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Should a 40 per cent MNC stake be allowed in SCI?

Foreign Shores
outlookindia.com
-0001-11-30T00:00:00+0553
A recent R.K. Swamy/bbdo campaign describes the Shipping Corporation of India (sci) as an automatic choice for Vasco da Gama if the explorer were to rely on a shipping company for his voyages. But soon, India's largestÑand the world's largest state-owned shipping company (113 vessels; turnover Rs 2,700 crore) could actually be co-owned by a Danish, Norwegian or a Japanese company. The government is close to selecting a global giant to offload 40 per cent of its 80.12 per cent equity.

"The final decision will be announced soon," says sci chairman and managing-director P.K. Srivastava. Shipping sources told Outlook that the companies in the running are Maersk (Denmark), Western Bulk Carrier (Norway), Neptune (Singapore) and Mitsui osk Lines (Japan), which already has a joint venture with sci for transportation of liquefied natural gas (lng) to Enron's Dabhol power project.

But it may not be easy to offload sci shares. "sci, for years, has been patronised by the government and has little expertise in globally marketing cargo movement. Besides, a large number of its vessels are fairly old. It will not be easy to net a big fish," the sources said.

Srivastava agrees. Addressing shareholders at the company's agm last week, he said he was apprehensive about whether sci would be able to retain its status as the nodal agency for transporting crude. "The company may not be able to sustain this unless its planned acquisition of tankers materialises without further delay," the sci chairman said.

Earlier this year, sci had offered to sell some of its stake to state-owned oil and gas companies but the latter showed no interest.

Expectedly, the proposed sale has generated controversy. "It would not have bothered me if it were any other psu. But we are talking of a shipping company. Even though the share of Indian shipping tonnage at our ports has decreased to a pathetic 29 per cent, one needs to keep in mind the country's energy situation. And, of course, its dependence on lng in the future. After all, total gas and oil tonnage on Indian ships is about 60 per cent," says Rahul Roy Chowdhury of the Institute of Defence & Strategic Analyses (idsa).

Roy Chowdhury, who is currently working on a study paper on the strategic importance of Indian ports and shipping companies, adds: "It's worrisome because the Indian government does not even have a shipping policy in place."

The issue has also triggered tensions within political parties. "We will debate this sale. Where are the ads in international papers inviting global tenders? Disinvestment of strategic companies needs to be monitored carefully," says Jairam Ramesh, Congress joint secretary (economic cell).

Agrees D. Raja of cpi: "We are opposed to divestment anyway. But in the case of sci, we have specifically warned the government of the consequences because the sci fleet is used by the defence forces in periods of crisis. We will be completely eroding our self-reliance in a strategic sector and pose serious threat to the country's economic sovereignty." Watch this space.

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