I-Sec, IDBI to aid 23 state-run units’ privatisation

MUMBAI, Feb 15: The Union industries ministry has appointed I-Sec, IDBI and Arthur Andersen as financial consultants to provide assistanc...

MUMBAI, Feb 15: The Union industries ministry has appointed I-Sec, IDBI and Arthur Andersen as financial consultants to provide assistance in the selection of joint venture partners for 23 of the total 48 loss-making public sector undertakings coming under the category of heavy industries. The ministry has decided to divest 74 per cent stake in a bid to encourage joint venture and private sector participation, union minister of state for industries Sukhbir Singh Badal said here on Monday.

"These PSUs have been faced with the problem of obsolete technologies, lack of finance and excess work force," he observed. "Our intent is to first clean up the balance sheets and make it attractive for private sector participation," he said and added that this could include waiver of loans also.

Badal said that voluntary retirement scheme (VRS) in these PSUs has been getting an overwhelming response from the employees and hoped that there would be higher allocation for this purpose in the forthcoming Union budget. "The VRS is not implemented under coersion," he added.

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He said that the present allocation of Rs 400 crore for PSUs was insufficient to meet requirements if the intent of the scheme was to make the units viable. He added that a VRS for units under the department of heavy industries (DHI) alone would require at least Rs 2,000 crore to revive them.

He said the industries ministry was of the opinion that a certain portion of disinvestment proceeds should be allocated for the revival of PSUs. Earlier, speaking on "Punjab — the emerging investment destination," Badal said the Punjab government has decided to nominate one officer from the state cadre for projects envisaging investment of over Rs 200 crore. He added that this has been one of the attractive schemes offered by the government to make Punjab an industrial hub of northern India. The seminar was organised jointly by the Confederation of Indian Industries and the Punjab State Industrial Development Corporation (PSIDC).

Badal called upon the investors to invest in a big way in Punjab which has an ideal infrastructure, power sufficiency and lack of trade unionism. He added that militancy has been wiped out of the state and it is one of the safest states in the country.

PSIDC managing director SS Brar said that Punjab can well claim to be a vibrant industrial economy — as it has over 200,000 small-scale industrial units as a well-developed ancillary network, besides 500 large-sized ventures. Moreover, a large number of multinational companies have their bases in the state.

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Brar said the state has already introduced special package for information technology and agro industries. A venture capital fund specially for the IT industry has already been put in place to encourage investment in this sector.