FACT Lacks Funds For VRS

Kochi, October 23: | Updated: Oct 24 2002, 05:30am hrs
Fertilisers and Chemicals Travancore Ltd (FACT) which had embarked on a massive slimming exercise has found itself unable to go forward with the voluntary retirement scheme due to lack of funds.

The company, which is under the disinvestment plan of the Central government, had successfully implemented a few schemes whereby it brought down its staff strength to around 6,000. However, the latest offer through which it intended bringing the superannuation age to 58 for all categories received a jolt as it realised that it will not be able to find funds for the 470 staff who opted for the scheme.

FACT officials said the company had embarked on a major cost-cutting exercise through which it planned to pay the retirement benefits to its employees. However with the disinvestment plan imminent trade unions which had agreed to co-operate in cost-cutting, refused to be a party to the whole exercise.

The company which has been reeling in the red for quite sometime now ended the first half of this fiscal with a loss of Rs 127.41 crore compared to Rs 123.03 crore during the corresponding period last year.

Fertlisers sales dipped to Rs 207.81 crore compared to Rs 324.72 crore last year. Revenue from the petrochemical division was Rs 79.9 crore compared to Rs 162.24 crore. Income fell from Rs 500.92 crore to Rs 293.13, sources said.

Meanwhile, FACT has clarified on the row over inviting fresh tender for water transport of liquefied ammonia gas. The 10-year contract awarded to Ardershir B Cursetjee & Sons (ABC) ends only in 2008. ABC has issued a public notice saying it would seek legal recourse. However, FACT has said that as per the contract, ABC would transport 1,40,00 tonnes annually. However, there was shortfall in the load and ABC had to provide payment for this. Notice had been issued to the company earlier.

Also, as per the agreement the price quoted for transportation of one tonne of LAG was Rs 1,800 when road transport would be only Rs 162 per tonne.

Moreover, the company had already incurred a loss of Rs 25 crore through this deal, officials said. With FACTs demand for LAG expected to go up to 1,65,000 tonnes a year, there was the need to go in for a fresh bid, they said adding that the PSU was keen on going ahead with the new tender plan.