HDPEL

The Centre is toying with the idea to induct a strategic partner and give up its majority control in Hooghly Dock & Port Engineers Ltd (HDPEL) to revive the city-based sick public sector unit, adopting an innovative model that will skirt privatisation.

The company, engaged in shipbuilding and repairing, will lease out its assets to a joint venture entity in which a private company will have a majority stake (76 per cent) and full operational and managerial freedom. HDPEL will become a shell company and earn rent apart from holding 26 per cent in the joint venture.

The company, engaged in shipbuilding and repairing, will lease out its assets to a joint venture entity in which a private company will have a majority stake (76 per cent) and full operational and managerial freedom. HDPEL will become a shell company and earn rent apart from holding 26 per cent in the joint venture.

"Hooghly Dock is closed now. We are trying to restructure and revive it with foreign collaboration," Gadkari said at an interactive session organised by the MCC Chamber of Commerce & Industries.

Established in 1817 on the banks of Hooghly, HDPEL is one of the oldest shipyards in India. After suffering heavy losses, it was taken over by the Centre through an act of Parliament in 1984. The company has two manufacturing facilities in Salkia and Nazirgaunge (near Botanical Garden) with 216 employees on its rolls. However, the Centre has announced a lucrative voluntary retirement scheme and all the employees are likely to opt for it.

"It is not possible to privatise the PSU given the political sensitiveness attached to it. So the ministry is toying with this innovative model where a private firm can have operational and management freedom but the ownership will remain with the government," a source said.

Under the NDA government led by Atal Bihari Vajpayee, several PSUs such as Indian Petrochemicals Corporation Ltd, IBP and Videsh Sanchar Nigam Ltd were privatised. However, the UPA government junked the idea and resorted to piecemeal stake sales in state-run companies such as Coal India without giving up majority control. The Narendra Modi-government has so far not indicated that it will take the privatisation route.

As a result, this two-tier structure is being considered where holding company HDPEL will see no dilution. However, the business will in effect be run by the joint venture, which will pay rent for the 30-acre river-facing plot and associated infrastructure. The chairman and the managing director will also be selected by the private firm.

The minimum annual rent for the unit is likely to be around Rs 4.3 crore.

"The shipping ministry is clear that it is more interested to revive the company and utilise the national asset than earning rent from it," sources said. The joint venture will get the asset on 30-year rent with the option of extension for another 30 years.

The facilities can be used to build barges, small ships and hovercraft apart from repairing work. "There is a lot of latent demand in Bengal. With the focus on coastal shipping and inland waterways, demand for barges and ships will only go up. Moreover, there is requirement to repair them," industry observers said. However, the tender will come at a time of overcapacity in ship-building capacity globally.

At the MCC meeting, Gadkari today launched the recently built fly ash handling jetty, a stacker cum reclaimer and refurbished lock entrance besides laying the foundation stone for a floating storage cargo-handling facility at Haldia Dock Complex through a remote control.

The private company will be selected through a global tender where precedence will be given to technology.