CHAPTER ONE
1.0 INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Government owned parastatals are those created in order to carry out special tasks for the welfare of its citizens. These types of tasks cannot be carried out by private individuals or people due to the nature of the financial involvement and the effectiveness of its services. They are nonprofit oriented, since their aim is not to maximize profit, it is sub-divided into two viz:- federal and state owned parastatals. Federal owned parastatals. Federal owned parastatals are those owned by the federal government. Some of the federal government owned parastatals are: National Electric Power Authority (NEPA), Nigeria Telecommunications Limited (NITEL), Nigeria Ports Authority (NPA), Nigeria Postal Services PLC (NIPOST), Nigeria Railway Corporation (NRC), Nigeria Teaching Hospital (NTH), Federal Radio Corporation of Nigeria (FRCN), Nigeria Television Authority (NTA) etc State owned parastatals are those owned by the state government. Some of the state government owned parastatals are: Enugu State Broadcasting Service (ESBS), Enugu State Water Corporation, Enugu State Schools, and State Hospitals etc.
Their responsibilities – NEPA are responsible for the generation and distribution of power. NITEL are responsible for Telephones, Telex, Telefax, installation and servicing. NIPOST are incharge of postal services, telegram, overseas mails and parcels. Nigeria Railway Corporation (NRC) are incharge of transport by train Nigeria Airways Corporation (NAC) are in charge of transport by air or plane. Nigeria Broadcasting Corporations (NBC) are responsible for radio and Television broadcast services. Water Corporations are responsible for treatment and distribution of water to the people. Hospitals are in charge of treating the sick and immunization.
These government parastatals are only established and run by the government to ensure equitable distribution of its services to the generality of people, for it the parastatals are left in the hand of private sectors or individuals, they may tend to politicize it, thereby distorting the assumed equitable services or equitable distribution services or equitable distribution rendered.
According to Akande (1999) government parastatals or public corporation means business organizations that come into existence through appropriate enabling Acts of parliament, Decrees or Edicts in a particular country or state. They may be commercially oriented or public service oriented. Most of them have been commercially oriented in Nigeria in recent time.
Its characteristic features are:
(i) They are usually state or federal owned.
(ii) They are established purposely to render public services.
(iii) Over-reliance on government subventions survive.
According to any Anyanwuochi (2002) Public Corporations are sometimes called state enterprises. In a mixed economy, public corporations involve economic activities undertaken by the state. They form what we normally refer to as the public sector. Although, they are operated on commercial basis, the intention behind their establishment is for the benedict of the members of the public. They are not usually established to maximize profit although, in some cases they are expected to at least break-even. Through these parastatals the government now provides the services which could have been too expensive and unprofitable for private sectors.