The Hindu : CCEA clears closure of seven cement units

Online edition of India's National Newspaper
Saturday, Apr 20, 2002

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CCEA clears closure of seven cement units

By Our Special Correspondent

NEW DELHI April 19. The Government will act as the regulatory authority for the oil sector till legislation for setting up a Petroleum Regulatory Board is approved by Parliament. The Bill, which was cleared by the Cabinet on Thursday, will now be referred to a Parliamentary Standing Committee.

Disclosing this here today, the Parliamentary Affairs Minister, Pramod Mahajan, said the Petroleum Regulatory Board Bill, 2002, aimed at creating an agency that would regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum products, excluding the production of crude oil and natural gas. It would regulate the downstream oil refining and marketing sector while the existing Directorate-General of Hydrocarbons would act as the regulator for the upstream oil exploration and production. The board had been formed to protect consumers' interests and to ensure an uninterrupted and adequate supply of petroleum products in a market after the dismantling of the administered pricing mechanism (APM).

Briefing presspersons on Thursday's meeting of the Cabinet Committee on Economic Affairs (CCEA), he said it had cleared the closure of seven non-operational units of the Cement Corporation of India and the financial restructuring of the ailing Hindustan Paper Corporation (HPC). A voluntary retirement scheme would be offered to the employees of the CCI units. The modalities of meeting the expenditure on the VRS would be worked out by the Ministries of Finance and Heavy Industries and Public Enteprises.

The units being closed down are located in Mandhar and Akaltara in Chhatisgarh, Kukunta in Karnataka, Nayagaon in Madhya Pradesh, Charkhi Dadra in Haryana, Adilabad in Andhra Pradesh and the grinding unit in Delhi. The CCI, which was set up in 1965, has been making losses since 1992-93. Its accumulated losses stood at Rs. 1425.92 crores in March 2001.

The Government also approved the financial restructuring package for the loss-making HPC, which entails writing off the frozen past interest including penal interest. It also approved a package for the payment of salary and wages of the company's employees and also for redemption of non-cumulative redeemable preference shares.

Mr. Mahajan said that with the financial restructuring, it would be possible to turn around the company, and its accumulated losses would be wiped out by 2004-05. This would also facilitate the company's disinvestment programme.

The HPC, which was set up in 1970, has two manufacturing units — the Nagaon Paper Mills and the Cachar Paper Mills in Assam. The corporation also has three subsidiaries — Hindustan Newsprint in Kerala, Nagaland Pulp and Paper Company in Nagaland and Mandya National Paper mills in Karnataka.

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