Ending the impasse over taking over of profit-making Palakkad unit of Instrumentation Limited (IL) from Union Ministry of Heavy Industries and Public Enterprises, the State government is now preparing to pay for the company assets to be handed over to it.
A Thiruvananthapuram-based private consultancy has been entrusted with the task of fixing the price. On the other hand, the Union Ministry has agreed in principle to clear the pending dues of existing work force and those who retired from service in the recent years before the handing over.
The long-awaited handing over process reached a deadlock in recent weeks with the Union Ministry remaining non-committal on clearing the pending dues and the State government favouring a liability-free take over.
It was a high-level meeting held in the presence of Industry Minister A.C. Moideen in Thiruvananthapuram on Wednesday and attended by top officials of the Ministry that decided to end the impasse. Union Ministry offcials convinced the State that taking over of such a profit making unit after paying for its assets would not cause any financial burden on the State. The State had categorically said that the Union government must clear all salary arrears and pending benefits of the staff before handing over the unit.
Representatives of the staff of the public sector company, who attended the meeting, reminded the Industry Minister that only immediate takeover would help the company retain its performance against stiff competition in the market of control valves and allied instruments.
This is the first time that a State government is taking over a Central PSU. The Union government had, a year ago, requested the State government to take over the unit.
Ministry officials claimed that they decided to pass the baton to the State government after failing to find a suitable option to retain it as a Central PSU. Before urging the State to take over the PSU, the Centre had probed options, including a joint venture, PPP model and merger with BHEL, to keep the Palakkad unit functional. The Palakkad unit has 320 staff members at present on its rolls.
The takeover would be a viable option for the State government as the profit-making unit continued to be India’s largest supplier of control valves and allied instruments.
The Ministry had already closed down the loss-making mother unit of the company at Kota in Rajasthan. It was the accumulating losses of the mother unit that had landed the Palakkad unit in a crisis.
