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The Union Cabinet on Wednesday gave its approval to a proposal that will facilitate the Narendra Modi-led government's first strategic sale of a public sector unit (PSU). It cleared an improved voluntary retirement scheme (VRS) for employees of the near-defunct Central Inland Water Transport Corporation (CIWTC), so that it becomes easier for the government to sell the Kolkata-headquartered unlisted company to an investor.
CIWTC has been making losses since its inception in 1967, set up with the purpose of operating a fleet of ships on rivers in West Bengal and Assam. The government has been trying to divest the company since 2004.
"Implementation of the improved VRS package would offer a better severance package to the employees of CIWTC. This would improve the prospects of finding an investor to either take over the assets or ensure viable commercial use of assets," the Centre said in a statement after the Cabinet meeting, chaired by Prime Minister Narendra Modi.
If and when the sale of CIWTC takes place, it will be the first such privatisation by the Modi government. The Modi government has said it was actively looking to wind up or divest loss-making PSUs. The prime minister has himself stressed selling inefficient PSUs as part of his larger plan of managing state-owned companies professionally and making them more profitable.
Wednesday's statement after the Cabinet meeting said the VRS currently being offered wasn't attractive to the employees and "therefore does not evince much interest from the existing workforce" as it comes under the central dearness allowance of 1996 and industrial dearness allowance of 1997.
The VRS benefit would be computed on the 2006 pay scale for the employees covered under central dearness allowance, it said, adding that for other employees, it would be based on the 2007 industrial dearness allowance-linked pay scale.
"The improved VRS scheme would be opened for a period of three months from the date of its offer with a provision of extension by another one month. Necessary grant-in-aid from the government of India under Non-Plan would be given for this purpose," the statement said.
CIWTC, whose abandoned barges and ships dot Kolkata's river line, was provided a Rs 140-crore revival plan by the central government in 2001. About Rs 76 crore was to be provided by the Centre and the rest was to be raised by selling the company's assets.
However, the then Left Front government in West Bengal rejected the financial package, leaving divestment the only option. There was also a plan to hand over the management of the company to private operators, who would then be given a deadline to revive the company. However, that, too, didn't pass muster with the Left Front government.
| READYING CIWTC FOR SALE |
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