Jharkhand clears Rs.8 bn package for ailing PSU (Lead)

Dec 15, 2007, 11:08 GMT

Ranchi, Dec 15 (IANS) The Jharkhand government has cleared a Rs.8.06 billion package to revive the ailing state-owned Heavy Engineering Corporation (HEC).

The package was approved by the state cabinet Friday night. It includes waiving Rs.5 billion electricity bill of HEC, which owes the same amount to the Jharkhand State Electricity Board (JSEB).

The government will give JSEB Rs.5 billion in different phases.

The package also includes Rs.1.70 billion for rehabilitation of the company, Rs.600 million for the buildings used by the state government and Rs.200 million for the land used by the state government.

It will also include a waiver of water tax of Rs.310 million, commercial taxes of Rs.255 million and other things.

The HEC will give 2,342 acres vacant land to the state government.

The package has brought relief to the employees and management of HEC.

'The package will help HEC in modernising plants and clearing the payment of retired employees. The amount will be used in the best way to ensure restructuring of the company,' said G.K. Pillai, chairman and managing director of HEC.

After clearing the package, Chief Minister Madhu Koda said: 'We hope that the good days of HEC will return soon and the company will emerge as a profitable PSU.'

HEC, established in 1963, has been mostly a loss making PSU. HEC had gone to the Board for Industrial and Financial Reconstruction (BIFR), which two years ago recommended its closure. However, the Jharkhand government was against it and requested the central government to revive the company.

HEC was a dream project of first Indian prime minister Jawaharlal Nehru. Last year, HEC posted a net profit of Rs.28.4 million. In the first six months of the current financial year, HEC crossed the sale target of Rs.1.72 billion by achieving Rs.1.80 billion.

© 2007 Indo-Asian News Service