The Hindu Business Line : Bengal plans to raise Rs 1,700 cr to revamp PSEs

"Based on our experience with the pilot project, we have developed a model for restructuring the State public sector; we have already submitted a proposal to the Department of Economic Affairs for raising resources."

Kolkata , May 18

THE West Bengal Government plans to raise Rs 1,700 crore from different foreign agencies for restructuring 29 public sector enterprises during 2005-07.

Bulk of the PSUs identified for restructuring is from the power and transport sectors, including the electricity board.

The Government has already launched a Rs 237-crore pilot programme for restructuring 26 loss making PSUs, including Great Eastern Hotel. The measures taken include closure, inviting joint venture partner with a majority stake to the private sector participant and modernisation of four PSUs. The Department of International Development (DFID) of the UK Government has sponsored Rs 213 crore of the total outlay. The project will result in annual savings of Rs 60 crore to the State Government.

West Bengal has a total of 89 state enterprises, mostly loss-making, leading to an annual burden of Rs 1,500 crore to the State Government.

"Based on our experience with the pilot project, we have developed a model for restructuring the State public sector. We have already submitted a proposal to the Department of Economic Affairs for raising resources from different donor agencies for the second phase of restructuring. We are expecting the same to be cleared in next two weeks," Mr Sunil Mitra, State Principal Secretary for Department of Public Enterprises (PED), told newspersons here. PED is acting as the nodal agency in implementing the project.

While DFID has already announced a doubling of its assistance to West Bengal to £40 million in the current fiscal and is expected to take an active part in the project, Mr Mitra indicated that the State Government approached the World Bank for restructuring transport facilities.

Earlier, inaugurating a workshop on `The restructuring of PSUs - Best practices', the West Bengal Chief Minister, Mr Buddhadeb Bhattacharjee, said no State Government could afford to bear an annual burden of Rs 1,500 crore on account of PSUs. The workshop was organised by the State Public Enterprises Department and DFID and was attended by a number of foreign donor agencies.

"Bulk of the State PSUs is taken over from private managements in the past to avoid closure. We did oblige the popular demand then but without any consideration for the future. Accordingly, today we have a hotel, a newspaper and many other such unwanted activities for State Government. We have recently closed the newspaper and are in the process of handing over the hotel to the private sector. But there is a lot more to be done," Mr Bhattacharjee added.

Talking about the need to reform the power and transport utilities, he said the WBSEB has already turned around and was registering an operational profit. Further restructuring will make it even more efficient.

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