Govt. sets up panel of Secretaries on acquisition of assets abroad by CPSEs

The Department of Public Enterprises has constituted a Coordination Committee of Secretaries to implement the Government's Policy for Acquisition of Raw Material Assets Abroad by Central Public Sector Enterprises (CPSEs).

The policy is aimed at ensuring availability of adequate quantities of raw material, crucial for the growth of manufacturing sector and for the economy as a whole.

The committee, which will be chaired by the Cabinet Secretary, includes the Finance Secretary, and Secretaries from the Ministry of External Affairs, Department of Legal Affairs, Department of Public Enterprises and of the administrative Ministry/Department of the concerned CPSE whose proposal is being considered.

The committee would co-opt any other Secretary, considered relevant to decision making as member(s).

The mechanism of Empowered Committee of Secretaries set up by Ministry of Petroleum & Natural Gas and by Ministry of Steel shall continue to function and consider proposals for acquisition of raw materials abroad beyond the powers delegated to the Boards of concerned CPSEs.

Proposals, which are beyond the powers of the Board of CPSEs and require a coordinated approach or budgetary support, would be considered by Coordinating Committee of Secretaries (CCoS). This committee would, if required, facilitate a consortium approach in high value or strategically important acquisitions.

According to the release, the following class of proposals for acquisition of raw material assets abroad by CPSEs would be put up before the CCoS and would not be required to be routed through the Empowered Committee of Secretaries:

(i) Proposals where the administrative Ministry/CPSE requests for a coordinated view even though acquisition is with CPSE’s funds and the investment falls within the delegated powers of the Boards of the CPSE, giving reasons also for its request.

(ii) All proposals for acquisition of raw material overseas by CPSEs involving Government funds, before such proposals are placed before the Cabinet Committee on Economic Affairs (CCEA).

The committee shall add value to the proposals of acquisition of raw material assets abroad by CPSEs before they are considered by the CCEA by considering the following issues:
(i) Avoiding competition among Indian companies

(ii) Reconciling interests of the nation viz-a-viz those of the CPSE(s) in the event of a conflict

(iii) Providing forum for sharing of available experience

(iv) Facilitating quick, coordinated decision making

(v) Exploring the possibility of infrastructure development in the target country

(vi) Coordinating grant of concessional credit to foreign enterprise/Government in return for long term commitment for the supply of natural resources

(vii) Recommending government funding, and its nature (grant, loan or equity), for the overseas investment proposal.

The Committee will be serviced by a Special Cell, to be set up in the DPE which would undertake only coordination-related activities in close cooperation with concerned Ministries.

The DPE would as early as possible but not later than two weeks from the receipt of the details of the proposal, convene a meeting of the above committee on acquisition of raw material assets abroad to take a view, including on whether or not the proposal should be pursued on a standalone basis or whether the proposal should be taken up as an umbrella approach by a consortium of different CPSEs/private sector companies, or negotiated as a package deal.

The committee would also decide on the infrastructure that can be developed as a part of the package and other assistance that can be offered including soft loans, educational, scientific, cultural, health and social infrastructure, the release added.

NNN