DIL’s plant sell plan gains momentum
KESCO’S EXERCISE of sending notice to the Duncan Industries Limited (DIL) to snap power supply on March 31 went in vein. Despite the notice, the power company was not able to snap power supply of DIL’s fertilizer plant at Panki today. According to sources, KESCo was all set to take the wind out of Duncans’ sail, but the power that be in the state capital came to the rescue of the fertiliser giant at the eleventh hour.
KESCo charges a minimum monthly payment of Rs 3.85 crore from the DIL for ensuring power supply to the plant. But, due to severe financial crisis when the DIL was not able to pay the dues for the current month, then the KESCo shot off a notice to the DIL to clear its dues by March 29 or else power supply of the plant would be snapped on March 31.
Keeping in view the present financial crisis of DIL, snapping of power supply seemed inevitable. However, the powers that be in Lucknow came to the rescue of the DIL on Friday and refrained KESCo from snapping the power supply of DIL.
As per the MoU signed between KESCo and DIL, the latter was to pay a minimum amount of Rs 3.85 crore to the power company. This amount had to be paid irrespective of the fact that whether the plant was operative. The State Government played a pivotal role in the re-opening of the DIL unit on August 30, 2005 by waving off its dues running into several crores. But, hardly after two-and-half months, production at the DIL stopped on October 18, 2005 due to financial crisis. The extent of financial crisis at DIL can be accessed from the fact that the employees had not even received their salary from January this year.
A senior official of KESCo on condition of anonymity said, “KESCo was all set to snap the power supply today but a phone call from the State capital explicitly stalled our move. We cannot do anything but to implement the orders.”
{{/usCountry}}A senior official of KESCo on condition of anonymity said, “KESCo was all set to snap the power supply today but a phone call from the State capital explicitly stalled our move. We cannot do anything but to implement the orders.”
{{/usCountry}}This development gives the Duncans management a fresh lease of life and now it can accelerate the ‘sell-the-plant’ plan. Initially, the RIL was the frontrunner to purchase the plant but negotiations fell through at the last stage over the final cost of purchase. While at present, the fertilizer giant KRIBHCO is holding negotiations to take over DIL, but a final agreement is yet to be reached.