Saturday, November 30, 2013

Headless PSUs: How long they should remain so?

Can PSUs deliver sans boss?
NMDC, NHPC, MMTC and HMT are some of the PSUs that share a common element. All these and many others are functioning for quite some time without any regular heads. The question is how long should a PSU function without a regular boss? And there is no doubt the absence of the boss at the helm...
does have a bearing on the functioning of the PSU. Some crucial decisions couldn't be taken quickly in the absence of a regular chief. This is also because the acting chiefs are often devoid of powers to take key decisions.
In most of these cases, the delay is either due to Public Enterprises Selection Board (PESB) acting late on appointment or late receipt of vigilance clearance. It may also due to the parent ministry not favouring the PESB's choice. In such cases, the selected panel has to be scrapped and a new advertisement has to be notified. When PESB recommends a name, his candidature remains valid for one year and if such a person is not appointed within that period the entire process has to be started all over again.
Sometimes, a joint secretary is often appointed as temporary chief of a PSU, like in the case of HMT. But the appointment of a joint secretary is often seen a convenient step for the administrative machinery as he has to report to his senior boss who is the secretary in the concerned ministry. Therefore, the secretary can influence the functioning of the particular PSU in a direct manner.
At least a dozen public sector undertakings have been headless for a span ranging from three months to three years. NHPC’s top post has been vacant since January 1, 2011. NMDC has been functioning for nearly two years without a full-time chairman. NMDC, country's largest iron ore miner, is without a full-time chairman since the retirement of its earlier regular head Rana Som on December 31, 2011. Steel Authority of India Ltd (SAIL) chairman CS Verma is officiating as NMDC head. PESB had selected a candidate, but the steel ministry rejected the choice. Later, an appointed panel, headed by Planning Commission Member Arun Maira, recommended names of Narendra Kothari, CEO of SAIL Burnpur plant and TK Lahiry, CMD of Bharat Coking Coal Ltd in May. 
Metals and Minerals Trading Corporation of India (MMTC), a central public sector enterprise, is worth Rs 66,000 crore and is one of the highest earners of foreign exchange, but the organization has been without a regular CMD since October 2010. In October 2012, an additional secretary in the commerce ministry, DS Dhesi, took over as the CMD in addition to his present assignment as the director-general of the trading giant.
HMT Ltd hasn’t had a regular CMD for two years and after the suspension of SG Sridhar in August this year, Harbhajan Singh, a joint secretary in the ministry of heavy industries, is the acting CMD of the PSU major. 
In the past too, other major PSUs like BHEL, NALCO, Coal India and ONGC functioned without a chairman for months on end often leading to delays in critical decisions.

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