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Chhattisgarh offers to buy into BALCO

The chief minister of Chhattisgarh has said that his government is ready to buy 40 per cent of Bharat Aluminium Company Ltd (BALCO) rather than see the country's third-largest smelter privatised through a trade sale.

India hopes to complete the sale of a 51 per cent stake by March.

Bidders include Sterlite Industries Ltd, a copper and aluminium producer, and a combination of Alcoa Inc, the world's largest aluminium maker and Hindalco Industries Ltd, the country's biggest aluminium producer.

But trade unions in the minerals and timber-rich state have been joined by the local government in opposing the federal government's plan to sell 51 per cent of the aluminium maker.

"We will not allow BALCO to go into the private hands and move a resolution against the sell-off in the state cabinet," Chhattisgarh's Chief Minister Ajit Jogi said.

"State Industries Minister Mahendra Karma has already written a letter to Divestment Minister Arun Shourie in this context," he said.

In the letter he quoted Karma as saying if the central government wanted to go ahead with the divestment, "at least 40 per cent equity be handed over to the Chhattisgarh government, 20 per cent to the company employees and the remaining to the financial institutions (FIs)".

India invited bids last June to sell 51 per cent of the company. Three shortlisted bidders submitted price bids last week after a first round of technical qualification.

And BALCO said on Friday that its new strategic shareholder will have to pump in Rs 20 billion to modernise the firm's technology.

Chhattisgarh was carved out from the southern part of Madhya Pradesh last November and Jogi belongs to the opposition Congress party, which has reservations about the "big-ticket" privatisation process set in motion by Prime Minister Atal Behari Vajpayee's Bharatiya Janata Party (BJP)-led coalition government.

The Indian National Trade Union Congress (INTUC), a labour federation considered close to the Congress party, has accused the government of selling off BALCO "for a song" and vowed to fight against the sell-off.

He also said the accusations made by trade unions had not been set at rest yet by the government.

INTUC leaders say the government plans to raise Rs 8.0 billion fom the sell-off, whereas it should fetch five times that amount.

INTUC leader R D Tripathi said a Delhi court had ruled that managements were obliged to discuss service conditions with labour unions in a company before divestment could begin.

"But in this case this practice has not been followed," he said.

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