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Parastatals

Article Review   by:penword     Original Author: hrb
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A parastatal is an organisation formed or controlled by the Government.They perform specific roles in a country and their activities are found in such areas as transport,communication,financial and management,production and marketing.Parastatals are formed to provide services that are generally in public interest that private sector may not provide on grounds of heavy capital investment needed at initial stages.
Most parastatals are formed by acts of parliament while others are formed under the existing laws.When formed under acts,such acts outline proposed names of the parastatal,aims and objectives,goals and services to trade,location,appointment of top executives,powers of board of directors and ministry under which they function.
The management of a parastatal is by the chairman and the members of the board of directors,all appointed by the relevant minister.The chairman and the board of directors are responsible for implementation of aims and objectives pf the parastatals.The board of directors is drawn from the Government and prominent persons from the private sector.The chairman of the board of directors reports to the Government through the minister.
The initial source of capital to run parastatals is usually form the Government as a vote of expenditure from the ministry concerned.Thereafter they run their affairs of finances independently observing their privilege of separate legal entity.To interpret the wording,they can sue,be sue, enter int contracts and can own properties.
Published: September 17, 2010   
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