PPP-Value Creation

Bikash Choudhury



This refers to sale of equity in NALCO. In principle, many progressive economist and politician do not have objection to sell a miniscule portion of central Govt. shares in public sector enterprises to generate much needed revenue to finance all the time growing Government’s non-plan expenditure. However, Govt. can look fresh at PPP model to create an exponential growth in value creation in all public enterprises before deciding on off-loading its shares.
Our public sector enterprises lack an entrepreneurial mindset comparable to leading family or professional run private enterprise; which is sine-qua-non of growth, share holder value creation in current globalised business environment. To deal with the issue, govt.and planning commission may examine to appoint leaders of private enterprise as co-chairman of public enterprises; who don’t have any conflict of interest with the assigned public enterprise to add a streak of entrepreneurial mindset in each public sector organization, to, eventually drive the growth. Policy can be so designed that private sector leader as Co-Chairman can spend quality 25-40 hours a month for public enterprise in lieu of a compensation of 0.25% of net growth in incremental profit and of course, the perks of being closely associated with the Govt.. Hypothetically, just in case Govt. decide to appoint Mukesh Ambani to Railways, Sunil Mittal to NALCO, Kumar Mangalam Birla to Air India, Anil Ambani to NABARD, Anand Mahindra to BSNL, Udaya Kotak to NTPC and Chanda Kochar to ONGC; may be, in a year from now, we would see a qualitative difference, not only, in the enterprise value of public sector but, in the over all intrinsic strength of all public enterprise. More over, these exercises would work as a case study with demonstrate-able demonstration effect on all public enterprises in central and state Govt. in the country.