‘Preventing’ participation in HLL bidding against cooperative federalism, Kerala tells Centre

Kerala Chief Minister Pinarayi Vijayan has said that “preventing” the state from participating in the open bidding of the city-headquartered Hindustan Lifecare Ltd, a central PSU, which is proposed to be disinvested by the Centre was against cooperative federalism. Preventing a state government from participating in an open bidding process would not be in accordance with the principles of cooperative federalism and the state government has the competence accorded to it by the Constitution to take a decision on its own in such matters, the CM said in a letter to Prime Minister Narendra Modi. In his brief letter, Vijayan pointed out that he had already sent a letter in June, 2017 requesting the Centre not to proceed with the privatisation of HLL. Despite this, when the union government had decided to go ahead with the disinvestment, the state government expressed its interest to participate in the open bidding, he noted.

Presently, the Department of Investment and Public Asset Management has communicated to the state government that there is scope for government/ government PSEs to participate in the strategic disinvestment process in pursuance of the Preliminary Information Memorandum and Expression of Interest. As per the PIM and global Invitation for the submission of Expression of Interest for the strategic disinvestment of HLL, CPSEs or Central Government owned Cooperative Societies are the only ones specified as being not eligible to participate in the proposed transaction, he said. “It is not specified anywhere that the state government/ state PSUs’ are not eligible to participate in the bidding process of HLL,” Vijayan pointed out. He urged the PM to note that the land for the HLL was acquired and handed over to the Centre by the Kerala government for setting up a specific project. “If the Government of India proposes not to retain HLL as a government entity, it follows that the state government should be given the option to retain it as a state PSU. Hence, the state government should be given the First Right to hold the land and assets of the Hindustan Lifecare Ltd in Kerala,” he further said. The CM also requested Modi to either handover the land and assets of the HLL in Kerala to the state government or permit it to participate in the Expression of Interest process and the Request for Proposal process for the disinvestment of the PSU. A recent cabinet meeting, held here, entrusted Vijayan with writing a letter to the PM conveying its policy opinion against the Centre’s action denying a chance for Kerala to take part in the bidding procedure.