Power Ministry refuses to toe DoD line

Ministry has refused to toe the DoD’s line on the issue. In fact the power ministry has refused to go against the recommendations of the Disinvestment Commission which had suggested that the time was not opportune for these public sector utilities to be disturbed as they had a vital role to play in building power infrastructure in the country. Not only this, the Commission had suggested that if any disinvestment in these PSUs was contemplated, the first stage should involve a restructuring of the corporations and think of disinvestment only when these reforms were complete.

These views of the power ministry, highly placed sources said, had been communicated to the DoD a few days ago. What has upset the power ministry is the fact that the proposal was mooted by the DoD without even consulting the Power Ministry. Not only was the proposal mooted by the DoD, it hasn’t even been sent to the power ministry for their consideration and comments.

The proposal, sources say, is the brainchild of the DoD secretary Pradeep Baijal who was formerly special secretary in the Power Ministry and had moved a similar proposal at that time.

The power ministry had in fact commissioned ICICI and SBI Caps to study this issue, but both of them had suggested that NTPC buying NHPC was not the best route to restructure these corporations. In fact they had stated that buying out NHPC would deplete NTPC’s cash reserves which should actually be used for adding more capacities for power generation.

This view-point actually endorsed the Disinvestment Commission’s suggestions which also opined that cross holdings of equity between different PSUs would not help in any additional generation of resources in the sector.

The power ministry is not the first to object to the disivestment plans of the DoD. The Heavy Industries Minister Manohar Joshi has already protested against any disinvestment in what he has called strategic PSUs. Joshi has in fact written to the Prime Minister Atal Behari Vajpayee and Minister for Disinvestment Arun Jaitley that the government should refrain from divesting its stake in five key PSUs under his department.

The companies are — Bharat Heavy Electricals Ltd (BHEL), Heavy Engineering Corporation (HEC), HMT Ltd, Bharat Ophthalmic Glass Ltd (BOGL) and Hindustan Photo Films Manufacturing Company Ltd (HPF).