Calcutta, Aug. 17: The Bengal government has decided to close down three loss-making public sector undertakings, signalling an intent to reduce the outgo on sick units.
The decision to fold up Neo Pipes and Tubes, National Iron and Steel Company and biscuit-manufacturer Lily Products was cleared by the cabinet today, a senior minister said. The government is also planning to either liquidate Durgapur Chemicals, another loss-making venture, or sell off most of its stake in it.
According to sources, Neo Pipes and Tubes, National Iron and Steel Company and Lily Products together employ more than 375 people and around Rs 200 crore is spent annually to pay their salaries. The companies are not in production.
"No official announcement has been made as closing down state-owned units is a politically sensitive issue," the minister said, adding that chief minister Mamata Banerjee had been against shutting down insolvent PSUs.
Commerce and industries minister Amit Mitra refused comment on the cabinet's decision.
Sources who attended the cabinet meeting said the government had agreed in principle to close down Neo Pipes and Tubes on Hare Street, National Iron and Steel Company in Belur and Lily Products at Ultadanga.
"Durgapur Chemicals, another loss-making PSU, could be liquidated soon," the minister said on the condition of anonymity. Liquidation refers to the sale of the assets of a company.
Another minister said the employees of Neo Pipes and Tubes, National Iron and Steel Company and Lily Products would be transferred to several departments "so that their expertise can be used".
The sources said the employees could be absorbed into the Groups C and D categories, based on their educational qualifications and experience.
"There are many vacancies in these categories. Some of the vacancies could be filled up with these employees. This way, the government will be able to avoid recruitments and save some money," an official said.
In 2013, the public enterprises department had sent a report to the cabinet, making it clear the three PSUs had no future and suggesting closure. But the chief minister had asked ministers and officials to explore ways to revive the PSUs. "But we could not find a way," a Nabanna official said.
The government has decided to include the 150 acres held by the PSUs in the state's land bank, set up for industrialisation.
The cabinet has not taken the final decision on Durgapur Chemicals. "Primarily, it has been decided that the West Bengal Industrial Development Corporation will take the final call on the PSU. The government might retain some stake and sell the majority of the shares," a minister said.
The four companies were part of a batch of PSUs that the Left government had planned to restructure with help from the UK's Department for International Development (DFID).
In the first phase, 34 PSUs had been restructured with a financial assistance of Rs 200 crore from the DFID between 2006 and 2008.
Then chief minister Buddhadeb Bhattacharjee and then industries minister Nirupam Sen had taken up the initiative to restructure another 23 PSUs, including these four.
The state government had decided to retain the four companies and disinvest three others, including Great Eastern Hotel.
The Left government had planned to bring on board joint venture partners for the rest of the units and close down those for which such support would not be found.
"Efforts had been made to bring in private players for all the companies, but they did not yield results. If the government has decided to close them down, it is the right move," said a senior bureaucrat who had been associated with the restructuring bid in 2006.
