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Orissa inching towards privatisation of 14 public sector units

M I Khan in Bhubaneshwar

The Orissa state government has realised that it cannot bear the burden of loss-making public sector undertakings any more. Keeping in view its own deteriorating financial health, it has decided to privatise some PSUs soon.

To start with, the state government has chosen 14 PSUs which include 11 state-owned corporations and three of their subsidiaries. Some of the big names likely to be privatised are the Industrial Development Corporation, Orissa Hydro Power Corporation, Orissa Power Generation Corporation, Orissa Tourism Development Corporation, Konark Television, Orissa Textile Mills besides the subsidiaries like the Idcol Cement.

"State government is likely to call for privatisation bidding by the next month if everything goes as per the plan," a highly placed source in the state government said. He added that the new Biju Janata Dal-Bharatiya Janata Party alliance government is serious about waving the green signal to privatisation of the PSUs.

Public Enterprises Minister Bed Prakash Agarwal said that the state government has made up its mind not to help the loss-making PSUs anymore."Today, the state government is not willing to waste its funds to run these loss-making PSUs keeping in view its own financial health," he said.

He recalled that only last month, during the state assembly session, he had announced the government's intention to privatise the loss-making PSUs.

The previous Congress government in the state brought White Paper on State Finances last year in which it suggested fiscal correctness measures. Under the title of the reform and restructuring of PSUs, the white paper categorically recommended that the public sector enterprises which are running in loss will be either closed or privatised.

Secondly, the state government will only retain those enterprises which are concerned with promotional activities.

Even the latest Economic Survey for 1999-2000 also suggested to reduce the debt burden of the state by selective divestment in public enterprises.

Sources in the state public enterprises department said that the state government has no funds to write off the huge losses made by these PSUs. "Increasing debt burden of the state left the government in doldrum," sources pointed. The total investment on the 36 PSUs of the state has been around Rs 64.07 billion while their cumulalitive losses add up to Rs 7.09 billion.

These PSUs have eroded their capital base over the years. Their outstanding loans are huge. Sources said that the total authorised capital of these 14 PSUs proposed to be privatised is at Rs 23.55 billion but their outstanding loans stand at Rs 24.86 billion.

The state government has yet to finalise the details of the state government's stake in these PSUs after the privatisation and other details."Everything will be ready by the next month," sources said.

Business

Orissa