Date:03/05/2005 URL: http://www.thehindubusinessline.com/2005/05/03/stories/2005050302820300.htm

Back NJMC units referred to PSU reconstruction board

Kohinoor Mandal

Kolkata , May 2

THE Union Ministry of Textiles has referred two units of National Jute Manufactures Corporation Ltd (NJMC), the ailing public sector company, to the Board for Reconstruction of Public Sector Enterprises (BRPSE).

Of the six NJMC units, a senior official of the Ministry said only these two units would be taken up for revival and the others would be wound up as per the orders of the Board for Industrial & Financial Reconstruction (BIFR).

The two units which have been referred to BRPSE are Kardah Jute Mill and Kinnison Jute Mill, both in West Bengal. "We have referred these units to BRPSE," Mr R. Poornalingam of the Union Textile Ministry, told Business Line.

NJMC, which used to be the only public sector company engaged in jute goods production, was incorporated in 1980. The company was referred to BIFR in August 1992; on July 8, 2004, the board ordered winding up of the company.

The cost of winding up NJMC would be more than Rs 1,000 crore, and 75 per cent of it would go towards funding voluntary retirement schemes.

Union Ministry sources said the Government was likely to submit a report on the corporation to BRPSE shortly. Mr Poornalingam confirmed this development and added that the report would be submitted in a few days.

BRPSE was constituted by the Union Government in December 2004. It was mandated to work out reconstruction plans for ailing public sector companies.

Apart from the two units of NJMC, a few other public sector units, including Madras Fertilisers, were referred to this body.

The National Jute Policy, which was announced in the third week of April by Mr S.S. Vaghela, Union Textiles Minister, had also talked of the steps taken by the Government to "restructure and revitalise" NJMC. It said the Government had "initiated steps to revive" the two units of the corporation.

At present, all six units of NJMC are closed because power supply to these mills was disconnected by the respective power companies for non-payment. Hence, there has been no production.