As bidders exit, govt scraps BPCL disinvestment for now

NEW DELHI: The government has decided to cancel the current disinvestment process of staterun Bharat Petroleum Corporation Ltd (BPCL) because of a single bidder situation and the Union finance ministry will reinitiate the bidding process again at a later date, a top functionary said.

The department of investment and public asset management (Dipam) confirmed the decision, citing the decision by several of companies that had expressed to pull out due to the economic uncertainty created by successive Covid-19 waves and geopolitical tensions.

“In view of this… Government of India has decided to call off the present EOI (expression of interest) process for strategic disinvestment of BPCL and the Eois received from QIPS (qualified interested parties) shall stand cancelled,” the statement said.

The decision appears linked to the fact that only one company remained in the fray. A top official further explained the decision. “We do not want a situation like Vizhinjam port project that was awarded to a single bidder during the Congress regime [in Kerala],” the person said asking not to be named. The person was referring to a report by the Comptroller and Auditor General of India (CAG), which pointed out that the project was awarded to the “lone” bidder” in 2015.

The person referred to Union finance minister Nirmala Sitharaman’s statement in Tamil in the Lok Sabha on this matter on December 13, 2021: “You can issue a global tender, but if there is only a single bidder, the bid is cancelled. You don’t call them (the single bidder) and give it to them,” the FM’S office tweeted the same that day.

Speaking on this matter in the house that day, Sitharaman said that even in a case where global tender was issued, but only single bid was received, then the bid is cancelled. She was replying a debate on the NDPS (Amendment) Bill, 2021 in the Lok Sabha.

A finance ministry official on condition of anonymity said what FM had explained the correct procedure for global tendering process and award of projects in the Parliament that day and the same is true even now. “Hence, retendering is the only correct way for disinvestment of BPCL. Yes, the government may consider new market situations and other sector-related factors before inviting bids again in an appropriate time,” the official added.

The government in March 2020 invited Expressions of Interest (Eois) through global tender from bidders to sell its entire 52.98% equity stake in BPCL. While initially three private firms participated in the bidding process, but two of them eventually backed out on various grounds.

According to the Dipam statement, “the majority of QIPS have expressed their inability to continue in the current process of disinvestment of BPCL”.