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In absence of working capital, HEC gradually ‘dying down’

Ranchi, Sep 27 (IANS) Ranchi-based public sector company Heavy Engineering Corporation (HEC) Limited, once known as the mother of all industries in the country, is now gradually “dying down”.

All three huge furnaces of its Foundry Forge Plant (FFP) have cooled down and it will cost Rs 4 to 5 crore to restart them and the company is currently not in a position to spend the amount. This is the situation when the company has work orders worth about Rs 1,500 crore from various companies including ISRO and SAIL, but does not have the working capital to complete it.

The officials here have 19 to 20 months’ salary outstanding and the Ministry of Heavy Industries has given up on providing any kind of assistance to the company.

The foundation stone of the company was laid in 1958 and production started there in 1963. Till the Covid period in the year 2020, there had never been such a situation when all the furnaces in the company had to be closed. This is the second time since the Covid period, when all the furnaces of the FFP have cooled off.

Experts say that HEC’s FFP is the largest forging and foundry plant of its kind in the world. The plant is spread over 13,16,930 square meters, in which 76,000 tonnes of machinery is installed.

The company, which started with about 22,000 employees, now has only 3,400 employees and officers left and they too have “no work except registering their attendance in the plant”.

Workers usually protest in front of the plant demanding payment of their outstanding salaries, but there is no one here to listen to them. There has not even been a full-time CMD (Chairman and Managing Director) in the company for more than two years. Nalin Singhal, CMD of Bharat Heavy Electricals Limited (BHEL) is the CMD in-charge here, who visits here “occasionally in two-three months”.

The HEC is a Public Sector Undertaking under the Ministry of Heavy Industries located in Ranchi’s Dhurwa area.

It has been learnt that the HEC has been facing a financial crisis for the last two-three years. According to sources, the HEC has requested the Ministry of Heavy Industries several times to provide working capital of Rs 1,000 crore.

The Ministry, however, has apparently submitted that the Centre cannot extend any help.

The company has produced numbers of heavy machinery and equipment for various industries including Steel, Cement, Aluminium, Mining, Mineral Processing, Defence, ISRO, Railways, Coal Sector in the last sixty years.

With time, due to non-renewal of factory machines, inefficiencies of management, conflicts between unions and management, HEC started incurring losses and its financial condition deteriorated year after year. Although there were several discussions at the Central government level regarding its revival, no concrete steps could be taken till now.

In the year 2016, the Central Government formed a multi-member committee of experts under the chairmanship of Vijay Kumar Saraswat, member of NITI Aayog and former Secretary of DRDO. It analysed the prospects of HEC on the basis of a “Modernisation and Revival Plan”.

The Saraswat Committee strongly recommended the revival of HEC. It was also recommended to modernise its plants, introduce a system of bank guarantees to ensure the working capital of the company, and immediately appointing a managing director and directors.

Notably, the firm delivered the mobile launching pad, among other crucial and complex equipment, for Chandrayaan-3 in December 2022, ahead of schedule, even as the staff, including the engineers, senior officials and workers, were going unpaid.



Indian Abroad News Desk
Indian Abroad News Desk
Indian Abroad is a news channel and fortnightly newspaper meant for Australia’s Indian community and, besides news, focuses on lifestyle subjects like health, travel, culture, arts, beauty, fashion, entertainment, Bollywood, etc. Our YouTube channel here features daily news bulletins besides infotainment videos on lifestyle subjects.

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