Eye on package

Ranchi, May 22: Heavy Engineering Corporation (HEC), a rare profit-making PSU despite grappling with severe cash flow problems, outdated technology and tough markets, is hoping for a modernisation package from Prime Minister-elect Narendra Modi.

“We have a new Prime Minister and will soon have a new Union minister of heavy industries. We are hopeful about a new set of policy guidelines to streamline the functioning of PSUs and industrial sector as a whole,” Vishvajit Sahay, joint director of the New Delhi-based department of heavy industries and HEC chairman-cum-managing director, told The Telegraph.

A Rs 800-crore plan has been drafted to fund HEC modernisation, he added.

“Central funds apart, the HEC will also raise a part of the sum on its own. Most machines at HEC are over five decades old and need replacement to cut down on overheads. Mecon, given the task of drawing up a detailed project report to modernise HEC, has submitted its preliminary report. We shall soon make a detailed presentation before Planning Commission,” Sahay said.

The corporation also sought approval from Union finance ministry for funds worth Rs 200 crore by increasing cash credit limit with State Bank of India from Rs 453 crore to Rs 653 crore. A higher cash credit limit will help HEC meet its working capital needs.

Calling the situation at HEC manageable, Sahay said: “There are at least 11 major sick PSUs for which the Centre sanctions funds regularly to pay employee salaries. HEC is much better off.”

HEC’s core competence is coal, steel and railways. “It is also trying to diversify into defence, nuclear and thermal power, cranes and equipment for chemical and petro-chemical industries,” Sahay said.

Declared sick in 1992, the Board for Industrial and Financial Reconstruction in 2005 ordered its closure. But, HEC proved pundits wrong.

HEC its first recorded profit of Rs 2.86 crore in 2006-07, followed by Rs 4 crore in 2007-08, Rs 18.37 crore in 2008-09 and Rs 26.93 crore in 2009-10.

In 2010-11, it recorded its highest profit of Rs 38.69 crore. In 2011-12, profit went down to Rs 5.90 crore but improved to Rs 12.21 crore in 2012-13.