New Delhi: Bharat Earth Movers Limited (BEML), which was lined up for disinvestment by the Narendra Modi government along with other public sector undertakings (PSUs), has been witnessing a series of protests by various unions and associations of employees in the recent past. The workers have said that the relay protest would continue till the government rolls back the privatisation decision.
The protest, which started on October 14, saw a mass demonstration on October 26 in Bengaluru with employees raising slogans “BEML is the Property of Workers’ and “No one has the right to sell it to private looters”. More than 200 employees, under the banner of BEML Employees Association, participated in the protest in front of the Bengaluru unit of the mini ratna company.
“We are opposing the government’s decision of total privatisation. We will lose job security. Also, 18% SC/ST reservation, 5% physically handicapped reservation would be wiped out if privatisation comes into effect. We demand the company should remain under the government with 51% stake,” said Domlur Srinivasa Reddy, President of BEML Employees Association.
The protesters have regularly been organising candle marches and human chains. Along with the Bengaluru complex, protests are being organised simultaneously in Kolar Gold Field Complex, Mysuru Complex and Palakkad Complex.
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On July 8 this year, defence minister Rajnath Singh defended the Bharatiya Janata Party-led central government’s plan to disinvest BEML in the name of improving efficiency of the company. While replying to a question by KK Ragesh from Kerala in Parliament, Singh said: “The government had given ‘in-principle’ approval for strategic disinvestment of BEML to the extent of 26 percent out of the government share holding of 54.03 percent with the transfer of management control to a strategic buyer.”
The government also decided to hive off the surplus land and other assets from the strategic disinvestment of BEML and dispose them of separately. The government had given approval for the strategic disinvestment of BEML in November 2016. Since then, the associations and unions in BEML have been opposing the government’s move to privatise such an important company.
Earlier, the then parliamentarian from Palakkad, MB Rajesh, had alleged a possible scam behind the disinvestment process too. The government is selling off the shares and assets for a limited amount, which is far below the actual market value of BEML’s assets. The assets of BEML are estimated to be worth well above Rs. 50,000 crore. In Bengaluru alone, BEML owns 205 acres of land. In Mysore, BEML owns 530 acres, 2,400 acres in Kolar Gold Fields and 375 acres in Palakkad.
In addition, the previous Siddaramaiah government in Karnataka and the present Pinarayi Vijayan-led government in Kerala had intervened in this matter registering their opposition to the privatisation of BEML.
Read More: Centre Reaffirms Disinvestment of Profit-making BEML
While the central government claims that the disinvestment and transfer of management control will increase the efficiency of the company, the performing records of the company tell a different story.
“BEML is the only PSU that manufactures Metro coaches in India. The company has served orders from Bengaluru, Jaipur, Kolkata, Delhi and Mumbai. Among these, Mumbai was the latest one. Then how can the government blame the efficiency of the company?,” said a BEML eomployee on the condition of anonymity.
BEML had bagged the Rs 3,015 crore Mumbai Metro corridor order after competing with international companies, including CRC from China. “BEML was the lowest among seven bidders which included seven internationally renowned companies,” read a press release by the Ministry of Housing and Urban Poverty Alleviation.
“Also, the Centre has no liability over BEML. Recently, Rs 23.56 crore had been invested by the centre, while BEML had paid about Rs 200 crore as dividend to the government,” the employee added.
When questions were raised about national security while privatising such an important company, which is contributing to the defence sector, the defence minister had said that disinvestment was a policy followed by all governments, adding that this was also a recommendation of government advisory body, NITI Aayog, on strategic sale of assets in public sector undertakings.
However, the Modi government has been skirting concerns raised about national security by various bodies. BEML has businesses in several segments and the defence segment constitutes 16.16%, rail and network comprise 31.12% of its total business, while mining and construction make for 52.27% business.
“If someone asks about the products of BEML through Right to Information, they don’t give any reply pointing out the security concerns. Then, how can the government hand over such an important sector to private players,” asked one of the employees of BEML.
So far, among the stakes of the private players in BEML, the Reliance group holds 11%, Kotak has 4% and foreign investors have 13%. Along with these private entities, LIC also owns a stake in the company.
As per the Department of Investment and Public Asset Management (DIPAM), the process of disinvestment is underway. “Core Group of Secretaries on Disinvestment (CGD) in its meeting held on 16.09.2019 recommended that since the IMG has already identified certain non-core assets for monetisation, DoDP may suggest Board of BEML to pass the resolution to authorise monetization of assets and subsequently process for the approval of Alternative Mechanism (AM). Further, meeting of the Evaluation Committee (EC) was held on 24.09.2019 to discuss Expression of Interest (EoI) and Preliminary Information Memorandum (PIM). EC suggested certain modifications,” reads the update from DIPAM.
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