "final stages" for sales of stakes in India's biggest shipping line, Shipping Corp of India, and hopeful of completing it by December.

The government which owns 80 per cent of SCI, plans to sell 51 per cent to a strategic partner.

"We have received all the necessary clearances with regard to Shipping Corp and it should be through by December," he said.

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