PSU IN MEDIA

Merging oil PSUs to create a goliath bad idea instead privatise HPCL or BPCL

  • by Psu Connect
  • Date: 04-02-17

NEW DELHI . Before creating an ‘integrated public sector oil major’ as finance minister Arun Jaitley spoke of on Wednesday, the government would be well advised to look at its downsides. Even globally, the history of M&As succeeding is a poor one, imagine doing this in a PSU environment. 
 
A key element of any M&A, it is obvious, is savings in manpower and resources—when the government is unable to even privatise PSUs due to fear of job losses, what are the chances it can shut down various departments in the merging PSUs? 
 
Merging Air India and Indian Airlines took years with the work cultures very different and each airline continuing to follow different policies for a long time, and there was even a tussle on whether AI or IA pilots should be flying certain routes. 
 
To the extent decision-making in any PSU is influenced by bureaucrats and politicians, or by the fear of the CAG/CBI/CVC, one integrated oil company is even more risky since even bigger decisions will be taken under pressure or put on hold.Financial Express

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