The Union Minister for Heavy Industries, Anant Geete on Friday informed that the proposed closure of the five sick units under the department of heavy industries will be completed in the next two-three months. While the cost of closure of these units is estimated to be around Rs 1,400 crore, the assets of these Central Public Sector Enterprises (CPSEs) are estimated to be worth Rs 22,000 crore.

The five sick CPSEs include HMT Watch, HMT Chinar Watch, HMT Bearing, Tungabhadra Steel and Hindustan Cable, which have been non-functional since 2007.

“About Rs 4,000 crore have been spent so far towards the salary and wages till now. Since there was no productive outcome and it was a burden on Central exchequer, we decided to close them down. The cost of closing down (these units) is only about Rs 1,400 crore, while the asset value of these companies is about Rs 22,000 crore. Government will use it by selling it,” said Geete on the sidelines of an industry event here.

However on disinvestment of other CPSEs, the minister ruled out any such move saying, “There is no plan for disinvestment of CPSEs in capital goods sector. No steps are being taken by the government in this direction.”

The five sick units employ about 2,800 employees, out of which 1,500 are employed with Hindustan Cable alone. The government will offer a voluntary retirement scheme (VRS) for these employees. “All of them had 1987 pay scale, but for the VRS package, we will give them the pay scale of 2007. So the VRS package is very attractive,” he said.

“The cabinet has given its in-principle approval (to close down the units). Now, individual unit-wise proposals we have sent to the Cabinet. So, the closure, will be completed in the next two-three months,” said the minister adding that there was no one interested to invest in these companies.

The minister further stated that the government is considering several options to utilise the huge saleable assets that will be available to the government post the closure. “All these units have prime location. We are ready to give it to a buyer who is ready to buy all these assets like land, plant and machinery on ‘as it is where it is’ basis. Or if someone is interested only in plant and machinery and some other is ready to buy only land, accordingly we will decide. However, the final decision is yet to be taken,” he said.

The minister was in the town to attend a workshop on 'Technology Development for Capital Goods: Constraints & the Way Forward' organised by the Federation of Indian Chambers of Commerce and Industry - Gujarat chapter, which was attended by SME players engaged in capital goods manufacturing.