As BHEL’s net profit declines by 59.5%, Anant Geete cites Coal Scam as the reason

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Coal scam adversely affected the business of state-run power equipment maker BHEL during the three fiscals to 2014-15 even as the company doubled its production capacity, Heavy Industries Minister Anant Geete said on Wednesday.

“BHEL’s core function is that of power equipment manufacturing. However, in 2012-13, 2013-14 and 2014-15 the power generation was halted due to coal scam,” the minister said. “New power projects were not commissioned while BHEL doubled its manufacturing capacity to aid generation of 20,000 MW power leading to its financial troubles,” he said.
State-run power equipment maker BHEL’s standalone net profit declined 59.5% to Rs 359.58 crore in the quarter ended March 31, 2016, due to lower income from operations. On the consolidated basis, BHEL posted a net loss of Rs 895.93 crore for the year ended March 31, 2016.

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Besides, Joint Secretary in the Department of Public Enterprises Rajesh K Chaudhry said that central public sector enterprises (CPSEs) are yet to sign MoUs due to the revision in MoU guidelines in December. “The negotiations regarding MoU are going on according to the new guidelines. The preliminary negotiations of 80 big PSUs like Maharatnas and Navratnas have been completed while targets of 60 PSUs have been fixed,” Chaudhry said.

He cited the revision in guidelines as the reason behind the delay in signing of MoUs, adding that the negotiations in this regard will be completed by month-end or July first week. The guidelines were revised with an objective to have stringent evaluation of performance of CPSEs under MoU system.

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Chaudhry informed that the Department of Public Enterprises is monitoring the capital expenditure of PSUs in respect of the targets fixed for 2015-16 and submitting a monthly report to the Prime Minister’s Office (PMO). “Every month we have to monitor this (capex) and submit a report to the PMO. As a result, their (CPSEs) performance has started improving,” he said.

Besides, Geete said that the final decision regarding disinvestment of PSUs on the report submitted by NITI Aayog will be taken by the concerned Ministry of the respective PSU. NITI Aayog had submitted its proposal to the Prime Minister’s Office on strategic sale, privatisation of PSUs and closure of loss-making units.

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The NITI panel, headed by its Vice-Chairman Arvind Panagariya with CEO Amitabh Kant and other members on board, has prepared a detailed blueprint on PSU reforms. The Aayog has already submitted two lists of PSUs for strategic sale and closure or sale of sick units. Although the panels’ recommendation has not been made public, some media reports suggest that it has pitched for reducing the government’s stake to 49% or below in PSUs at one go under the strategic sale option.