The Divestment Commission on Thursday recommended splitting Central Warehousing Corporation into several companies as a precursor to its privatisation and disfavoured immediate divestment of Numaligarh refinery.

Three companies would be formed to take over the assets of CWC along its major lines of business, while another 17 would be set up to take over the stake of CWC in state warehousing corporations, the commission said in its report submitted recently to the government.

It also recommended transfer of assets and liabilities of CWC and SWC to newly formed companies subsequent to which the entire government equity in two companies dealing with general and port warehousing could be divested to strategic partners.

In the case of the third company, which would deal with foodgrains, the commission said any decision on privatisation should be taken within three years in line with progress of private sector participation in the sector, growth of private sector warehouses besides establishment of regulatory framework.

The commission also favoured action to repeal the Warehousing Corporations Act, 1962. The government currently holds over 55 per cent stake in CWC while State Bank of India is a major shareholder with 21 per cent equity.

Set up in 1956 with the mandate of preventing forced sale of produce by farmers at low prices, the corporation currently runs 473 warehouses with a combined capacity of 92 million MT.

CWC also holds 50 per cent stake in as many as 17 state warehousing corporations across the country.