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Central govt. to privatise 13 firms this fiscal

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CIOL Bureau
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By Unni Krishnan

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NEW DELHI: India said on Thursday it would sell government stakes in 13

state-run firms in the current financial year in a bid to breathe life into its

faltering privatization program. Disinvestment Minister Arun Shourie told

reporters after a three-hour meeting of the privatization panel headed by Prime

Minister Atal behari Vajpayee that a timetable for selling the stakes in the 13

firms had been finalized.

The companies identified for privatization include CMC Ltd. , Hindustan Zinc,

Hotel Corporation of India, Hindustan Teleprinters, India Tourism Development

Corporation, IBP Co., Indian Petrochemicals Corp Ltd., car-maker Maruti Udyog

Ltd. and telecoms firm Videsh Sanchar Nigam Ltd. among others.

"Each administrative ministry will be responsible for adhering to the

time schedule. We will report to the cabinet committee on disinvestment every

month on the time-table," Shourie said. India's latest push for its

privatization program comes at a time when the global economy and markets are in

turmoil following the deadly attacks on the United States.

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Analysts say the government will be unable to make much headway under the

current situation and would again fall way short of its target of raising Rs 120

billion in the current financial year through the sale of stakes in state-firms.

Earlier this month the government's ambitious plans to sell 40 per cent of its

stake in the state-run long-haul carrier Air India were virtually grounded after

the high profile Singapore Airlines pulled out of the consortium bidding for the

stake.

Blow to privatization

Air India is now left with only one bidder - India's salt-to-software

conglomerate Tata group and analysts believe that the government is unlikely to

go ahead with the sale. The government had earlier identified 27 firms for

privatization in 2001/02, but six months into the financial year it has been

forced to lower its expectations by pruning the list after being unable to shed

its stake in any firm.

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Shourie said the government had received two financial bids for 74 per cent

stake in Hindustan Teleprinters Ltd. (HTL) and would final invite bids for

software and computer maintenance company CMC on Friday. He said the

privatization panel would meet again on October 1 to assess the bids for HTL and

CMC. The government that owns 80 per cent of CMC, plans to sell 57.3 per cent to

a combination of investors including employees.

Domestic media reports say that only four bidders now remain in the race for

a stake in CMC. They are India's largest software exporter Tata Consultancy

Services, Wipro Ltd., India's No. 3 software exporter, US computer major

Hewlett-Packard and the local petrochemicals group Reliance. CMC's shares closed

at Rs 312.05, up 48.85 on Thursday at the Bombay Stock Exchange. The panel also

decided to sell 1.97 per cent equity in VSNL and 6.31 per cent in CMC to

employees at one-third of the market price, but the shares would be only be

transferred after privatization of the two firms.

(C) Reuters Limited 2001.

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