Centre delays Instrumentation Ltd (Palakkad) handover to Kerala

Seeking payment for land contrary to agreement?

THIRUVANANTHAPURAM: It’s close to a year since the Central Government consented to hand over the Palakkad unit of Instrumentation Ltd to Kerala Government, but the deal is still languishing for want of a go-ahead from New Delhi.

Talking to businessbenchmark.news, informed sources said the Centre is trying to give political colour to the issue and is now raising new issues to jeopardise the deal.

Though there was agreement between Kerala Government and Centre that the company would be handed over to the State on payment of Rs53.02 crore, now the Centre has sought additional payment against the value of the land too.

In fact, the Public Sector Undertakings Restructuring and Internal Audit Board (RIAB) had been entrusted with the task of forming the new company about a year ago, but the new demand from the Centre has thrown spanner in the works.

Debunking the Centre’s new demand as baseless, a source close to the State Government said that the land was originally given to the company (Instrumentation Ltd) by the State Government in order to attract the company into Kerala.

“And the condition was that if the company didn’t need the land, it had to be returned to the State Government,” he explained further. While the Instrumentation Ltd’s Palakkad unit has been generating profit, its Kota (Rajasthan) unit, which is defunct now, had been a perpetual loss maker.

In fact, the State Government had gone to the extent of issuing a press statement in July last stating that it had taken over the unit from the Ministry of Heavy Industries and Public Enterprises.

It was following the Central move to close down the unit, the State government evinced interest in taking over the Palakkad unit and formed a four-member committee headed by the Chief Secretary to study the proposal.

The unit had assets to the tune of Rs76.63 crore and liabilities for Rs23.61 crore including the salary arrears of employees, and this had led to the agreement to price the company at Rs53.02 crore.

 

 

 

 

 

 

 

 

 

 

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