The government is considering a proposal to disinvest another 11 public sector companies, including Delhi’s landmark Ashok Hotel, MTNL’s tower business and equipment-maker Bharat Heavy Electricals (Bhel) through a mix of long-term lease, asset and strategic sale. With NITI Aayog sharing the latest sell-off list with the finance ministry, close to 50 companies have now been recommended for disinvestment via the strategic sale and leasing route, although the government’s track record has remained poor.
Finance ministry officials said the proposals were being studied and a final decision will be taken by the cabinet committee on economic affairs, but defended the movement on strategic sale so far, arguing that the government was on course to complete some of the transactions, including Air India, where 76% equity is being offered for sale compared to the recommendation of 100%.
Sources said NITI Aayog has recommended leasing out of Hotel Ashok — spread over 25 acres in the Capital’s diplomatic enclave — for 60 years to get the worn down property back to shape. While the Atal Bihari Vajpayee government had sought to sell Hotel Ashok, the plan was resisted by the tourism ministry, apart from other problems.
Even during the Narendra Modi regime, the sale of ITDC hotels has not been taken off as the government has opted to play safe. Last year, then tourism minister Mahesh Sharma had said the property was not on the disinvestment list, along with Samrat Hotel, as they were only a few metres away from the PM’s residence on what is now called Lok Kalyan Marg. Sources said the panel headed by economist Rajiv Kumar has also recommended that government should begin selling assets in MTNL, once a top state-run company, which is now the third-biggest loss maker behind BSNL and Air India. The proposal is to hive off the telecom PSU’s towers into a separate company and sell off the entity. An outright stake sale has not been proposed, given the large real estate holdings. Surprisingly, Niti Aayog has not given any roadmap for BSNL, that reported loss of around Rs 4,800 crore in 2016-17.
Other companies — from National Textiles Corporation to Hindustan Copper and Telecommunications Consultants (India) — may be put up for strategic sale with NITI Aayog recommending that government could exit most of these PSUs. While some of the companies, such as NTC, reported impressive profit in 2016-17, it was on the back of exceptional items or one-time gains.