THERE seemed to be some glimmer of hope for the sick PSUs reeling under massive losses and facing shut down when a committee headed by NTPC chairman Arup Roy Choudhury submitted a report earlier this month advocating involvement of some...profit-making central public sector undertakings (CPSEs) in aiding the revival of the sick ones.
However, that thin hope now seems to have fizzled out with the cash-rich PSUs showing unwillingness to spend money in reviving their sick brethren.
The report has already been submitted to the ministries of public enterprise and heavy industries.
Now, after the report was submitted, the revival package outlined by the Arup Roy Choudhury committee hangs in balance since the latter are not keen on extending any such lifeline.
The cash-rich PSUs on whom the revival plan rests are not very keen on the proposal as they are unsure about its feasibility, a media report quoted a government official as saying.
The report that draws heavily from similar plans in countries like Russia and China proposes formation of an asset restructuring company (ARC) with the help of capital from CPSUs sitting on a pile of cash. According to estimates, profit-making CPSEs have a cash pile in excess of R1.6 lakh crore with ONGC, NTPC, Fertiliser Corporation, Coal India and Bharat Heavy Electricals topping the list of profit-making CPSEs.
On the other hand, BSNL, MTNL, Air India, Chennai Petroleum and Hindustan Photo Films are the top five loss-making CPSEs.
The ARC will be managed by a professional management team that would be drawn from both the public and private sectors, and the body will have the discretion to decide on revivable units and take only those units on board.
These sick units will act as subsidiaries of the umbrella holding body of the ARC. The companies that put money in the ARC will get a proportionate share of profit if and when the sick unit start earning it.
The decision to divest the subsidiaries from the parent body (ARC) will be taken according to parameters to ensure that the revived units do not fall back into the rut. The proceeds from the divestment will again be shared among the stakeholders of the ARC.According to the official definition of a sick PSU — a unit with annual accumulated losses exceeding half its net worth — there are 61 sick CPSEs.