The DPE has thrown a curveball at the ministry’s plan to give more autonomy to HPCL by giving it a Maharatna status by citing procedures and antecedents
New Delhi: The Department of Public Enterprises (DPE) and the Ministry of Petroleum and Natural Gas (MoP&NG) seem to be at loggerheads with each other over a move to grant Maharatna status to state-run Hindustan Petroleum Corporation Limited (HPCL), an exchange of letters between the two has shown. The DPE has thrown a curveball at the ministry’s plan to give more autonomy to HPCL by citing procedures and antecedents. The DPE has said that HPCL’s categorisation cannot be upgraded without getting approval from its promoter, Oil and Natural Gas Corp (ONGC).
In a letter addressed to the petroleum ministry on February 12, the DPE asked it to get ONGC’s consent before resubmitting a revised proposal on giving Maharatna status to HPCL. “The views/approval of ONGC, holding company of HPCL, on the proposal for grant of Maharatna status to HPCL is not available in the proposal,” said the DPE in the letter.
‘No previous instance of granting Maharatna tag to a subsidiary’
In the letter, the DPE had asked the ministry to give reasons as to why it was considering an exalted status for HPCL, despite the fact that ONGC was already a Maharatna company.
“There is no previous instance of grant of Maharatna status to a subsidiary Central public sector enterprise. The Ministry is requested to furnish the reasons for proposing grant of Maharatna status to HPCL, now a subsidiary of ONGC which is itself a Maharatna company,” the letter said.
Bones of contention
According to the DPE, the revised proposal should be based on HPCL’s performance for the fiscal 2018-19 rather than on the basis of fiscal 2017-18. “Since more than 10 months of the current financial year 2018-19 are already over, it would be appropriate that the performance of HPCL for 2018-19 is taken into consideration while processing this proposal,” the DPE said in the letter.
Pradhan responds to DPE
Despite the concerns raised by the DPE, Pradhan has continued to rally behind HPCL. In a letter addressed to the DPE some days later, Pradhan said, ““… HPCL meets all the qualification criteria as defined for Maharatna status and there is nothing in the guidelines which prohibits grant of Maharatna status to them. MoPNG has already recommended the proposal to DPE after approval of the competent authority.” He also issued a directive to Secretary MM Kutty, asking him to immediately provide all inputs to the DPE for speedy approval.
“I suggest that all the necessary clarifications be provided to DPE immediately, keeping in view the background, the matter may be actively pursued with DPE so that the process of grant of Maharatna to HPCL can be completed expeditiously,” Pradhan said in the letter.
Not all has been well between ONGC and HPCL
Last year, ONGC bought the Centre’s 51 percent stake in HPCL for Rs 36,915 crore. However, despite the deal, HPCL has so far refused to recognise ONGC as a promoter. HPCL continues to list the ‘President of India’ as its promoter with ‘zero’ shareholding, while ONGC is listed as a ‘public shareholder’ owning 51.11 percent share.