Selloffs start in public sector companies making losses

NEW DELHI: The government on Wednesday kicked off the process of strategic sale in loss-making public sector companies with the Cabinet approving disinvestment in Central Inland Water Transport Corporation.

As a first step, the Cabinet cleared an "improved" voluntary retirement scheme in the state-run firm headquartered in Kolkata, which will be followed by disinvestment. "Implementation of the improved VRS package would offer a better severance package to the employees of CIWTC. This would improve the prospects of finding an investor to either take over the assets or ensure viable commercial use of assets," the government said in a statement.

According to the last available numbers, CIWTC reported loss of nearly Rs 24 crore in 2012-13. Considering, it has a little over 312 employees, the VRS cost will not be significant.

The government had earlier listed six loss-making companies — Hindustan Photo Films, HMT Bearings, HMT Chinar Watches, Tungbhadra Steel, Hindustan Cable and HMT Watches — for sale or closure but wants to have a clear policy to ensure that their land is either taken over by the state or central government to avoid any controversies. Within six PSUs, a portion of HMT Watches will be retained, given its enormous nostalgia value.

Although the UPA government had planned to go ahead with stake sale in loss-making companies, it never progressed beyond the proposal stage.