New HEC CMD Vishvajit Sahay at a news conference in Ranchi on Thursday. Picture by Prashant Mitra
Ranchi, Feb.13: Heavy Engineering Corporation Ltd has asked the Centre for a funds infusion of Rs 200 crore by increasing its cash credit loan facility with State Bank of India, saying it was the only way to keep the ailing corporation get out of the red.
“Shortage of working capital to fund ongoing production processes is the biggest challenge before HEC. We have requested the Union finance ministry to enhance HEC’s cash credit limit from the present Rs 253 crore to Rs 453 crore,” said Vishvajit Sahay, joint director, department of heavy industries, New Delhi, who is the new CMD.
HEC, he added, had also asked the ministry to provide additional bank guarantees as collateral for the enhanced loan amounts.
Being an election year, additional funds requested for HEC from the Centre needs to be included in the vote on account which is to be tabled before Parliament this month.
“We are in constant touch with the Union heavy industries and finance ministries so that additional funds can be ensured for HEC,” Sahay told newsmen in Ranchi today.
“The situation is critical but manageable. There are at least 11 major sick PSUs in the country for whom the Union cabinet sanctions funds on a regular basis to pay for salaries. These PSUs have ceased to function and their workmen do not even attend the shop floor though they are required to be paid their monthly emoluments. HEC is far better off vis-ŕ-vis these PSUs,” the new CMD said.
Efforts have also been launched to recover around Rs 400 crore dues from HEC’s debtors. However, Sahay conceded that failure to meet existing annual targets had precipitated the present crisis that led to the exit of the former CMD R. Misra.
Detailing a recovery road map for HEC, Sahay pointed out that in addition to the request for a hike in its cash credit loan, the corporation had also put in a formal request to MECON, Ranchi, to draw up a capital expenditure plan for replacing its outdated plant and machinery.
“In addition to a severe funds crunch, HEC’s performance has been hampered by outdated technology. We badly need to bring in latest technology to improve performance. Once MECON gives its detailed project report, we shall estimate the fund requirements and take up the matter with the heavy industries ministry,” he added.
Among HEC’s core competence areas are coal, steel, and railways. In addition, Sahay said, efforts would be made to diversify into defence and the power sectors.