Faced with inordinate delay in closing down sick CPSEs, the government has come out with timelines for disposal of movable assets, sale of land and retrenchment of employees not opting for voluntary retirement.
Issuing the guidelines, the Department of Public Enterprises (DPE) said the government is concerned about the inordinate delays and extended time taken for closing down sick or loss-making central public sector enterprises (CPSEs) where decisions for closure were taken a long time ago.
For such CPSEs, the government has been providing budgetary support, thus straining its scarce resources.
“The government would now like to ensure the decisions taken by the competent authority are implemented by ensuring payment of financial compensation, discharging of liabilities, legal responsibilities, disposal/monetisation of land and movable assets in a time-bound manner,” DPE said.
Land management and auctioning agencies will be entrusted with the job to dispose of movable and immovable assets.
Government’s premier think-tank Niti Aayog has identified 74 loss-making public sector undertakings. Of these, sources said 26 have been recommended for closure.
As per the timelines laid down by DPE, the retrenchment of employees of such CPSEs who have not opted for VRS has to be completed within four months from the ‘Zero Date’, the date of issue of minutes of approval for closure of sick or loss-making CPSEs by the Cabinet or Cabinet Committee of Economic Affairs.
The wages, salaries and other statutory dues have to settled within three months from the Zero Date.
The VRS package will be as per the 2007 notional pay scale, irrespective of the grade in which the CPSE operates “for release of employees”.
Settlement of statutory dues and liabilities towards revenue and tax department has to be completed within three months while payment to secured creditors has to be done in two months.
The sale of leasehold or freehold land needs to be complete within six months. Central government departments will get priority if these want to purchase land, followed by central government bodies or CPSEs, state government departments and state government bodies or state PSEs.
In case no offer is received within six months from the Zero Date, the disposal of immovable asset will be done through an auctioning agency to any entity. Land would be sold as per the approved land use.
In case the land is not sold, the property will be used for the public purpose, including affordable housing or other central government flagship programmes.
The assets shall be disposed of “by e-auction through a transparent process,” Department of Public Enterprises (DPE) said.
The Administrative Ministry under which the sick/loss making CPSE earmarked for closure falls will negotiate with the secured creditors to settle their dues at the minimum value as One Time Settlement (OTS).
For all the cases of closure, Niti Aayog will monitor the implementation of the decision along with prescribed timeliness. For the purpose, an oversight committee would be put in place in the Aayog.
The auctioning agency will be paid one per cent amount realised from auction subject to maximum of Rs 25 lakh per auction.
The guidelines, the DPE said, will not apply to CPSEs under liquidation where liquidator has been appointed. In respect of CPSEs where the process of closure has already started and is underway, a shorter timeline may be re-worked out by the administrative Ministry/Department in consultation with Niti Aayog.
Proceeds from sale of assets after making payment for all liabilities would be deposited in the Consolidated Fund of India.
The land management agency shall manage, maintain and if required, engage a security agency for the watch and ward of the assets on contract basis for the CPSE against payment. It will ensure that the land is not encroached, movable assets are not stolen and the premises is secured.