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Journalism of Courage
NEW DELHI, JAN 4: The ministry of steel and mines has recommended winding up of loss-making public sector Bharat Gold Mines Ltd to the union cabinet.The ministry has also sought cabinet8217;s approval for allowing BGML to offer voluntary retirement scheme package to the employees who opt for the same within three months from the date of offer. BGML had 4367 employees on its rolls as on October 1, 1998. The cost of VRS for these employees has been estimated around Rs 100 crore.
The government intends to convey its decision to wind up the company to the Board for Industrial Financial Reconstruction BIFR within two weeks of the approval of the union cabinet.
The ministry decided to wind-up BGML, which had accumulated losses of Rs 343.38 crore as on March 31, 1998, after efforts to find a suitable private partner for takeover did not materialise.
BGML8217;s performance has been falling for the last several years. Production touched a low of 514 kgs in 1997-98 as compared to 692 kgs in 1996-97. The cost ofproduction was a whopping Rs 11,016 per ten grammes during 1997-98. The total plan and non-plan loans outstanding as on March 1998 were Rs 76.57 crore and Rs 86.60 crore, respectively. The total penal interest on both plan and non-plan loans stood at Rs 130.54 crore.
The reasons for continuous losses over the past several years has been put on fall in the grade of gold from a high of 47 grammes per tonne to the present level of a mere three grammes per tonne, high operational costs, surplus manpower, increase in power tariffs and overhead expenditure. At the same time, average realisation per 10 grammes of gold fell to Rs 4356 in 1997-98 to Rs 5097 in 1996-97.
The government floated advertisements inviting private partners in May 1997 and appointed S B Billimoria amp; Company for assistance in identifying a suitable co-promoter. It shortlisted two prospective partners 8212; Northern Resources USA Ltd and Karnataka Gold Mining Ltd of Australia. However, both the bidders were found unsuitable after detailedscrutiny of their proposals.
