The Central public sector undertakings (CPSUs) will soon be allowed to acquire natural assets like oil, coal and mines abroad without prior Cabinet nod. According to sources, the Department of Public Enterprises (DPE) will be moving a Cabinet note suggesting that an empowered committee headed by Cabinet Secretary could clear these projects.
This is expected to help the CPSUs to compete with private firms who are also eying raw material assets overseas to cut costs.
The move would also help fight competition from Chinese firms. These deals need to be struck at short notice in a highly competitive environment.
The idea is that the empowered committee clears the CPSE proposals for buying natural assets abroad within three weeks. Currently, the approvals through the Cabinet/CCEA route takes up to six months. The empowered committee will also comprise secretaries of the administrative ministry (in charge) of PSU, the Chairman and Managing Director of the firm and representatives from ministries of external affairs, law and finance.
World?s largest coal producer Coal India who is currently is in talks with the US-based Peabody Energy and Massey Energy for stakes in the mines owned by these companies seems to be the early beneficiary if the proposal gets approved soon.
Even state-run steel major Steel Authority of India (SAIL) along with NTPC, Coal India, Rashtriya Ispat Nigam is scouting for coal mines in abroad independently as well as through International Coal Ventures (ICVL).