Financial Daily from THE HINDU group of publications
Saturday, Jun 14, 2003
Travancore Rayons revival Final decision next week?
KOCHI, June 13
THE State Government has been given two more weeks by the Kerala High Court to take a final decision on the proposal to revive Travancore Rayons Ltd (TRL), ordered to be wound up by the BIFR in April last.
On a request made by the State Government following the expiry of the extended time, the Kerala High Court has granted another two weeks for submitting its report on the revival package, official sources told Business Line on Friday.
They said that "an enlarged Cabinet sub-committee", led by the Industries Minister, which included Ministers of Power, Transport, Finance, Revenue, Education, Forests and Labour, had held discussions with the promoters Mr M.S. Singh and Mr Damodaran on May 28 last and the outcome of this meeting was expected to be discussed at the next meeting of the Cabinet on Wednesday.
The Coimbatore-based promoters, understood to have diluted their demands and now had asked for only a few concessions such as deferment of payment of electricity charges for five years or till their proposed captive power plant becomes operational. They said to have agreed to pay the power charges at the current tariff.
Trade union sources said that the company had been sick for over a decade and it (the current proposal) was the only proposal ever came up for rehabilitating this unit.
The High Court, which had granted one-month extension last time, has now allowed only 15 days more. Therefore, it is high time that the Cabinet came out with a final and positive decision, it is felt.
The proposal of the promoters, Dinosaur Industries Ltd (DIL), was rejected by the BIFR. The subsequent appeal filed by the management was also dismissed by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) wide its order on April 18, 2002, saying "the list of DIL's demand without any commitment on the part of DIL and without any evidence of its resourcefulness, does not inspire any confidence that such demands can be accepted. TRL has become too heavily indebted and it will not be possible to rehabilitate it". Now the issue is pending in the High Court.
The promoters were asked to submit a revised proposal by the Government by mid last year and accordingly it was given on September 20 last to a sub-committee constituted for studying it. However, it could not take a final decision on the revival package and, hence, the present Cabinet sub-committee was constituted.
The Government had signed an MoU with the promoters on June 17, 2002, after the verdict of the BIFR and the AAIFR. And under which a final decision on the proposal was to be taken with in three months.
Although 11 months have elapsed, the Government could not come out with its decision on the issue that involves the survival of over 1,200 workers of the company who are under lay-off for over one year now.
The lacklustre approach on such issues would send out wrong signals to prospective entrepreneurs who are being lured to invest in the State, especially after the GIM, industry sources said.
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