Govt to consider rly PSUs’ demand for footing Iraq bill

The Cabinet Committee on Economic Affairs is likely to consider a proposal to provide relief worth over Rs 215 crore...

The Cabinet Committee on Economic Affairs is likely to consider a proposal to provide relief worth over Rs 215 crore to two of Railways’ Public Sector Undertakings — RITES Limited and IRCON International Limited — to compensate for their pending dues for projects executed in Iraq in the 1980s. A meeting of the CCEA is scheduled for Friday.

Both RITES and IRCON were engaged in the implementation of several railway projects in Iraq during the 1980s. While IRCON was involved in the construction of a high-speed rail line in Samawa and Al Muthanna sections, RITES was providing project management consultancy to the Iraq Government for three new rail line projects.

“However, the Gulf War and the subsequent turmoil in Iraq meant that both RITES and IRCON had to abandon their projects. Since the Iraq Government was not able to clear its dues to both these PSUs, they were asking the government to clear them since the outstanding money reflected poorly on their balance sheets,” an official said. “After nearly 15 years, it has now come up before the CCEA,” he added.

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Out of the total outstanding dues, RITES has a major chunk with around Rs 200 crore while IRCON has roughly 15 crore pending. If the Government decides to foot this Bill, it is likely to take up the matter with the Iraqi Government on a government-to-government basis to realise the dues from that country, said sources.

Other issues before CCEA:

• Crop insurance scheme for tea, rubber, tobacco and spices like ginger, turmeric, chilli, pepper, cardamom

• Launching of Central Sector Scheme on rejuvenation, modernisation and technology upgradation of coir industry

•Approval for implementation of polio eradication strategies recommended by experts for 2008-09.