New Delhi, Oct 16 (IANS): In a move to speed up its disinvestment process, the government is formed a consultative group headed by Department of Investment and Public Asset Management(DIPAM) for making recommendations for selection of central public sector enterprises (CPSEs) for strategic divestment.

According to a DIPAM office memorandum (OM), the government has also formed an Evaluation Sub-Committee which will be involved in the transcations on request for proposal (RFPs), eligibility norms and shareholders' agreements, among others.

The consultative group is composed of the DIPAM Secretary, the NITI Aayog CEO or his representative, and the Secretaries of Corporate Affairs, Department of Public Enterprises and the Ministries concerned.

The government has also substituted of the existing Evaluation Committee with an Evaluation Sub-Committee (ESC) to be headed by the DIPAM Financial Advisor, the e administrative Ministry's Financial Advisor, a representative each not below the rank of Joint Secretary of the Department of Economic Affairs and Department of Legal Affairs and any other special invitee like CMD or Director Finance of the concerned CPSE.

The extant Evaluation Committees constituted for the purpose of strategic disinvestment of CPSEs are abolished, the OM said.

The consultative group will make recommendations to the inter-ministerial group (IMG) for strategic disinvestment of CPSEs based on detailed analysis and fine-tuning of the recommendations by NITI Aayog.

It will consider the CPSEs identified by the DIPAM or the administrative Ministry for strategic disinvestment and will suggest broad contours and structures of the transaction for specific divestment.

Earlier this month, the cabinet had approved a DIPAM proposal for a new process for strategic disinvestment whereby stakeholders would be consulted before inviting bids.

"Cabinet Committee on Economic Affairs, on October 3 has approved this Department's proposal for modifications in the existing procedure and mechanism of strategic disinvestment of CPSEs", the OM said.

DIPAM will now become the nodal department for all decisions relating to strategic disinvestment. So far, the strategic disinvestment process did not allow for stakeholder consultation before the government started calling for Expressions of Interest (EOI).

This will help DIPAM to assess investor demand and concerns better on specific stake sales, before formally inviting bids, as the prospective bidders' concerns will be on board.

The evaluation panel, which will be a sub-committee of the IMG will also suggest the contours of transactions and to identify core and non-core assets of CPSEs. The panel will examine the inception and final valuation reports, as forwarded by the administrative department and make recommendations to the IMG for deciding the reserve price.

The government will sell its full equity in BPCL and SCI to private investors, while in CONCOR it may pare its stake to 25 per cent and also give up management control.

The government is also looking to exit Air India by divesting 100 per cent equity in favour of a strategic bidder.