Author: Express News Service
Publication: The Indian Express
Date: May 27, 2006
URL: http://www.indianexpress.com/story/5249.html
Three loss-making public-sector undertakings
(PSUs) of Gujarat have started making profits, and the turnaround is being
attributed to absence of political interference.
The Modi government has not appointed any
political person to head these PSUs, and senior bureaucrats are being being
given a free hand in running them.
Over the last few years, there has been a
marked turnaround in Gujarat State Fertilizers & Chemicals Ltd (GSFC),
Gujarat Alkalies & Chemicals Ltd (GACL), and Gujarat Electricity Board
(GEB), which has since been restructured. Two other PSUs - Gujarat Narmada
Fertilizer Co and Gujarat Industrial Power Co - have improved profits.
GSFC had registered losses of Rs 390 crore
in 2002-03. The next year it showed a Rs 42 crore profit. In 2004-05 the profit
rose to Rs 252 crore, and in 2005-06 to Rs 437 crore.
GSFC managing-director A.K. Luke, an IAS officer,
attributed the turnaround to good business practice: running all plants to
full capacity, switching fuel from naphtha to natural gas, and restructuing
or renegotiating at cheaper rates of interest loans of Rs 900 crore. He said
the switch from naphtha to natural gas gave "GSFC a big lift."
"Besides, we resolved to go for aggressive
marketing. We also reduced the cost of transportation of fertilizer,"
said Luke. "A decision to introduce a day-to-day management information
system involving all GSFC employees has also contributed to the turnaround."
All this has been reflected in the share price:
the GSFC share price has risen from Rs 15.50 in March 2005 to Rs 212 this
Wednesday.
Of the GEB turnaround, Minister of State for
Energy Saurabh Patel said the chief factors responsible were: increase in
plant-load factor from 62 per cent to 70 per cent; review of power-purchase
agreements with private producers; and, most important, reduction of transmission
& distribution losses from 35 per cent to 26 per cent by curbing power
theft.
In 2000-01 the board had accumulated losses
of Rs 2,543 crore, which were wiped out eventually, and in 2005-06 it notched
up a profit of Rs 200 crore.
"This is a remarkable turnaround, and
has happened for the first time in GEB's history," he said. GACL, which
manufactures sodium hydroxide and related chemicals, had posted losses of
Rs 66.28 crore in 2001-02. In 2005-06 it made a profit of Rs 293.80 crore.
Its share price rose from Rs 11.88 in 2004 to about Rs 170 today.
The Bharuch-based GNFC has shown improvement
in profits, with figures rising from Rs 71.67 crore in 2001-02 to Rs 294.72
crore in 2005-06. This is being attributed to increase in production, aggressive
marketing, and upgradation of technology. GIPC's profits have risen from Rs
24.90 crore in 2001-02 to Rs 114.81 crore in 2005-06. The power company declared
a dividend of Rs 45 in 2005-06, the minister said.
