State divestment body lies in shambles

While chairman Sharad Upasani had demitted office on October 1, 2003, the other members, Rajendra Prabhakar Chitale and Ravi Narain, resigned on Sunday, almost unnoticed.

According to sources in the know of the development, the exit can be viewed against the backdrop of the government's failure to comply with the schedule for the disinvestment closure and restructuring orders issued in respect of eight public sector enterprises by the MBRSE.

Incidentally, the directives of MBRSE, a quasi-judicial body, are binding upon the Maharashtra government.

The Upasani commission had issued orders to disinvest the state government's stake in Mafco Ltd and Chitali Distilleries. It had also recommended that the Haffkine Bio-Pharmaceuticals Corporation Ltd be referred once again to it for disinvestment.

In the case of Mafco Ltd, a MBRSE status report says: "The order for disinvesting the Maharashtra government's stake in Mafco Ltd was issued on December 19, 2002. Five bidders were qualified for the next stage of the disinvestment. Due diligence and site visits were completed. Representative of employees were heard. The disinvestment of Mafco is expected to be completed by August 2003."

However, the case remains a victim of the government's inaction. In the case of Chitali Distilleries, the MBRSE had said: "The disinvestment process is expected to be completed by August, 2003."

Here also the case is no different. In the case of Haffkine Bio-Pharmaceuticals Corporation, the commission had said: "The corporation needs funds to the extent of Rs 80 crore for capital investment over the next five years. Since the government is not in a position to contribute this amount, it ought to refer the body again before the board for disinvestment."

The new reference to the MBRSE under section 13 (2)(i) is still awaited.

The state may attribute its stand on the MBRSE proposals to various procedural delays involved in inviting public tenders and executing them.

But what justification can the state give on the non-compliance with the order to close down state enterprises which have been eating into the state exchequer?

More than a year after the MBRSE directed the closure of the Maharashtra Land Development Corporation and spelt out the manner in which this should be achieved by July 15, 2002, the corporation continues to cost the state's exchequer.

In respect of the Kolhapur Film City Corporation (KFCC), after pursuing all options of merging the state body with another to revive it without success and the state government categorically stating that it would not provide any funds for reviving the corporation, the MBRSE passed orders for its closure indicating the procedure on December 30, 2002.

The MBRSE status report says: "The state government has not taken any action on the orders." The state government has also failed to comply with the revival plans suggested by MBRSE.

The commission had referred the Maharashtra Fisheries Development Corporation (MFDC), the Maharashtra State Road Transport Corporation (MSRTC) and the Maharashtra Sheep and Goats Development Corporation for restructuring.

The MBRSE, in its recent status report on MFDC notes: "Interim orders were issued on December 13, 2002. The state government was asked to release the balance grant of Rs 71 lakh. A scrutiny shows that the government has neither released the funds nor completed the survey prior to the next auction as directed."

The case of the MSRTC is not different. The board's time-bound schedule for reviving the corporation issued on January 7, 2003, is not being adhered to. The case is ditto with MSGDC.

The government despite being mum on the fate of the old referrals has referred another nine state enterprises to it for either restructuring, disinvestment or closure.

J P Dange, principal secretary, animal husbandry, dairy development and fisheries department, in reply to a Business Standard query on why the state was delaying in complying with the MBRSE orders, said, "The matter is confidential and will be placed before the Cabinet soon."