The government has decided to sell its stake in the Hindustan Petroleum Corporation Ltd to a private company and privatise the Bharat Petroleum Corporation Ltd through a public issue, Divestment Minister Arun Shourie told the Lok Sabha on Monday.

Following is the text of a statement made by Shourie: 

Hon'ble Sir,

As you and the Hon'ble Members are aware, the government has been implementing successfully an intensely considered and well-defined programme of divestment in central public sector enterprises. The government has, however, been receiving from time to time several significant suggestions from the Hon'ble Members of this House as also from experts and others.

With you kind permission and through you, I would like to inform the House that the government has, after detailed deliberations on the various views expressed and suggestions made, decided in a meeting held on the 6^th December 2002 to fine-tune the divestment policy and programme by adopting the following approach:

The main objective of divestment is to put national resources and assets to optimal use and in particular to unleash the productive potential inherent in our public sector enterprises. The policy of divestment specifically aims at:

• Modernization and upgradation of public sector enterprises;
• Creation of new assets;
• Generation of employment; and
• Retiring of public debt.

Government would continue to ensure that divestment does not result in alienation of national assets, which, through the process of divestments, remain where they are. It will also ensure that divestment does not result in private monopolies.

In order to provide complete visibility to the government's continued commitment of utilization of divestments proceeds for social and infrastructure sectors, the government would set up a Divestment Proceeds Fund. This fund will be used for financing fresh employment opportunities and investment, and for retirement of public debt.

For the divestments of natural asset companies, the ministry of finance and the ministry of divestment will work out guidelines.

The ministry of finance will also prepare for consideration of the Cabinet Committee on Divestment a paper on the feasibility and modalities of setting up an asset management company to hold, manage and dispose the residual holding of the government in the companies in which government equity has been divested to a strategic partner.

With these objectives as the guiding principle, the government has taken the following specific decisions:

• To divest through sale of shares to the public in Bharat Petroleum Corporation Limited;
• To divest in Hindustan Petroleum Corporation Limited through strategic sale.
• To allot, in both cases of BPCL and HPCL, a specific percentage of shares to the employees of the two companies at a concessional price.