Financial Daily from THE HINDU group of publications
Tuesday, Apr 16, 2002
Regulatory Bodies & Rulings
AAIFR rejects Trayons plea against BIFR ruling
KOCHI, April 15
THE writ filed by the sick Travancore Rayons Ltd (Trayons) against the BIFR directive to wind up the unit has not been admitted by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR), which met in New Delhi on Monday to review the order.
The authority is said to have demanded that the revival proposal submitted by the Coimbatore-based entrepreneur, Mr N. Damodaran, should have a tie-up with the State Government for the rehabilitation of the company.
The trade unions and the State Government were parties, together with the Trayons management in the writ petition, reliable sources told Business Line.
They said that the AAIFR decision would not affect the ongoing efforts of the Government to revive the ailing unit as it could approach the High Court now against the BIFR order.
Meanwhile, the stage is set here for signing a MoU with the promoter, Mr Damodaran, who had held discussions with the respective Ministers and Heads of departments on his proposal to revive the unit. Most of the concessions asked for by the promoter had been accepted by the State Government. The Central clearance had been sought for leasing out 25,000 acres of forest land to the promoter company for planting eucalyptus.
If the Centre does not agree to hand over the land on a 99-year lease, the State might think of going in for a joint venture with the promoters for planting trees required for producing wood fibre pulp, they said. Besides, for 300 acres of land to set up a pulp factory, the site was being identified.
Besides, the company would be provided power at the existing rates till the proposed captive power plant became operational and the difference in cost between the Kerala State Electricity Board tariff and the concessional rate allowed to the company would be borne by the Industries Department, a Government source said.
The State Government had also agreed to continue with the guarantees given by it to the financial institutions till a one-time settlement was reached with the FIs as per RBI guidelines, he said.
As the final discussion with the high-power committee was over, the Government was inclined to sign the MoU and that was expected some time this month. In that case, work on the rehabilitation of the unit at nearby Perumbavoor would commence in June, he added.
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