Kerala CM seeks PM's intervention in Bharat Petroleum's disinvestment

Kerala Chief Minister Pinarayi Vijayan on Saturday has written a letter to Prime Minister Narendra Modi and has sought his intervention to stop the reported move to disinvest the state-owned Bharat Petroleum Corporation Limited. (BPCL). In a letter to the Prime Minister, Vijayan said that the Centre had initiated action through release of Request for Proposal (RPF). he said that the move has caused 'severe anxiety' among the general public in the state. Vijayan urged the Prime Minister to issue appropriate directions to give up the move to disinvest BPCL. He also said that PM should give instructions to retain it under the present ownership pattern in the interest of the stakeholders and national interest.

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What is the matter?

In the letter, CM Vijayan stated that Kerala government proposes to set up a petrochemical park adjacent to BPCL on the assurance that the feedstock from the refinery would be made available. With the initiation of the disinvestment process, the proposed investment of around Rs 25,000 crore would become uncertain, Vijayan said. Entrepreneurs who have come forward to invest are faced with the question of whether the feedstock from the refinery would be available or not and if available, its cost, he said. The state government and civil society are concerned that the BPCL disinvestment would not be in the interest of more than 13,000 persons directly employed and contract employees. 

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Stating that the state government was the promoter of the erstwhile Kochi refinery with a five percent stake, the Kerala CM added that the state government had extended financial and non-financial incentives to BPCL when the refinery capacity was augmented. The state government had also agreed to refund the entire 'Work Contract Tax' amounting to Rs 85 crore to BPCL, the letter said. It was also agreed to treat the additional VAT revenue, due to the augmented capacity of BPCL, as soft loan, which is refundable after 15 years, the letter stated. About Rs 1,500 crore has been advanced in this endeavor and these assistances from the state government was to ensure that the public sector refinery should be strengthened, he said.

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