Imperfect process

The world over, privatisation has often been accompanied by controversy""usually over the selling of public sector companies to "wrong" bidders or at the wrong price.

Indeed, the very first round of disinvestment came under the scanner for the bundling of saleable shares with unsaleable ones, leading (as experience showed) to sub-optimal pricing.

Now it is the turn of strategic sales (introduced for the first time by the NDA government, with the redoubtable Arun Shourie as the disinvestment minister) to be examined and found wanting. The immediate issue is two hotels that belonged to an Air-India subsidiary.

The subject was ripe for controversy. In both cases, there was eventually just one bidder. In one case, the successful bidder immediately re-sold the property at a much higher price.

In the other case, if reports are to be believed, the successful bidder has defaulted to the banks that funded his bid. And it does not help that the minister had had a meeting with the bankers to the bidder, for stated reasons that are less than fully convincing.

The report of the Comptroller and Auditor General goes into a variety of other issues in relation to one sale, and reveals an imperfect process.

But no one will believe that Mr Shourie acted for dishonest reasons, and nothing to that effect is even implied, though the finance minister's statement that Mr Shourie took an "active interest" in the sale can be said to have a subtle sub-text.

What is known from earlier reports is that the bidder had used the influence of Mr Thackeray of the Shiv Sena (a member of the NDA) to gain more time to pay up. What this episode tells us is that, even as ministers are right to actively discharge their responsibilities, they should be aware that their decisions will be scrutinised and, if found wanting, criticised.