Dredg­ing Corp stake sale, oil stor­age at Padur get govt nod

The govern­ment tar­gets Rs 80,000 crore from PSU dis­in­vest­ments, 87 days’ crude stor­age fa­cil­ity against any sup­ply dis­rup­tion

Financial Chronicle - - PLAN, POLICY - FC BUREAU

THE cabi­net on Thurs­day ap­proved strate­gic sale of govern­ment stake in Dredg­ing Cor­po­ra­tion of In­dia (DCIL) to con­sor­tium of four ports. The govern­ment cur­rently holds 73.44 per cent in the com­pany.

“The cabi­net com­mit­tee on eco­nomic af­fairs (CCEA) has given in prin­ci­ple ap­proval for strate­gic dis­in­vest­ment of 100 per cent govern­ment share in DCIL to con­sor­tium of 4 ports, namely Vishakha­p­at­nam Port Trust, Pa­radeep Port Trust, Jawa­har­lal Nehru Port Trust and Kandla Port Trust,” an of­fi­cial tweet said.

The ap­proval will fur­ther fa­cil­i­tate the link­age of dredg­ing ac­tiv­i­ties with the ports, keep­ing in view the role of DCIL in ex­pan­sion of dredg­ing ac­tiv­ity in the coun­try as well as po­ten­tial diver­si­fi­ca­tion of ports into third party dredg­ing, the tweet said af­ter the meet­ing of CCEA chaired by prime min­is­ter Naren­dra Modi.

“The co-shar­ing of fa­cil­i­ties be­tween the com­pany as well as ports shall lead to sav­ings for ports. This would fur­ther pro­vide op­por­tu­ni­ties for larger in­vest­ment in DCIL as in­te­gra­tion with ports shall help in ef­fec­tive ver­ti­cal link­age in the value chain,” the tweet added.

The govern­ment has bud­geted to raise Rs 80,000 crore from pub­lic sec­tor (PSU) dis­in­vest­ment. So far this fi­nan­cial year, the govern­ment has mopped up over Rs 15,000 crore from PSU stake sale.

The cabi­net also ap­proved fill­ing up of the un­der­ground strate­gic oil stor­age at Padur in Kar­nataka by for­eign oil com­pa­nies, who could use it as stor­age for trad­ing in the re­gion but will have to part with the oil in case of an emer­gency in In­dia, said law and IT min­is­ter Ravi Shankar Prasad af­ter the cabi­net meet­ing.

Padur stor­age has four com­part­ments of 0.625 mil­lion tonnes each.

In­dia has build 5.33 mil­lion tonnes of emer­gency stor­age in un­der­ground rock cav­erns in Man­ga­lore and Padur in Kar­nataka and Visakha­p­at­nam in Andhra Pradesh. While a third of the Visakha­p­at­nam Hin­dus­tan Petroleum Corp and Abu Dhabi Na­tional Oil Co have hired fa­cil­ity and the govern­ment has filled the stor­age at Man­ga­lore. The 2.5 mil­lion tonnes Padur fa­cil­ity re­mains empty.

“The fill­ing of the strate­gic petroleum re­serves un­der pub­lic-pri­vate-part­ner­ship model is be­ing un­der­taken to re­duce bud­getary sup­port of the govern­ment,” an of­fi­cial state­ment is­sued af­ter the meet­ing said.

In­dian Strate­gic Petroleum Re­serves (ISPRL) has con­structed and com­mis­sioned un­der­ground rock cav­erns for stor­age of to­tal 5.33 mil­lion tonnes of crude oil at three lo­ca­tions – Vishakha­p­at­nam (1.33 mil­lion tonnes), Man­ga­lore (1.5 mil­lion tonnes) and Padur (2.5 mil­lion tonnes).

The to­tal 5.33 mil­lion tonnes ca­pac­ity un­der phase-I of the SPR pro­gramme is cur­rently es­ti­mated to sup­ply about 9.5 days of In­dia’s crude re­quire­ment.

Prasad said the stor­ing of oil by for­eign firms would help save the govern­ment Rs 10,000 crore in fill­ing cost.

In the phase-II, In­dia plans to build an ad­di­tional 6.5 mil­lion tonnes fa­cil­i­ties at Chandikhol in Odisha and Padur in Kar­nataka, which is ex­pected to aug­ment the emer­gency cover against any sup­ply dis­rup­tion by an­other 11.5 days.

Oil traders and pro­duc­ers could use the Padur stor­age to stock their oil and sell it to re­finer­ies in the re­gion on com­mer­cial terms. In­dia, which meets 83 per cent of its oil needs through im­ports, will have the right of first re­fusal to buy the crude oil stored the fa­cil­i­ties in case of an emer­gency, he said.

In­dian re­fin­ers main­tain 65 days of crude stor­age, and when added to the stor­age planned and achieved by ISPRL, take the In­dian crude stor­age tally to about 87 days. This is very close to the stor­age of 90 days man­dated by IEA for mem­ber coun­tries.

In an­other sig­nif­i­cant de­ci­sion, the cabi­net ap­proved a pro­posal to man­age Ahmed­abad, Jaipur, Luc­know and three other air­ports un­der the pub­lic pri­vate part­ner­ship (PPP) model. The three other aero­dromes are those at Guwahati, Thiru­vanan­tha­pu­ram and Man­galuru.

The op­er­a­tion, man­age­ment and devel­op­ment of all these aero­dromes, owned by the Air­ports Au­thor­ity of In­dia, would be done un­der PPP, an of­fi­cial tweet said.

This would be done through the pub­lic pri­vate part­ner­ship ap­praisal com­mit­tee (PPPAC). Any is­sue that is be­yond the scope of PPPAC would be dealt with by an em­pow­ered group of sec­re­taries, the tweet said.

The Niti Aayog chief ex­ec­u­tive of­fi­cer would head the group. Sec­re­taries of the civil avi­a­tion min­istry, the depart­ment of eco­nomic af­fairs and the depart­ment of ex­pen­di­ture would be part of the group.

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