The Hindu : Govt. to wait for investors in five PSUs

Online edition of India's National Newspaper
Sunday, Nov 23, 2003

Southern States

Southern States - Karnataka

Govt. to wait for investors in five PSUs

By Our Special Correspondent

Bangalore Nov. 22. The State Government, which has decided to close down five State-run public sector undertakings (PSUs), has decided to wait for investors, if any, until the official liquidators commence their work. This gives some more time to private investors to take over these units.

The Minister for Law, Parliamentary Affairs, and Disinvestment, D.B. Chandre Gowda, told The Hindu here on Saturday that the exercise of offering the voluntary retirement scheme (VRS) to over 5,000 employees of the New Government Electric Factory (NGEF) was completed today. As many as 119 NGEF employees, who had refused to opt for VRS, had now retracted from their stand after the Government notified recently that they would be dismissed from service. The VRS payments for this group would cost around Rs. 6 crore.

He said the Government had received a letter of interest from the Kirloskar Group which sought to purchase the new machinery available at the NGEF, some of which were believed to be still unpacked. The sale of the machinery alone would fetch the Government Rs. 10 crore.

The five State-run Government undertakings from which disinvestment was planned some time ago were the NGEF, Mysore Lamps, the Mysore Acetate company, the Karnataka Telecom, and the Karnataka Textiles.

The NGEF and Mysore Lamps were well run for a long time until various factors resulted in losses for them. The Karnataka Telecom suffered a setback soon after it was commissioned and hardly ever earned profits.

Mr. Gowda said the Government's plan pertaining to Mysore Lamps was to sell the brand name which itself would fetch a royalty of around Rs. 50 lakh.

Alongside would be the sale of machinery and real estate. Many lamp manufacturers had informally evinced interest in the purchase of the brand name.

The VRS for Mysore Lamp employees had also been set in motion and would cost the Government over Rs. 50 crore. While Rs. 46 crore had been paid, preparations were on to pay the balance, he added.

The concept of selling the brand name of Mysore lamps was relatively new. For nearly two decades, the company earned good profits until it slid to a poor shape owing to various factors, including the maladministration of the company and the intense competition in electric bulbs marketing.

He said the two official liquidators for the five undertakings would be of the rank of joint director of industries and commerce.

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