Oct. 14: The Jharkhand government has sought a “bailout package” for Heavy Engineering Corporation (HEC) from the Centre, reflecting a greater resolve to revive the sick company.
At a meeting with Union finance minister Jaswant Singh, chief minister Arjun Munda proposed a package of Rs 1,500 crore for the 42-year-old corporation that has contributed significantly in the production of defence goods.
“We have asked the Centre to provide a package of about Rs 1,500 crore for the bailout of HEC. The package is likely to put the corporation back on the rails,” Munda told The Telegraph.
He said the closure of the unit was not a “viable option” as it is one of the most prestigious public sector units in the country. “The finance minister has been receptive. He has assured us that the issue would be given serious consideration,” Munda said.
The chief minister said discussions on Indian Steel Wires, another sick unit, were also held. The company had been referred to the Board for Industrial and Financial Reconstruction (BIFR).
The Centre’s willingness to provide a package to HEC was conveyed to the Jharkhand government last year itself. The Union heavy industries minister had also asked the BJP-led government to furnish an estimate of the package.
However, a prominent reason that has delayed the revival of the unit is the failure to draft a rehabilitation package. This is despite the formation of a two-member committee comprising the secretary in the Union ministry and the Jharkhand chief secretary.
The BIFR had ordered the sale of HEC and directed the Industrial Development Bank of India to put up a “sale notice”.
Munda said a “crucial meeting” has been fixed on October 22 in Delhi with the Centre where a host of issues would be discussed, including the HEC.
Four parties, including Sterlite Industries and the HEC Officers’ Association, had filed bids with the IDBI, stating their intention to take over HEC.
Welcoming today’s development “as a positive signal”, the officers’ association leader .P. Singh said the union had earlier suggested a merger of HEC with the defence establishment.
HEC director S. Biswas said the company was “vigorously pursuing” both the Centre and the state for a comprehensive revival package.
He said the company has sought permission to convert assets into resources, sales tax deferment and prompt payment of rentals by the state government.