Rs.75-cr annual grant to Hindustan Paper Corporation unit
The Cabinet Committee on Economic Affairs (CCEA) on Friday announced financial packages for employees of three sick PSUs — Indian Telephone Industries (ITI), Hindustan Photo Films and Hindustan Machine Tools Ltd (HMT) — besides approving Rs.75 crore per annum to Cachar Paper Mill, a unit of Hindustan Paper Corporation Ltd to meet its additional operating costs.
The CCEA approved a soft loan of Rs.200 crore for paying salaries of over 7,500 employees of Bangalore-based ITI.
“The soft loan will ensure that employees of ITI Ltd receive their salaries on time and motivate them to work in the company, which is on a slow and steady comeback trail from being a ‘sick' company,” an official release said.
The company incurred accumulated losses to the tune of Rs.4,527 crore as on March 31, 2013.The current level of losses of ITI Ltd is largely on account of lack of profitable orders and heavy interest burden on borrowings.
Similarly, the government okayed Rs.181.54 crore voluntary retirement service (VRS) package for over 700 workers of HPF based on notional pay scales of 2007 as one time relaxation of Department of Public Enterprises Guidelines.
The Udhagamandalam (Tamil Nadu)-based firm was declared sick by the Board for Industrial and Financial Reconstruction in 1996.
The CCEA has cleared implementation of the 1997 pay scale for over 2,800 employees of HMT Machine Tools Ltd besides increasing their retirement age from 58 to 60.
“The implementation of 1997 pay revision will be from the date of approval with one time relaxation of the Department of Public Enterprises [DPE] guidelines,” the release said.
The government has made a provision of non-plan loan of Rs.61.04 crore at seven per cent interest per annum spread over two years (2014-15 and 2015-16) to bear the additional impact of implementation of 1997 pay revision.
Besides, it has sanctioned Rs.75 crore as non-plan loan for working capital purposes.
The CCEA also waived interest on a government loan of Rs.38.58 crore (up to March 31, 2014). The total financial implication of the proposal in the form of non-plan loan would be Rs.136.04 crore.
It approved annual financial support of around Rs.75 crore for Assam-based Cachar Paper Mill, a unit of Hindustan Paper Corporation Ltd, to meet its additional operating costs.
“Providing grant would enable the Cachar Paper Mill to become viable and competitive. This will ensure security of the future, of not only the employees of the mill, but also people living around the mill,” the release said.
The grant shall be to the tune of 90 per cent of the transportation cost till such time that the gauge conversion of the Lumding-Silchar railway line is completed.
Cachar Paper Mill is located at Panchgram in Hailakandi District of Assam.Poor rail network
Due to poor rail and road network, transportation of raw material and finished product to and from the Cachar mill is very difficult and cost of transportation is much higher compared to other competing paper mills, thereby denying a level-playing field to Hindustan Paper Corporation