in divestment

Praveen Chandran
24 September 2002

Mumbai: The Shipping Corporation of India (SCI) staff union has met former Indian prime minister and Janata Dal leader Vishwanath Pratap Singh and pleaded him to intervene on the SCI privatisation issue.

Singh, according to union secretary Satish Baria, assured the union of his support and that of members of Parliament. Singh said they would take up this issue in the next session of Parliament. Singh said he is not against privatisation, but corporations connected with the countrys security should not be privatised. The union also asked Singh to convince the cabinet and other national leaders of the need of state control over SCI.

Singh also agreed with the union that SCI is a cash cow for the government, which is in dire need of money. "It has been making continuous profits and in the current year it has given 25 per cent of its net profit as dividends apart from paying a tax of Rs 172 crore on its profits."

The union in its plea to Singh said the government wants to sell its shares in the company at a throwaway price of between Rs 500 crore and Rs 600 crore, while the valuation is not based on proper financial and business considerations. The union pointed out that the total asset value of the corporation as on 31 February 2000 is Rs 5,900 crore, while the liabilities loans on the fleet were Rs 1,488.10 crore. As per the estimate, the current asset value of 40-per cent government shares of the company is Rs 2,360 crore. But the government wants to sell these shares to just Rs 500 crore to Rs 600 crore.

Besides, the financial figures for the last five years show an impressive annual average turnover and profit of Rs 13,286 crore and Rs 1,580 crore, respectively. In the last five years, SCI notched up foreign exchange earnings of around Rs 3,090 core, the union said.

The union added: "The employees outgo, including shore and floating, is only 13 per cent of our turnover, which is better than international standards of 15 per cent of the turnover. It means SCIs performance is the best. The total employee strength of SCI on date is 9,378 (including the crew) to manage 99 vessels and SCI is also successfully manning 33 ships of Oil and Natural Gas Corporation."