Monday, June 20, 2011

Govt to push for Concor, Ircon divestment

NEW DELHI: Public sector enterprises under the Railway Ministry could be back on the disinvestment list soon. The Finance Ministry is likely to initiate discussions with the Railway Ministry amid concerns that the government will not be able to meet its disinvestment target for this fiscal. The companies in which the government could dilute its stake are Container Corporation of India (Concor) and Indian Railway Construction Corporation (Ircon).

"All administrative ministries are looking at suitable candidates under their control. We expect the Railway Ministry to soon initiate the exercise," a government official said, requesting anonymity on the ground that the move may also require political consensus. Mamata Banerjee, when she was the railway minister, had opposed disinvestment in railway public sector companies. But following her Trinamool Congress party .s landslide victory in West Bengal elections, she is expected to be more open to the idea of a stake sale in some companies under the Railway Ministry.

The new railway minister is likely to be a representative of the Trinamool Congress party. "In any case, we are talking of sharing the wealth of these public sector units with the people. There should be no opposition to that," the official said. The government holds over 99% stake in Ircon and 63.09% in Concor and may dilute about 10% in Ircon and 5% in Concor. A finance ministry official said the government has strong reasons to list these companies under the current circumstances as small issues, such as that of the National Building Construction Corporation, would not fetch enough money.

"You cannot bring companies where disinvestment was done said that the rise in global crude prices was raising the government's subsidy burden. "In this scenario, we would not like to miss our disinvestment targets," the finance ministry official said. In this fiscal, the government has only raised .`1,162 crore by selling 5% of its stake in Power Finance Corporation . The cabinet has also approved disinvestment in Sail, ONGC and Hindustan Copper. The volatile market conditions have already led to delay in some of the proposed public offers. Last week, Hindustan Copper said there was no pressing need for a follow-on offer as the company has enough funds.


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