Panel pulls up ECIL for dismal performance

NEW DELHI, APRIL 2: The Parliamentary Standing Committee on Energy has pulled up the Electronics Corporation of India ECIL for quot;di...

NEW DELHI, APRIL 2: The Parliamentary Standing Committee on Energy has pulled up the Electronics Corporation of India ECIL for quot;dismalquot; physical and financial performance.

Directing the Government to improve the working of the corporation, the committee said it should be able to compete against the preferred public sector undertakings to get a share of the Defence and Department of Telecommunications business.

In a recent report, the committee felt that the corporation could achieve its objective by putting in concerted efforts rather than fixing targets at higher levels.

It directed the corporation to apprise it of the specific efforts made to improve the availability of working capital and maximise order booking and execution and also of the outcome of the dialogue initiated with the Ministry of Defence and Department of Telecommunications to ensure a fair share of business from them.

It also asked the government to inform the committee about the result of the efforts made to reduce the number of redundant employees working in the corporation.

The administrative department, Department of Atomic Energy, told the committee that the product portfolio and core competencies acquired by ECIL over the years have been essentially towards serving the needs of three key sectors, defence, telecommunications and nuclear power.

It said Ministry of Defence and Department of Telecommunications have their own undertakings and ECIL has to compete against these to get a share of their business.

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The department further stated that the volume of supplies for nuclear power stations have also come down since ECIL8217;s business in this area mainly consists of supplying control and instrumentation equipment for the few power plants of the Nuclear Power Corporation of India NPCIL and no new nuclear power station could be taken up by the corporation during the Eighth Plan period.

All these factors resulted in ECIL turnover not showing significant growth in 1995-96 and thereafter and the profits were accordingly marginal, the department said adding that the problem had got accentuated because of the heavy salary bill which has become a fixed cost and has to be borne by the company despite diminishing contributions from several business lines.

The department further said that analysis of the prevailing market conditions reveals that competition is going to increase, further affecting the already thin profit margins and only way to achieve at least a breakeven position is thus by increasing the turnover and so targets were being fixed at higher levels as compared to previous years achievements.