Shourie keeps selloff plans on track

new delhi: the government's privatisation agenda received a boost on tuesday, with the cabinet committee on disinvestment (ccd) finalising a slew of selloffs and setting the agenda for the next fiscal. disinvestment minister arun shourie said petro giants hpcl and bpcl would be privatised within three months of the dismantling of the administered price mechanism (apm).but he made it clear that ioc—which got 33.58 per cent of petro marketing firm ibp for rs 1,153.68 crore—will not bid for these two companies. "we want to create healthy competition between the public and privatesector," shourie explained, when he was repeatedly asked why ioc is being barred. he added that for both hpcl and bpcl, the government will go for a strategic sale. indeed, the decision to let one psu oil giant, ioc, buy out another is a first. ioc's bid—which, sources say, was carefully planned and put in at the last minute to foil any leak to a competitor—was far in excess of the reserve price of rs 337 crore and successfully edged out big players like shell, reliance, and kuwait petroleum. "apart from ioc's bid", shourie said, "other bids ranged between rs 460 and rs 595 crore." initially reluctant to disclose the second highest bidder, he finally gave in and announced it was shell with a bid of rs 595 crore. in ioc's offer, the value per share works out to rs 1,551. reliance has also lost out in the race for vsnl, where the vajpayee government decided to sell 25 per cent to the tatas for rs 1,439.25 crore. shourie disclosed that reliance bid stood at rs 1,346.625 crore. tata group company panatone will pay the government rs 202 per share for the 25 per cent stake. the reserve price for vsnl, in which the government has a 53 per cent holding, was rs 1,218.375 crore. shourie said that in the process of disinvesting from vsnl, the government had taken out rs 1,887 crore as dividend and rs 363 crore as dividend tax. disinvestment secretary pradip baijal pointed out, "thus, the government has received rs 3,689 crore from the vsnl disinvestment." the tatas have been given a call option for the fifth year, subject to the condition that the government would retain at least one share and one vote position to enforce its affirmative vote on assets. employees will get 1.97 per cent of shares. the transaction documents for both vsnl and ibp will be signed in the next two days followed by an open offer for 20 per cent of floating shares. state-run hotels disinvestment proved to be a mixed bag, though. three itdc hotels and one hotel corporation of india (hci) property have been sold. centaur hotel, a property of the hci, has been sold to radisson hotel, delhi, for rs 83 crore (reserve price: rs 78 crore). itdc's lodhi hotel, delhi, went to silver links of singapore for rs 76.22 crore (rs 40.36 crore). qutab hotel, delhi, went to sushil gupta and associates for rs 35.67 crore (rs 31 crore). and, laxmi vilas palace, udaipur, has been bagged by bharat hotels of lalit suri for rs 7.52 crore (rs 6.12 crore). but there were no takers for hotel ashok, janpath, ranjit, kanishka, yatri niwas—all in delhi—and itdc's hotel in varanasi. shourie said, "the ministry of tourism has been asked to study them and come back to the cabinet."