BPCL sale: The true value of BPCL is Rs 9 lakh cr, says PSU officers’ federation

New Delhi: In a first-ever press conference, two federations representing officers of Maharatna PSUs have claimed that the valuation estimates doing the rounds for BPCL sale is grossly undervalued, and it's true value is Rs 9 lakh crore. "Our comprehensive evaluation of the assets of BPCL reveals true worth of BPCL to be Rs 9 lakh crore. The valuation figure has been arrived at using one of the methods listed by DIPAM in its RFP for engaging an asset valuer… replacement valuation," said Mukul Kumar, convenor of Federation of Oil PSU Officers (FOPO) and Confederation of Maharatna Companies (COMCO), on Monday.

Although no official figures have been released so far, reports have claimed that the government is expected to raise Rs 1.06 lakh crore from BPCL sale, based on market capitalisation. The term refers to the value of a company that is traded on the stock market, calculated by multiplying the total number of shares by the present share price.

'BPCL sale is like killing the golden goose'

The two federations, who claim to represent 70,000 officers from blue-chip public sector companies, opposed BPCL privatisation, saying that it was like killing the goose that lays golden eggs. Kumar said that the two federations were not opposed to the idea of privatisation, but privatising a PSU that pays more than Rs 17,000 crore as dividend to the Central government is not in the interest of common people and the sector itself. "Ensure a level playing field and let them (private sector) come in and set up their own infrastructure. We don't have any problem in competing with them. We are just saying that they should not be handed over the company's assets, which have been set up over years, on a platter," Kumar said.

On the issue of social welfare

Citing the example of the government's flagship Ujjwala, PAHAL and Swachha Bharat schemes, Alok K Roy, president of Indian Oil officers' association, said that these schemes have been implemented by the state-run oil marketing companies, keeping in mind the idea of social welfare. "Will a private sector company go to far-flung areas that are not profitable and implement these schemes?" Kumar said privatising BPCL would deal a blow to the government's social commitment as the new owner is not likely to follow the policy of providing reservation to SC/ST, OBCs and economically weaker classes and not service remote and not-so-profitable areas.

'No plan to strike as of now'

Commenting on the future plan of action, the FOPO convenor said that there's no plan to go on strike as of now, but the federations will chart the future course of action in due time. For now, the federations will submit a presentation to Prime Minister Narendra Modi, stating the facts of the case. "We will also buy some time. So that we can arrange some alternative source of funding. Because the government's purpose behind selling off the Maharatna PSU seems to be to bridge its fiscal deficit. So, we'll try to figure that out," said Kumar.

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The backdrop

The Cabinet Committee on Economic Affairs (CCEA) gave a nod to the privatisation of BPCL on November 20, along with two other PSUs — Shipping Corporation of India (SCI) and Container Corporation of India. In a written response submitted in the Lok Sabha, Minister of State (MoS) for Finance Anurag Singh Thakur said that the profitability is not a criteria for the government to decide if a PSU should be disinvested or not.

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