The Telegraph
Since 1st March, 1999
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George makes selloff splash

New Delhi, Sept. 3: George Fernandes, who has opposed the “strategic sale” of public sector oil companies, has managed to make his views heard loud and clear at an informal sitting of a Cabinet committee today, well-placed official sources said.

Among the defence minister’s listeners were Prime Minister Atal Bihari Vajpayee, deputy Prime Minister L.K. Advani and finance minister Jaswant Singh. Fernandes was supported by Singh, the sources said.

The defence minister stressed that the government should follow the disinvestment guidelines laid down by the G.V. Ramakrishna Committee, which was formed by the United Front government.

“The committee’s report is a comprehensive document and deals with questions every political party should be aware of and need answers to,” Fernandes told reporters after the meeting.

Referring to oil companies, the committee, which went into the specifics of every PSU on the disinvestment charter, had said their shares should be disbursed in favour of financial institutions so that the government could retain control even after disinvestment.

Sources close to the Prime Minister said that after hearing out the various points of view at the one-and-a-half-hour meeting, Vajpayee indicated that he favoured a consensus on disinvestment in two oil giants — HPCL and BPCL.

The Prime Minister is keen on a solution which would “accommodate everyone’s views and give the impression that the government was not backtracking on the disinvestment policy”, a source said.

The deputy Prime Minister was more candid and, according to sources close to him, went along with Fernandes to the extent that the oil sector disinvestment should not create a private monopoly by favouring one business conglomerate. “An option other than outright sale to a particular business house could be considered,” Advani said.

He reportedly had a long meeting with swadeshi ideologue S. Gurumurthy before today’s meeting. Gurumurthy is believed to be against the strategic sale of oil PSU shares.

The compulsions of facing Assembly polls also weighed on Vajpayee and Advani. According to sources, the two felt that the average voter may not be able to appreciate the “finer” considerations behind a PSU sale.

“What will click with them is a possible slogan saying the family silver was auctioned to fatten some in the government. Remember how the gold mortgage (as guarantee for foreign exchange) reduced Chandra Shekhar to a cipher in the 1991 election'” asked a BJP leader.

The sources quoted Advani as saying that rather than rushing into a “hasty” decision on HPCL and BPCL, the government should consider in detail all implications, including what he reportedly called the “vital” security aspect.

The deputy Prime Minister also called for a “middle path” which would steer clear of the “extreme pro- and anti-disinvestment lines” that emerged within the government.

Vajpayee had two rounds of meetings with disinvestment minister Arun Shourie last week. Sources said Advani would try and bring Fernandes and Shourie together for an informal sitting before the Cabinet committee on disinvestment formally meets on September 7.

The deputy Prime Minister, who had intervened in a similar face-off between Shourie and Pramod Mahajan over the MTNL-BSNL sale, reportedly felt that rather than the differences spilling out at the Cabinet meeting, Shourie and Fernandes should try and reconcile them beforehand.

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