New Delhi, Feb 7 (UNI) The Cabinet Committee on Economic Affairs (CCEA) today approved the transfer of administrative control of the loss-making Bharat Wagon and Engineering Company Ltd(BWEL) in Bihar, a subsidiary of Bharat Bhari Udyog Nigam Limited (BBUNL), to the Railway Ministry after its financial restructuring.
As part of the restructuring plan, the Department of Heavy Industries would provide Rs 23.27 crore for meeting the employees' dues till September 2007 by reducing its equity in BWEL worth that amount, Finance Minister P Chidambaram said.
Also, the loans of the company amounting to Rs 77.60 crore would be offset with a corresponding reduction in its losses.
The Railway Ministry will provide equity of Rs 6.83 crore and a similar amount in loan for capital investment in the company. The Ministry would also decide to engage the existing employees or to provide non-Plan loan of Rs 10 crore for meeting expenses of Voluntary Retirement Scheme (VRS) of 200 employees.
After the takeover, the Railway Ministry would be authorised to appoint Chairman, and Managing Director and fill other Board level posts in BWEL, Mr Chidambaram said.
He said the financial restructuring would make the company achieve positive net worth, which would improve its credit worthiness and emable it to finance its diversification plans and become viable.
Later, Railway Minister Lalu Prasad said his ministry would invest Rs 41 crore in BWEL factories in Mokama and Muzaffarpur for their financial turnaround and improving their functioning.
''After the Railways' takeover, the company will be able to receive orders for wagon manufacturing, which will, in turn, improve its productivity and streamline its financial condition,'' he added.
UNI SKS BDP DS1645