CCD hunts for ways to sell BPCL, HPCL

In a bid to push forward the divestment programme, the government on Friday is likely to choose between a political or a legal option to find a way out for privatisation of the two public sector oil units halted by the Supreme Court verdict.

Cabinet Committee on Divestment, chaired by Prime Minister Atal Bihari Vajpayee, will meet in New Delhi on Friday to consider various options presented by Divestment Minister Arun Shourie after his elaborate consultations with Law Minister Arun Jaitley.

Also Read The Divestment Development

The Supreme Court has directed the government to halt the divestment of Hindustan Petroleum Corporation Ltd, Bharat Petroleum Corporation Ltd and get an approval of Parliament.

Although lined up in the CCD agenda are a slew of companies like Engineers India Ltd and Balmer Lawrie, which are in the final stages of divestment and where the price bids are now to be called, all eyes would be on what decisions CCD takes to resolve the crisis which has virtually thrown the privatisation programme in a state of uncertainty.

The agenda note, circulated to concerned ministries recently, does not contain the option paper although sources said this could be included later.

As a prelude to the CCD meeting, Shourie has already met Deputy Prime Minister L K Advani to discuss how to proceed with the divestment programme in the wake of fears that certain observations made in the ruling could trigger a plethora of cases in other PSUs, particularly due to reference made by the court to a 'constitutional angle.'

The government now has two options on the divestment impasse - to go for a legal recourse or find a political solution to get the approval of Parliament for sale of 34.01 per cent stake in HPCL and 35.2 per cent stake in BPCL.

A review of the apex court judgement may not be a favoured option as it would involve the same bench.

The government is learnt to be weighing the option of approaching the Supreme Court to seek clarifications on its ruling, especially as the Madras high court recently asked the Centre to hold the final divestment of Madras Fertilisers till a decision was taken on a petition challenging the PSU's privatisation.

It had, however, allowed the government to go ahead with the procedure.

Another legal option before the government could be to seek a constitution bench review.

It is unclear whether Shourie has been able to convince Jaitley about the merits of the exercise, sources said.