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Punjab govt keen on closure of chemical unit, but Rana KP backs revival: Meeting on August 4

Set up in 1975 by Punjab State Industrial Development Corporation (PSIDC), the state-owned unit manufactures chemicals used as raw material in a number of products such as soap.

punjab Updated: Jul 28, 2017 09:25 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times, Chandigarh
Punjab government,MLA and Vidhan Sabha speaker Rana KP Singh,Punjab Alkalies and Chemicals Limited
Punjab Alkalies and Chemicals Limited (PACL) in Nangal.(HT Photo)

As the Punjab government plans to shut down the loss-making Punjab Alkalies and Chemicals Limited (PACL) in Nangal, area MLA and Vidhan Sabha speaker Rana KP Singh has resisted the move.

Set up in 1975 by Punjab State Industrial Development Corporation (PSIDC), the state-owned unit manufactures chemicals used as raw material in a number of products such as soap. It falls in Anandpur Sahib constituency represented by Rana KP. He says 25,000 persons, including employees, transporters and staff of ancillary units, depend on it.

PACL was declared a sick unit 10 years ago after its losses exceeded its net worth. At present, it has accumulated losses of Rs 101 crore, and bearing a monthly loss of Rs 2 crore. Sources said the PACL management is unable to pay electricity bills or meet other day-to-day expenses. It owes Rs 86 crore in bills to the Punjab State Power Corporation Limited.

A meeting on its fate is scheduled to be chaired by chief minister Capt Amarinder Singh on August 4. The top brass is learnt to have sought closure of the unit or disinvestment of government’s stake.

ABOUT THE COMPANY
  • Set up in 1975, PACL nosedived as cost of power rose exorbitantly and the company failed to check other anti-competitive practices. It was declared sick in 2007 as losses rose beyond the net worth of company.
  • Punjab government plans to divest ownership or shut it completely but speaker Rana KP Singh opposes that move as it falls in his constituency.
  • It’s 1 of 3 such units in country for chemicals for use in number of industries and products. Other two are private and earning profits.

But Rana said, “I am trying to bring it back on track, and I am sure the government will help revive the sick unit.”

Sources said there’s a proposal of giving power at Rs 5 a unit to the PACL which consumes the most power among industry in the state at 240 million units a year. Its annual power bill is Rs 170 crore, that is 66% of the input cost. Also in the proposal are concessions, a soft loan of Rs 6 crore from the government for repair and refurbishment, and a five-year moratorium on pending power bills.

It must be underlined that there are two other such units in the country — at Rajpura in Punjab and Ahmedabad in Gujarat — that are privately owned and earning profits. Both have captive plants to generate power for the unit.

As per a presentation held by the government, PACL has double the cost of production as compared to these two. This is attributed to high power consumption due to poor plant condition, high cost of power being received from the state corporation, and high cost of transportation of finished goods.

First Published: Jul 28, 2017 09:23 IST