Centre mulls part-stake sale of DCI, other PSUs

Visakhapatnam: The Narendra Modi government appears to have watered down its stand on strategic sale of Dredging Corporation of India (DCI) and a few other PSUs, on the lines of Air India, keeping in mind the next Parliamentary polls.

Current indications are that the government, instead of selling its entire stake in DCI and the other companies to private players, will opt for a part-stake sale, so that it continues to have control in these entities.

DCI is engaged in dredging of ports so as to maintain the required depth of water for different ships to berth, besides deepening inland waterways. 

The government has about 73 per cent holding in DCI.  “It appears that the government now wants to divest about 20 per cent equity to the private sector, so that it continues to hold a controlling stake of over 51 per cent,” a senior official of the company, who did not want to be named, told this correspondent.

Last month, after the Air India decision, the government even prepared a Cabinet note for a strategic sale of DCI, along with other state-owned entities like HLL Lifecare, Indian Medicines, Kamarajar Port and Karnataka Antibiotics.  

In fact, the bidding process for DCI’s outright sale was to start in August/September. An outright sale of DCI, as was planned, would have fetched about Rs 1,400 crore to the exchequer.

There was an outcry from DCI employees and officers, who feared that a complete takeover of the miniratna company by a private operator would bruise the interests of the firm.

“The softening of the strategic sale is only from the election point of view.  If the government returns to power, it will again go in for a strategic sale,” a representative of the DCI employees union said.

Now, with the softening of stand, the company expects to get a quicker clearance from the ministry for the purchase of a high-capacity trailer suction dredger.  Although it had submitted the proposal some time ago, the ministry has kept it in abeyance in view of the proposed strategic sale.

While its existing dredgers have a capacity of between 4,500 and 7.500 cub mts, the one it plans to purchase will have a capacity of 10,000 to 12,000 cub mts, estimated to cost about Rs 600 crore. 

In the long run, it proposed to acquire special dredgers and equipment for rock dredging, which yields a margin of 20-25 per cent, as against the 5-10 per cent in maintenance dredging which DCI is currently doing.