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REVIVAL RAMS INTO COFFERS.

SEVERAL public sector undertakings ( PSUs) set up in the 60s to manufacture products that range from photo films to fertilisers have turned sick but have been lined up for revival instead of being wound up to check further draining of funds.

Hindustan Photo Films Manufacturing Company Ltd ( HPF), which has its corporate headquarters in picturesque Ooty, is a classic example.

Incorporated in 1960 with the objective of achieving self- reliance in photo- sensitised goods, the company has four manufacturing units, three of which are in Udhagamandalam and one in Chennai.

Since HPF was piling up heavy loss, it was registered with Board of Industrial Finance and Reconstruction ( BIFR) way back in 1995. In January 2003, the BIFR recommended that it should be shut down.

However, the company obtained an interim stay from the Madras High Court against the BIFR order. To make matters worse, the company was later referred to the Board of Reconstruction of Public Sector Enterprises ( BRPSE), which approved the revival proposal in 2010.

Shockingly, the PSU continues to merrily incur loss of over ` 1,000 crore a year. The company has over 800 employees on its rolls even as it has gained the dubious distinction of being ranked among the top 10 loss- makers in the public sector.

A senior official of the Department of Heavy Industries told M AIL T ODAY , " HPF has lost its relevance as a public sector company as the private sector has grown and digitised products have flooded the market." Hindustan Steelworks Construction Ltd ( HSCL), incorporated in 1964 for undertaking construction of modern integrated steel plants, is another typical example of a loss- making public sector company on which the government is squandering resources.

The company had accumulated loss to the tune of ` 1,383 crore in 1999. Despite a capital restructuring undertaken in 1999, it is still running at loss.

However, BRPSE has recommended a proposal to revive the company.

Ironically, the management of HSCL has been indicted by the Comptroller and Auditor General of India ( CAG) for arbitrarily forming a ` 105- crore joint venture ( JV) with Sricon Infrastructure which caused a ` 16.64- crore loss to the public sector company. The CAG report was tabled in Parliament in August 2011.

The CAG report states that there was no record available with the company on the method and criteria for selection of the JV partner, whose credentials were never evaluated.

The JV firm was awarded a contract for four- laning of the Nagpur- Hyderabad section of National Highway 7 but could not complete the work. The National Highways Authority of India terminated the contract and forfeited the bank guarantee furnished by it HSCL further incurred a loss of ` 8.64 crore due to funds provided to the JV from time to time, the CAG added.

Madras Fertilisers Ltd ( MFL), a sick PSU which has failed to pay back a ` 550- crore government loan, is another company that is being considered for revival.

" Resources which could be used to set up schools and hospitals are being wasted on these unviable enterprises," a senior Planning Commission official said.

The S. K. Roongta panel, which was constituted by the Planning Commission on suggesting reforms for PSUs, has recommended that loss- making public sector companies should be identified for disinvestment.

The panel said, " Since many of our loss- making CPSEs ( central public sector enterprises) have surplus land, it would be desirable to create a Public Sector Land Development Authority for developing such lands and unlocking their real value."

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Publication:Mail Today (New Delhi, India)
Date:Sep 27, 2012
Words:599
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