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Centre unable to sell surplus land of 3 ailing PSUs

The total liabilities of the three ailing companies amount to Rs 20,358 crore. Out of this, the liability for IDPL stands at Rs 10,866 crores, BCPL Rs 8,681 crore and HAL Rs 811 crore.

india Updated: Feb 14, 2018 23:59 IST
Saubhadra Chatterji
Saubhadra Chatterji
Hindustan Times, New Delhi
Public sector enterprise,Ailing PSU,National Democratic Alliance
Bengal Chemicals & Pharmaceuticals Limited (BCPL) in Kolkata.(HT File Photo)

The National Democratic Alliance (NDA) government has not been able to sell surplus land of at least three ailing state-owned firms, according to a note by the chemicals and fertilizers ministry submitted to a parliamentary panel last month.

Two years ago, the Union cabinet decided to sell land of four underperforming state-owned firms in the pharma business — Hindustan Antibiotics Limited (HAL), Indian Drugs & Pharmaceuticals Limited (IDPL), Rajasthan Drugs & Pharmaceuticals Limited (RDPL) and Bengal Chemicals & Pharmaceuticals Limited (BCPL) — to meet their outstanding liabilities. Last month, the chemicals and fertlizers ministry, under which these companies come , informed the parliamentary committee on public undertakings that there were no bidders for land of three companies and that the sale in RDPL is stuck in a legal tangle. Hindustan Times has reviewed the note.

Selling land is a popular and viable route for funding revival packages of state-owned companies or settling their dues. In this case though, there have been no takers for the land, which is in not-so-attractive locations and, in some cases, comes with squatters, said an official involved in the discussions who asked not to be identified.

“Central government, state government, leading PSUs (public sector undertakings), financial institutions were requested on 18.05.2017 separately to bid. NBCC invited Request for Quotations from government agencies for land of IDPL plant at Hyderabad, but no bids were received despite extension of date, “ the ministry wrote in its note on IDPL. It had similar comments for BCPL and HAL. The government planned to close down IDPL and RDPL and find strategic buyers for the other two.

“The sale proceeds were meant to pay for outstanding liabilities and voluntary retirement and separation schemes,” said the ministry’s note. The land up for sale was located in Rishikesh, Hyderabad, Muzaffarabad (Bihar) and Bhubneshwar.

Bengal Chemicals was set up in 1901 and the HAL and IDPL came up in the early years of Independent India, but all these companies have fallen sick in the last few years.

In 2016, the Union cabinet approved a plan to monetise almost 1,600 acres of land belonging to the four companies and spread over different parts of the country. The four companies have a total land of 2,352 acres.

When the panel asked if there were other ways to make these companies profitable, the government maintained that in view of the cabinet decision to offload stakes, no comment can be offered at this stage.

The total liabilities of the three ailing companies amount to Rs 20,358 crore. Out of this, the liability for IDPL stands at Rs 10,866 crores, BCPL Rs 8,681 crore and HAL Rs 811 crore.

“Overall we see that developers are wary of buying land on down payments. They want to enter joint ventures with the government because customers these days prefer ready-to-move-in properties. I think the government should have allowed private players to bid and enter into a mechanism to develop the land,” said Vineet Ralia, MD at real-estate firm Sare Homes.

First Published: Feb 14, 2018 23:57 IST