The Hindu Business Line : Options study on 20 PSEs to be completed this fiscal

THE Implementation Secretariat, the independent body overseeing the public enterprises reform in Andhra Pradesh, expects to complete `Options Study' by the end of this financial year in the case of about 20-odd enterprises out of 34 mandated and also to divest Government stake in some of them.

Godavari Fertiliser and Chemicals Ltd, Andhra Pradesh State Financial Corporation, Andhra Pradesh Industrial Development Corporation, Andhra Pradesh Dairy Development Federation are among the enterprises where the divestment process is planned to be taken up within the next six months.

The Implementation Secretariat has announced that the reform process has been completed in 20 enterprises out of the 23 mandated for the year 2002-2003 by the Andhra Pradesh Government.

In a communique, the Implementation Secretariat has said that the institutional framework evolved in Andhra Pradesh to carry out public enterprise reform is being seen as a model by other States to follow. They have been sending their senior officials to study the progress achieved in the public enterprises reform process in the State.

Mr Deepak Kumar Panwar, Principal Secretary, Public Enterprises Department and Chairman of Implementation Secretariat, said that the success of the implementation of PSE reforms in Andhra Pradesh was a reflection of the Government's commitment to carry out privatisation/divestment in the State.

The State enterprises reform had gathered momentum during the last two years and in all 31 enterprises under Phase-I and II had been privatised/closed or restructured as per the mandate.

As against 23 enterprises covered during 2002-2003, the reform process has been completed in 20 enterprises so far. In the case of 10 enterprises, privatisation process is at advanced stage.

While commenting about the various stages in terms of the ongoing reforms process, Mr Panwar said that the judgment delivered by the Andhra Pradesh High Court in the Nizam Sugars Ltd case was a landmark development as the Government action was tested on the touchstone of transparency and fairness. The Court had declared that the IS, in this case, had procured the best market price and had chosen a superior proposal.

A fiscal impact study undertaken by the IS for 130 enterprises provides deep insights into their performance and the impact on the State finances. The accumulated losses of Rs 157 crore in 1996-97 had mounted to Rs 3,210 crore in 2000-2001 at a CAGR of 27 per cent. Besides subsidies, cost to the exchequer was about Rs 7,191 crore.

The Andhra Pradesh Government and the Indian Farmers Fertiliser Co-operative (IFFCO) are likely to divest 51 per cent of their shareholding in the State-owned Godavari Fertilisers and Chemicals Ltd before the end of this fiscal year. While the State would go ahead with the divestment of its stake, the decision of IFFCO was awaited, Mr Panwar said.

Consultants Capital Fortunes have been entrusted with the task of valuation of several enterprises that are to be offered to the public through the divestment process. The State holds stake in several big enterprises including Nagarjuna Fertilisers, VST Industries and Sirpur Paper Mills and AP Paper Mills.

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