Report by KEC correspondent
The Kerala government announced buying back of the Bharat Heavy Electrical Limited-Electrical Machines Limited (BHEL-EML) in northern Kasaragod district. BHEL-Electrical Machines Ltd, Kasaragod, was a Central Public Sector Enterprise (CPSE) and a subsidiary of BHEL, a Maharatna company.
The state government took over BHEK-EML by spending a total amount of Rs. 77 crore. Rs. 43 crore shall be used for revival of the company by providing it with fresh lease and advanced facilities and Rs. 34 crore towards liability. Amount sanctioned under liability also includes pending salaries of Rs. 14 crore which were due since last two years.
In 2010, Kerala Electrical and Allied Engineering Company (KEL), which was a 100% state government-run company at that time, was taken over by BHEL (one of the biggest central PSUs). BHEL bought 51% stake in the company for Rs. 5.5 crore from the state government. Hence, in 2010 it became a joint venture of the Central and State government, Central government having a 51% stake and State government with 49% stake in the company.
As a part of the privatization policy, it was announced in 2016 that the central government is planning to sell its 51% stake in the company. On June 12, 2017, the Kerala State government announced it would buy back the 51% stake from BHEL.
In 2010, when BHEL took over KEL, it was promised that it would invest in the company and expand its product line. However, no such steps were ever taken. On the contrary, planned efforts were made to slowly turn the profitable unit sick and hence privatize it. The Maharatna company made no investments since the takeover and never paid salaries of its employees on time. In many interviews employees of the company alleged that BHEL took over the profitable unit to ground it. With no working capital available, the company started losing its clients and making loses. The unit was shut in March 2020 during the nationwide lockdown and has not reopened ever since.
At the announcement to takeover by the State government on 7th September the Kerala Chief Minister cautioned against Center’s policy to privatize public sector undertakings. He further added, “The state government has decided to take over the PSU in view of the privatization threat. After independence, our country has followed a policy of strengthening public sector units. However, with globalization, there was a change in the policy which tilted towards privatization. Ours is a government which recognizes the significance of a public sector undertaking. We have taken over the Palakkad unit of Instrumentation Limited as well as Hindustan Newsprint Limited in Kottayam. For this, we need the cooperation of workers”.