To maximise realisations from stake sale in two companies in its disinvestment pipeline — Oil India Ltd (OIL) and NTPC — the government has planned to sort out some of the issues before launching offer for sale (OFS).
The stake sale in the two companies is critical to meeting the government’s Rs 30,000-crore disinvestment target for the current financial year, as the government has managed to garner only about Rs 6,900 crore so far.
The groundwork for the OIL issue, slated for the second fortnight of this month, has already been completed; merchant bankers for this have also been selected. The issue is expected to fetch around Rs 2,500 crore. Another 9.5 per cent disinvestment in NTPC is expected to bring in Rs 12,000 crore and the finance ministry’s plan is to bring the OFS in the first fortnight of February.
A senior finance ministry official said meetings with the associated ministries had been scheduled next week to resolve issues of both OIL and NTPC. He added the idea was to boost the market sentiment about the two companies for better price realisation.
The official indicated some concrete measures were in the offing and those would be discussed at the meetings. While Oil India’s concerns are mainly on account of sharing of the subsidy burden, NTPC had issues pertaining to coal block allocations and fuel supply.
NTPC has been facing uncertainty over availability of coal which has stalled 11,000- Mw new planned capacity.
The fresh capacity, stuck for want of fuel, includes three units of 800 Mw each at the Darlipalli power plant, two units of 800 Mw each at Gajmara project in Odisha, 3,960-Mw Barethi plant, 1,320-Mw Tanda plant, 500-Mw Unchahar plant in Uttar Pradesh and the second unit of 1,320-Mw Barh project in Bihar. The company told Business Standard coal linkages for some of these plants were granted without identifying mines – another reason for the issue.
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Compounding the problem of limited fuel supply through linkage by Coal India is the fact that the government had in June last year cancelled allotment of five of NTPC’s seven coal blocks. The blocks have not been re-allocated despite the power ministry’s repeated requests.
Among other issues, NTPC’s showcase 1,980-Mw Karanpura power project in Jharkhand is stuck due to wrangling over its location. The coal ministry has objected to the Rs 12,000-crore super thermal project, arguing that setting up the plant would sterilise over six billion tones of high-grade coal reserves located beneath the site. The project has led to a massive bickering between the coal and power ministries. It has not taken off despite repeated interventions at multiple levels.
The finance ministry official said good results in OIL and NTPC OFSs would help the government mop up at least Rs 25,000 crore through disinvestment in 2012-13.