Heavy Industry Ministry working on plan to shut 5 loss-making PSUs

The Heavy Industry and Public Enterprises Ministry is drawing up a plan to shut five chronic loss-making Central Public Sector Enterprises.

This follows the January 5 ‘in-principle’ decision of the Union Cabinet to shutter PSUs running in losses, starting with HMT Watches, HMT Barings, HMT Chinar Watch, Hindustan Cables and Tungabhadra Steel.

“The Heavy Industry Ministry is working on separate proposals for each of these five CPSEs” a senior Government official told BusinessLine .

Under the original proposal, there were six PSUs, the sixth being Hindustan Photo Films (HPF). But a formal decision on HPF has already been taken.

Elaborating on the individual proposals being worked out, another official said they would have details such as the number of employees, their age profile, the companies’ dues (statutory and others), assets and other liabilities.

“Once the proposal is approved at the highest level, then the effort will be to provide the required money in the revised estimate of the 2014-15 Budget,” he said.

The revised estimate will be given at the time the Budget for 2015-16 is presented, in February.

The Ministry plans to spend ₹1,080 crore towards one-time settlement through a voluntary retirement scheme (VRS) for workers. The six companies have around 3,600 workers.

In fact, HMT Watches, which is a subsidiary of HMT Ltd, has already submitted a voluntary retirement/voluntary separation scheme to the Centre on downsizing of its manpower. At present, it has 1,000 employees and the annual wage bill is around ₹45 crore. The company has been making losses for the last 15 years and functioning with budgetary support.

After closure, the ministry proposes to sell the assets of the PSUs. Efforts are also on to monetise the vacant land available with these PSUs, estimated to be 8,000 acres.