The Union government’s plan to offload its stakes in Hindustan Newsprint Limited (HNL) may not take off as planned.
With the State government expressing its willingness to take over the factory, the Central government would not be able to turn down the offer and divest its stakes by restricting the scope for participating in the bid to the private sector alone.
Sources close to the process told
here that the Centre’s restricted disinvestment plan is being construed as a bid to keep the State governments at bay and clear hassles for private players to clinch the deal.
This would virtually render the fate of the company uncertain. For, prospective investors may not take the pains to revive a loss-making unit and only be interested in utilising its extensive land resources.
This sounds true in the case of the HNL which possesses 700 acres of prime industrial land with all infrastructure facilities and 6,000 acres of land granted on lease for growing eucalyptus to ensure uninterrupted supply of raw material to run the factory.
The State government has already proved its commitment in nurturing the public sector by stepping in to take over the Instrumentation Limited at a cost of Rs. 53 crore as agreed by the Centre.
The Kasaragod unit of BHEL Electrical Machines Limited which had specialised in the production of rotating electrical machines was also facing a closure threat, despite having majors such as Indian Railways on its client list.
The State government negotiated with the Centre and took over the unit at zero cost. These acquisitions have lent credence to the State’s claim in supporting public sector and also participating in the bid for the HNL, sources said.
Even if the Centre resolves to overlook the State’s claim, the prospective investor may find the going tough since the latter may turn down requests for improving infrastructure facilities and other utilities.
The State also reserves the right to retrieve the land it had allotted for specific purpose on detecting any diversion. This provision arms the State to act against investors who use the land for real estate or other commercial purposes. It could invoke the provision too in the event of a necessity, sources said.
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