Selloff Panel'S Strategy For Ipcl Criticised
The Disinvestment Commission's recommendations regarding the strategic sale of 25 per cent of IPCL to avoid market dominance by any single player has drawn criticism from certain quarters.
In a letter to the ministry of chemicals & fertilisers, Patel Shantilal Purshottam, a member of Parliament, has pointed out that the commission's report on the modalities of strategic sale of IPCL would, in fact, ensure that "the disinvestment of IPCL is conducted in a manner that the company falls into the hands of foreign companies".
The commission had recommended the sale of 25 per cent of IPCL equity to a strategic buyer, with transfer of management control, on the basis of global competitive bids.
However, while pre-qualifying bidders, the commission has reiterated that care should be taken to ensure that the strategic sale does not lead to market dominance by any single player.
The letter states that "the concept of market dominance by any single player" is completely misplaced as far as the petrochemicals industry in India is concerned.
First, the petrochemicals industry has been delicensed in the first stages of economic reforms, way back in 1991".
The letter goes on to further state that "substantial investments are being made to set up huge new manufacturing facilities in this sector by public sector units (PSUs) such as Gas Authority of India Ltd (GAIL) and by several other private sector companies.
These include: the multi-billion Haldia petrochemicals complex being set up by George Soros group in association with the Tatas; large investments being made by the Mafatlal group-owned NOCIL which is already in talks with several foreign companies to participate in the venture; and new investments being planned in this sector by leading Indian refining companies, such as HPCL and BPCL".
Besides, it also points out that import barriers in the petrochemicals sector have been completely removed.
All petrochemicals products manufactured in the country could be imported from any part of the world.
Customs duties on imported petrochemicals have also been sharply brought down, from levels of 110 per cent to around 30 per cent.
Moreover, several petrochemicals companies, such as Sabic from the Middle East, have already set up trading units in India and are importing petrochemicals product from abroad, for sale in the Indian markets.
"IPCL is a company which has long been eyed by the multinational lobby.....it would be highly detrimental to our national interests to permit this blatant handing over of our valuable industrial assets, in the guise of a strategic sale, to foreign companies", the letter states.