On Oil PSU board decisions

Oil PSU board decisions must now get Jr Minister's nod


In a move that may curb the autonomy of blue chip oil PSUs, the Petroleum Ministry wants decisions made by boards of firms like ONGC and IOC to pass muster with junior oil minister Jitin Prasada.For the first time ever, the Petroleum Ministry has asked government directors on the board of oil PSUs to not only report decisions made by the company, but also submit minutes of the board meetings to Minister of State for Petroleum and Natural Gas Jitin Prasada.

While the government has two to three directors on the board of PSUs to represent its interest as the largest shareholder, board decisions have never before been put up to ministers.Sources said Petroleum Minister Murli Deora has never interfered with the functioning of the oil PSU boards, which are considered independent by all standards. That independence now stands challenged, with board decisions subject to scrutiny by Prasada.

"Officers on the board of various oil PSUs are directed to keep Minister of State (Prasada) informed about decisions taken in the meeting of the (company) board," an oil ministry order dated May 19 said. "The minutes of the meeting of the board may (also) be put up to Minister of State."Terming the order as "retrograde", bureaucrats who have served on the board of Navratna PSUs said in the past only the Secretary of the Ministry was consulted on matters connected to government policy. It wasn't clear why board decisions have to be reported to Prasada when senior officials of the ministry were part of the decision-making process.

"If any item in the agenda for a board meeting had a bearing on government policy, we would inform the secretary and take directions. But never were things like minutes of the meeting submitted to the secretary, leave alone the minister," a senior IAS officer who served on the board of a Navratna oil PSU said.The move, industry observers said, will curb PSU autonomy, as their decisions will now be subject to scrutiny by political appointees.

Also, sensitive information like bids made by India's flagship overseas firm, ONGC Videsh Ltd, for acquisition of oil and properties, which are minuted, may be leaked after going out of the company domain. They said any bid that OVL made was till now confined to a panel of top bureaucrats or the Cabinet, which clears it. Prasada is a part of neither.OVL, which had in the past lost out on big projects because its bids were leaked, now submits only coded names of acquisition targets to the government panel approving it. But the board minutes have details of the entire bid.
Press Trust of India