Hindustan Shipyard may get revival package

State govt to waive entire Rs 45-crore dues of commercial taxes

The loss-making Hindustan Shipyard Limited (HSL) is likely to get a revival package from the ministry of shipping.

The state government has also agreed to waive the entire Rs 45-crore dues of commercial taxes "� a condition set by Union minister of shipping and transport T R Baalu, for a revival package for India's oldest ship-building yard.

T R Baalu while being in favour of the revival of HSL, has insisted that the state government waive commercial tax dues for HSL before the implementation of the revival package. The state commercial taxes department has been claiming Rs 45 crore as outstanding dues for the last seven years.

Ajit Tewari, chairman and managing director of HSL, called on the chief minister Y S Rajasekhara Reddy in Hyderabad on Thursday to discuss the issue and the state government has agreed to waive the entire dues.

HSL, which has accumulated loses of over Rs 1,000 crore, has faced a severe financial crunch due to lack of ship-building orders and insufficient working capital. The HSL management has recently sent a fresh revival package proposal to the central government.

"The government is responding positively to the fresh revival package. We expect some financial support during this fiscal itself," said a senior official of HSL.

According to the revival package, the government will either directly meet the working capital needs for the completion of the existing ship-building orders on schedule or give stand guarantee so that HSL can avail loans from financial institutions.

HSL recently received Rs 20 crore as an inter-corporate loan from Visakhapatnam Dock Labour Board following a directive from the ministry of shipping.

"At present, HSL has more than Rs 200 crore worth orders for ship-building. Once sufficient working capital is available, we will not only complete all the orders on time but will also get more orders," the HSL official said.

In the ship repairs segment, HSL has been doing well for the last four years. Last year, the turnover from the ship repairs division was around Rs 100 crore.

The HSL management has proposed to downsize the manpower strength by 1,000 over the next two years.

The manpower strength which was over 7,000 four years ago has been brought down to 3,581 at present. HSL has targeted to cut down the strength to around 2,500. For this, it needs more than Rs 100 crore to implement a voluntary retirement scheme (VRS).