The Cabinet Committee on Economic Affairs today gave nod to the listing of 11 public sector undertakings, including five railway subsidiaries -- Ircon International, Indian Railway Catering and Tourism Corporation (IRCTC), Rail Vikas Nigam, Indian Railway Finance Corporation (IRFC) and RITES Ltd.
The plan to list railway subsidiaries IRCTC and IRFC was mooted by finance minister Arun Jaitley in his budget. The Department of Public Asset Management (Dipam) has already initiated the process of fixing a consultant for the listing of these two companies. The non-railway companies that got approval for getting listed are Bharat Dynamics (BDL), Garden Reach Shipbuilders & Engineers (GRSE) , Mazagon Dock Shipbuilders (MDSL), North Eastern Electric Power Corporation (NEEPCO), MSTC Ltd and Mishra Dhatu Nigam (MIDHANI).
"As approved, listing of CPSEs will be through public offer of shares upto 25% of Government of India’s shareholding, which may include offer of fresh shares for raising of resources from market. However, actual disinvestment in respect of each CPSE alongwith the mode of raising resources has been delegated for decision on a case to case basis to the alternative mechanism, headed by the Finance Minister," a government statement said. The CCEA has also approved reservation of shares for the eligible employees of 11 CPSEs in accordance with the extant provisions of SEBI Regulations. With a view to ensure wider participation by small investors in the CPSEs’ disinvestment program, a price discount upto 5% on the issue price has also been approved for the retail investors and eligible employees.
The lisiting of railway PSUs comes at a time when the government has shelved the plan to create a mega companies for railways -- including Bharat Wagon & Engineering Company and others like Container Corporation of India, Ircon International, Indian Railway Catering and Tourism Corporation (IRCTC), Konkan Railway Corporation, Mumbai Railway Vikas Corporation, Rail Vikas Nigam, Railtel Corporation of India, RITES, Dedicated Freight Corridor Corporation of India, Burn Standard Company and Braithwaite & Company and Kolkata Metro Rail Corporation -- under one holding company.
Other key decisions
The Cabinet also approved signing of Framework of Understanding (FoU) on Cooperation in the Hydrocarbon Sector with Bangladesh. The objective of the proposed FoU is to establish a cooperative institutional framework mechanism to facilitate and enhance India-Bangladesh bilateral cooperation in the hydrocarbon sector on the basis of equality and mutual benefit.
The FoU promotes bilateral cooperation at the sub-regional and regional levels. It will provide impetus to development and enable the two countries to realize their developmental aspirations, shared destiny and common vision of a peaceful and prosperous South Asia. The proposed FoU is non-binding in nature and will be valid for five years.
It also cleared policy to provide Purchase Preference (linked with Local Content (PP-LC) in all Public Sector Undertakings under Ministry of Petroleum & Natural Gas. The Policy will be applicable for five years. A steering committee will be constituted to oversee implementation of the Policy and carry out annual review and recommend continuation of the policy from year to year basis.
Under the Policy, the targets of Local Content (LC) will be stipulated for certain oil and gas business activities. The manufacturers/ service providers who meet the local content targets and whose quoted price is within 10% of the lowest valid price bid would be eligible for purchase preference for a stipulated portion of the purchase order on matching such price.
The Policy is expected to encourage suppliers and service providers to progressively adopt 'Make in India' practices and add value to their goods and services within the country. The Policy will apply to all the Public Sector Enterprises and their wholly owned subsidiaries, Joint Ventures that have 51% or more equity by one or more public sector enterprises, attached and subordinate offices of Ministry of Petroleum and Natural Gas.
