BHEL may have to shell out Rs 651 cr for BHPV
Power equipment major Bharat Heavy Electricals (Bhel) may soon have to bail out the ailing Bharat Heavy Plate & Vessels (BHPV) by investing about Rs 615 crore.
By Niranjan Bharati, TNN |
NEW DELHI: Power equipment major Bharat Heavy Electricals (Bhel) may soon have to bail out the ailing Bharat Heavy Plate & Vessels (BHPV) by investing about Rs 615 crore.
Department of heavy industry has moved a draft Cabinet note to this effect, government sources said. The draft has recommended that Bhel should takeover the loss-making PSU along with its existing manpower.
The ministry and the Board for Reconstruction of Public Sector Enterprises (BRPSE) were in favour of Bhel reviving the company since the the government would be required to spend the least in such a scenario.
The BRPSE had in fact recommended that the government should make a cash infusion of Rs 263.57 crore, while the navratna company should invest Rs 396.66 crore.
The government, however, was not ready to infuse any money and has recommended that Bhel should make the total investment of Rs 615.79 crore. The government would give non-cash support including loan waiver amounting to Rs 414.95 crore for a period up to March this year and a freeze on any further interest which the loan amount may have incurred after March.
The department of heavy industries has argued that takeover of BHPV would help Bhel in manufacture of high pressure boilers and other heavier equipment. However, industry observers believe that the takeover of a loss-making company can affect Bhel’s performance.
The cost of revival of BHPV on standalone basis was estimated at about Rs 1,073.68 crore and the same with BHEL would amount to Rs 1,302 crore. The DHI has backed the proposal to revive the company through Bhel because government would have no cash obligations in this case.
Department of heavy industry has moved a draft Cabinet note to this effect, government sources said. The draft has recommended that Bhel should takeover the loss-making PSU along with its existing manpower.
The ministry and the Board for Reconstruction of Public Sector Enterprises (BRPSE) were in favour of Bhel reviving the company since the the government would be required to spend the least in such a scenario.
The BRPSE had in fact recommended that the government should make a cash infusion of Rs 263.57 crore, while the navratna company should invest Rs 396.66 crore.
The government, however, was not ready to infuse any money and has recommended that Bhel should make the total investment of Rs 615.79 crore. The government would give non-cash support including loan waiver amounting to Rs 414.95 crore for a period up to March this year and a freeze on any further interest which the loan amount may have incurred after March.
The department of heavy industries has argued that takeover of BHPV would help Bhel in manufacture of high pressure boilers and other heavier equipment. However, industry observers believe that the takeover of a loss-making company can affect Bhel’s performance.
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The cost of revival of BHPV on standalone basis was estimated at about Rs 1,073.68 crore and the same with BHEL would amount to Rs 1,302 crore. The DHI has backed the proposal to revive the company through Bhel because government would have no cash obligations in this case.
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