The Telegraph
Since 1st March, 1999
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George jab at oil divestment
- Defence minister opposes ‘private monopolies’

New Delhi, Sept. 1: Defence minister George Fernandes today called for brakes on the reforms process, arguing that if the policies led to creation of “private monopolies”, they needed to be corrected.

With the disinvestment of two public sector oil giants — HPCL and BPCL — in the pipeline, Fernandes’ opposition can lead to a questioning of the Centre’s motives. Even critics within the establishment will voice suspicion of a tacit encouragement to one particular industrial group or a cabal of companies in the divestment process.

Fernandes has denied, though, that he has written to the Prime Minister opposing disinvestment in oil companies on the grounds of national security. Fernandes, who was elected Samata Party president today, said differences of opinion on a policy matter were being interpreted as a threat to the NDA government.

Fernandes’ observations can put a spanner in the disinvestment works, particularly his statement warning against creation of “private monopolies”.

The Centre has made it clear that public sector companies like Indian Oil will not be allowed to bid for HPCL and BPCL. That leaves Reliance and Shell as the groups hotly favoured to win the lucrative business.

Fernandes said he has sought a meeting with the Prime Minister and convening of a small group of ministers to reconcile differences on the disinvestment process.

“We have some suggestions to make. We have sought a meeting to be convened by the Prime Minister. Having a different viewpoint does not mean that we are attacking the government.

“We need to have a review followed by a course correction wherever necessary and identify the areas where there is scope for reforms because out of five years, three years are getting over. I am not saying disinvestment should be stopped, I simply want a review,” he said.

Fernandes said he favoured disinvestment being carried out in accordance with the recommendations of the G.V. Ramakrishna-led disinvestment commission.

One criticism of the disinvestment in oil companies is that it can harm “strategic interests”. Critics of the disinvestment policy say oil companies were nationalised following the 1971 war when there was a possibility that they would not contribute to the war effort. But Fernandes today sought to clear the air by saying he has not written to the Prime Minister on this score.

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