Calcutta, Nov. 22: Buddhadeb Bhattacharjee’s government will include seven loss-making subsidiary companies of Webel in the first phase of its restructuring scheme. A decision to close down five of these units and restructure two others has already been taken, officials said.
“The government wants to include these seven companies in the first package of restructuring that the British funding agency, Department for International Development (DFID), is already providing funds for,” state commerce and industries minister Nirupam Sen said.
The decision to close down the loss-making units has received cabinet sanction and only a formal clearance from the government is to be given. The government will also have to make an assessment on the number of employees working in the sick units and work out compensation packages for them.
Most companies under the West Bengal Electronics Industries Development Corporation Limited (with the brand name Webel) have outdated technology and incur huge overhead costs. With the cumulative loss of these companies running into crores, it has become difficult for the government either to make fresh investments into these units or continue running them.
The decision to close down the loss-making subsidiary companies is in tune with the Bengal government’s policy to close down non-viable public sector enterprises and retain potentially viable ones. In case of privatisation or joint venture restructuring, the policy is to have a maximum of 74 per cent equity share and management control by the strategic investor, with the state government retaining 26 per cent equity share.
In keeping with this line, the government has decided to close down Webel Video Devices Limited, Webel Capacitors, Webel Crystals, Webel Carbon & Metal Film Resistors and Webel Multimedia. Two others, Webel Tools Ind. Limited and Webel Power Electronics Limited will be put into a restructuring package.
The subsidiary companies were formed between the late seventies and late eighties. Already, three subsidiary companies — Webel Video Devices Limited, Webel Crystals and Webel Carbon & Metal Film Resistors — have ceased operations, Webel managing director S.K. Mitra said.
The Bengal government wants to invite private investment for Webel Tools Ind. Limited and Webel Power Electronics Limited and develop these into joint venture companies.
About 390 employees of all the five companies would be offered early retirement schemes (ERS) due to the closure.
“DFID is already providing us with about Rs 175 crore for ERS scheme under the first phase of industrial restructuring for 12 public sector enterprises. We want to include the seven Webel companies in the first phase itself. The total funds for the scheme might then add up to about Rs 210 to Rs 215 crore,” Sen said.
The commerce and industries minister also said that employees in the seven subsidiary Webel companies will be offered the same package as that of the employees of the public sector enterprises in the first phase of reconstruction.
As part of the restructuring scheme, employees of loss making units which are closed down will be offered scopes of training. In case the employees do not want to avail the training facility, any dependent would be offered the same.