New Delhi: As government pursues its divestment target of Rs 80,000 crore in the current fiscal, the deck has been cleared for the strategic disinvestment of the government's entire stake in the Dredging Corporation of India Limited (DCIL) to a consortium of four ports — Vishakhapatnam Port Trust, Paradeep Port Trust, Jawahar Lal Nehru Port Trust and Kandla Port Trust. On November 8, a statement released by the government said that the Cabinet Committee on Economic Affairs has given an 'in-principle' approval for the same.
The government holds 73.44 percent shares in DCIL valued at a little over Rs 700 crore as per current market prices of the share.
"The approval will further facilitate the linkage of dredging activities with the ports, keeping in view the role of the DCIL in the expansion of dredging activity in the country as well as potential scope for diversification of ports into third-party dredging," the government said in the press release.
It added that the co-sharing of facilities between the company as well as ports will 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," it said.
The strategic disinvestment of DCIL shall be undertaken after conducting due diligence exercise by both the entities with the help of advisors appointed for the transaction.
The Union Cabinet also approved the filling of Padur Strategic Petroleum Reserves (SPR) at Padur, Karnataka, by foreign oil companies.
"The SPR facility at Padur is an underground rock cavern with a total capacity of 2.5 million metric tonnes (MMT) having four compartments of 0.625 MMT each. The filling of the SPR under PPP model is being undertaken to reduce budgetary support of Government of India," an official statement said. The government expects to save Rs 10,000 crore by this move, Electronics and IT Minister Ravi Shankar Prasad said, adding that "energy security is important for every country… so we maintain strategic petroleum reserve."
India has constructed and commissioned underground rock caverns for storage of total 5.33 MMT of crude oil at three locations — Vishakhapatnam (1.33 MMT), Mangaluru (1.5 MMT) and Padur (2.5 MMT).