Much before the Cabinet Committee on Economic Affairs’ decision to privatise the Central Electronics Ltd (CEL) based on a recommendation by the Niti Aayog, the Department of Science and Technology had urged the Niti Aayog not to privatise a strategically important and profit making CPSE.
Documents available with the BusinessLine also show that the ministry’s arguments got support even from the members of Niti Aayog.
The Centre announced last week that the decision to privatise the CEL is put on hold considering the grievances of the workers.
Forwarding a set of representations received from trade unions in CEL, the then Union Minister for Science and Technology Harsh Vardhan cited the profit made by the CEL and asked the Niti Aayog to consider the pleas of unions.
He said in a letter to Niti Aayog Vice-Chairman Rajiv Kumar that the unions want the Centre to desist from 100 per cent strategic sale of CEL owing to its strategic position it enjoys and its contribution towards the safety and security and defense preparedness of the country.
“Moreover, CEL has shown better results over the years and posted a net profit of ₹21.71 crore during the financial year 2017-18,” the letter written in January, 2019 said.
Similarly, Secretary, Department of Scientific and Industrial Research (DSIR) and eminent scientist Shekhar C Mande also warned the Niti Aayog against the privatisation of the CEL.
Mande too told Rajiv Kumar in 2019 that it was painful to note that even public sector banks have refused to fund new projects of the CEL on account of pending disinvestment.
“In more recent times the company has turned around and has been making profits for past five years despite increasing competition in its business lines (Chinese dumping in Solar, MNC entry in Railway Signalling Systems etc.). The company, today, has wiped out all its accumulated losses and carries positive reserves on its balance sheet and is rapidly moving forward on many fronts,” he said and urged the Niti Aayog to review its proposal as there is major focus and task given to CSIR laboratories to take technologies developed by them to the market.
He said the CSIR laboratories are carrying out good research and development activities but sometime they lack last-mile skills required for converting the technology in to a product.
“CEL has been specifically set up with the mandate of taking technologies developed by National Laboratories to the market and can provide this support for converting the technologies to products which can be directly marketed by CEL or licensed out to other manufacturers, in a fully tested and packaged form; CEL is the ideal vehicle for implementation of the AGNI Mission announced by the Prime Minister; as CEL has been fully turned around in the past five years and is today self sustainable and is presently involved in development and manufacture of a number of systems/ sub systems of strategic importance,” he said in the letter.
Mande got support from Niti Ayog itself. Another eminent scientist and member of Niti Ayog VK Saraswat told Mande that the disinvestment process was in an advanced stage.
“Considering the strategic relevance of the CEL for the nation, and the consistently evolving geopolitical dynamics, the DSIR should herald the cause of saving the CEL from the proposed disinvestment,” Saraswat urged and suggested that “the DSIR may work expeditiously on the feasibility and the modalities of the transformation of the CEL into a Society in order to ensure that its strategic work which is very important for the nation does not get eroded / lost - because of the proposed disinvestment.”
The CAG, CVC and the CCI are looking at the complaints filed against the disinvestment of the CEL.
Meanwhile, CPI(M) MP in Rajya Sabha V Sivadasan also urged CAG Girish Chandra Murmu to investigate alleged bid-rigging in the matter.
Sivadasan said Nandal Finance & Leasing Private Limited, which was selected by the Centre to sell the CEL, has no fixed assets.
“It is a trading company with no significant resources. 99.96 per cent of this company’s shares are held by M/s Premier Furniture & Interiors Private Limited, which was formed on October 23, 2007. There is also a case pending before National Company Law Tribunal. Yet, the government has diluted the terms of bidding to enable such a company to bid for CEL,” he said. Sivadasan said private appropriation of public assets is the classic definition of corruption.
“CEL divestment is a clinical case of looting public money using executive power. A company which by even completing its pending orders could generate a profit of ₹730 crore and which owns land worth ₹440 crore is being sold off for a pittance of ₹210 crore in a bidding process where only two firms have participated and that too, after diluting the terms. There is a need to put an immediate curb on the divestment process and an urgent investigation needs to be conducted in this matter,” he said in the letter to Murmu.