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Policy can't breathe life into sick units

Calcutta, July 6: Politics proposes, economics disposes.

The Left Front government seems to have realised that there is little option but to shelve a salvage mission and close down two loss-making units ' a telling gesture that exposes the pitfalls in enforcing the CPM's freshly-minted public sector policy.

The companies on the hit list are Webel Toolsind and Webel Power Electronics, two equipment manufacturing companies that together employ around 70 people and have accumulated a loss of Rs 30 crore.

Both were supposed to have been shut down in November last as part of a restructuring programme but the government chose to scout for joint venture partners to breathe fresh life into the companies.

The search was in tune with the CPM's policy on public sector units, which was adopted by the party's central committee meeting in Calcutta last month. According to a resolution passed then, state-owned sick companies can be closed down only after sufficient efforts at turning them around.

Seven months before the resolution was adopted, the Bengal government had got down to work and tried to implement the future policy in letter and spirit.

The state government invited expression of interest from prospective joint venture partners in the two companies, both part of the West Bengal Electronics Industries Development Corporation.

The state-owned corporation, which comes under the information technology department, has 15 units, including holding company Webel, in its stable.

The search for joint venture partners was part of the first phase of restructuring ' based on the suggestions made by consultants L.B. Jha ' in the corporation's loss-making units with a combined accumulated loss of over Rs 100 crore.

After a deadline expired in April, the corporation brought the shutters down on five other sick units ' Webel Carbon & Metal Film Resistors, Webel Capacitors, Webel Video Devices, Webel Crystals and Webel Multimedia.

With help from the UK's Department for International Development, the displaced workers, numbering over 400, were offered an early retirement package.

However, the state clung to Webel Toolsind and Webel Power Electronics, waiting in vain for a white knight. 'Initially, some parties showed interest in the two companies, but no one turned up with a concrete and viable proposal,' a source said.

Wiser after incurring more losses by way of salaries and other expenses, the government has showed willingness to bite the bullet.

With the corporation's board busy working out the modalities for the next round of restructuring, it has been decided to pull the plug on the two units.

'We have not finalised anything as yet, but the process has started rolling,' said state information technology minister Manab Mukherjee.

Four other units ' Webel Informatics, Webel Consumer Electronics, Webel Communication Industries and Webel Electro Optics ' have also been identified along with these two companies for shutdown.

The exercise, expected to render 450 people jobless, will get off the ground once a committee headed by the chief secretary gives the proposal the go-ahead.

'Advisers L.B. Jha & Co had suggested closure of all the units, but the government tried to revive at least two units. Now there is no option,' the source said.

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