The Telegraph
Since 1st March, 1999
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Exercise to shed flab resumes
- Govt embarks on mission to restructure PSUs

Calcutta, May 24: Within a week of being sworn in, the seventh Left Front government is back on the reforms track, finalising a Rs 1,700-crore restructuring exercise and picking consultants to study lossmaking enterprises.

'Eight consultants have been shortlisted out of 40 applicants for studying 22 of the 29 state PSUs in the second phase. On June 1, we will invite technical and financial bids, after which the consultants will be picked,' a senior official of the public enterprises and industrial reconstruction department said.

Restructuring all 29 units, which have a total staff strength of over 75,000 and have su- ffered an accumulated loss of Rs 665 crore, will cost around Rs 1,700 crore.

'Of this, Rs 700 crore will purely be the state government's expenditure, while the remaining Rs 1,000 crore will be shared between the DFID (the British department for international development) and the state. Unlike the first phase, where we bore a mere 12.5 per cent of the required funds, the state will have to shoulder a greater burden this time as (the) DFID's resources are limited,' the official added.

The consultants will study the enterprises in detail and tell the government whether they are absolutely unviable, in which case they will be shut down.

In case there is hope, the consultants will suggest whether the companies should be retained under the government's ownership or whether they should be run as joint ventures to turn them around.

According to preliminary estimates, around 30,000 employees will be offered early retirement schemes in the second phase.

PricewaterhouseCoopers, the consultant appointed to restructure the West Bengal State Electricity Board and Durgapur Projects Ltd ' the two power utilities having around 30,000 employees ' has already submitted the first report. The second is pending.

Consulting Engineering Services and ICRA, which carried out the study on the transport undertakings ' the Calcutta Tramways Company, Calcutta State Transport Corporation, North Bengal State Transport Corporation, South Bengal State Transport Corporation and the West Bengal Surface Transport Corporation ' have also tabled their findings.

'We've received a report on what is ailing the transport corporations. We will commission another study asking the consultants for an action plan suggesting ways to turn them around,' said the official.

In addition to the power and transport companies, the West Bengal Film Development Corporation, West Bengal Tea Development Corporation, West Bengal Tourism Development Corporation and the Food Processing and Horticulture Development Corporation are among those on the chopping block.

The government expects the recommendations from all the consultants by October.

Earlier this week, the public enterprises and industrial reconstruction department wrote to the Union finance ministry, seeking its clearance for the Rs 1700-crore restructuring.

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