RANCHI: Ranchi’s Heavy Engineering Corporation (HEC) has been in a sticky wicket for nearly three decades. Once dubbed as the ‘mother of all industries’, the cash strapped PSU has been unable to give out the monthly salaries of its 1,300 odd employees for more than two years. Even though the Union government under Prime Minister Narendra Modi has hinted that it has no plans to revive the ailing company, its employees are still hoping for brighter days ahead.
Built with the technological collaboration of erstwhile USSR, HEC, established in 1958 was commissioned with an objective to build customized machinery and equipment for the country’s steel and coal industries.
The Central PSU, which helped commission the Bokaro and Visakhapatnam steel plants of the Steel Authority of India Limited (SAIL), diversified in the later years to other specialties and built launchpads for the DRDO (Defense Research and Development Organization) and the ISRO. However, despite its impressive list of clienteles, the PSU has been struggling for working capital, disbursement of salaries of its employees and even its much-needed modernization plans.
Replying to a question asked by BJP’s Ranchi MP Sanjay Seth in 2022, the Union ministry of heavy industries stated in the Lok Sabha that there were no proposals under consideration back then to revive the sick unit. The then Union minister of state for heavy industries, Krishna Pal Gurjar, had cited that even though five revival packages were sanctioned by the Centre for the HEC, its financial condition had steadily declined and its losses during the 202-21 FY was Rs 175.78 crore.
“One must understand that HEC is a company which builds customized industrial equipment and does not sell off the shelf items like steel and automobile companies. The equipment we build is customized and it takes time. None of our clients pay us in advance. For instance, if we must build a 400-ton crane, it must fit the exact requirements of the client or else it would become useless. Such products take time to get built and hence the money gets locked,” a senior HEC official told TOI, requesting anonymity.
Currently, the HEC has work orders of over Rs 1,200 crores but has no working capital to finish these projects. The PSU’s three units, comprising a foundry and forge plant, a heavy machine tools plant and a heavy machine building plant which are spread across a floor area of 2 lakh square meters, are more than six decades old. “All the equipment is 66 years old. “The modernisation plan was pegged at Rs 1,200 crores nearly a decade ago. At present, it should not cost more than Rs 3,000 crore,” another HEC official added.
In 2016, a committee under Niti Ayog led by its member VK Saraswat took stock of the HEC’s condition. The team, based on a three-day inspection of the sprawling plant, recommended that the PSU must be revived. The then Union minister Babul Supriyo had told the Lok Sabha in 2017 that the committee had recommended the HEC’s revival by its modernization and strengthening of its human resources.
“The HEC’s net worth was completely eroded in 1992 and it was referred to BIFR (Board for Industrial and Financial Reconstruction). The revival plan was sanctioned by the BIFR in 1996 and it could not succeed and the BIFR ordered for the winding up of the HEC in 2004. HEC appealed against the decision in Jharkhand High Court. Subsequently, the Board for Reconstruction of Public Sector Enterprises (BRPSE) approved a revival package for the HEC in October 2005. Subsequently, the Union cabinet approved a financial package in December that year,” the Union ministry of heavy industries says in a note posted on its website.
The HEC managed a brief turnaround in its fortunes and netted a profit of Rs 38.69 crore in 2011-12 FY, its highest since its inception in 1958, before going downhill again. In 2017, the Centre sanctioned a revival package of Rs 742.98 crore against the transfer of 675.43 acres of land to the Jharkhand government for the liquidation of its statutory dues and other liabilities.
The land transferred by the HEC to the state government was used to build the new Jharkhand Vidhan Sabha and Jharkhand High Court complex and Ranchi Smart City. Earlier, as a part of its revival packages in the early 2000s, the HEC had handed over land and its building infrastructure on which Jharkhand, then freshly carved out of Bihar, used to set up its state secretariat (Jharkhand Mantralaya), old Jharkhand Vidhan Sabha (formerly Russian Hostel) and other government offices and residences for MLAs, MPs and state ministers.
The closest HEC came to its revival was in 2018 when steps were being taken to put the ailing PSU under the Department of Atomic Energy (DAE) but the latter turned down the proposal.
“The HEC could be revived if the Centre brings it under the DAE, SAIL or some other PSU to which we cater to. But over the years, a feeling has developed that the Centre is reluctant to revive it so that the void created could be filled in by private companies who are eyeing big government contracts. The HEC does not have a full-time director, and its directors are from BHEL (Bharat Heavy Electricals Limited. We need modernization and financial packages for revival and the Centre is not serious about it,” Leela Dhar Singh, joint general secretary of the Hatia Project Workers’ Union, said.
The management of HEC could not be contacted for comments.