In a relief to employees of the central PSU Instrumentation Limited at Kanjikode near here, the Union Ministry of Heavy Industries and Public Enterprises has directed Bharat Heavy Electricals Limited (BHEL) not to proceed with its plan to recover loan arrears of the company’s loss-making mother unit at Kota in Rajasthan from the capital expenditure funds of the Palakkad unit.
In a letter to BHEL Chairman and Managing Director Atul Sobti, Ministry’s joint secretary Vishvajit Sahay also directed that the money already recovered from the profit-making Palakkad unit be refunded.
The letter, accessed by The Hindu , also states that the Union government favours the transfer of the Palakkad unit to the Kerala Government liability free.
Almost paralysed Palakkad unit
The BHEL move had almost paralysed the Palakkad unit that was making profit since its inception in 1974. The Centre’s intervention is in response to an article in The Hindu on June 2 on the impact of the recovery move. The BHEL was planning to deduct Rs.6.14 crore from the payments to be made to the Palakkad unit for purchasing valves.
The amount was arrears of a loan released by the BHEL in 2009 to the Kota unit. Employees resisted the move, saying it would deplete capital expenditure funds of the Palakkad unit and affect the unit’s performance and supply commitments to companies across the country.
“In 2009, the BHEL had given Rs.11.83 crore as loan to the Palakkad unit of Instrumentation Limited to bridge shortage in working capital. The amount was repaid as per the conditions laid out by the BHEL. The profit-making unit had kept its word. But the latest attempt was to recover Rs.6.14 crore given to the loss-making Kota unit and that too from the accounts of the Palakkad unit,” said employees union leader M. Preman.
It was following a public outcry that the Union government decided to hand over the Palakkad unit to the State government even while closing down the Kota unit.
The Employees Provident Fund Organisation (EPFO) had recently frozen Instrumentation Limited’s bank accounts, citing accumulated arrears to the tune of Rs.100 crore. This was despite the Palakkad unit handing over its share on time.
The Kota unit had been in the red for two decades and its efforts to make profit had failed.
