PSU help to be sought for HEC revival

The government is banking on the companies it owns for yet another attempt at the revival of Ranchi-based Heavy Engineering Corporation Ltd (HEC).

With behemoths like Steel Authority of India Ltd (SAIL) and Coal India Ltd (CIL) drawing up big plans for expansion, the ministry of heavy industry and public enterprises has taken steps so that some orders for machinery and consultancy flow to HEC.

"Talks have been held with steel minister Ram Vilas Paswan and officials of the coal ministry and they have assured us of support for the revival of HEC" said Minister of Heavy Industries and Public Enterprises Santosh Mohan Dev.

The search for a new chairman of the company has also been intensified as the position is vacant after the retirement of the incumbent.

HEC makes capital equipment, machine tools and spares for core sectors like mining, steel and railways.

The company has been in troubled waters since the 1970s. Between 1972 and 1996 a number of packages were implemented for the revival of HEC. The last one which was sanctioned in 1996 has also been declared failed by the Board for Industrial and Financial Reconstruction (BIFR).

The BIFR had ordered the closure of the company after the last revival package.

As a first step towards HEC's revival, the government is planning to move the appellate authority against the order of closure of company.

In the last 13 years, the government has written off Rs 294.14 crore and infused by way of equity, grant and loan Rs 890 crore in HEC.

This time the focus is less on capital infusion and more on support from other government companies.

SAIL has drawn up plans to increase hot metal production to 20 million tonnes by 2012 from the current 12.75 million tonnes.

The plan will be implemented in two stages. In first stage Rs 4,300 crore would be spent for debottlenecking capacities which is to be completed by 2006-07. This would pave the way for the second part of the plan that will run through 2011-12.

Coal India Ltd (CIL), on the other hand, is working on revival packages for its subsidiaries "" Eastern Coalfields Ltd, Bharat Coking Coal Ltd and Central Coalfields Ltd. The subsidiaries have become sick as they are burdened with old mines and equipment.

The estimated Rs 6,000 crore would be needed for the revival of CIL subsidiaries that will be spread over five to eight years. The opportunity that HEC has in these two projects are large enough considering that the company's last year revenues were Rs 149.39 crore.