HMT consolidating cost reduction measures : Minister

New Delhi, Jan 6 (UNI) Union Heavy Industries Minister Santosh Mohan Deb today said the HMT and its subsidiaries had formulated a comprehensive revival plan to tackle an 'extremely adverse' financial situation and the same had been approved by the government for implementation.

In his reply to MP B K Hariprasad, the minister said that HMT and its subsidiaries had a total borrowings of Rs 1,516 which the company was unable to service. The waiver of accumulated interest and conversion of outstanding government loans into equity was generally part of revival schemes, but it was not suffice to revive the company. It required substantial injection of funds to settle outstanding third party loans and to meet requirements of capital investments, the minister said.

Further part of funds requried was generated by disposal of non-performing assets and the sale was overseen transparently by the boards of the concerned companies, he added.

As far as the revision of salary and wages were concerned, it was proposed to take up when internal revenue generation of the company was sufficient enough to meet the revenue implications.

However considering the plight of employees, the companies were asked to factor in the pay revision implications in the revival proposals. The retirement age had been reduced to 58 from 60 as a policy in lossmaking PSUs and there was no proposal to enhance the retirement age, Mr Deb said.

He however said there was a proposal to consolidate the units to reduce administrative expenses as a consequence of competition from overseas manufacturers in the Indian market as cost of competitiveness of the HMT product was imperative and hence the company had initiated cost reduction measures including consolidation of units to achieve scale benefits of manufacturers.

UNI