PSUs may Rake in Moolah by Pledging Land

KOCHI: It seems the state is entering a new phase of disinvestment of Central Public Sector Undertakings which were having a tough time off late.

Marking the new era, one of the largest PSUs in the state, the Fertilisers and Chemicals Travancore Ltd (FACT) is all set to get a loan of Rs 1,000 crore by pledging 408 acres of land under its custody which is valued on a conservative estimate at Rs  2,000 crore. Many such PSUs in the state which are in troubled waters are likely to follow suit.

 In fact, Finance Minister Arun Jaitley in his Budget speech had said the government will encourage Central Public Sector Enterprises to divest individual assets like land, manufacturing unit to release their asset value for making investments in new projects.   Recently, the government had renamed Department of Disinvestment as the Department of Investment and Public Asset Management (DIPAM) to encourage PSUs to monetise idle assets for funding investments.

'The action plan is clear. Instead of the traditional way of disinvestment by diluting the stock holding, the government wants to divest physical assets like land. In Kerala, it started with FACT. In the past also there were issues with PSUs. But governments either at the Centre or in the state never dared to unlock the huge land banks in the possession of these PSUs. Now, the Central Government takes the stand of a money lender and gives money by taking land as collateral,” said M P Sukumaran Nair, former Special Secretary to the Chief Minister and former Managing Director, Travancore-Cochin Chemicals (TCC).

In another development, Union Shipping Minister Nitin Gadkari told the Lok Sabha on Thursday that there are financial viability problems at Cochin Port Trust and the Centre is trying to help it. He said the Port should create more business, improve finances and solve its problems. The Port is in crisis due to the recurring cost of dredging which will come to over Rs 100 crore a year. The Port has  245 acres of land within the city limits valued at Rs 9,800 crore.

 The other PSUs with massive land holdings in the state are FACT (Udyogamandal, Ambalamugal)-1,400 acres (Rs 7000 cr), HMT, Kalamassery - 374 acres (Rs 2244 cr), HOCL, Ambalamugal - 120 acres (300 cr), Cochin Shipyard - 80 acres (Rs 3,200 cr). These PSUs possess a total of 2219 acres valued roughly at Rs 22,544 cr.

“We never allow PSU land to reach private players and commercial establishments as what happened in Mumbai. Such moves will be opposed at any cost. Our opinion is that the land should be used for setting up public sector projects and social schemes,” said former Union Minister K V Thomas MP.