BHEL ancillaries going bankrupt

Look for Centre’s intervention to survive

July 23, 2017 08:43 pm | Updated August 08, 2017 03:15 pm IST

Very many ancillary units of Bharat Heavy Electricals Limited (BHEL) are literally in the red; actually, at the receiving end of banks.

As many as 200 of the over 400 units have reportedly closed down operations over the last few years, reflecting the scaled-down orders bagged by BHEL.

And, over 100 units are stated to be on the verge of closure at the mercy of banks in a helpless situation even as immovable properties the ancillaries had pledged as collatoral security are being confiscated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act

“The situation is really bad for the Small and Medium Enterprises units that used to provide 20,000 direct jobs and as many indirect jobs when the conditions was ideal. Rather than confiscating properties that would spell doom for the SME sector in Tiruchi that had flourished for decades, the Central Government must intervene with offers of moratorium on the loans, and fresh capital infusion to make the most of the strength of Tiruchi as a fabrication hub and sustain the operations of the ancillary units by diverting orders from defence equipment manufacturers,” Rajappa Rajkumar, Chairman of BRAMAS (BHELSIA Raw Materials) Industrial Service Association, said, adding that ancillary units have proposed to start 'Save Tiruchi SMEs' programme. The focus of the initiative will be to prevail upon the government to accord priority for saving existing SMEs over creating new ones, Mr. Rajkumar said.

The BHEL Small Industries Association is pinning hopes on the orders bagged by BHEL in recent months to attain at least 70 per cent of the targetted 3.2 lakh tonnes for this fiscal. There has been a perceptible rise in volumes in the final quarter of last fiscal and the first quarter now, S. Ashok Sundaresan, BHELSIA president, said.

The situation was indeed bad one year back when the units used to function for one month and remain idle for two months. But now, the capacity utilisation wagetting better, Mr. Ashok said.

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