Financial Daily from THE HINDU group of publications
Friday, Dec 20, 2002
Industry & Economy
State PSUs pose a challenge: SCOPE
KOLKATA, Dec. 19
THE Standing Conference of Public Enterprise (SCOPE), the apex professional organisation of the State-owned enterprises, is on a difficult mission of bringing corporate governance to the doorsteps of State PSUs.
But how is SCOPE going to handle the management issues of over 1,000 PSUs in the country - generally considered badly-managed and variously described as dens of corruption as also a drain on public funds?
Dr S.M. Dewan, Director-General of SCOPE, admitted that it was a daunting task. "It cannot be done overnight. We have taken the first few tentative steps'', he told Business Line.
SCOPE had amended its constitution to open its doors to State PSUs. It had also created a management consultancy forum with a panel of experts. "SCOPE is ready to lend a helping hand to willing State PSUs to come out of the morass'', he added.
To meet the challenges of increased competition, public enterprises are now required to adopt internationally prevalent and accredited corporate governance practices in order to access capital, technology and new business opportunity.
To begin with, there will be a drive to bring State PSUs under its ambit and guidance. SCOPE would first approach those with a better governance track record and are already listed such as Gujarat Mineral Development Corporation or Punjab Tractors, Dr Dewan indicated.
Since some of them may be disinvested shortly, SCOPE has also made provisions for the divested PSUs in which state-ownership will be at the 26 per cent level.
"Videsh Sanchar Nigam Ltd and Hindustan Zinc Ltd have expressed their intention to become our members even in their new avatar'', he added.
"After Enron, polemic has shifted from the issue of corporate ownership to governance globally. The virtues of controls and the reporting systems in the state-owned units are be being rediscoverd. Thus, the practices of the both worlds - public and private - are being reviewed to give way to a convergence of a new management model for corporate governance and transparency'', he observed.
But how does SCOPE plan to sensitise a State PSU management, headed by a politician chairman and run by a likely-to-be-transfered bureaucrat-turned managing director?
Dr Dewan said that SCOPE had set up a Centre for Excellence of the PSU management cadre. "It is developing models for PSUs - with special attention to State PSUs. These models will keep in view their special objectives and obligations to meet challenges of dynamic environment'', he added.
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