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23 PSEs to be converted into JVs

The government has decided to convert 23 public sector enterprises into joint venture companies with equity participation by joint venture partners and prepared a comprehensive strategy to improve the performance of 48 PSEs under the department of heavy industry.

Announcing this in New Delhi, Industry Minister Sikander Bakht told the consultative committee attached to his ministry that revival of viable PSEs under reference to the Board for Industrial and Financial Reconstruction, financial restructuring, manpower rationalisation, strengthening of boards or management and joint venture formation by induction of partners capable of providing technical, financial and marketing inputs, were the salient features of the PSE reform process.

The decision to form joint venture companies was part of the strategy to revive the companies so that they would not depend on the government budget but be able to sustain their viability on a long-term basis, he said.

Efforts were on to locate suitable partners capable of strengthening the PSEs concerned in areas like technology, management and marketing, Bakht said.

The industry minister said revival plans were under implementation in nine of the 23 PSEs referred to the BIFR. The government has agreed to provide fresh infusion of Rs 3.82 billion and financial restructuring of Rs 15.35 billion in these nine PSEs. The BIFR has recommended winding up of another nine PSEs as they were found unviable, he said.

Bakht said Cabinet approval has been sought for providing benefits equivalent to those available under the voluntary retirement scheme to employees of sick companies facing closure. Such employees would be entitled to retrenchment compensation as per the Industrial Disputes Act. The new proposal was to mitigate the hardship of workers and also to save unproductive expenditure on idle wages, he said.

Referring to members' suggestions for the formation of a separate cell to study the reasons for poor performance of PSEs, Bakht assured them that the ministry was fully aware of the factors behind the plight of the undertakings. He sought their cooperation in implementing the reform process especially in areas like manpower rationalisation and voluntary retirement scheme.

UNI