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India to invite bids for Balco next week

The Indian government will call for bids within a week for the strategic sale of a 51 per cent stake in Bharat Aluminium Company, the Financial Express daily said on Monday.

India's Department of Divestment has sorted out all the issues relating to the sale of the government stake, paving the way for profit-making Balco to emerge as the first state-run company to be privatised this fiscal, the paper said.

The government expects to complete the privatisation of the state-run aluminium firm in the current financial year, the paper said, quoting unidentified sources.

It said the bidders had completed due diligence and submitted their comments on the shareholders' agreement.

It said the Alcoa-Hindalco consortium and Sterlite were the leading bidders. Alcoa Inc is the world's largest aluminium maker, while Hindalco Industries is India's biggest aluminium producer.

Last week, the government invited expressions of interest from potential bidders for a 33.6 per cent stake sale in state-run petroleum marketing company IBP.

It is also pushing to divest its stake in domestic carrier Indian Airlines by the end of the fiscal year in order to shore up its faltering privatisation programme.

The government has been unable to shed any stake in state-run firms so far this financial year despite drawing up a strategy to aggressively push its privatisation programme.

Finance Minister Yashwant Sinha last week told reporters the government would fall short of its divestment or privatisation target of Rs 100 billion in the fiscal year to March 2001.

The government's privatisation plan has met with very little success due to stiff opposition from trade unions, differences on the issue within the ruling coalition, and lack of overall political consensus.

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