Government in a tight spot over Centre’s plans for PSU disinvestment

The Centre’s move to begin disinvestment of strategic public institutions ahead of the expiry of its tenure has put the government in a tight spot.

Published: 22nd December 2018 02:00 AM  |   Last Updated: 22nd December 2018 04:25 AM   |  A+A-

Trivandrum International Airport

Express News Service

THIRUVANANTHAPURAM: The Centre’s move to begin disinvestment of strategic public institutions ahead of the expiry of its tenure has put the government in a tight spot. The latest in the list was the Trivandrum airport, which was followed by the Thiruvananthapuram City Road Improvement Project (TCRIP) and the Sports Hub at Kariavattom. The last two institutions, however, are not Centrally-funded.

K G Vijayakumaran Nair,  member secretary Public Sector Restructuring and Internal Audit Board (RIAB), told Express the state was already in the final stage of clinching a deal with the Centre over the disinvestment of Instrumentation Ltd (IL), Palakkad, a PSU under the Ministry of Heavy Industries and Public Enterprises; BHEL Electrical Machines Ltd (BHEL-EML), Kasargod, a BHEL subsidiary and a joint venture between BHEL and the state government; as well as Hindustan Newsprint Ltd (HNL), Kottayam. Though the state government took over IL, Palakkad – rechristened IL-Kerala – the Union Cabinet was yet to give permission despite there being no technical issues. 

In the case of BHEL-EML, a manufacturer of rotating electrical machinery which caters to various sectors, including Indian Railways, a final decision on the takeover was yet to materialise owing to confusion over sharing the liability of the sick PSU. 

The state believes it is ready to take over the PSU without its liability. It is waiting for a favourable decision from the Centre, said a senior officer with the Industries Department. The takeover of HNL will take time as there is an arbitration over it. 

The Centre is reportedly trying to disinvest 49 per cent equity of HLL Lifecare Ltd, but the state government has not taken any decision as it was not approached in connection with the divestment, said officers. 

As for Trivandrum airport, which isn’t a PSU, the state government formed a special purpose vehicle named Trivandrum International Airport Ltd for the bidding. However, the chances of the state winning the bid are marginal. 

TCRIP and Sports Hub, Kariavattom, were set up by the debt-ridden Infrastructure Leasing & Financial Services (IL&FS) in public-private partnership mode. 

PWD Minister G Sudhakaran said if IL&FS offloads its stakes in the TCRIP as per the agreement between itself and the state, there will be no objection. Else, the state would have to rethink it, he said.
While the Sport Department has maintained the disinvestment of the Sports Hub won’t affect its ownership, a final decision on it has to be taken by the Chief Minister. 

The state government is also planning to take over the land given to private firms like Gwalior Rayons and Perumbavoor Rayons as the companies have become non-feasible financially.

In final stages

As per officers, the state is in the final stages of clinching a deal with the Centre over the disinvestment of Instrumentation Ltd, Palakkad, a PSU under the Ministry of Heavy Industries and Public Enterprises; BHEL Electrical Machines Ltd, Kasargod; and Hindustan Newsprint Ltd, Kottayam

Stay up to date on all the latest Kerala news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp