Sale of Central Electronics Limited (CEL) is anti-people, and anti-national

Report by KEC correspondent

On 29 November, the government announced the sale of Central Electronics Limited (CEL), the second central public sector undertaking to be sold to private players after Air India. It will be sold to Nandal Finance and Leasing Private Ltd., for merely Rs. 210 crores. Nandal Finance has no previous experience in the fields that CEL operates in.
CEL employees have been opposing this anti-worker, anti-people and anti-national move of the government.

CEL was established in 1974 under the Department of Scientific and Industrial Research to commercialise indigenous technologies developed by national laboratories and R&D institutions. It develops important technologies for railway safety and signalling, solar photovoltaics, defence electronics and integrated security and surveillance.

CEL develops indigenous technology and also collaborates with institutions like DRDO, BARC, CSIR and IITs. The company has developed axle counter systems used in railway signalling for safe running of trains. It is a pioneer in solar power technology and has played an important role in rural electrification. Further, it produces the Phase Control Module and Radome technology that is used in missiles. It manufactures bulletproof vests, night-vision devices and laser fencing.

In addition to fulfilling sensitive defence orders, CEL supplies important components to ISRO and the Indian navy. How can the privatisation of a company of such strategic importance to the country be justified?

The government claims that public sector companies have to be privatised as the government cannot afford to bear their losses. But, CEL has consistently made huge profits in the last 5–7 years and wiped out all accumulated losses in 2017–18. What is the government’s justification for selling a profit-making public sector unit? Despite losses in the past, the company’s net worth increased from Rs. 50 crores in March 2017 to Rs. 80.76 crores in March 2020.

CEL owns 50 acres of prime land in Sahibabad, near Delhi. That land alone is worth hundreds of crores of rupees. CEL also has valuable plants, machinery and urban property in Bengaluru.

The process of sale started in 2016, and it was reinitiated earlier this year through a request for expressions of interest. Interested buyers could bid for the company if they fulfilled two major criteria: they should have a minimum net worth of Rs. 50 crore, and their company should have been in existence for at least 3 years. No prior experience in the field of R&D or manufacturing of electronics was required. Thus, workers are rightly concerned that the private owner could eventually shut the factory and use CEL assets for other businesses. This means that hundreds of workers could lose their jobs and the country could lose decades of research and valuable technology.

Furthermore, even if CEL continues its current operations, the private owner would be free to manufacture only profitable products and ignore other equally important services. Considering the relaxed FDI rules in the country, the private owner would later be free to sell the company to foreign capitalists and further threaten national security.

It is well known that finance companies buy a company to make quick profits and then sale the company after a few years at a price much higher than they bought. They have no interest in developing new products or technologies.

The company was built with people’s money. It has made huge investments in research since its establishment 47 years ago. The sale of CEL is the sale of public assets and critical knowledge and technology. Assets built for public welfare are being sold for private profit. The sale of CEL is therefore anti-people.

The sale of CEL is also anti-national. Through this disastrous sale of national assets, the government has put the safety of sectors such as defence, aviation and railways as well as the country at risk.

The CEL of sale once again shows that for the government protecting interests of big capitalists is more important than looking after the interests of people and the country.