GoM meet tomorrow may decide on IPCL sale

Ravi Kapoor

New Delhi, Nov 5: With the group of ministers (GoM) meeting on Wednesday, the course of privatisation of Indian Petrochemical Corporation Ltd (IPCL) is likely to be decided.

The GoM was constituted by the Cabinet Committee on Disinvestment (CCD) about a month back to sort out the course of IPCL privatisation. The ministry of disinvestment (MoD) wants to revert back to the earlier route from the stage at which it was abandoned. This means calling financial bids from Reliance and the IOC-Soros-Chatterjee consortium, the only bidders left in the fray.

The ministry of petroleum & natural gas favours negotiated sale by which IOC takes over IPCL. The ministry of chemicals & fertilisers, administrative ministry for IPCL, favours fresh bidding.

The three ministries have divergent views on IPCL sale, but the MoD is hopeful that a decision would be taken at the GoM meet.
According MoD officials, the GoM meet should be successful because “there is consensus on the issue of IPCL divestment.”

The government had decided to privatise IPCL by way of strategic sale, and last year the privatisation was in a final phase. Financial bids were about to be called, and two bidders were left in the last lap.

Then, in November 2000, the CCD decided that IOC should take over the Vadodara plant of IPCL, as there were “synergies” between the two. In fact, the chairman-cum-managing director had personally met disinvestment minister Arun Shourie and convinced him of the synergies between IPCL, Vadodara, and Gujarat Refinery of IOC.

The synergies, however, never materialised and IPCL privatisation hit a huge roadblock. For, there was a vast gap between the valuations done by the IPCL management and Indian Oil Corporation (IOC) for IPCL, Vadodara. A number of efforts were made to resolve the vexed issue of IPCL Vadodara valuation. A committee of secretaries was set up. Negotiations were held, but all efforts came to naught.

Fed up by the bickerings between the IPCL and IOC managements, the MoD decided to take the issue to the CCD.