Expert Group Urges Govt To Write Off Losses To Revive Mecl

The expert committee for the revival of the Mineral Exploration Corporation Ltd (MECL) has recommended the government to write off the accumulated losses of the public sector unit uptil March 1995 amounting to Rs 37.27 crore against equity capital and outstanding loans with interest of Rs 10.01 crore.

The mines ministry is examining the committees recommendations and is expected to make a submission to the finance ministry for its approval.

Apart from this, the company has urged the ministry to write-off net loss of Rs 12.24 crore incurred during 1995-96 and waive interest on loan amounting to Rs 11.74 crore accrued between 1995-96 and 1996-97.

 

MECL, which has been making losses for the last seven years, improved its physical performance considerably in 1996-97 with drilling and mining registering an increase of 12 per cent and 81 per cent, respectively.

MECLs achievement in drilling and mining in 1996-97 was 1.8 lakh metres and 3,758 metres, respectively, compared to 1.6 lakh metres and 2,079 metres in 1995-96, according to the companys performance report for the quarter ending March 1997.

MECLs sales during 1996-97 were estimated at Rs 40.5 crore against Rs 35.4 crore in 1995-96, an increase of 14 per cent.

In spite of the improvement in the companys physical performance in 1996-97, MECL incurred a loss of Rs 14.10 crore during the year compared to Rs 12.24 crore in 1995-96.

The PSU, as per the committees recommendations, during the year made large procurement of critical spares and accessories for drilling and mining operations. MECLs operations have been seriously affected in the past years due to shortage of equipment.

The company has brought all mining activities under the control of its headquarters in Nagpur and centralised all commercial activities.

It has started to lay more stress on business development. MECL in 1996-97 secured orders worth Rs 51.25 crore which included priority regional exploration for ministry of coal. The company has offered to provide consultancy for coalbed methane resource estimation project. The Directorate-General of Hydrocarbons (DGH) is considering the proposal. It is also making efforts to provide expertise to national and international companies in diamond exploration.

The company is considering setting up a joint venture with South African companies for development of gold, diamond and platinum metals in the country. It is negotiating with MMTC and Assam Mineral Development Corporation for stone mining in the north eastern states for export to Bangladesh.

MECL has also taken step to cut manpower and improve productivity. The mines ministry has released Rs 1.5 crore for voluntary retirement scheme to the company. In 1996-97, 292 employees availed of the scheme.