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Monday, Feb 27, 2006


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No favourable winds for HSL revival

Ch. R. S. Sarma

The public sector Hindusthan Shipyard Limited (HSL) at Visakhapatnam — one of the oldest in the country — has been waiting a long time for the promised revival package and there does not seem to be an end to its wait.

The Congress as well as the Left parties had promised before the 2004 general elections that HSL's revival was high on their agenda, but the UPA Government that took office does not seem to be evincing much interest in the matter now.

HSL has on hand orders worth Rs 1,400 crore. However, the yard is perpetually plagued by working capital paucity and has to depend on advances from clients to execute the work orders. In 2005, the Chennai-based Goodearth Maritime Limited placed orders for the construction of four 30,000 DWT trader series bulk carriers. The Union Shipping Minister, Mr T. R. Baalu, laid the keel for the first vessel. The first ship is to be delivered in June and the next three at an interval of six months thereafter.

The Chennai-based company's intervention in the functioning of HSL has grown considerably since then, giving rise to speculation, and apprehesion on the part of unions, that the yard may be privatised or the Government may even be toying with the idea of a joint venture. However, the HSL Chairman and Managing Director, Rear Admiral Ajit Tewari, has dispelled such fears and said nothing should be read into it.

Unions' demand

The unions want the Centre to release at least Rs 50 crore towards working capital and strengthening of the infrastructure. There is an urgent need to install new machinery, construct a new building block and expand the berths.

One of the drawbacks faced by the yard is that the workforce is aged, the average age being 50. Of the 3,500 employees, most are in the late 40s or early 50s, as there has been no recruitment since the 1980s. In key departments such as production and designing, there is need for young workers.

The Navy is also doing its bit to help the struggling HSL. It is placing submarine refit orders with the yard. HSL has a submarine retrofit division and is now working on INS Vagli and INS Sindu Kirti.

The Andhra Pradesh Government, on its part, has agreed to waive HSL's sales tax arrears of about Rs 50 crore to help yard back on its feet.

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