Centre ‘sleeping’ on Instrumentation & BHEL-EML

Kerala wait for Centre nod on handover has been too long

 

THIRUVANANTHAPURAM: How long will the Central Government drag its feet on the Palakkad unit of Instrumentation Ltd and the Kazargod-based BHEL-EML and keep their employees guessing about their fate?

It is about a year since both Kerala Government and the Central Government agreed on handing over the ownership of these two companies to the State Government, but despite the absence of any discords between both sides on any of the major terms of the agreement, a final decision on the deal has been hanging fire for long.

According to sources privy to the deal, the State Government is waiting for the final papers to be signed by the Central Government, and the inordinate delay is costing the companies dearly. The managements of these companies are still in the dark as to which direction they should take as the very ownership of these companies is yet to be defined.

In the case of Instrumentation Ltd that makes control valves and control systems and employs about 400, the Central Government that owns the company lost interest as its larger unit in Kota has been in loss for decades though the other unit in Palakkad has been reporting moderate profit during the past ten years or more. After several rounds of talks, the Central Government conceded to State’s request to buy out the Palakkad unit.

The modalities on the take-over of the unit were in principle finalised, and an agreement was reached between both sides that the Kerala Government would pay Rs53.02 crore to the Centre.  A decision on the transfer of assets was viewed not to face any major roadblock as the 120 acre of land, where the company was established originally belonged to the state of Kerala.

Though, as Kerala claims, the State has already sent the papers to the Centre with regard to the deal, it is now sitting with its fingers crossed waiting for the final go-ahead. Talking to businessbenchmark.news, BS Raju, convener of Save Public Sector Coordination Committee, Kanjikode, said the Centre’s indecision on Instrumentation Ltd is costing the company a lot.

According to sources, once the ownership shifts to Kerala, Instrumentation can align its works with other companies based in Kerala such as Autokast Ltd, Keltron, etc, on many viable projects and can hence reap benefits for all participants.

“The employees are now worried about the fate of the company, which has been doing well for more than ten years now. They even don’t know who owns the company now – State or the Centre. This is really painful. Today, the management team is incapable of even contemplating a creative project for the company,” Raju added.

The scene is no different for the BHEL-EML too. The mutual agreement on handing over the BHEL subsidiary in Kerala (Kazargode) – BHEL-EML to the state was taken quite some time back. The Centre had lost its interest in the loss-making BHEL unit in Kerala, and at the same time the BHEL has taken the policy decision to soft-pedal on its subsidiaries.

Kerala evinced interest in the company where the State even invested Rs5 crore. In fact, the understanding was that the company ownership would be transferred to Kerala at zero cost.

Though the Centre decided to throw in the towel on the BHEL subsidiary in Kerala, the state had chalked out some specific plans with the help of Public Sector Restructuring and Internal Audit Board (Riab) to make use of the company’s capabilities to promote electrical vehicles. While BHEL-EML is well positioned to make electrical drives, companies like Kerala Automobiles and Keltron could be roped in to start a meaningful forward journey together.

But these ambitious plans are not able to go off the runway as the Centre is still sleeping on the ownership change and the formalities related to that. BHEL-EML was incorporated in 2011 as a joint venture with Government of Kerala, by acquiring the Kasaragod unit of KEL, a State PSU. BHEL owns 51 per cent equity in the Joint venture, whereas the Kerala government holds the remaining 49 per cent.

However, BHEL was found unwilling to invest any amount in the joint venture as agreed, and also wanted to exit the joint venture, a government release had explained earlier. The company with 174 employees was running on loss and these are the factors that led to the State showing keenness in taking over the company from Centre.

 

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