Maharashtra plans revaluation of state-run corporations

Private bank or Sicom may get the mandate

The Maharashtra government wants to find out the true worth of its assets, or at least of its 40 state-run corporations, and is thinking of either roping in a private bank for the purpose or of handing over the job to Sicom.

Confirming this, a senior secretariat official told Business Standard: "The bank (or Sicom) will be provided with all requisite information and data about the individual corporation by the CEOs of these state-run bodies. This is essential as, these the true worth of these corporations is not reflected in the government's accounting books."

This comes in the wake of repeated downgrades by credit rating agencies of Maharashtra's debt servicing abilities and these agencies and the media highlighting the state's burgeoning debt.

Once the true value of these companies is arrived at, the state government plans to come out with a concept paper on the kind of financial reconstruction required for each of these corporations to improve their 'true worth' valuation.

"The CEOs are being instructed to provide all the data sought by the agency (the bank or Sicom) when they are contacted. We will also update the bank with the current status of these corporations, 13 of which had been referred to the Maharashtra board for restructuring state enterprises (MBRSE). The MBRSE is currently chaired by Michael Pinto. However, earlier under the tenure of Sharad Upasani it had recommended disinvestment, closure or restructuring for 13 of these corporations that were referred to an Upasani-headed committee," the official said.

He added that the status of these MBRSE orders would also be presented to the bank so that its task of assessing the corporation's true worth becomes easier.

Interestingly, although the MBRSE's orders are binding upon the state government, the latter is yet to implement any of the orders issued by MBRSE so far. According to the state government the problem is the strong trade unions functioning in these corporations.

"We had even asked the Upasani committee (MBRSE) to hold parleys with the trade unions representing workers in the corporations that it has recommended for closure. However, the committee declined to do so, leaving the onus upon the state government to carry out its orders (of closure, restructuring and disinvestment) as well as to sell the idea to the employees working in these corporations. As a result, there has been no progress on either front."

The MBRSE had even gone to the extent of shortlisting five bidders to pick up the 100 per cent state government held equity in Mafco.