Instrumentation Ltd. not to be merged with BHEL

Centre not considering the proposal

April 24, 2015 12:00 am | Updated 08:36 am IST - Palakkad:

Hopes of making the Palakkad unit of Instrumentation Limited a subsidiary of Bharat Heavy Electricals Limited (BHEL) received yet another beating with the Union government making it clear that it was against the proposal.

The Hyderabad-based Institute of Public Enterprises Limited that explored various options for the unit’s survival had recommended its merger with BHEL, which buys 65 per cent of the products manufactured by the unit.

In a written reply to Palakkad MP M.B. Rajesh in the Lok Sabha, Minister of State for Heavy Industries G.M. Siddeshwara made it clear that the government was not considering the proposal. However, he said, the government would try to merge the unit with a profit-making industrial firm. The Minister was silent whether it would be a merger with a public-sector enterprise or selling majority shares to private players.

Efforts to save the unit

Mr. Rajesh said he would continue his efforts to save the unit. Despite being a profit-making public sector enterprise since its inception in 1974, the functioning of the Palakkad unit had been in rough weather due to accumulating losses of its mother unit in Kota, Rajasthan. It was only recently that the Employees Provident Fund Organisation (EPFO) froze its bank accounts, citing accumulating arrears to the tune of Rs.100 crore. This was despite the Palakkad unit handing over its share well in time.

The Kota unit has been in the red for two decades and its efforts to make profit have failed. Union Minister Pon Radhakrishnan who visited the unit four months ago had assured employees that the unit would be either given independent status or merged with a profit-making PSU.

‘Govt. will try to merge unit with a profit-making industrial firm’

BHEL buys 65% of products manufactured by unit

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