Oil PSUs sale may be postponed

CCD unlikely to factor in the SC's decision as a deterrent to disinvestment

With less than a week to go for the crucial October 3 Cabinet Committee on Disinvestment (CCD) meeting, opinion in the government is veering round to the outright postponement of divestment of oil majors Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) as the alternative that is the least damaging in the current political scenario and forthcoming elections.

Highly placed sources in the government said Deputy Prime Minister LK Advani did not concur with the fears expressed by Union Disinvestment Minister Arun Shourie that the Supreme Court order would trigger a clutch of public interest litigation petitions to undo the disinvestment of public sector undertakings in the past.

He also reportedly does not believe further disinvestment will be jeopardised by the HPCL, BPCL case, which he thinks is sui generis.

There is view in the government that there is a logic in the contortions that have accompanied the issue of divestment in the oil sector.

"Look at the sequence of events. When the issue first came up, the government on its own, decided to put it in cold storage for three months. Defence Minister George Fernandes wrote a letter to Prime Minister Atal Bihari Vajpayee and he decided nothing would be done on this for 90 days.

"Then we decided that one unit would be put up for sale and the other would go through the initial public offering (IPO) route. Then there was some doubt on this so the government itself referred the matter to the Attorney-General Soli Sorabjee for his opinion," sources said, recalling the history of the disinvestment.

They said the sequence of events indicated that the divestment of these two units was not a straightforward sell off. There were doubts, caveats and political interventions.

"What is happening now is a logical culmination of that process. There will be discussion on this in the CCD," they said. What appears certain is that the CCD is unlikely to factor in the Supreme Court's decision as a deterrent to disinvestment "" both past and present.

When he met Shourie last week, Advani is learnt to have clarified to the disinvestment minister that he considered the argument untenable that the Supreme Court's decision would halt the disinvestment process as such. Sources in the government admit that Advani held the view that barring the disinvestment of BPCL and HPCL, the Supreme Court's decision would not have any impact on the other issues.

Shourie had gone to convince Advani about the necessity of taking a legal recourse like asking for a review of the decision either through an appeal or through the presidential reference. Advani is learnt to have ruled out the option of a review petition for the simple reason that it will convey the impression of a confrontation between the judiciary and the executive.

At the CCD meeting, influential sections of the government are likely to argue that an extended public controversy on disinvestment will have the net effect of damaging the NDA's achievements on disinvestment. The more debate there is on it, the more the Congress will derive political advantage from it.