Marxists get foreign funds to mercy-kill their dying PSUs

The first instalment of the Rs 175-cr grant is meant to wind up 14 ‘‘perpetually sick’’ PSUs and settle workers’ dues. Its first instalment is of Rs 18.5 crore which will be used to pay off employees of two PSUs that the Marxist government has classified as ‘‘beyond recovery.’’

The DFID-backed restructuring plan includes a social safety net that proposes to train at least one member from the families of those who would be regarded as ‘‘surplus and laid off.’’ The trained member will be accommodated in the new set-up. The DFID deal also provides for health insurance cover for the laid-off workers.

Nirupam Sen, minister in charge of commerce and industries as well as public sector restructuring, said both units ceased to function long ago, but the workers could not be sent off with their dues since the government did not have the money.

‘‘This grant will be extremely beneficial for implementing the state’s plans for PSUs, which had to be put on hold for quite some time,’’ Sen said. ‘‘The size of the DFID grant can be increased depending on the success of the pilot project covering 14 perpetually sick PSUs,’’ he said.

The two PSUs whose workers are to be paid off first are Indian Paper Pulp with about 700 workers and Sunderban Sugarbeet Corp with 50 workers. Indian Paper Pulp has faced a perpetual shortage of raw materials from day one, and has produced practically nothing. Funds were siphoned off even as the huge workforce idled.

Sunderban Sugarbeet Corp was set up by the government in the late ’90s to produce alcohol, but mismanagement and planning flaws ensured that it never got off the ground.‘‘The government venture was based on recommendations of senior state government officials who, we find now, were interested in money-laundering,’’ said Kali Ghosh, a senior leader of the CPM-affiliated Centre for Indian Trade Unions (CITU) and a spokesman for the workers.

Once these two corporations are wound up, the government will turn its attention to 14 PSUs that have been perpetually in the red. The state of some of these companies is pitiable.

Take, for instance, four cases: • Durgapur Chemicals has around 870 employees and a cumulative loss of Rs 245 crore.

• Britannia Engineering has 650 on its rolls and a loss of Rs 50 crore on its books.

• Bharat Jute Mills has 600 employees and a loss of Rs 100 crore.

• Westinghouse has 990 employees and a loss of Rs 250 crore.

Last month, the West Bengal government had invited ‘‘expressions of interest’’ from private sector parties for a list of government-owned units that it feels can be revived with strategic tie-ups.

‘‘The response to the government initiative has been quite encouraging,’’ said Sen, ‘‘with as many as 56 companies wanting to make bids, some of them really serious.’’

Last week, the government extended the last date for receiving proposals. ‘‘Some responded through e-mail and fax and they have been given some more time to respond through the proper channel,’’ said Sen.

According to the Marxist blueprint, the government-owned units fall in four categories.

First come the units that can be revived by the government itself. Then, the units for which the government needs private help, followed by units that require huge investments and should therefore be sold.

At the bottom are units that have to be shut down because they are beyond redemption.