What will happen to BIC revival plan?
THE major hurdle coming in the way of the British India Corporation (BIC) revival plan is that the State Government did not allow the conversion of corporation?s leased land into free-hold plots. This was stated by the Union Textile Ministry and the BIC management.Updated: Apr 21, 2006 00:20 IST
THE major hurdle coming in the way of the British India Corporation (BIC) revival plan is that the State Government did not allow the conversion of corporation’s leased land into free-hold plots. This was stated by the Union Textile Ministry and the BIC management.
It was due to this fact that the Board for Industrial and Financial Reconstruction (BIFR) put forth an option for closure of the corporation. This has rendered the BIC employees almost jobless.
While the modified revival plan for the BIC was being discussed on Wednesday, the BIFR issued a notice to the authorities concerned questioning the feasibility of reviving the BIC and Lalimli.
The BIC management is gearing up for a suitable reply to the notice so that the closure could be avoided at the moment. The BICL was acquired under the Acquisition of Shares Act 1981 by the government so that the company can be managed properly.
Although the government provided the corporation with a proper management force, it failed to work as per the requirement which contributed to the BIC downfall.
A revival scheme worth Rs 211 core, put forth before the BIFR in 2000, was approved in 2002. Under the scheme, a sum of Rs 38 core was sanctioned by the government and Rs 49 core was to be obtained through loan from financial institutions. Besides, the rest of the amount was to be obtained from sale of its properties. However, this scheme could not be implemented.
However, during the review hearing of the scheme on November last year, the BIFR directed the Central Government to take a decision on the revival of the company through a joint venture partner within three months.
To implement the directive of the BIFR an Inter Ministerial Group (IMG) under the chairmanship of secretary (Textile) was formed to discuss the issue related to leasing out of the BIC mills through special purpose vehicle (SPV).
Although all necessary formalities were completed, no private partner showed interest till March 14 this year and the BIFR was informed about these developments on March 23. Therefore, a draft for modified revival scheme was made and submitted to the BIFR.
The proposed cost of the scheme was Rs 283.65 core as against the cost of Rs 210.51 core as mentioned in the original scheme.
The additional assistance of Rs 122.65 core has been sought from the Centre which has already Rs 86 core under the original rehabilitation scheme 2002.