Strategic Disinvestment Current Affairs - 2019
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Cabinet Committee on Economic Affairs (CCEA) has approved strategic disinvestment of 100% Government of India’s shares in Dredging Corporation of India Limited (DCIL) to consortium of four ports. Presently, Central Government holds 73.44% shares in DCIL. The consortium of four ports consists of Vishakhapatnam Port Trust (Andhra Pradesh), Paradeep Port Trust (Odisha), Jawahar Lal Nehru Port Trust (Maharashtra) and Kandla Port Trust (Gujarat). The government’s divestment target for fiscal 2018-19 was Rs 80,000 crore and so far it has garnered over Rs 15,000 crore from PSU stake sales.
Strategic sale of DCIL will further facilitate linkage of dredging activities with ports, keeping in view the role of DCIL in expansion of dredging activity in the country as well as potential scope for diversification of ports into third party dredging. The co-sharing of facilities between company as well as ports shall lead to savings for ports. This will also further provide opportunities for larger investment in DCIL as integration with ports shall help ineffective vertical linkage in value chain.
Dredging Corporation of India Limited (DCIL)
It is miniratna public sector unit (PSU) engaged in the business of dredging. It does dredging for Indian seaports exclusively. It is involved in capital dredging, beach nourishment, and land reclamation. It was established in March 1976 and is headquartered in Visakhapatnam, Andhra Pradesh. It reports to the Ministry of Shipping. Almost all maintenance dredging in Indian seaports is carried out by DCI. It also occasionally dredges at foreign seaports in countries such as Sri Lanka, Taiwan and Dubai.
The Union Government (Department of Investment and Public Asset Management) has approved a 100% disinvestment through strategic sale along with transfer of management control of Central Electronics Ltd. (CEL).
CEL was incorporated as CPSE in 1974 under the administrative control of Ministry of Science and Technology. It is wholly owned by the government and has a net worth of Rs. 50.34 crore as on March 2017.
The government is planning to engage an advisor from a consulting firm, investment banker or financial institution or merchant banker for providing advisory services and managing the disinvestment process.
The strategic disinvestment of CEL will take place through new alternative mechanism which was approved by the cabinet committee on economic affairs (CCEA) in August 2017. The alternative mechanism was approved for pursuing the government’s strategic sale disinvestment programme. This mechanism comprise of finance minister, minister for road transport & highways and the minister for the concerned administrative ministry.
In Strategic disinvestment, significant proportion of a Public Sector Unit’s (PSU) share and the management control goes to a private sector which is as strategic partner. It is different from the ordinary disinvestment in which management of PSU is retained with Government.