There is always a hidden agenda in the disinvestment of Public Sector Undertakings (PSU) in India for the past two decades. In the name of disinvestment, many crooked people in the Government, in connivance with the private sector try to sell out many strategic firms like Air India and even try to sell profitable PSUs. One such classic case is the attempt to sell the 100-year-old ever profit-making PSU Bridge and Roof Company (India) Limited (B&R), engaged in construction and industrial infrastructure.
The Kolkata-based Brides & Roof Company (India) Limited is a PSU established in 1920, engaged in construction, industrial infrastructure with a current annual turnover of more than Rs.2000 crores and has always been a profit-making firm.
The Employees Union of B&R alleges that some people in Government are in connivance with certain private construction companies to illegally sell the profitable PSU having Mini Ratna status. Bridge & Roof Bachao Committee accused that in order to favour certain private bidders, the disinvestment committee in consultation with Yes Bank had decreased the annual turnover criteria of the bidders from Rs.500 crores to Rs.350 crores. Here the million dollar question is why Government engages a controversial private bank Yes Bank, which was once caught by the Reserve Bank of India (RBI) for serious breaches[1]. Yes Bank was fined Rs.38 crores by RBI for GST related violations too[2].
Bridge & Roof
The Kolkata-based Brides & Roof Company (India) Limited is a PSU established in 1920, engaged in construction, industrial infrastructure with a current annual turnover of more than Rs.2000 crores and has always been a profit-making firm. The previous year turnover of this PSU was over Rs.1700 crores and has pending work orders of over Rs.3500 crores. Then why is this strategic firm opting to sell? Employees Union suggests that the company be listed in a Stock Exchange, so it can realize the full value of its potential. Has the management looked at this option? This company is a strategic unit, having been used by the government to build strategic constructions across the country.
The PSU Mini Ratna company for the past many decades engaged in constructions of buildings, roads, bridges, and infrastructure building of many power plants, nuclear plants, highways, and refineries. Two years ago Central Government decided to disinvest this profit making company under Ministry of Heavy Industries and engaged the private bank Yes Bank as the transaction advisor. The employees union questions this appointment of a controversial private banker and suggests that this itself exposes the many shoddy activities on the anvil to kill the profit-making public sector firm.
The employees unions accuse that certain officials in the Department of Investment and Public Asset Management (DIPAM) are behind this move to help their crony construction companies to acquire this profit-making PSU. DIPAM is under the Ministry of Finance and was earlier known as Department of Disinvestment, created during Arun Shourie’s tenure in NDA-1 Government.
“Yes Bank is the transaction advisor appointed by DIPAM, Govt of India. They have very unethically reduced the eligibility criteria for the prospective bidders from 500 Crs. to 350 Crs. without having any approval from the competent authority (NITI Aayog). They have hived-off a few assets of the original PIM and reduced the Net worth of the company originally assessed by Yes Bank Ltd without any proper decision in the matter,” say Employees Union leaders.
“It will be highly unfair to disinvest this consistently profit making company employing/ engaging so many people in so many states of the Country as a whole and West Bengal in particular. We look forward to your urgent intervention to hold the fast track action of 100% Strategic Disinvestment already initiated by DIPAM for the sake of one lakh members of the performing CPSE company under Central Govt. of India. On the other hand the Govt of India can generate much more funds by listing the shares of the company as per the current disinvestment policy,” said Bridge and Roof Bachao Committee in its memorandum to Government and major political parties.
References:
[1] Yes Bank shares fall sharply as RBI censures selective disclosure – Feb 18, 2019, Livemint.com
[2] RBI slaps Yes Bank with Rs.38 crores over GST violations – Sep 21, 2018, FinancialExpress.com
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The Article has been written by somebody who is incompetent . B&R is the most corrupt organization. For the Machinery they have they should be doing a Turnover of 25000 Cr not 1700 Cr. The Govt has no business to be in Business . Profit is a BUll shit Term . Sell this completely. Use the funds for Medical Facilities for the Poor
Profit making is an irrelevant criteria for disinvestment because:
1. Govt should not be wasting its time and resources on sectors which have an efficient pvt. market. Even in non-efficient sectors, intervention should be by regulation or competition generation, not by govt. venturism.
2. Profit making PSU if divested will fetch more money to the people ie profit criteria is priced into the deal anyway.
3. Sooner or later PSUs will fail when faced with competition. MTNL, BSNL, SBI, Air India have all destroyed billions of Indian poor’s value compared to competition. So dont wait for it to become a heap of crap!
4. Profit is irrelevant – it is return on capital which matters. For example some highways have 90% profit margin but negative returns.
I am glad if they sell this company.
Many many corrupt guys. Lazy buggars with poor accountability.
Rotting company.
Huge machinery and infrastructure but not utilized well.
I don’t think they can do any construction activity without taking money from contractors.
Know for delays as well.
Created during Biritish Era, good to dismantle it and throw it out.
Please get rid of it.
All PSUs must b privatized bcs currently Swarna castes(Brahman baniya rajputs kayastha etc) are not getting even 30% seats in any government exams and in TN situation is even more worse and soon time will come when we will bcm new Jews of india
My uncle who served and retired from a prominent PSU said that Bridge and Roof never met any deadlines for the contracts they were awarded and thus always led to adverse impacts.
Turnover and profit are very different. Turnover is the net sales generated by a business, while profit is the residual earnings of a business after all expenses have been charged against net sales. B & R is a loss making body.
Bridges & Roofs is a strategic PSU which builds strategic infrastructure for Govt. And this company is always in profit. Why selling a profit making firm. Problem is many pvt sector agents in Govt who float selling PSUs.
Our beloved PM told…..in news…PSU Born for Die…so all PSU’s die one fine day..so don’t trust these political leaders..