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Business News/ Politics / Policy/  Karnataka CM Siddaramaiah writes to Narendra Modi to review BEML disinvestment

Bengaluru: Karnataka chief minister Siddaramaiah on Thursday wrote to Prime Minister Narendra Modi seeking a review of the central government’s decision to sell public sector rail coach and construction equipment maker BEML Ltd.

Siddaramaiah, who also holds the finance portfolio in the state, said the decision will benefit only private parties at the cost of the public and also undermine national security.

“BEML with a freehold land of 2,696.63 acres and leasehold land of 1,494.93 acres is a very valuable PSU and cannot be sold to a private sector investor for the sake of achieving the disinvestment target," Siddaramaiah wrote.

Employees at BEML are opposed to any decision to sell the public sector unit.

In January, the ministry of defence had given its consent for strategic disinvestment of up to 26% of the company (the government has about 56%) including the transfer of management to the buyer. The Centre has set a target to raise about Rs72,500 crore from disinvestment in 2017-18, including Rs15,000 crore from strategic asset sale and Rs11,000 crore from listing five public sector insurance companies. The government has raised around Rs10,000 crore so far, Mint reported on 21 August.

“You should appreciate that investment of strategic and profit making CPSE only leads to private sector investor reaping windfall benefits and profit at the cost of public and is likely to undermine the security of the country," Siddaramaiah said.

The BEML factory in Bengaluru has been sporting a “Save BEML" banner for many months now, with employees trying to get more people to back their cause and resist privatisation. BEML has over 8,000 employees and at least nine manufacturing units across Karnataka, Siddaramaiah said in his letter.

“It (BEML) has been continuously paying an average dividend of Rs20 crore and taxes of around Rs600 crore to the exchequer from 2007-08 and earning foreign exchange through export of mining and other equipments to over 52 countries," he said.

“In the light of the above facts and circumstances, as advantages of retaining the CPSE in public sector far outweigh the benefits from its sale, I earnestly request you to kindly review the decision to disinvest BEML and let it continue as a CPSE," he said.

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Updated: 29 Sep 2017, 01:29 AM IST
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