CCEA approves sale of stake in 5 mining PSUs
08 January 2020
The union cabinet has approved in principle divestment of government equity stake in Minerals and Metals Trading Corporation Limited (MMTC), National Mineral Development Corporation (NMDC), MECON, Bharat Heavy Electricals Ltd and Neelachal Ispat Nigam Limited, which is a joint venture with two Odisha state undertakings.
The Cabinet Committee on Economic Affairs (CCEA) at its meeting chaired by Prime Minister Narendra Modi gave its 'in principle' approval for strategic divestment of equity shareholding in the five public sector companies.
The government plans to sell up to 49.78 per cent share of MMTC, 10.10 per cent of NMDC, 0.68 per cent each of MECON and BHEL, 12 per cent stake in Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL) and a 20.47 per cent stake in Odisha Mining Corporation’s Neelachal Ispat Nigam Limited (NINL) to a strategic buyer.
Buyers will be identified through a two-stage auction procedure. NINL is a Joint venture, in which four CPSEs, namely MMTC, NMDC, BHEL and MECON and 2 State PSUs of Odisha government, namely IPICOL and OMC are shareholders.
The proposed strategic disinvestment of NINL would unlock resources to be used to finance the social sector/developmental programmes of the government benefiting the public. It is also expected that the successful strategic buyer may bring in new management/technology/investment for the growth of the company and may use innovative methods for the development of the business operations of the company, which may generate more employment opportunities.
The CCEA also today granted approval to the North East Gas Grid project of Indradhanush Gas Grid Limited with viability gap funding/capital grant at 60 per cent of the estimated cost of Rs9,265 crore (including interest during construction). Quantum of VGF would be capped at 60 per cent of estimated project cost and would not be linked with upward capital cost variation.
MoPNG shall identify milestones for major activities for this project and link the same for releases of capital grant of the project.
For effective monitoring of the project implementation, a committee comprising of officials from ministry of petroleum and natural gas, department of expenditure, ministry of development of north east region, ministry of environment, forest and climate change, and department of fertilizers, may be formed, which would periodically review the progress in implementation of the project and take steps to smoothen out any issues in execution.
Total length of pipeline is 1,656 km and tentative project cost is Rs9,265 crore. As per the plan, gas pipeline grid would be developed in the eight states of the north-eastern region, ie, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura.
The Capital Grant will provide natural gas supplies to various types of consumers viz. Industrial, PNG (Domestic), CNG (Transport) etc and would immensely help in substituting the liquid fuels. The pipeline grid would ensure reliability and uninterrupted natural gas supplies to the consumers which otherwise gets severely affected due to various reasons in this part of the country.
Availability of Natural gas across the region is expected to boost industrial growth without impacting the environment and would offer better quality of life to the people in general due to use of cleaner and green fuel.