The Left Front government in West Bengal will close down two public sector enterprises (PSEs), offload shares in nine PSE to hive them off as joint ventures, retain 13 enterprises and decide on three more using a line of credit from UK's Department for International Development (DFID) worth 23 million pounds.
With this, the government, once seen as the champion of the state sector, would be reforming a second set of public enterprises, some ailing and some healthy, in West Bengal.
The process of closure and privatisation through the joint venture route will be managed, and the funds handled, by the state public enterprises and industrial reconstruction department, said Sumanta Chaudhuri, secretary of the department.
The money, roughly around Rs 184 crore, will be spent on capacity building of the sick PSEs as well as on the early retirement scheme (ERS) for employees in these units.
In the first phase, the Left Front government had sold off landmark entities like Great Eastern Hotels. Transport sector PSEs will not feature in the second phase of public sector reform. In all, around 28 PSEs will be taken up in the second phase.
The funds would be partly used to retire workers through ERS and this would release the assets and make them more attractive to private sector buyers.
While DFID will bear one-thirds of the cost to be incurred in the ERS scheme, the rest will be borne by the state government.
The funds spent on capacity building would come entirely from the international agency, Chaudhuri mentioned.
While nine PSEs have been selected for conversion into joint ventures and 13
The state was yet to decide on the fate of three enterprises, said Chaudhuri.
Of the nine units that were selected for transformation into joint ventures, three were cooperative spinning mills, three were dairies, two information technology companies (named Webel Consumer Electronics and Webel Communications), and the West Bengal Film Development Corporation.
Units to be retained included some minor irrigation enterprises and some others in the commerce and industries department, said Chaudhuri.
External consultants were appointed last year to review and prepare a report on the restructuring process.
Delloitte and PricewaterhouseCoopers had been selected to prepare the report for the process of converting the state enterprises into joint venture companies.
Delloitte and MottMcDonald had been engaged to prepare a report on the 13 units to be retained under state government ownership.
The reports on the companies to be retained were likely to be ready within four months, said Chaudhuri, adding that these reports will have three components -- financial issues, business and human resources.
The funding will be routed through the industrial reconstruction department, Chaudhuri said.
As for the ERS scheme, it will be open to all employees in all the units in all the categories.
