Financial Daily from THE HINDU group of publications
Saturday, Mar 13, 2004
Decks cleared for TRL revival
Kochi , March 12
ALL hurdles seem to have been cleared to revive Travancore Rayons Ltd (TRL) at nearby Perumbavur, with the government and leaders of the opposition parties reaching a consensus.
At a meeting on Tuesday (March 9) held by the State Industry Minister, Mr P.K. Kunhalikutty, the leaders of the Oposition, led by their leader, Mr V.S. Achuthanandan, gave the nod for the government to go ahead with the revival of TRL by Coimbatore-based promoter Mr N. Damodaran. Those who participated in the meeting included Mr P.P. Thankachan, President, KPCC, and Mr Ommen Chandy, UDF Convenor, official sources told Business Line on Friday.
They discussed the proposal and the detailed MoU to be signed with Mr Damodaran, expected sometime late next week after obtaining the formal approval of the Cabinet, the sources said.
As per the rehabilitation proposal, the promoter is to invest Rs 530 crore over a period of five years for modernisation of the company, they said. In the first year, the promoter would invest Rs 60 crore to renovate the existing plant. All old machinery would be phased out in three years.
Soon after signing the MoU, the promoters would commence discussions with financial institutions, banks and employees, the sources said.
The opposition leaders were said to have agreed on the major elements in the proposal of the promoter, such as exemption from sales tax for eight years, power supply at Rs 0.29 per unit for five years and allotment of forestland for developing a captive plantation.
The detailed MoU is understood to have been cleared by the State Legal Department. Now, only Cabinet approval is awaited, they said.
Earlier in December, the State Cabinet had, in principle, accepted the revised rehabilitation package submitted by the promoters after diluting their initial demands. The promoter's original demands included concessions/facilities such as electricity tariff at 29 paise per unit for a minimum of five years, continuance of the existing water tariff, extension of land lease for 99 years at the existing lease rental, continuance of government guarantee to financial institutions/banks till clearance by the new management or 10 years, waiver of entire disputed/undisputed electricity dues/duty and sales tax, exemption from sales tax for 10 years and waiver of guarantee commission accrued and to accrue. However, the promoters had diluted their demands and submitted a revised proposal as required by the government.
The company has been under lay-off for over two years now, and about 1,200 workers are without wages. At present, the unit is maintained by a skeleton staff of 70 people on monthly wages of Rs 500, the sources said.
The initial rehabilitation package submitted by the promoters was rejected both by the BIFR and AAIFR which had ordered the winding-up of the company early last year.
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