Good governance:Fixing State Corporations- Part 2- My column 18 October 2010

Fundamental to the Government's rebooting of the governance rules in the State sector is the rationalization of the sector. The idea of these State companies was that certain policy objectives of the Government could best be achieved in a corporate environment, away from some restraints of legislation, Parliament and politics.

The recent PNM opted for an expansion of the model in which limited liability companies, wholly owned by the State, provided goods and services to the public. With these State companies, procurement through the Central Tenders Board is avoided and internal tender rules apply. Variations in compensation suggest that salary decisions are subjective. Allowances and terms and conditions follow suit, lacking homogeneity across the State sector.In that context a renegade State sector has evolved and Parliament and Cabinet do not provide the major public policy thrust for the sector. There are two operating models and in one, the inner Cabinet defines an end result and gives it to the most malleable State company to execute, without regard to core function.