The revival of Braithwaite & Co hangs in fire for more than a year as the government is yet to release Rs 12.13 crore as working capital for the ailing central government public sector unit.
The companys revival package, approved by the Board for Industrial & Financial Reconstruction (BIFR) in October 1995, called for an injection of Rs 12.13 crore by the government to solve the liquidity crisis. Sources alleged that the goverments reluctance to revive the sick unit was evident as there was no provision for the fund in the last two Union budgets of February and July 1996.
At the BIFR review meeting in August 1996, the governments representative failed to explain the delay in releasing the funds. The governments lackadaisical attitude has not only escalated the revival costs sanctioned by the board but created severe cash problems for the sick unit, sources said.
Meanwhile, Braithwaite returned to the black after its units began reporting net profits from September 1996. The company managed to salvage its working capital requirement through customers advance and internal resources. The production target for the 1996-97 fiscal is Rs 150 crore, while the present order-book position is at Rs 105.23 crore.
However, sources apprehend loss in production and productivity if the government does not release the funds at the earliest. In such circumstances, the company would again come back to the red belying the hope of revival, they said.
The governments attitude has raised fears that the sick units will be winded up or sold to private parties. The Braithwaite Officers Associatio has demanded immediate release of working capital for supply of inputs to avoid disruption of the production process and expedition of the revival process sanctioned by the BIFR.
Iin another case of the governments negligence towards sick PSUs, the Burn Standard Officers Association has sought a reimbursement of Rs 59 crore from the railway ministry for the cash loss incurred by the company due to the faulty wagon acquisition policy of the railways, sources said. The curtailment of wagon orders between 1994-96 has hit the companys wagon manufacturing units at Howrah.
