The Hindu : Business : HSL pins hopes on revival package

Online edition of India's National Newspaper
Wednesday, May 25, 2005

Business

Business

HSL pins hopes on revival package

R. Sampath

Shipyard workforce to be pruned through VRS, says CMD

VISAKHAPATNAM: Humming with a good order book position, Hindustan Shipyard Ltd. (HSL) is confident of a turnaround in its fortunes once the Centre clears the revival package for the premier public sector shipbuilding facility here, according to HSL's Chairman and Managing Director, Ajit Tewari.

In an exclusive interview to The Hindu, he said the revival package would enable HSL to come out of the debt trap it had got into over a period, and that its net worth would then turn positive. (At present HSL's debt burden is around Rs. 700 crore. Except for Rs. 173 crore payable to State Bank of India for the commercial borrowings, the balance of the debt comprises Government loans).

In this connection, Rear Admiral Tewari referred to the Andhra Pradesh Government's waiver of the sales tax arrears to the tune of Rs. 112.70 crore, including accumulated interest, and said: "It is a great relief for us, and we thank profusely the Chief Minister, Y. S. Rajasekhara Reddy, for this gesture.''

The HSL chief was happy to note that the State government had linked up the waiver proposal with the Centre's clearing the revival package.

He explained that the revival package pertained not only to debt relief, but also working capital grant and financial assistance for implementing the voluntary retirement scheme.

Admiral Tewari hoped that 500 to 600 employees would opt for VRS this year and said: "We intend pruning the workforce to 2,200 from the existing 3,550 in three years. This might require a grant of Rs. 128 crore.''

Saying that HSL "is working to full capacity now and the productivity has reached the same level as when the yard was making profit two decades ago'', he said his aim was to double productivity in the next six months.

The CMD said HSL was having orders totalling Rs. 1,200 crore for building 21 vessels of various types, besides a good number for repairs.

``Not keeping the delivery schedule has been HSL's unpleasant aspect, but we are trying to overcome it. We will be handing over a 600-tonne research vessel to the National Institute of Ocean Technology in October as per schedule, possibly a month ahead. We are also keen on delivering a 30,000 dwt bulker to the Chennai-based Goodearth Maritime Ltd. in the next 14 months. If we achieve that, that will be a turning point for HSL,'' Admiral Tewari said.

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