The five public sector units which are running sick will be closed. The NDA government will be freeing assets worth Rs 22,000 crore belonging to five sick Public Sector Units under his ministry — including three companies of HMT — as it goes about closing these “nonproductive units” by rolling out “an attractive VRS package” for 2800 existing employees, said, Union Minister of Heavy Industries and Public Enterprises, Anant Geete on Friday. According to the minister, “We have decided to close down five sick PSUs that fall under my ministry. There are three units that belong to HMT — HMT Watches, HMT Chinar Watches and HMT Bearings. The other two are Tungabadhara Steel Products Ltd and Hindustan Cables Limited.”
“We have decided to close them down, because since 2007 there is not production in these units and we have already spent about Rs 4000 crore only on salary and wages of the employees. How long will we continue to spend on salaries in these nonproductive units,” the minister adding that the government will be giving an “attractive VRS package”. This will be based on the pay- scales which is existed in 2007.
“The cabinet has given an in-principal approval. We have also sent an unit-wise proposal to the cabinet and we are hoping to get wrap it up in the next 2-3 months,” the minister told mediapersons.
“The cost of shutting these units down is just Rs 14,00 crore and the asset value of these companies is Rs 22,000 crore, the minister said all the immovable properties of these companies including land, plant and machinery, will be sold to interested parties in “as-it-is, where-it-is” basis. “The decision for the sale of property is yet to be taken”, the minister said adding that these companies were located in prime zones. “The highest number of employees is in Hindustan Cables; which has 1500 employees and the total number of employees involved in these five units is 2800,” the minister adding that his ministry had tired to find investors for these PSUs in the past but have been unsuccessful.
While the three HMT companies have manufacturing and administrative facilities in Hyderabad, Jammu, Bangalore, Tumkur (Karnataka) and Ranibagh (Uttarkhand), Hindustan Cables Ltd has units located at Hyderabad, Naini Allahabhad (Uttar Pradesh) and Rupnarainpur (West Bengal), while Tungabhadra Steel Products Ltd has assets in Hospet (Karnataka). Earlier addressing the workshop, the minister said, that the manufacturing sector in the country is passing through “difficult times” and is finding it hard to compete with global peers.