28 Orissa Psus Close Down

As many as 28 public sector companies, with a paid-up capital of Rs 1.91 crore, have been closed down in Orissa due to mounting losses, according to the Comptroller and Auditor-generals report for the year ended March 1996.

At present, out of the 46 operating companies at present, 28 companies are in the red and 23 face liquidation.

There is a total of 74 public sector undertakings in the state.

At a time when the Orissa government has embarked upon a plan to accelerate the pace of industrialisation, the poor financial health of most of the public sector companies sends out negative signals to prospective investors.

The total capital investment in the state undertakings was Rs 1338.57 crore by way of equity (Rs 951.81 crore and long-term loans (Rs 386.76 crore).

The state government guaranteed the repayment of loans and interest raised by 17 companies and the outstandings stood at Rs 1349.43 crore as on March 31, 1996.

According to the report, 12 companies accumulated loss of Rs 127.11 crore have eroded their paid-up capital by Rs 110.42 crore. Four of the loss-making companies have either been declared sick or referred to the Board of Industrial Financial Reconstruction (BIFR).

The state governments investment in these units was Rs .70 crore, and that of holding companies, Rs 5.06 crore.

Some of the prominent loss-making PSUs include Orissa Agro-Industries Corporation, Orissa State Seeds Corporation, Orissa State Commercial Transport Corporation, Orichem Ltd, Idcol Piping & Engineering Works, ABS Spinning Mill and Ipitron Times. Others are: Konark Television, Orissa Textile Mills, Orissa Construction Corporation, Orissa State Handloom Development Corporation, Industrial Development Corporation of Orissa and Orissa State Road Transport Corporation.

The heavy losses have been attributed to working capital shortage, over staffing, low capacity utilisation, lack of order and mounting interest burden.

Excepting the newly formed Grid Corporation of Orissa, no other company has finalised their accounts for 1995-96.