For new partnerships

Interview with Satyanarayana Dash, Secretary, Ministry of Heavy Industries and Public Enterprises.

AS Secretary in the Ministry of Heavy Industries and Public Enterprises, Satyanarayana Dash handles the rehabilitation of sick public sector units. The Ministry also has administrative control of the automobile sector, which is now facing a downturn.

In this interview, Dash shares his views and the Ministrys plan to forge alliances between strong and weak public sector enterprises public-public partnerships to facilitate the rehabilitation of weak units. Excerpts:

Now that the Ministry has been able to finalise a new pay structure for executives of Central public sector enterprises, what is its next priority area?

The major task for the Ministry is the rehabilitation of loss-making units. As of today, we have 32 operational companies under the Ministry of Heavy Industries out of which 16 are profitable and 16 are loss-making. We will move ahead with rehabilitation proposals after we receive the recommendations of the Board for Reconstruction of Public Sector Enterprises [BRPSE].

The recommendations from the BRPSE involve two types of assistance. One is on providing cash support to the companies from the Ministry, along with suggestions on bringing in new technologies through foreign collaboration.

The second part involves the waiver of loans and interest so that their balance sheets become clean and they become eligible for bank borrowings. But despite the overall slowdown in the global economy, public-sector power utilities are doing better than companies in many other sectors.

How many companies have been revived in recent times?

When I took over there were 34 units, which we have been able to reduce to 32. This is because we merged one small instrumentation company with HMT as they are located in the same place.

There is another company Bharat Wagon & Engineering Company in Bihar. This we have handed over to the Railways. Since the Railways is expanding, this facility is now making new types of full stainless steel wagons and also some more new items.

Is there any new strategy for the speedy revival of loss-making units?

The present government has committed in the National Common Minimum Programme that all efforts would be made to revive loss-making companies without closing them down. One of the ideas that the Ministry is pursuing now is public-public partnership. After public-private partnership we are focussing on a strategy of partnership among public-sector units to tie up a weak company with a strong one, particularly where there could be synergy.

There have been some successes in such efforts. The power sector is doing well and Bharat Heavy Electricals Limited [BHEL] is already saying that it will have to outsource the manufacture of many pieces of equipment in order to complete all the projects it has in hand. It has already entered into such arrangements with other public companies.

What is BHELs order book at present?

The company has orders of around Rs.1.30 lakh crore whereas its turnover this year is around Rs.28,000 crore. What is important is how BHEL will expand to satisfy all these orders. So the company is expanding its capacity from the present 10,000 MW a year to 15,000 MW a year by December 2009 and scale up further to 20,000 MW annually by December 2011.

Bharat Heavy Plate & Vessels [BHPV] in Vizag was not doing well, but we found that the products it makes can be used by BHEL in its projects. So the BHPV has been made into a subsidiary company of BHEL.

Next, the Ministry is looking at Instrumentation Limited; it has two units in Rajasthan and Kerala. Every company handling large projects needs a lot of instrumentation works, so this company could also be merged suitably with a large company like BHEL.

Another is the Heavy Engineering Corporation [HEC], which does a lot of forging and casting work. So we said HEC can supply casting and forging jobs to BHEL.

BHEL has signed an MoU with the company and has placed orders. Now the company is making marginal profits. Its services will be useful to BHEL for setting up balancing plant facilities, such as those for coal-handling and ashhandling, in its power projects.

The automobile sector has been hit badly in the present economic situation. How is the Ministry helping the automotive sector?

The automobile sector has suffered from the high interest rates and the global liquidity crisis. As far as monetary control is concerned, the Reserve Bank of India has initiated a number of steps. Interest rates also have started to come down.

Simultaneously, automobile manufacturers are devising strategies to adjust to the changed market conditions. But we have noticed that companies that have a large export base have still done well. Companies such as Hyundai, which have high exports, have done better than other companies. Also, companies that are coming out with more and more new models catering to specific customer segments are doing better than their counterparts.

Similarly, automobile component manufacturers have suffered because of high steel prices. Since steel prices have come down now, these companies will start doing better.

What is the progress in setting up new automobile testing centres?

We are setting up six new facilities through the National Automotive Testing and Research Programme (Natrip).

This is particularly important because from April 2010 India will introduce Bharat Stage IV emission standards which is equivalent to Euro Stage IV standards. In the north, the main hub will be at Manesar in Haryana and in the south the main hub will be in Chennai. The other test facilities would come up in Indore [Madhya Pradesh], Pune [Maharashtra], and Silchar in Assam.

The Silchar facility will have simulators for driving on hilly terrain and will also have a driving training centre. At Indore, there will be special facilities for checking vehicles on various types of tracks.