NTC to stitch new JV model for revival

In a bid to revitalise the bidding process, the PSU is now looking at a new model and has invited consulting agencies to submit their presentations in this regard by May 31. ‘‘By the end of next month we hope to have a new model in place which will hopefully receive a much better response,’’ Pillai added.

The textiles ministry has, however, rejected suggestions by the standing committee on labour to look at ways other than joint ventures with private sector for the revival of 29 mills with the National Textile Corporation.

‘‘In the end NTC will only have 22 mills with it and we do not want a large enterprise as managing it becomes a problem. For a PSU which seeks to achieve a turnaround it is important to keep its size under manageable limits,’’ said a senior ministry official.

NTC is also working on integrating its 9 subsidiaries with the parent company.

The labour committee report on its assessment of the revival scheme of the PSU stated that ‘‘joint venture with the private sector should be the last option before the government as NTC itself had emerged from the graveyard of failed private mills.’’

Observing that the PSU had raised Rs 2,200 crore last year from the sale of 5 mills in Mumbai, the committee had hinted that after the sale of other mills the PSU will have enough cash reserves with it to modernise the 29 mills itself. NTC has another 17 mills with it in Mumbai alone and is set to retain five of them with itself.

PSU is still undecided on the remaining 12 and ‘‘may sell off or initiate JVs for their modernisation.’’

The committee had also suggested that viable mills located in prime locations of cities be shifted to suburban areas to mobilize funds. The ministry has already submitted a draft modified revival scheme (DMRS) to the Board for Industrial and Financial Reconstruction (BIFR).

‘‘Joint venture route for 29 mills is the best for NTC as we do not want to fall into the trap of debts while managing a huge corporation. Instead we are looking at integration and strengthening our retail presence. A smaller more profitable organization suits us more than higher capacities and poor management,’’ said Pillai. NTC is also cutting down on the number of showrooms from 282 to 100 and hopes to achieve a turnaround without any deficit by the end of FY 2006-07.