The Hindu Business Line : No move to privatise State PSEs, says AP CM

The Cabinet has cleared the implementation of Action Plan - III of public enterprise reform to cover 30 PSEs and cooperatives. This is to be taken up and completed within three years from 2006-07, covering 10 enterprises a year.

Hyderabad , July 10

The Andhra Pradesh Chief Minister, Dr Y.S. Rajasekhara Reddy, on Monday said that there was no move to privatise public sector enterprises, which includes large corporations such as the AP State Road Transport Corporation and Singareni Collieries Company Ltd.

In fact, the effort is to strengthen their management and improve their performance.

However, the State would reform and restructure some of the State-owned public sector enterprises and even merge some of the corporations in tune with the market requirements and business imperatives.

Addressing newspersons at Secretariat here, Dr Reddy said that a decision was taken at the recent Cabinet meeting to restructure some of the PSEs and streamline their functioning to current day business environment. As a part of this exercise, it is proposed to merge a corporation like the AP Industrial Development Corporation with AP Industrial Infrastructure Corporation Ltd (APIIC).

Explaining the rationale for such a move, Dr Reddy said that when APIDC was created about 30 years ago, there were not many funding options for small and medium sector enterprises and APIDC would play a key role in helping them. Now that banks and financial institutions are lending, APIDC is not in a position to match them as it has to borrow from banks to lend to SMEs. Therefore, it was felt that merger of APIDC with APIIC would be an ideal option.

The Cabinet, which met here last week, cleared the implementation of Action Plan - III of public enterprise reform to cover 30 PSEs and cooperatives. This is to be taken up and completed within three years from 2006-07, covering 10 enterprises a year. These include RTC, Singareni, State Trading Corporation, State Cooperative Bank, Mineral Development Corporation, Housing Corporation and Beverages Corporation.

As a part of this exercise, studies will be undertaken to recommend measures for potentially viable enterprises to improve their performance by restructuring.

Reiterating that there is no move to privatise either RTC or Singareni, Dr Reddy said that last year, the Government infused about Rs 600 crore to improve the financial position of RTC and to strengthen its functioning and compete better with the private sector operators.

HOLISTIC APPROACH

The Chief Minister said that the effort of the Government is trained at bringing in a holistic approach to development. This can be seen from the fact that in the last two years, the State added about 7.5 lakh acres of additional area under irrigation and also brought down the tariff for industrial consumers, to woo more companies.

POPPALAGUDA LAND ISSUE

Referring to the Poppalaguda land issue near here, the Chief Minister said that the Government was in the process of examining tissues relating to allotment of land of about 1,000 acres to refugees, of which about 220 acres was in dispute. A decision on the course of action would be taken shortly. The Government has also sought legal opinion about the issue.

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