Govt to hire outside agencies for PSU appraisal

The government proposes to hire outside agencies to measure the performance of the Maharatna, Navratna and Mini-Ratna PSUs which have been significant operational and financial autonomy.

The Department of Public Enterprises (DPE) has invited bids from professional agencies to monitor the blue-chip PSUs against their peers in the private sector, including foreign companies. The objective is to ensure that the operational and financial freedom given to top PSUs is well utilised by them.

"It's proposed to utilise the services of a professional agency in assisting DPE in the periodic monitoring of the Maharatna, Navratna and Mini-Ratna CPSEs and measuring to what extent the delegated powers have been utilised by these units," the department said in its bid document.

The government is also keen to professionalise the senior PSU management below the board level. "It has been felt that since senior executives like general managers and deputy general managers also play an important role in the decision making process, the issue of professionalisation should be broadened," the DPE said.

The performance review, to be completed by December, will also evaluate the Central public sector enterprises in term of corporate governance. The appointed outside agency will be "required to devise an objective and quantitative system of measuring the compliance of the corporate governance guidelines by the CPSEs".

The other job to be assigned to the agency will include review of the current categarisation of the state-runs companies. The categorisation into A,B,C and D has important implications in terms in determining salaries of the board level officials and eligibility for getting Navratna status.

The government has delegated enhanced powers to PSUs. Four of the top performers-- ONGC, IOC, SAIL and NTPC-- have been upgraded to Maharatna from Navratnas.

The Maharatna firms can take financial decisions up to Rs 5,000 crore without government approval.

The Navratana and Mini-Ratna firms enjoy financial autonomy to take decisions up to Rs 1,000 crore and Rs 500 crore, respectively.