Book English 2011.p65 - Ministry of Textiles

ministry of textilesRevision in the Cost of Scheme onaccount of Cash Loss during theimplementation periodThe Cost of Scheme submitted to theCabinet in March 2010 was based uponthe DRS prepared by IDBI in 2007according to which the implementationperiod was taken as 2 years from 1.4.2008(i.e. upto 31.3.2010). However, the approvalof the cabinet on the said DRS was receivedonly in March 2010, due to which, theimplementation period of the revival schemeneeds to be revised. IDBI, while finalisingthe revised DRS for submission to BIFR,has formulated the DRS by consideringthe revised implementation period as 2years from 1.4.2011 and has reported thefresh provision for supporting the cash lossduring the Implementation of RevivalScheme needs to be provided in the Costof Scheme. Accordingly, A Revised Cost ofScheme of Rs. 1562.98 Crore has beenprepared. The Implementation period isnow kept upto 2012-13, assuming thatBIFR approval would be obtained in 2010-11 and thereafter, a support for 2 years ofimplementation period would be required.Financing of the revised Cost of Schemewould require an additional budgetarysupport (Interest free loan) of Rs 145.45Crore during 2010-11 to 2012-13. TheUnion Cabinet has also approved thisproposal in their meeting dated 25th March2010. The MOT has informed IDBI(operating agency appointed by BIFR forRevival of NJMC) and BIFR regarding thisapproval of Revised cost of scheme of Rs.1562.98 Crores and a composite packagefor VRS of officers. The BIFR is in theprocess of its circulation and approval ofthe Revival Plan of NJMC as prepared byIDBI and cost of scheme approved by theUnion Cabinet on 25th November 2010.Revised draft rehabilitation scheme(DRS) submitted by IDBIThe revised DRS submitted by IDBI toBIFR on 09/09/2010 with modified cost ofthe scheme Rs. 1562.98 Crore is anupdating of earlier DRS as per decision ofthe government. The GOI has alreadyreleased Rs. 1,207.31 Crore in the year2006-07 to 2009-10 and would providefurther interest free loan of Rs. 343.95Crore in the year 2010-11 to 2012-13.Balance was sought from the West BengalGovernment by way of adjustment of loanand interest against compensation of landacquisitioned for Titagarh Thermal PowerPlant. The proposal also consists ofclosure of remaining 3 Mills (National,Union and Alexendra) and generation ofresources for repayment of GOI loanthrough sale of surplus assets of closedmills as well as surplus assets availablein the revived mills.Voluntary Retirement SchemeAs per decision of the Cabinet to reducemanpower in NJMC by offering VRS to allemployees, management has successfullycompleted VRS of all its Workmen andclerical staff and sub-staff. The, VRS ofremaining officers of the company is alsobeing implemented as per compositepackage approved by Cabinet.Reference to Board for Industrial andFinancial Reconstruction (BIFR) andCurrent StatusIn view of continuous cash loss andcomplete erosion of net worth, thecompany was referred to the Board forIndustrial and Financial Reconstruction(BIFR) on 11th August 1992. Thereafter,BIFR declared the Company as sickunder the provisions of Sick IndustrialCompanies (Special Provision) Act, 1985(SICA). Time and again various revivalproposals were submitted to BIFR whichwere turned down due to promoters (GOI)unwillingness. As such BIFR vide its orderdt. 08-07-2004 recommended winding upof the company in terms of Sec 20(i) ofSick Industrial Companies (SpecialProvisions) Act 1985 (SICA) and forwarded196