Union minister of heavy industries and public enterprises Anant Geete on Friday said that the government would be freeing assets worth Rs 22,000 crore belonging to five sick public sector units under his ministry — including three companies of HMT — as it goes about closing these “non-productive units” by rolling out “an attractive VRS package” for 2,800 existing employees.
“We have decided to close down five sick PSUs that fall under my ministry. There are three units that belong to HMT — HMT Watches, HMT Chinar Watches and HMT Bearings. The other two are Tungabadhara Steel Products Ltd and Hindustan Cables Limited,” the minister said on the sidelines of a workshop held here.
“We have decided to close them down, because since 2007 there is not production in these units and we have already spent about Rs 4,000 crore only on salary and wages of the employees. How long will we continue to spend on salaries in these nonproductive units”,” the minister asked, adding that the government will be giving an “attractive VRS package” which will be based on the pay-scales that existed in 2007.
“The Cabinet has given an in-principal approval. We have also sent an unit-wise proposal to the cabinet and we are hoping to get wrap it up in the next 2-3 months,” the minister told mediapersons.
“The cost of shutting these units down is just Rs 1,400 crore and the asset value of these companies is Rs 22,000 crore, the minister said all the immovable properties of these companies including land, plant and machinery, will be sold to interested parties in “as-it-is, where-it-is” basis. “The decision for the sale of property is yet to be taken,” the minister said adding that these companies were located in prime zones.