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Bid to offer HSL on a platter to pvt cos.Since the shipyard has been taken over by the Defence Department, there may not be possibility of closure but the government might seek private investment under PPP mode, experts opined.
Visakhapatnam: The NDA government bid to shut down Hindustan Shipyard Limited (HSL) will deal a major blow to the public sector undertakings in the country and experts find it more than an economic measure – it can be an offer on a platter to private companies in the garb of ‘Make In India.’Established in 1941 by Walchand Group, the shipyard was later taken over by the Indian government in 1952 and corporatised as Hindustan Shipyard Ltd in 1961. With a fully paid-up capital of Rs 129 crore, HSL provides building and repair services to clients like the Navy, Coast Guard, commercial shippers and oil platforms. It can build and repair ships up to 70,000 DWT and 50,000 DWT. Till date, it has built 117 vessels and repaired over 1,600 vessels.
Since the shipyard has been taken over by the Defence Department, there may not be possibility of closure but the government might seek private investment under PPP mode, experts opined. The government has also announced FDI in the Defence sector and Hindustan Shipyard Limited could be the first company to get this investment as per the indications available.Though the Defence Department took over HSL in 2010, not a single order was given to the yard since then. Last year, the government had announced an ambitious project under which Rs 60,000 crore would be spent for building six submarines under the P-75 (I) of the Indian Navy.
Tenders were invited in which private shipbuilding yards and Defence yards bid for the work. However, the CMDs of Defence sector yards felt that the government yards cannot compete with the private sector due to the competition. HSL Chairman and Managing Director (CMD) Rear Admiral NK Mishra last month said any private shipyard would work for profits. He expressed fears of compromise on quality as private shipyards bid at lower price to bag the projects and they never worked for losses.
He also expressed fears that the private companies could compromise on security aspects.“The Hindustan Shipyard was taken over by the government in 1952 on the ground that shipbuilding industry had strategic implications for the economy. That very same reason continues to exist today,” said former civil servant EAS Sarma.He said the shipbuilding industry was facing problems all over the world due to a slump in demand and HSL’s losses were on account of that. “The government’s policy that it should privatise or close down all loss-making units is irrational.
It should support units such as HSL on strategic grounds, as the unit can provide crucial strategic assets even today. Rich experience and expertise cannot be brushed aside. Along with Mazagon Dock, HSL has an important role to play in the coming decades,” he added. The city committee of Communist Party of India (Marxist) demanded the government to roll back its proposal and found fault with Chief Minister N Chandrababu Naidu for not responding to the announcement of the BJP-led NDA government.
By KMP Patnaik
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