The Hindu Business Line : EMC pins hopes on Dabhol revival to exit BIFR fold

THE possible revival of the Dabhol Power Company (DPC) and its subsequent resumption of operations seem to be high on the agenda of not only the Centre but also a small company based here.

Much of the fortunes of Electrical Manufacturing Company Ltd (EMC), a transmission tower and conductor manufacturing company, are today linked with the revival of DPC - once considered the harbinger of a liberalised Indian power sector.

EMC, a company in which the family of senior Congress leader (now an MP), Mr Kamal Nath, has an equity stake (of over 50 per cent), is now fighting for its survival after being forced to go down under on account of unpaid works, shortage of working capital and fierce competition from some of its bigger rivals.

In case of DPC, the Kolkata-based EMC had won the order for setting up transmission lines for power evacuation.

With a lockout on at two of its three units, EMC is eking out its existence making aluminium extrusion items for some two-wheeler manufacturers like Bajaj Auto, LML and Royal Enfield, etc., as well as some ordnance factories.

The company was referred to the Board for Industrial and Financial Reconstruction in October 2001. The BIFR appointed Punjab National Bank as the operating agency, which has charted out a revival plan.

Sources said that the nearly-70-year-old company is capable of coming out of the BIFR-fold on its own strength. However, they admitted to Business Line that much of the company's future hinges on the revival of DPC for which EMC had part-executed a Rs 42-crore order for supply of towers and installation of 400 kV transmission lines from Dabhol to Nagothane in Maharashtra.

Sources felt that the company's passage back to profits would be smoothened if DPC resumes operations since EMC could then execute the remaining part of its contract and recover its investments.

Sources indicated that the West Bengal Government (two of the units are located here, while the third is located at Naini near Allahabad) has agreed to make the sacrifices necessary to revive the company.

Alongside a resolution of the DPC imbroglio, the EMC management is also eagerly looking forward to a land deal coming through.

EMC is trying to sell its holding of 10.3 acres at Jessore Road where its main works are now located.

It is planning to relocate to a new site at Sankrail in Howrah and plough back its earnings to revive the company.

The Rs 35-crore that EMC plans to raise through the deal is proposed to be utilised in the revival of the company, which has accumulated losses of Rs 80 crore.

However, the BIFR package will now also have to be reworked a little factoring in this development according to sources.