Here’s why BPCL EoI is taking so long to be out

New Delhi: Even though DIPAM Secretary Tuhin Kanta Pandey said at the beginning of February that the EoI, or the Expression of Interest, for the sale of BPCL, will be out in a few days, the industry is still waiting to hear how long it is going to be. According to a senior source in the know of the matter, the BPCL EoI is stuck at the Alternate Mechanism-level with the ministers.

'Draft BPCL EoI has been sent forward by the bureaucrats'

The source said, "All the work that was to be done by bureaucrats on the BPCL EoI has been done. And now, it is stuck at the ministers' level, with the Alternate Mechanism." He added that previously the BPCL EoI was expected to be out by January-end. However, the January deadline got extended to February. And now, the document is awaiting clearance from the Alternate Mechanism for BPCL, which is the last hurdle in the clearance process. "As soon as the document is approved by the mechanism, it will be out in the papers the next day," the source said. He added that the roadshows for BPCL sale have received a substantial response from investors and the government wants to make sure that the EoI is in line with their expectations.

What is an Alternate Mechanism?

The Alternative Mechanism is a group of ministers tasked with taking decisions related to the disinvestment of various PSUs. The mechanism for BPCL is headed by Finance minister Nirmala Sitharaman, Minister of Road Transport and Highways Nitin Gadkari and Minister for Petroleum and Natural Gas Dharmendra Pradhan.

The backdrop

The government announced the decision to privatise BPCL in November 2019. It is looking to raise a big chunk of its disinvestment target for FY2020-21 by offloading a 53.29 percent stake in the state-run fuel retailer. The Economic Survey 2019-20 had said that the government's decision to divest the state-run company had resulted in an increase of Rs 33,000 crore in the value of shareholders' equity in the company as compared to HPCL.

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