The Hindu : Andhra Pradesh News : HSL may be taken over by Ministry of Defence

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Monday, Oct 15, 2007
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Andhra Pradesh

Andhra Pradesh

HSL may be taken over by Ministry of Defence

Santosh Patnaik

It has state-of-the-art facilities for shipbuilding and repairs

VISAKHAPATNAM: The Hindustan Shipyard Limited (HSL) is likely to be put back on the right track with the Ministry of Defence showing keen interest to bring it under its control.

The Group of Ministers set up by the Union Cabinet has also evinced interest in bringing HSL under administrative control of MoD. As of now, Mazgaon Dock Limited, Garden Reach Shipbuilding Engineers, and Goa Shipyard Limited are under the MoD.

HSL, set up in 1941, has state-of-the-art facilities for shipbuilding, repairs, submarine retrofitting and offshore platforms.

It has so far built 150 ships and repaired nearly 1800 ships of various sizes with design, construction, conversion and repair yards under one roof with ISO 9001 certification. MoD is keen because of the location of Eastern Naval Command headquarters in the neighbourhood of HSL and the futuristic naval base coming up near Atchutapuram.

“The GoM is studying the proposal to bring it under MoD and the response is very positive,” Congress MP and former Chief Minister N. Janardhan Reddy told THE HINDU. Mr, Reddy, who took the initiative, said a formal decision would be taken soon.

Rs.800-cr plan

The revival-cum-restructuring plan cleared by the Bureau for Reconstruction of Public Sector Enterprises envisages putting HSL on profit path by waiving off its loans adjusting some its liabilities.

In addition to pruning the size of workforce, the plan aims at setting right the injustice done in 1997 when the Rs.591-crore capital structuring was cleared without taking into consideration the payment of Minimum Alternate Tax.

The undue delay in clearing the revival plan has led to its losses accumulating to over Rs.1,100 crores.

The HSL is doing well business-wise taking advantage of the boom in shipbuilding with orders worth Rs.2,000 crores on-hand. It needs pumping in of working capital and modernisation of some machinery to adhere to delivery schedule.

Merger talk

Earlier, the Good Earth Maritime Limited put at rest speculation that it was trying to take over HSL by pulling the strings in the corridors of power.

Its top brass during a visit to the yard had declared that HSL had world-class standards and it would be globally competitive due its excellent workmanship and expertise.

HSL, which is building six 53,000 DWT bulk carriers for GML, is set to increase its turnover from last year’s Rs.318 crores to Rs.362 crores during current fiscal.

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