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NRLwill be retained by a government-owned firm, before disinvestment:FM

New Delhi:The cabinet committee on economic affairs (CCEA) on Wednesday cleared one of the government’s largest asset-sale exercises involving five companies, including the privatization of Bharat Petroleum Corp. Ltd (BPCL) and Shipping Corp. of India (SCI).

Other companies in which the government will sell stakes include Container Corp, of India Ltd (Concor), THDC India Ltd (THDC) and North Eastern Electric Power Corp. Ltd (Neepco). As part of a consolidation exercise of the state run hydropower firms, the GoI will sell its 74.23% and 100% stake in THDC and Neepco respectively along with management control to state run India’s largest power generation company-NTPC Ltd.

In 2014, a concept paper on the possibility of a merger of all state-owned hydroelectric companies recommended a phased approach, starting with North Eastern Electric Power Corp Ltd (Neepco) to be combined with NHPC Ltd, followed by THDC India Ltd and SJVN Ltd.

Also, the government will sell its 63.75% and 30.8% stake share in Shipping Corporation of India and Container Corporation of India respectively along with management control to a strategic buyer.

In the case of BPCL, the government will sell its 53.29% stake to a strategic buyer, ceding management control, finance minister Nirmala Sitharaman told reporters after the CCEA meeting on Wednesday. The proposed sale will, however, exclude the strategic Numaligarh Refinery Ltd (NRL) in Assam, which will be later sold to another state-run firm, given India’s need to secure fuel supplies for security forces in the north-east.

“A carve-out has been made of NRL,” she said. “It will be moved out of BPCL and will be retained by a government-owned firm, before disinvestment.”

A strategic investor will get access to BPCL’s refining capacity of 37 million tonnes per annum and around 15,000 retail outlets in the world’s third largest oil consuming nation. The company reported a profit of 7,132 crore on sales of 3.37 trillion in the year ended 31 March.

As part of a consolidation of state-run hydropower companies, the government will sell its 74.23% and 100% stake in THDC and Neepco respectively to government-controlled NTPC Ltd, India’s largest power producer.

Selling these assets will be key to the government meeting its ambitious target of generating 1.05 trillion from asset sales in the current fiscal year. The government’s decision to slash corporate taxes to boost the economy and attract investments has left Sitharaman struggling to meet the year’s fiscal deficit target of 3.3% despite receiving a 1.76 trillion windfall from the Reserve Bank of India.

Sale of assets will be key to the govt meeting its ambitious target of generating  <span class='webrupee'>₹</span>1.05 trillion from disinvestment
Sale of assets will be key to the govt meeting its ambitious target of generating 1.05 trillion from disinvestment

The CCEA also approved the sale of the government’s 63.75% and 30.8% stake in SCI and Concor respectively, along with management control, to a strategic buyer.

The aggressive asset sales plan comes amid Asia’s third-largest economy growing at the slowest pace in six years in the June quarter.

The decision on BPCL comes in the backdrop of the government also opening up the fuel retail market by lowering the entry barrier and allowing all companies with a net worth of 250 crore to set up outlets. The earlier rules required prior investments of 2,000 crore for companies to enter the fuel retail segment, which many believed, favoured state-run fuel retailers, including Indian Oil Corp. Ltd, BPCL and Hindustan Petroleum Corp. Ltd. Private sector oil companies, such as Reliance Industries Ltd, Essar Oil Ltd and Shell India, have some presence in the fuel retailing space that is dominated by the state-run firms.

In recent times, the Indian energy space has been witnessing growing interest from investors. While Adani Gas Ltd and Total SA plan to bld a gas fuel retail network of 1,500 outlets along highways, the world’s largest oil producer, Saudi Arabian Oil Co. (Saudi Aramco), is also considering entering the fuel retailing market in India. That apart, global energy majors, such as Rosneft, Kuwait Petroleum, ExxonMobil, Shell and Abu Dhabi National Oil Co. are planning to acquire the government’s stake in BPCL.

State-run Oil and Natural Gas Corp. (ONGC), which accounts for 73% of India’s oil and gas output, acquired the government’s stake in HPCL for 36,915 crore last year.

The government has already decided to privatize national carrier Air India and shut down state-owned trading companies in a signal that it will exit companies in non-strategic sectors.

Also, the government has decided to merge its twin state-run telecom companies—Bharat Sanchar Nigam Ltd and Mahanagar Telecom Nigam Ltd—in an effort to turn around the money-losing firms.

The strategy would also see the government look at ways to exploit the vast land assets of the two companies. In March this year, Power Finance Corp Ltd (PFC) completed the purchase of a controlling stake in state-run peer REC Ltd to create an $80-billion lending giant by assets. PFC paid 14,500 crore to the Union government to buy a 52.63% stake in REC.

The Cabinet also approved the food ministry’s decision to import 120,000 tonnes of onions to improve the key kitchen staple’s domestic availability.


Elephant Corridor Near Kaziranga Remains Blocked Even After SC Order to Remove

by Sangeeta Barooah Pisharoty

New Delhi: An elephant corridor near Kaziranga National Park, Assam, continues to be blocked by a concrete wall erected by Numaligarh Refinery Limited (NRL), an oil company in the state’s Golaghat district. This is even after the Supreme Court set aside its civil appeal defending the action.

NRL is a Miniratna public-sector enterprise under the Ministry of Petroleum and Natural Gas. It was inaugurated in 1999 by then Prime Minister Atal Bihari Vajpayee. More recently, Prime Minister Narendra Modi laid the foundation stone for its biodiesel plant.

On January 18, a bench of the apex court comprising Justices D.Y. Chandrachud and M.R. Shah dismissed the NRL’s plea because the 2.2-km-long boundary wall is within 20 km of Kaziranga. More importantly, the area where the wall stands is also part of the Deopahar Reserve Forest. This forest connects Kaziranga to the Karbi Anglong hills and has been a traditional animal corridor.

Acknowledging its strategic importance to elephants in the area, the Assam government on January 19 notified Deopahar as a reserve forest under Section 17 of the Assam Forest Regulation 1891.

Also read: Oil and ‘Outsiders’: Outrage in Assam Over the BJP’s Decision to Privatise Oil Fields

When the NRL build the wall in 2011, Deopahar had been a proposed reserve forest. Then again, the wall at the time was within a ‘no development zone’ notified by the Ministry of Forest and Environment in 1996.

The NRL boundary wall appropriates an area that the company wants to use to extend its township, which includes a golf course. It submitted to the court that the wall had built on land it possessed and that it didn’t fall within the elephant corridor. However, dismissing the plea, the court reportedly contended, “Elephants have the first right to the forest. Elephants do not go to office in a designated route. We can’t encroach upon the elephants’ areas.”

On August 24, 2016, the National Green Tribunal (NGT) directed the district administration to demolish the wall. This order was in response to a petition filed by Rohit Choudhury, a local environmental activist, in August 2015. Choudhury had been motivated by an incident in which an elephant reportedly sustained a fatal haemorrhage after bashing its head against the wall trying to break it.

The NRL then filed a review application with the NGT before the one month compliance period ended, which the tribunal dismissed on August 3, 2018. It also asked the district administration to follow its earlier order within a month and the NRL to cough up Rs 25 lakh to help afforest the area.

While the NGT was hearing the case, a short YouTube video captured by a local youth showing a herd of elephants trying to push themselves against the controversial wall created a sensation among the green activists and concerned citizens.

But there was an issue in between. According to Choudhury, the district administration decided to demolish 289 metres of the wall in March 2018 – before the NGT had responded to the review petition.

The decision to demolish only a part of the wall was made on the basis of a survey report compiled by a local circle officer and an official of the forest department. It had then been submitted to the district commissioner (at the time). According to the report, the NRL had encroached upon only one hectare of land; it claimed that the rest belonged to the company.

N.K. Vasu, the state’s principal chief conservator of forests, had told this correspondent then, “It has nothing to do with the [August 2016] NGT order. The case is still on and it is sub-judice.”

However, soon after, the state government filed an affidavit with the NGT that it had complied with the order.

The NRL used this survey report to back up its appeal with the Supreme Court, claiming that it legally owned most of the land. However, the court wasn’t interested.

An appeal to the Supreme Court is the only legal way to challenge an NGT order. Before doing so, the NRL also applied for and received a stay from the Gauhati high court. Though the high court didn’t have jurisdiction under the NGT Act to stay a tribunal order, it did so on the back of a letter by the then district commissioner, which said that the administration would demolish the wall.

Thereafter, the law required the NRL to approach the apex court. However, though the court has upheld the NGT order, oil refinery authorities are citing the high court’s order seeking status quo in the matter and to not to proceed with the demolition.

After the Supreme Court order, Jayashree Naiding, the divisional forest officer, wrote a letter to the NRL. In reply, the chief general manager (human resources) of the NRL wrote to Naiding on February 14:

This is to inform you that the matter is sub-judice in the Honourable Gauhati High Court and has been directed to maintain status quo as regard to the remaining hectares of land as on today till the returnable date. The said status quo is in operation till date. Therefore, you are requested to comply with the aforesaid orders of the Honourable Gauhati High Court and maintain the same.

“I am a bit perplexed by the NRL’s argument,” Choudhury said, “as the SC order of January 18 clearly stated that pending appeals, if any, shall stand disposed of.”

Naiding told The Wire that she had “forwarded the response of the NRL to the higher officials” of her department and that she is “awaiting further advice on the issue”. She added that she had also communicated [the matter] to the district commissioner” – which is currently Dhiren Hazarika.

Hazarika has also written a letter to the NRL asking them to comply with the order. “I am new to the place and am studying the case,” he told The Wire.

Also read: Oil Exploring Survey Near Kaziranga Cancelled After Locals Chase Away Firm

However, he also alleged that the NRL had concealed the fact that it had received a stay order from the Gauhati high court in its appeal to the Supreme Court. “So I am writing a letter to the advocate general of the state for further advice on how to proceed legally in this case.”

Meanwhile, Choudhury has written to Alok Kumar,  the state’s chief secretary, about how NRL has failed to comply with the Supreme Court order even after a month had passed. He said he had sent copies of the letter to the local administration and the registrar of the Supreme Court.

Dated February 20, the letter reads:

Non-demolition of the entire boundary wall will attract penalty under Sections 26, 27 and 28 of the National Green Tribunal Act, 2010. It will also be contempt of the honourable Supreme Court’s order. Therefore, it is stated that the illegal boundary wall constructed by NRL in the Deopahar forest of ‘No Development Zone’ be demolished immediately. In case no action is taken urgently to demolish the said boundary wall, then the undersigned will be constrained to take legal recourse as mandated by law against the Chief Secretary [and other officers of the district administration].

As of March 4, he hadn’t heard back from the state administration.

First publishe in The Wire

Sangeeta Barooah Pisharoty
S P Barooah