Joshi's new turf battle -- don't sell EPIL and B&R

Joshi's new turf battle -- don't sell EPIL and B&R
Nandita Roy

NEW DELHI, JULY 24: In a last ditch effort to hold on to his shrinking turf, Department of Public Enterprises and Heavy Industries Minister Manohar Joshi has identified two undertakings -- Engineering Projects (India) Ltd and Bridge & Roof Company (India) Ltd where, he feels, government should not divest its majority stake for the next two years.

The minister feels both EPIL and B & R Ltd should first undergo financial restructuring before being put on the block, sources close to the minister confided. Since both PSUs have a high order booking position, financial restructuring rather than outright disinvestment would fetch a better price, Joshi hopes. Also, improving the health of these PSUs should be the priority in order to get a better deal in a sell-off process, sources added. As on 30th June, 2000, EPIL's order booking position was worth Rs160 crore while that of B & R was Rs288 crore. EPIL's target for order booking in the year 2000-2001 is Rs 180 crore and that of B & R is Rs375 crore.

The stand taken by the ministry is despite the fact that consultants A F Ferguson had recommended that the government should divest up to 74 per cent in both EPIL and B & R Ltd to a joint venture partner. Ferguson's report, which has now been put into cold storage, was paid nearly Rs10 lakh for its recommendations on each PSU. The report is gathering dust in Udyog Bhavan as the ministry has no plans to pass them on to the Department of Disinvestment (DoD) for taking their divestment plans to a logical conclusion.

What is more, EPIL and B & R are construction companies and are non-core areas. The Cabinet Committee of Disinvestment (CCD) had taken a decision last week that only defence, atomic energy and railways would be held as strategic sectors and the rest as non-strategic. So Joshi's plans to get a Cabinet sanction for declaring five key PSUs -- BHEL, HEC, HMT, BOGL and HPF as ``strategic,'' had earlier failed. Joshi is yet to take proposals for EPIL and B & R to the Cabinet.

Last year, while EPIL's turnover was Rs 120 crore and losses to the tune of Rs 45 crore, B & R Ltd's turnover was Rs345 crore and profits Rs6.15 crore. EPIL's projects relate to civil and structural engineering, material handling, metallurgical, petrochemical, environment and pollution control. On the other hand B & R Ltd handles civil engineering works in respect of buildings, concrete bridges, project civil works, cooling towers, mechanical erection of complete plants for refineries, fertilisers, chemical, steel, aluminium etc.