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<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image">REUTERS/Christian HartmannGreek Prime Minister Alexis Tsipras reacts during a voting session at the Parliament in Athens, Greece, July 11, 2015.</div></div></div>Greece <a href="http://uk.businessinsider.com/greece-european-leaders-summit-bailout-deal-2015-7">finally has a deal</a> after months of tense negotiation. In a lot of ways, it's a massive climb-down on what the government wanted, and even more austere than previous bailout agreements the country has signed up to.Greece must make cuts to its pension industry, liberalise some protected sectors of the economy, and conduct a review into its labour market, among other reforms - but perhaps the most stark is what it's being asked to do about privatisation.Athens is being asked for "a significantly scaled up privatisation programme," and they're not kidding. Here's the detail:Valuable Greek assets will be transferred to an independent fund that will monetize the assets through privatisations and other means. The monetization of the assets will be one source to make the scheduled repayment of the new loan of ESM and generate over the life of the new loan a targeted total of EUR 50bn.When negotiations for a bailout kicked off, a lot of observers expected privatisation to be a big problem, since Syriza, the victorious and radically left-wing party, had campaigned against them. But as the talks developed, they focused more on debt relief and pensions.But even if the government is more open to selling off state assets, €50 billion ($55.83 billion, £35.97 billion) is a lot of money in Greece. In fact, it's more than a fifth of Greece's GDP. It's much larger than any privatisation programme Greece has previously been asked to undertake. And since the proceeds would be used to repay the bailout loan they're getting now, a failure to meet the goal will mean raising the money through taxation, or once again finding itself on the edge of default.But the document even suggests that Greece might privatise more, asking the participants to "explore possibilities to reduce the financing envelope, through an alternative fiscal path or higher privatisation proceeds."<div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"><a href="http://ec.europa.eu/economy_finance/publications/occasional_paper/2011/pdf/ocp82_en.pdf">European Commission</a></div></div></div>Back in July 2011, the European Commission made its first estimates for receipts from privatisation, it expected that Greece would raise €50 billion ($55.3 billion, £35.6 billion) from 2010 to 2015. That plan quite quickly went completely to pot. The chart on the right shows the expected outcomes by mid-2014, when the Commission expected €6.3 billion ($6.96 billion, £4.48 billion) So what's now on the table an astonishing ask. The latest review expected that Greece would raise €22.3 billion ($24.65 billion, £15.86 billion) by the end of 2020. That's still not even half of what's suggested by Monday's deal. Syriza's rise to power in January put some of the privatisation projects in doubt. Initially, analysts weren't sure the flagship sale of the Port of Piraeus would go ahead, but Prime Minister Alexis Tsipras <a href="http://www.wsj.com/articles/greece-to-proceed-with-piraeus-port-privatization-1423573999">made a show of confirming the fact that it would</a>.Despite the fact that privatisation hasn't been a major sticking point in the recent negotiations doesn't mean that the current government will be able to more than double the income from already-optimistic privatisation plans.If it gets anywhere near to completion, the new privatisation plans will a colossal programme of state asset-selling, especially for a country not transitioning from a communist regime - and it'll be one of the only ones that began with a radical left-wing government. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/facts-about-greek-economy-bailout-euro-crisis-2015-6">6 mind-blowing facts about Greece's economy</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="JueTR5dTo3QyUhdNPH4LuPBLRuUjzGwo" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Greece just signed up to privatisation programme twice as big as it had before

The <keyword id="47209" type="General" weightage="100" keywordseo="finance-ministry" source="Orion">Finance Ministry</keyword> will move ahead with the already-announced and planned privatisation of state-owned companies in the next fiscal, and the chances of the new addition to that list of CPSEs in the <keyword id="6358021" type="General" weightage="80" keywordseo="budget" source="Orion">Budget</keyword> for 2023-24 is unlikely, sources said. The disinvestment target outlined in the Budget for the next fiscal is likely to be a scaled-down and realistic one, as the budgeted PSU sell-off target is going to be missed for the fourth year in a row this fiscal. In the current fiscal, the government had budgeted to collect Rs 65,000 crore from disinvestment. However, so far, it has realised only Rs 31,106 crore by selling minority stakes in public sector companies. After tasting success in privatising loss-making Air India in 2021, the progress of PSU sell-off has not been very impressive over the past year, and experts say that with the general election around the corner in 2024, no major disinvestment announcement is expected in this Budget either. "The plan is to move ahead with the strategic sale of the companies for which the Cabinet approval is already in place," an official told PTI. This means that the government will go ahead with the privatisation of companies like Shipping Corporation of India, NMDC Steel Ltd, BEML, HLL Lifecare, Container Corporation of India and RINL or <keyword id="221747" type="General" weightage="50" keywordseo="vizag-steel" source="Orion">Vizag Steel</keyword>, as well as the big ticket IDBI Bank. Considering that strategic sale or privatisation takes at least a year, and in some cases even more, to conclude, a high budgeted disinvestment target may not be achievable. Nangia Andersen LLP, Partner- Government and Public Sector Advisory, Suraj Nangia said: "The privatization process often takes time, depending on the type of privatization and the economic, social, and political context, emphasizing the importance of a medium-term plan, a solid regulatory framework, and competitive markets". "A multi-year strategic plan for privatisation can be formulated to ensure there is a concrete timeline and a well-designed sequencing and strategy for privatisation," Nangia said. EY India, <keyword id="665532" type="General" weightage="80" keywordseo="associate-partner" source="Orion">Associate Partner</keyword>, Tax and Economic Policy Group, Rajnish <keyword id="6356160" type="General" weightage="80" keywordseo="gupta" source="Orion">Gupta</keyword> said the privatisation programme may see an uptick after the 2024 general elections. "Maybe this year's Budget is going to be a little muted and we may see announcements around disinvestment and sale of minority stakes. After 2024, we may see an acceleration in the privatisation programme again," Gupta said. In the past year, the government had called off a couple of strategic sales, including BPCL, due to a lack of investor interest. Experts feel that the private sector will be more keen on buying state-owned companies if their deal is sweetened with tax incentives and regulatory exemptions. Nangia said private sector participation is more likely to be successful when the required information is accurate, such as that of the operating performance, the condition of assets etc. "An important factor considered by investors as they decide on bidding in privatisation programme is a 'predictable regulatory environment and absence of undue administrative impediments to business in general'. Other relevant factors include sufficient and accessible resources, including the presence of relevant infrastructure and human capital, tax incentives, financial subsidies and regulatory exemptions," Nangia added. SEE ALSO: <a href="https://www.businessinsider.in/budget/news/budgeting-for-climate-change/articleshow/97378027.cms">Budgeting for the fifth C</a> <a href="https://www.businessinsider.in/business/news/an-app-that-wants-to-turn-fear-of-stock-markets-into-fun-raises-75-lakh-from-sharks/articleshow/97378121.cms">An app that wants to turn fear of stock markets into fun raises ₹75 lakh from sharks</a> <a href="https://www.businessinsider.in/india/news/steps-taken-in-subsidence-hit-joshimath-inadequate-declare-himalayas-eco-sensitive-zone-say-experts/articleshow/97411665.cms">Steps taken in subsidence-hit Joshimath inadequate, declare Himalayas eco-sensitive zone, say experts</a>

Finance Ministry to stick to privatisation of already announced CPSEs next fiscal

New Delhi, Jan 31 () Most privatised CPSE witnessed improvement in net worth, profit, gross revenue and sales growth after the transition, the Economic Survey has said.
 The survey, tabled in Parliament on Friday, examined the change in performance for each individual central public sector enterprises (CPSE). It studied the movement in major financial indicators for each of the firm ten years before and after the year of strategic disinvestment or privatisation. 
 Taken individually, each privatised CPSE witnessed improvement in net worth, net profit, gross revenue, net profit margin, sales growth in the post-privatisation period compared to pre-privatisation period except for Hindustan Teleprinters, MFIL and Tata Communications in the case of few indicators. it said.
 Disinvestment improves firms' performance and overall productivity, and unlocks their potential to create wealth. This would have a multiplier effect on other sectors of the economy, according to the survey.
 Aggressive disinvestment, preferably through the route of strategic sale, should be utilised to bring in higher profitability, promote efficiency, increase competitiveness and to promote professionalism in management in CPSEs, the survey advocates.
 It observes that the focus of the strategic disinvestment needs to be to exit from non-strategic business and directed towards optimising economic potential of these CPSEs.
 This, it said, would in turn unlock capital for use elsewhere - especially in public infrastructure like roads, power, transmission lines, sewage systems, irrigation systems, railways and urban infrastructure. 
 It is encouraging that the enabling provisions by Department of Investment and Public Asset Management (DIPAM) are already in place, it added.
 According to the survey, the cabinet has in-principle approved the disinvestment in various CPSEs. These need to be taken up aggressively to facilitate creation of fiscal space and improve the efficient allocation of public resources.
 The survey noted that there are about 264 CPSEs under 38 different ministries/departments.
 Of these, 13 ministries/departments have around 10 CPSEs each under its jurisdiction. It is evident that many of the CPSEs are profitable.
 "However, CPSEs have generally underperformed the market as is evident from the average return of only 4 per cent of BSE CPSE index against the 38 per cent return of BSE Sensex during the period 2014-2019. The aim of any privatisation or disinvestment programme should, therefore, be the maximisation of the government's equity stake value," it said.
 The survey also suggested that the government can transfer its stake in the listed CPSEs to a separate corporate entity. This entity would be managed by an independent board and would be mandated to divest the government stake in these CPSEs over a period of time. 
 This will lend professionalism and autonomy to the disinvestment programme which, in turn, would improve the economic performance of the CPSEs, it added.
 In November 2019, the government gave in-principle approval to reduce government of India's paid-up share capital below 51 per cent in select CPSEs.
 To examine the efficiency gains from privatisation and whether the purported benefits of privatisation have indeed manifested in the Indian context, the survey analyses the before-after performance of 11 CPSEs that had undergone strategic disinvestment from 1999-2000 to 2003-04, it said. ABI ABI ANS
ANS

Privatised CPSEs reported better profit, sales after transition: Survey

New Delhi, Dec 9 () Officers union of blue-chip PSUs on Monday opposed the government's decision to privatise India's second-biggest oil firm BPCL, saying family silver worth Rs 9 lakh crore is being sold for a fraction of the amount.
 The Federation of Oil PSU Officers (FOPO) and Confederation of Maharatna Companies (COMCO), claiming to represent over 70,000 officers of the top state-owned firms, at a press conference said the government was killing the goose which lays golden eggs by privatising the highly profitable Bharat Petroleum Corp Ltd (BPCL).
 "Our comprehensive evaluation of the assets of BPCL reveals true worth of BPCL to be Rs 9 lakh crore. Today's market cap of BPCL is Rs 1.06 lakh crore. Typically, management control fetches 30-40 per cent premium over the market cap. Even after considering a premium of over 100 per cent, there is likely destruction of wealth to the tune of Rs 4.46 lakh crore," said Mukul Kumar, convenor, FOPO and COMCO.
 The officers union, he said, was not opposed to private competition but they should not be handed on a platter assets set up over years. "Let them come in and set up their own infrastructure. We don't have any problem to compete with them."
 The Union Cabinet had last month approved the sale of the government's entire 53.29 per cent stake in BPCL, arguing the resources unlocked by the strategic disinvestment would be used to finance social sector programmes benefiting the public.
 BPCL was created by nationalising Burmah Shell after the private firms refused to cooperate in the national duties during the 1971 war, Kumar said. "The proposed privatisation would be no less than taking about-turn from the compulsion cited for effecting nationalisation."
 Asked if the officers union will go on strike to protest privatisation plans, he replied in the negative, saying they will submit a representation to the Prime Minister about the facts.
 "BPCL is a Maharatna company and part of the Fortune 500 list of companies for 15 years. It has sound finances, efficient management, second-largest fuel retailer, pays more than Rs 17,000 crore as dividend to the central government. It has 6,000 acres of land across India, of which 750 acres is in Mumbai alone which is valued for crores of rupees," he said.
 He said privatising BPCL would dent the government's social commitment as the new owner is not likely to follow the policy of providing reservation to SC/ST, OBCs and economically weaker classes as also not service remote and not so profitable areas.
 "The goose that lays golden eggs is being killed to meet the government's fiscal deficit target," he said. "This is anti-people and biggest wealth destroyer step."
 Citing past privatisation moves where the new buyer asset stripped the companies they acquired, he said the government should empower the PSUs and give them level playing field to compete with the private sector.
 "This (privatisation of BPCL) is suicidal for the country," he said. ANZ ABM

Officers union opposes BPCL privatisation

In order to insulate airlines and passengers from high user charges, the <keyword id="149609" type="ORGANIZATION" weightage="100" keywordseo="Ministry-of-Civil-Aviation">Ministry of Civil Aviation</keyword> is reconsidering management contracts to private operators at India’s six airports. 
 
“We need to consider our learnings from the airport contracts awarded in the past,” a senior ministry official said. “One concern raised by stakeholders is the cost of turnaround of an aircraft. The turnaround cost for a jet is around $6,000 at an Indian private airport, whereas it costs $2,300 at Changi (Singapore) airport. We need to ensure privatisation does not increase the cost of the airport,” he added. 
 
The Civil Aviation Ministry will seek approval from an inter-ministerial group to give management contracts at six airports: Chennai, Kolkata, Lucknow, Guwahati, Jaipur and Ahmedabad. 
 
The ministry is also taking stock of the views expressed by the Comptroller and Auditor General on privatisation of Delhi and Mumbai airports. “We are looking into these concerns. All this will be debated in the inter-ministerial group,” the official added. 
 
The United Progressive Alliance government had initiated the process to award management contracts for these airports in 2013. 
Image: Thinkstock

Govt Reviewing Airport
Privatisation To Control High User Charges

Britain's Chancellor George Osborne dropped a pretty incredible statistic in <a href="http://uk.businessinsider.com/summer-budget-2015-everything-you-need-to-know-2015-7">Wednesday's Budget</a> in a throwaway line that hardly anyone has picked up on.Early on in his speech to Parliament Osborne said: "Indeed, the sale of government assets this year will deliver the largest privatisation proceeds of all time, higher than the previous record in 1987."The Conservative Party plans to raise £31 billion ($47.7 billion) this year by selling off publicly owned assets, the most ever raised from privatisation in a single year. <div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="www.gov.uk" title_caption=" HMRC's analysis of privatization. " class="zoomin" href="https://static-ssl.businessinsider.com/image/559e2bbddd08951e5a8b4597-960/hmrc privatisation.jpg"></a><a href="https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/443232/50325_Summer_Budget_15_Web_Accessible.pdf">www.gov.uk</a> HMRC's analysis of privatization. </div></div></div>Even when adjusted for inflation it beats the previous record by £10 billion ($15.4 billion). The record was set in 1987 at the height of Margaret Thatcher's privatisation boom. Back then the centerpiece sell-off was the £7.2 billion ($11 billion) privatisation of BP.£31 billion is a colossal amount of money to raise but what's craziest is the fact that nobody seems to notice. When Royal Mail was privatized in 2013 it dominated the headlines. But the amount raised then is trivial compared to the total the government is planning to raise this year, as the chart below shows.The main reason all this is flying under the radar is because most of the money is coming from selling things we shouldn't own anyway. <a href="http://cdn.budgetresponsibility.independent.gov.uk/July-2015-EFO-234224.pdf">The Office for Budget Responsibility (OBR) is forecasting</a> that the government will raise £13 billion ($20 billion) of the total <a href="http://uk.businessinsider.com/treasury-sells-further-734-million-lloyds-shares-for-600-million-2015-6">selling off shares in Lloyds</a> this year. A similar amount is expected to be raised selling off mortgages the government bought when it bailed out Northern Rock and Bradford &amp; Bingley.These, <a href="http://uk.businessinsider.com/llodys-royal-bank-of-scotland-government-share-sale-loss-2015-5">combined with a sell-off of Royal Bank of Scotland shares</a>, make up the bulk of the cash being raised this year, as the chart below shows. (UKAR owns the mortgage assets.)<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image"><a title_source="Office for Budget Responsibility" title_caption=" The OBR's forecasts for where privatization money will come from. " class="zoomin" href="https://static-ssl.businessinsider.com/image/559e2bbddd08951e5a8b4598-960/asset sales.jpg"></a><a href="http://cdn.budgetresponsibility.independent.gov.uk/July-2015-EFO-234224.pdf">Office for Budget Responsibility</a> The OBR's forecasts for where privatization money will come from. </div></div></div>Other more controversial privatisation schemes include <a href="http://uk.businessinsider.com/chancellor-george-osborne-to-sell-off-1998-2012-student-loan-book-now-vince-cable-gone-2015-5">selling off the student loan book</a>. The government is also mulling plans to privatize the Green Investment Bank, which was set up under the coalition to finance environmental businesses.The Conservatives are rushing to get all these assets off their books not only because they believe in small government (although they may well do), but because they've committed to reducing the country's public debt burden. But here's the kicker <a href="http://cdn.budgetresponsibility.independent.gov.uk/July-2015-EFO-234224.pdf">from the OBR</a>: "Financial asset sales typically bring forward cash that would otherwise have been received later in mortgage repayments and dividends, so they only reduce net debt temporarily."Lloyds and Royal Bank of Scotland would have offered a steady income flow to the government, as would the mortgages.Instead, the Conservatives are spending future cash now to pay down debt. That doesn't look like a sustainable solution to solving the country's fiscal problem and could come back to haunt them - or, if they're lucky, future governments. <div class="margin-top"> <h3>NOW WATCH: <a href="http://www.businessinsider.com/president-obama-sings-amazing-grace-charleston-2015-6">We can't stop watching President Obama launch into 'Amazing Grace' at Pinckney's eulogy</a></h3> <div> <div> <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="sxczl4dTqN-89bq3OFAqVoKyeIYWMNa0" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div> </div> </div> </div>

Britain is in the middle of a privatisation boom bigger than Margaret Thatcher's - but no one seems to notice

New Delhi, Nov 27 () Loss-making Air India will have to be closed down if not privatised, Civil Aviation Minister Hardeep Singh Puri informed Rajya Sabha on Wednesday and said the government is committed to secure a favourable deal for all employees of the state-owned carrier.
The government is in the process of finalising invitation of bids, he said, adding interests of employees of the state-owned carrier Air India would be protected and there would be no job loss till its privatisation.
"Your airlines would have to be closed down if not privatised," Puri said while replying to a supplementary question.
"... The process of disinvestment is underway. The issue of getting bids will arise only after we complete the processing. So far, the alternative mechanism, under the chairmanship of the Home Minister, has been made," he said.
"We have taken some decisions. Other decisions are being processed. Once we invite bids, then, we will see how many bids have come in," Puri added.
Talking about employees' concern, he said, "Issues being related to current employees, their health cover, how many would remain and what would happen, we are committed to secure a favourable deal for all employees."
Puri said there is a decline in global freight traffic but there might not be any impact in India.
"There is a decline in global freight traffic but if you look at the Indian scenario, I think that transportation by air is taking off and I don't see too much of a decline there."
The minister highlighted that earlier it used to take 116 hours to import a particular product and now it has come down to 39 hours.
"Hour for exports is down to 24 hours. So, the freight traffic is increasing. It has been in double digits till recently. I don't have the very latest figures but my submission is that global trends may not really be impacting on our domestic figures."
While replying to a separate query, he rejected recent reports suggesting that several pilots of Air India are leaving the airline as their salaries are not being paid on time.
"Air India pilots are very well looked after and their salaries in relation to what other air carriers are offering are very good," said Puri.
He further said, "Insofar as resignations are concerned, I have not heard of any single case where anybody has resigned."
Puri said 25 per cent salaries of various employees were withheld when Air India was in financial crisis.
"There is full intention that before the privatisation or disinvestment is completed, this 25 per cent would be reimbursed to all employees in all segments," he said.
The minister also assured that there would be no job loss in Air India till privatisation.
On November 17, Finance Minister Nirmala Sitharaman had said that the government is looking to wrap up the sale of state-run companies Air India by March 2020.
Earlier, the plan to sell Air India did not go through for lack of investors and the lukewarm response to its sale.
The ailing national carrier has a debt of around Rs 58,000 crore. KRH MJH ZMN

Air India would be closed if not privatised: Civil Aviation Minister in RS

Mumbai, Jan 27 () The Internal mechanism panel, comprising members from both the Air India management and its trade unions, met for the first time in New Delhi to discuss various employees-related issues ahead of the carrier's proposed privatisation, a source said.
The trade union representative are said to have discussed with the management all the issues concerning their employment such as service-contracts, job-security, gratuity, pension and voluntary retirement scheme after the company goes into private hands, the source privy to the meeting proceedings told .
Air India had on last Tuesday constituted a nine-member committee to look into staff-related issues after discussions between Civil Aviation Minister Hardeep Singh Puri and representatives of various Air India unions.
Puri had asked the airline to set up an internal mechanism committee comprising members from the management and its various trade unions to sort out privatisation-related issues of employees.
"During the meeting, which lasted for about 4-5 hours, various unions representatives raised the issues such as job-security, service-contracts, gratuity, pension, the possibility of VRS and other HR related problems that may crop up after the airline is privatised," the source said.
He said the management took the minute of the meeting and an elaborate discussion is expected to take place at the next meeting on Thursday.
The source, however, said that the AI bid document, which the government brought out early in the day, could not be discussed as the unions were yet to study it.
Apart from three general managers of the airline, there are six representatives from various employee unions on the panel. IAS BAL
BAL

Air India panel discusses privatisation-related issues of employees

Budget 2020: LIC to get Privatised

Civil Aviation Minister <keyword id="2128920" type="UNKNOWN" weightage="100" keywordseo="Ashok-Gajapathi-Raju">Ashok Gajapathi Raju</keyword> has ruled out the privatisation of <keyword id="2573" type="CITY" weightage="100" keywordseo="Air-India">Air India</keyword> in the near future. However, he also added that there have been suggestions from various quarters to privatise the state-run carrier. 
 
A committee will be set up to chalk out the future roadmap for Air India. "It is essential to ensure that the national carrier achieves its full potential," the minister said. 
 Proposals for listing the <keyword id="74939" type="ORGANIZATION" weightage="100" keywordseo="Airport-Authority-of-India">Airport Authority of India</keyword> (AAI) and <keyword id="132488" type="COMPANY" weightage="80" keywordseo="Pawan-Hans">Pawan Hans</keyword> on the stock market have also been made in the Draft Civil Aviation Policy. "AAI will be corporatised followed by its listing on the stock exchanges to improve efficiency and transparency," Raju said. He further added that listing of Pawan Hans would also be undertaken. 
 
AAI looks after 125 airports across the country, including 11 international, 81 domestic and eight customs airports.

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