Ear to the ground
But PSUs are meant to be milked!
Civil Aviation Minister Rajiv Pratap Rudy’s behaviour is indefensible not only for the way he went about milking the Airport Authority of India but also the way he sought to justify it. But if one were to go through the affairs of his ministry, Rudy’s case can be easily ignored. Flip through the latest reports of the Comptroller and Auditor General of India, submitted in Parliament in the last session, and you would get the point.
CAG Report No. 4 of 2004, which reviewed performance of selected public sector undertakings between April 1998 and March 2003 has this to say about the Indian Airlines:
* Wage bill of IA went up by Rs 143 crore, though the number of employees went down by 11 percent during the period. Additional wage bill was met with periodic hikes in airfare.
* Productivity Linked Incentives (PLI) went up by over Rs 100 crore during the period but there was no corresponding gain to the company. The total PLI package was to the tune of Rs 1,450 crore while IA actually incurred a loss of Rs 585.83 crore during the same period! Here are some details:
(i) IA paid fixed productivity allowance/special productivity allowance amounting to Rs 250 crore during the period. But this payment was not linked to performance or productivity;
(ii) Pilots and flight engineers were paid flying allowances to the tune of Rs 4 crore even while they were on privilege leave;
(iii) Cockpit crew were paid Rs 2.79 crore even while they were not on flying duty but flying with passengers from one base station to another for operation of return flight. Mind you, this is over and above 65 percent normal flying allowance cockpit crew get, as per their agreement with the company, even when they are travelling thus;
(iv) An extra sum of Rs 33 lakh of flying allowance was paid for flying Air India in domestic sector, at the rate of 50 percent more than what is allowed. The plea: “After operation of such flights, pilots had to remain idle for three consecutive days due to Flight Duty Time Limitation.” CAG found this claim dubious and
(v) An excess layover allowance of Rs 3.22 crore was paid between February 2001 and March 2003, though all such previous allowance had been replaced with productivity allowance that started in 1996, for no reason or rhyme.
(The CAG report actually points out through facts and figures how the performance level for productivity linked incentives was actually pegged lower than the average, thus “rewarding employees for achieving average performance!)
* Cabin crew and pilots were paid Rs 13.57 crore as ‘out-of-pocket expenses’ over and above the terms of settlement entered with their unions, which already made a provision towards this.
* Rs 8.12 crore paid for professional development allowance although the company was already reimbursing expenditure on technical and professional literature.
As one can guess the ministry didn’t bother to respond when CAG suggested corrective measures. Any wonder the ministry officials jumped to Rudy’s support in his hour of crisis?
But why pick on Indian Airlines alone. CAG’s scrutiny (Report No. 3 of 2004) revealed seven PSUs made payment of Rs 17 crore to officers on foreign travel between October 1995 and March 2003 without even asking for vouchers. All seven PSUs--ITPO, Shipping Corporation, IRCON International, HAL, Bharat Earth Movers, Bharat Electronics Limited and others—had their own explanations, which CAG said, were not acceptable.
Another instance: Report No. 3 gives details of how MMTC, State Trading Corporation and PEC Limited made an excess payment of Rs 5.33 crore to its employees by way of leave enchashment of earned leaves by calculating a 26-day month, instead of 30-day month as is the norm. And how did the PSUs explain it? Among other things, they said, other PSUs too followed similar practice and it was done to make the VRS more attractive.
If you think these are minor aberrations, read this. Food Corporation of India was supplied excess rice valued at Rs 133 crore between April 2001 and September 2002 to exporters. The exporters were to be given a certain amount of extra rice to account for broken grains. But FCI hiked the limit arbitrarily and needless to say, the exporters were richer by at least Rs 133 crore.
The list is long and there are accounts of all kinds of dubious activities that PSUs indulge in. All such activities involve huge money transactions and one can safely assume that such dubious activities are not accidental.
Take for example the Oil India’s award for drilling four wells in Saurashtra and North East Coast in 1993. The award went to a private company knowing fully well that the company was not capable of doing the job. The company was found technically deficient and incompetent at various stages of the work too but no punitive action was taken, even the performance bond was not invoked in time. Finally, the contract was terminated but not before the Oil India had lost Rs 74 crore and got embroiled in unnecessary litigation, which is continuing.
In yet another case, Power Finance Corporation disbursed loans amounting to Rs 99.32 crore to a private party for building a hydel project without adhering to normal safeguards and terms and conditions of disbursement in 1999-2000. Work is, naturally, on hold.
In all, it is a cosy world out there, the world of public sector undertakings. Bureaucrats, politicians and their friends and relatives coexist happily, using PSUs to fund their private pleasures without anybody really disturbing them. The Rudy affair happens only once in decades. Everybody would soon forget it. CAG reports, in any case, doesn’t matter much for the ruling establishments.
Monday, November 26, 2007
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