PSUs and Maharatna status

Four PSUs pitch for Maharatna status

Four major public sector undertaking (PSU) companies IndianOil (IOC),
NTPC, Steel Authority of India Limited (SAIL) and Oil and Natural Gas
Corporation (ONGC) are aiming for the 'Maharatna' status paving way
for their financial and boardroom freedom.

Sources said that IOC, NTPC, SAIL and ONGC have made presentations
before the inter-ministerial committee (IMC) making a claim for the
status seeking more autonomy in decision-making and financial
investments.

The Union Cabinet had last year set out 9 criteria for seeking this status.

Senior officials from the Department of Expenditure, Department of
Public Enterprises, Planning Commission as well as the administrative
ministries are represented on the IMC.

Officials said the Maharatna status would provide enhanced financial
autonomy for PSUs for taking decisions relating to investments in
joint venture companies and mergers and acquisitions.

The idea behind the whole exercise is to give a thrust to the plans of
the PSUs with a significant international presence to become global
giants Maharatna status will be reviewed by an apex committee headed
by the Cabinet Secretary.

All four companies have increased their international presence in
recent years. While ONGC and IOC are looking for opportunities abroad
to acquire oil and gas assets, NTPC and SAIL are hunting for captive
coal blocks in foreign lands.

ONGC has been faced with serious constraints in financing OVL's
acquisitions of oil and gas assets abroad because of investment
ceilings and the need to time and again go back to the Government and
the Cabinet to seek approval for such international commitments.

At present, ONGC's investment in any OVL project cannot exceed Rs.1,
000 crore but could stand enhanced to Rs.5, 000 crore if it acquires
the Maharatna status.

The companies are required to give convincing reasons to the IMC that
they have a strong case for grant of Maharatna status and that it is
not seeking the tag just because it meets the minimum criteria laid by
the government.
Hindu, New Delhi, April 11, 2010