Aiming a cure

New Delhi, April 8: The government has roped in IIT Kharagpur for a fresh feasibility study to revive the ailing Calcutta-based Hindustan Cables Ltd (HCL). However, it has taken serious note of the company management misusing the Rs 98.56-crore budgetary support extended to it.

IIT Kharagpur is expected to submit the feasibility study by mid-May. It has been asked to undertake “a comprehensive holistic study”, chalking out various options from which the government can choose the best strategy to revive the company that has been ailing for the past three years.

A senior official told The Telegraph, “While a number of studies were undertaken earlier, all of them fell short of presenting an integrated approach taking the separate strengths as well as weaknesses of all the units of the company into account.”

The IIT team has been asked to analyse techno-economic issues related to possible product lines that can be adopted by HCL. The life cycle of these products, demand forecast studies and the potential margins the company can expect to make are some of the parameters to be considered. The study will focus on the financial break even and cost-benefit analyses of each option to enable the government to finally vet the figures and move ahead with the project, the official said.

However, he also said HCL has been asked to recover the money it has paid as wage revision arrears to its employees from a Rs 98.56-crore budgetary support that the company was actually given to pay statutory dues.

The government said the money was meant to settle statutory outstanding dues, which include provident fund, gratuity and ESI contribution of employees.

A senior official said, “HCL’s net worth has turned negative many times over. It owes around Rs 600 crore to banks as loans. Another Rs 250 crore has been borrowed from the government, which the company has also not been able to pay up.”