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Privatisation of Government Firms - an Insight

Privatisation of Government Firms - an Insight, naya haryana, नया हरियाणा

6th September 2014

Naya Haryana

Due to poor cash and resource management in the last 10 years, the Hooda administration is now cash strapped and does not have adequate resources to either fund infrastructure development in the state or initiate any kind of social welfare projects. This is the reason why we find most cities, towns and villages in appalling condition on almost all parameters.

Gurgaon, which is held out as a flagship pride of the state, is mostly developed through private capital and private initiative. Even today, Gurgaon lacks government-run public transportation. The metro we see today is mostly been funded and operated by the Delhi metro. The monorail is a private initiative. Gurgaon roads, street lighting, parks etc., that fall within the state's ambit of responsibility, are all in a poor condition. Noida and Greater Noida, which picked up pace of development much later, are far ahead on state funded and maintained infrastructure.

If we go beyond Gurgaon and look at the overall state, the Haryana Roadways is in a bad condition. The buses are in poor condition and many need to be replaced, while others need major overhaul. While other states have introduced low floor buses in their states under the JNNURM scheme, we don't see these buses in Haryana.

Failed attempt at privatisation: Roadways

The Haryana roadways is in a bad condition. The roadways has a large number of workers that include all categories like, drivers, conductors, mechanics, and cleaners etc., that are temporary staff. They have been demanding regularisation for a long time. In order to meet the long pending need for upgradation and overhaul of the entire fleet, the state government initiated a partial privatisation program.

This has been deeply resisted by the employees who are backed by strong unions, which have been repeatedly calling for strikes to resist any attempt by the state government towards privatisation.

The inept handling of the situation by the state government has led to a stalemate, where on one side it does not have the funds to modernise the long pending fleet of buses, and on the other it is unable to bring the trade unions on board to agree to partial privatisation. Meanwhile the public continues to suffer.

Failed attempt at privatisation: Power

The Hooda administration has been totally responsible for mismanaging the power situation in the state. It came to power on tall promises of turning Haryana into a dream modern state, but today we have nothing but power failure throughout the day. Factories that run only partially or operate on diesel gensets that they fund, schools where children sit in the sweltering heat because there is no electricity, hospitals and health centres that operate partially due to lack of power, and the list of suffering goes on and on.

In all these years, the Hooda government made very little investment at generating power in the state and today it has to rely on power being purchased from the grid. The bungling is not limited to weak attempts at privatisation alone but also at private outsourcing of power supply. The problem here is that due to lopsided priorities, the state electricity board has not been able to pay the grid suppliers on time and the suppliers have been threatening to cut the supply for a long time.

The state government signed an agreement with Adani Power Limited (APL) for supply of electricity to the state. Due to sheer mismanagement on its part, the payments were not released on time, as a result on Aug 27 this year, APL cut off 1424 MW of power that it was contracted to supply to the state.

For a state already reeling under massive power shortage and with Haryana having to deal with a poor monsoon this year, can our state afford this bungling at a time like this? The people want answers as to why the government allowed the situation to come to this stage? Why did it fail to engage with APL much earlier rather than allow the situation to come to this point where they were forced to cut the power? And APL is not the only one whose payments are due. Speak to any of the vendors that supply power equipment to HSEB or offer services to them and they will tell you the long wait and frustration that they have to undergo to get their payments.

The state government has also failed in its attempt to introduce privatisation of power transmission and distribution within the state. The power distribution system is in a mess with major replacement and maintenance required along the entire supply chain. The state government doesn't have the money to invest and has failed to motivate the state government employees to step up the work culture. In all this, the people continue to suffer.

Take a look at how a city like Mumbai has managed its power distribution network that ensures 24 hour supply. The people, offices and factories do not need to use generators. The power distribution is entirely handled by Tata Power and Reliance, who are both doing a good job of it. Closer home, Delhi has managed quite successfully to improve their power distribution through privatisation and brought in the Tatas and Reliance.

So how is it that these states were able to successfully convince and work with their state government employees and get them to agree to privatisation of power distribution, while our Hooda government has totally failed? Doesn't this show the sheer incompetency of the state government? It neither has the money nor the ability to bring in change.

Failed attempt at privatisation: Tourism

The same is true of other arms of the government. Take tourism. The state government did a great job in the early 70s when it set up a network of tourist places and developed these as low cost but well maintained tourist spots. Haryana had one of the most successful models at the time.

But now the state infrastructure for tourism is languishing due to lack of modernisation and upgradation of facilities. Despite having several more very good tourism spots that can be developed, the state government has not been able to bring in more funds nor been able to get the state employees to agree to privatisation. In the process the state has been losing revenue and tourist to other states.

Inept governance

The problem is that this government lacks the political will to address both the state employee demands, as also introduce the much needed privatisation, that can bring in the required capital and efficiencies. End of the day, it is a matter of leadership and administration. When these are weak, the state negotiates from a position of weakness and then this is taken advantage of by everyone.

The state has paid dearly for this incompetency for 10 years. The citizens of Haryana have suffered enough and have given enough time to this administration to deliver on its promises. But now it's time for a Nayi Soch. It's time for a Naya Haryana.

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