The Telegraph
Since 1st March, 1999
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Shourie ready for give & take

New Delhi, Sept. 6: Disinvestment minister Arun Shourie plans to make peace with the anti-divestment lobby in the Cabinet by backing down from his opposition to public sector units bidding for government-owned oil companies, provided there is agreement to continue with the policy of strategic sales.

The offer may be made either at a gathering at Prime Minister A.B. Vajpayee’s house tomorrow morning or at the meeting of the Cabinet committee on divestment to be held later. Although Shourie is unlikely to attend the informal conclave, where petroleum minister Ram Naik, defence minister George Fernandes, finance minister Jaswant Singh and deputy Prime Minister L.K. Advani will be present, the offer is likely to be discussed.

Fernandes and Naik have been in the forefront of the group in the Cabinet which has opposed the manner in which divestment is being conducted, arguing that strategic sales could actually replace state monopolies with private ones, besides compromising national security.

The Sangh parivar added its voice to the lobby with an attack on the divestment process today. For Shourie, any backdown — Vajpayee is believed to have advised a compromise — will be full of poignancy because he had got the Cabinet to bar PSUs from bidding for other PSUs.

Naik met Advani today to argue that Hindustan Petroleum (HPCL) and Bharat Petroleum (BPCL) should not be handed to private companies through strategic sales, keeping in mind the experience when foreign oil companies refused to assist the government in its war requirement, forcing Indira Gandhi to nationalise them.

Naik has also finalised a presentation which he plans to make tomorrow on a series of investments which he feels are necessary for the oil sector. Money for this will be raised through public issues — by HPCL and BPCL as well. Acceptance of this proposal could be an automatic negation of divestment.

But Shourie’s main problem is that Fernandes and Naik, encouraged by the RSS outburst against the divestment policy for the oil industry, may stick to their guns in demanding that strategic sales be given up altogether and Vajpayee may give in.

The disinvestment ministry feels that if this happens, it will set a precedent which could be used in several other industries that have security ramifications, such as telecom, steel and even aluminium.

Already, Shourie is facing an attack from newly-appointed coal and mines minister Uma Bharti, who has opposed selling Nalco to a strategic buyer, arguing instead that the government should sell its stake in the market in phases or through an issue overseas.

Disinvestment ministry officials believe Bharti, known to be a Sangh and Advani favourite, has timed her offensive to coincide with the controversy raised by Fernandes to lend weight to the move against strategic sales.

Even communications minister Pramod Mahajan, who is otherwise dead set against PSUs bidding for other PSUs, is ranged against Shourie. Mahajan is scared Shourie will put MTNL and BSNL, the two state-run telecom companies, on the block, thereby shrinking his own fief. The communications minister is trying to stall this by proposing a merger of the two already huge companies to create a giant a private bidder may find next to impossible to buy.

Moves Mahajan has made in relation to VSNL — a successful divestment Shourie piloted — have kindled suspicions he wants to make an exemplary failure of the company the Tatas bought. Mahajan has threatened to deny VSNL its core business of telephone traffic emanating from MTNL and BSNL.

If Shourie finds himself totally defeated at tomorrow’s meeting, despite the peace offer he is willing to make, sources close to him said he would find it difficult to continue in office.

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