Defaulting public sector organisations
Sunday, 2 November 2008
Shamim Ahmed
Public sector organisations that do not settle their accounts with other government or private bodies negatively affect proper functioning of the public sector as a whole. The defaulting public sector organisations sometimes face formidable difficulties in clearing their debts. More often the difficulties are their own making. These bodies cannot and should not, therefore, expect that their inability to clear debts deserves a sympathetic consideration.
As a matter of fact neither sympathy nor undue consideration should be shown to defaulters of any category in the interest of efficient functioning of the economy. The private sector defaulters also draw harsh criticism from the media. It creates pressure on the private sector to better utilise their non-performing loans. But the opposite is the case in respect of the public sector enterprises, where many resourceful organisations deliberately withhold payment of their dues to other government bodies, pushing them into serious financial and consequential problems.
Biman Bangladesh is a case in point. The national flag carrier has been a losing concern for long due mainly to all pervasive corruption in the organisation and indifference of its management. But the airlines could be a profit earner with better management. This was how the experts evaluated Biman even before it was changed into a corporate body for more efficiency. But there was no justifiable reason for Biman not being able to service its debts so long. It should have been able to pay them out of its regular earnings. But its management developed a strange mentality that it would not have to pay the dues, particularly to another government owned body. Thus, it did not pay for long the price of jet fuel it procured from the state-run Bangladesh Petroleum Corporation (BPC). Consequently, BPC suffered unbearable financial burden.
Beside, public utility services like the Dhaka Electricity Supply Authority (DESA) and Water and Sewerage Authority (WASA) have huge unsettled claims against public as well as private sector clients. The non-payment of their dues by these defaulting clients has created enormous financials burdens for the utility services. As a result, they cannot take up routine maintenance and development work. The utility bodies are more proactive nowadays in collecting their dues from private clients. But there seems to be no such enthusiasm to collect outstanding dues from the public sector customers.
There is a pressing need for all public organisations to gear up the collection of their outstanding dues from the defaulting organisations.
Public sector organisations that do not settle their accounts with other government or private bodies negatively affect proper functioning of the public sector as a whole. The defaulting public sector organisations sometimes face formidable difficulties in clearing their debts. More often the difficulties are their own making. These bodies cannot and should not, therefore, expect that their inability to clear debts deserves a sympathetic consideration.
As a matter of fact neither sympathy nor undue consideration should be shown to defaulters of any category in the interest of efficient functioning of the economy. The private sector defaulters also draw harsh criticism from the media. It creates pressure on the private sector to better utilise their non-performing loans. But the opposite is the case in respect of the public sector enterprises, where many resourceful organisations deliberately withhold payment of their dues to other government bodies, pushing them into serious financial and consequential problems.
Biman Bangladesh is a case in point. The national flag carrier has been a losing concern for long due mainly to all pervasive corruption in the organisation and indifference of its management. But the airlines could be a profit earner with better management. This was how the experts evaluated Biman even before it was changed into a corporate body for more efficiency. But there was no justifiable reason for Biman not being able to service its debts so long. It should have been able to pay them out of its regular earnings. But its management developed a strange mentality that it would not have to pay the dues, particularly to another government owned body. Thus, it did not pay for long the price of jet fuel it procured from the state-run Bangladesh Petroleum Corporation (BPC). Consequently, BPC suffered unbearable financial burden.
Beside, public utility services like the Dhaka Electricity Supply Authority (DESA) and Water and Sewerage Authority (WASA) have huge unsettled claims against public as well as private sector clients. The non-payment of their dues by these defaulting clients has created enormous financials burdens for the utility services. As a result, they cannot take up routine maintenance and development work. The utility bodies are more proactive nowadays in collecting their dues from private clients. But there seems to be no such enthusiasm to collect outstanding dues from the public sector customers.
There is a pressing need for all public organisations to gear up the collection of their outstanding dues from the defaulting organisations.