The Telegraph
Saturday , October 13 , 2012
Since 1st March, 1999
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Sick unit auction for fresh firms

Six sick units would soon go under the hammer to generate government funds and send a positive signal to prospective investors about land availability in the industry-starved state.

Although industry insiders said the government should have revived the units, Bihar State Credit and Investment Corporation (Bicico) officials feel auctioning those set-ups was the best way out for two reasons.

First, government-run Bicico was facing cash crunch as in less than 15 years it had exhausted initial funds of Rs 200 crore with the list of defaulters getting longer.

This auction of sick units — 75 such set-ups are already on Bicico’s list — would enable the corporation to enrich its coffers. Second, the buyer would get land — considered most precious in the current scenario — of the respective unit.

Among the six companies to be auctioned this fiscal year, M/s Magadh Smokless Coking Coal Industries Pvt. Ltd has 180 decimal of land in Aurangabad while M/s Jai Ganga Foods Pvt. Ltd has 95.88 decimal near Hajipur. M/s Gupteshwaram Rice Mills Ltd has the highest among the units with 2 acres at Bhabhua in Kaimur district, M/s Bihar Steel Tubes Pvt. Ltd possesses 12 cottahs in Gaya, M/s Patliputa Kaanch Udyog has 40 decimal in Patna City and M/s Rama Expoinvest Pvt. Ltd got 23.5 decimal in the government-owned Patliputra Industrial Area in Patna.

“All these six companies have their basic infrastructure ready. Except one at the Patliputra Industrial Area, all other units were set up on private land. Bidders have to file requests by October 18. Even investors outside the state can bid to get land and required infrastructure. In fact, the process of auction will also be regularised,” a Bicico official said.

In case of sick units in the Patliputra Industrial Area, another government agency, Bihar Industrial Area Development Authority (Biada), would be involved to transfer ownership of land to new investors.

“We have been requesting the state government to pump in fresh capital to Bicico so that we get some benefits,” said Satyajit Kumar, the vice-chairman of the eastern region of Confederation of Indian Industry.

He added that at least 2,000 units were declared sick but no measure had been chalked out for their revival.

“The government could revive Bihar State Financial Corporation or Bicico itself for fresh lease of life to the sick units,” Kumar said.