'HMT consolidating cost reduction measures'

New Delhi, Jan 6: Union Heavy Industries Minister Santosh MohanDeb today said the HMT and its subsidiaries had formulated acomprehensive revival plan to tackle an 'extremely adverse' financialsituation and the same had been approved by the government forimplementation.

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

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

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

However considering the plight of employees, the companies wereasked to factor in the pay revision implications in the revivalproposals. The retirement age had been reduced to 58 from 60 as apolicy in lossmaking PSUs and there was no proposal to enhance theretirement age, Mr Deb said.

He however said there was a proposal to consolidate the units toreduce administrative expenses as a consequence of competition fromoverseas manufacturers in the Indian market as cost of competitivenessof the HMT product was imperative and hence the company had initiatedcost reduction measures including consolidation of units to achievescale benefits of manufacturers.

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