Officers union of blue-chip PSUs on Monday opposed the government's decision to privatise India's second-biggest oil firm BPCL, saying family silver worth Rs 9 lakh crore is being sold for a fraction of the amount.
The Federation of Oil PSU Officers (FOPO) and Confederation of Maharatna Companies (COMCO), claiming to represent over 70,000 officers of the top state-owned firms, at a press conference said the government was killing the goose which lays golden eggs by privatising the highly profitable Bharat Petroleum Corp Ltd (BPCL).
"Our comprehensive evaluation of the assets of BPCL reveals true worth of BPCL to be Rs 9 lakh crore. Today's market cap of BPCL is Rs 1.06 lakh crore. Typically, management control fetches 30-40 per cent premium over the market cap. Even after considering a premium of over 100 per cent, there is likely destruction of wealth to the tune of Rs 4.46 lakh crore," said Mukul Kumar, convenor, FOPO and COMCO.
The officers union, he said, was not opposed to private competition but they should not be handed on a platter assets set up over years. "Let them come in and set up their own infrastructure. We don't have any problem to compete with them."
The Union Cabinet had last month approved the sale of the government's entire 53.29 per cent stake in BPCL, arguing the resources unlocked by the strategic disinvestment would be used to finance social sector programmes benefiting the public.
BPCL was created by nationalising Burmah Shell after the private firms refused to cooperate in the national duties during the 1971 war, Kumar said. "The proposed privatisation would be no less than taking about-turn from the compulsion cited for effecting nationalisation."
Asked if the officers union will go on strike to protest privatisation plans, he replied in the negative, saying they will submit a representation to the Prime Minister about the facts.
"BPCL is a Maharatna company and part of the Fortune 500 list of companies for 15 years. It has sound finances, efficient management, second-largest fuel retailer, pays more than Rs 17,000 crore as dividend to the central government. It has 6,000 acres of land across India, of which 750 acres is in Mumbai alone which is valued for crores of rupees," he said.
He said privatising BPCL would dent the government's social commitment as the new owner is not likely to follow the policy of providing reservation to SC/ST, OBCs and economically weaker classes as also not service remote and not so profitable areas.
"The goose that lays golden eggs is being killed to meet the government's fiscal deficit target," he said. "This is anti-people and biggest wealth destroyer step."
Citing past privatisation moves where the new buyer asset stripped the companies they acquired, he said the government should empower the PSUs and give them level playing field to compete with the private sector.
"This (privatisation of BPCL) is suicidal for the country," he said.
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