Due to the growing interference of the Centre in public sector companies, ONGC has reached the brink of bankruptcy.
The ONGC, a Navaratna company, is facing a severe economic crisis and the condition has now become so dismal that it is paying off its employees through loans.
After ruining the country's small and medium enterprises through demonetisation and the Goods and Services Tax (GST), the central government is now hell-bent upon destroying the Navaratna companies of the country. In order to save the power company which is owned by Gujarat government, it has come to light that the Centre forced the Oil and Natural Gas Corporation (ONGC) to buy a gas block, which did not bear any gas even after the state incurred an expenditure of ₹20,000 crore.
Consequently, ONGC, a Navaratna company, is facing a severe economic crisis and the condition has now become so dismal that it is paying off its employees through loans. This situation has arisen due to constant intervention of the central government in the functioning of the ONGC over the last four-and-a-half years. The allegations have been made by ONGC’s employees in a letter written to the Prime Minister by ONGC Employees Mazdoor Sabha.
Due to the growing interference of the Centre in public sector companies, ONGC has reached the brink of bankruptcy. Once financially self-sufficient, the ONGC now has to take an overdraft from the banks for payment of salaries and allowances to the employees. This happened because the Central Government forced ONGC to buy the Krishna-Godavari basin from Gujarat State Petroleum Corporation for ₹8,000 crores.
ONGC Employees Mazdoor Sabha has written a letter to Prime Minister Narendra Modi in this regard and conveyed the entire situation.
The general secretary of the Mazdoor Sabha, AR Tadvi, has mentioned in the letter, “During 2016, the Government of India forced ONGC to acquire gas blocks in Krishna Godavari basin belonging to Gujarat State Petroleum Corporation, GSPC for a total consideration of nearly ₹8,000 crore. This, despite the fact, that the GSPC’s discovery in 2005 hasn’t resulted in any production as late as 2015, even after a whopping investment of ₹19,576 crore.”
“Even after GSPC spent large sums of money, hired foreign experts and imported sophisticated equipments, they couldn’t find gas. Then why was ONGC asked to pay ₹8,000 crores to acquire this block?” says the letter.
Copy of the letter written by ONGC employees Mazdoor Sabha
Tadvi said that various decisions of the Central government have ‘badly affected the cash reserves of a cash-rich company like ONGC.” He goes on to say that by interfering in the functioning of ONGC, the Central government has not only bailed out GPSC but also forced it to buy the government’s entire stake of 51.11% in Hindustan Petroleum (HPCL) for ₹36,915 crores in an off-market deal which was 14% higher than the closing share price of HPCL of that day.
With this acquisition, the ONGC debt rose to ₹1,11,533 crores in the financial year of 2018 as compared to ₹55,619 crores in the year 2017.
Tadvi further says in the letter that the government interference in ONGC does not end here. “The government’s intention of interfering in the decision-making and spending decisions of ONGC is also evident in its selection of Dr. Sambit Patra as an independent director of ONGC, who otherwise does not qualify for the said post.”
According to this letter, the Central government is misusing the CSR (Corporate Social Responsibility) fund of ONGC. Tadvi accuses in the letter that the ministers of the Central government have constantly been exerting pressure on the company to “increase its CSR spending on various projects which otherwise should have been sponsored by the Government of India.”
He has mentioned the various schemes of the government of India, on which the ONGC is being constantly forced to invest—LPG distribution, construction of toilets, distribution of sanitary napkins in girls’ schools or adopting a village, etc., are some of the government’s schemes that he has mentioned in his letter.
Talking to National Herald, AR Tadvi said, “The condition has deteriorated so much that the file prepared for buying necessary safety equipment for the workers has been gathering dust in the ministry for 3-4 years and no decision is being taken on it.”
He said, “The ONGC has been buying essential security equipment for the employees from a foreign company, but now oil minister Dharmendra Pradhan has been pressuring the company to buy them from a particular Indian company. The equipment of this Indian company does not meet our requirements. It’s been 68 years since ONGC was established, but now the government says that the company should construct a 10 feet high wall around all its complexes and install CCTV cameras and sensors. About two thousand crores will be spent on this. I do not know which way the government wants to take this company,” he further added. He says that the government does not pay any attention when they ask for help in developing crude oil.
He said that the employees are now ready to pay any price to save the ONGC. But they want to know why Modi ji and Pradhan ji so desperately want to save a company like GSPC which is burdened with the losses of ₹20,000 crores.
Tadvi said that the PMO has acknowledged the receipt of the letter sent by ONGC Mazdoor Sabha and responding to the letter, the PMO has said that the required action would be taken on it.