Financial Daily from THE HINDU group of publications
Saturday, Jun 26, 2004
Left plea to merge HOCL unit with Kochi Refineries
Thiruvananthapuram , June 25
THE Left Democratic Front (LDF) in Kerala has urged the Union Government to merge the Kochi unit of Hindustan Organic Chemicals Ltd (HOCL) with Kochi Refineries Ltd (KRL).
In a memorandum to the Finance Minister, Mr P. Chidambaram, the front pointed out that HOCL has been facing the threat of being referred to the Board for Industrial and Financial Reconstruction mainly due to the perennial loss incurred by the parent unit at Rasayani in Maharashtra. On the other hand, the Kochi unit has been making huge profits year after year.
The LDF has now suggested that the Kochi unit should first be made a subsidiary of HOCL and then merged with KRL by transfer of the stakes to the latter.
The sales proceeds from this stakes transfer can be utilised for reviving the Rasayani unit. In the case of Fertilisers and Chemicals Travancore (FACT), the memorandum has called for writing off of the Union Government loan of Rs 609.26 crore.
It also wants the Union Government to provide guarantee for obtaining Rs 200 crore bank loan as working capital and formulate a special package to run the urea plant of FACT until the proposed LNG terminal at Kochi becomes operational.
The memorandum has also highlighted the need for merging the Palakkad unit of Indian Telephone Industries with BSNL as the latter's production wing.
It has been further pointed out that ITI, with six units spread over four states and with many regional and sub-offices across the country, can meet the requirements of BSNL in the globalisation scenario.
Till the merger, the reservation provided for ITI in the tender for BSNL and MTNL can be raised to 50 per cent from the existing 30 per cent. The guidelines of Department of Public Enterprises for providing 10 per cent price preference for PSUs in all the tenders should also be strictly followed by BSNL and MTNL.
In order to solve the problems faced by the agricultural sector, the front wants the Finance Minister to make a slew of policy changes and also earmark adequate budgetary allocations.
The demands include raising of the import duty on palm oil to safeguard the interests of the coconut farmers in Kerala, banning of duty-free import of rubber under the Advance Licensing Scheme and increasing the import duty on rubber to at least 100 per cent from the prevailing 25 per cent.
Besides, the Government should initiate measures to ensure that 40 per cent of the credit disbursed by the banks in the State flowed to the priority sector.
Steps should also be taken to see to it that 18 per cent of the total bank credit is disbursed in the agricultural sector.
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