By IANS
New Delhi : Having succeeded in bringing about a turnaround of the Indian Railways, Railway Minister Lalu Prasad has now turned his attention to sick public sector units of heavy industries catering to his ministry.
As a result, the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Manmohan Singh decided to take away sick state-run unit Bharat Wagon and Engineering Limited (BWEL), Patna, from its mother company Bharat Bhari Udyog Nigam Limited (BBUNL), run by the heavy industries ministry, and hand it over to the railway ministry.
“After the takeover, the railway ministry will be authorised to appoint its own chairman and managing director and fill other board level posts” to run the company, Finance Minister P. Chidambaram said.
The department of heavy industries will provide a sum of Rs.232.7 million for paying up the dues of the employees till Sep 30 last year.
The CCEA has also approved that the heavy industries ministry will pay Rs.232.7 million more in the form of equity to offset accumulated losses.
In addition, the CCEA has also agreed to convert a government loan of Rs.776 million extended to BWEL through its mother organisation BBUNL into an equity.
An amount of Rs.459.5 million outstanding against BBUNL as interest on its borrowing and loans has also been waived.
The company has at present 200 employees whom the railway ministry may offer voluntary retirement scheme (VRS). The CCEA has approved setting aside a sum of Rs.100 million for the purpose.
“The CCEA has also exempted the railway ministry for five years from absorbing back Grade A, Grade B and technical Group C employees of the company,” said Chidambaram.
He said: “The finance restructuring will make the company achieve positive net worth which will improve its creditworthiness. The company will be able to finance its diversification plans and become viable.”
“By taking over BWEL, based in Patna, he will be able to showcase his achievements to people of Bihar and also cater to his constituency by providing employment in Patna itself,” said an associate of the minister.