1. ITI employees get R150-cr arrears, but PSU’s future remains bleak

ITI employees get R150-cr arrears, but PSU’s future remains bleak

The employees of ailing public sector undertaking Indian Telephone Industries (ITI), whose salaries havs been withheld since January, can now heave a sigh of relief.

By: | Published: June 8, 2015 12:43 AM

The employees of ailing public sector undertaking Indian Telephone Industries (ITI), whose salaries havs been withheld since January, can now heave a sigh of relief. With the Centre disbursing Rs 150 crore last week as part of a revival package, the company has finally paid salaries to its 6,056 employees.

“As part of the Rs 4,156.79-crore revival package prepared by BIFR last year, we received Rs 150 crore last week for salaries. Accordingly, we have paid salaries from January to April, while May salary is still pending,” KL Dhingra, CMD, ITI, said.

Employee utilisation at some units remains under 20% even as the company battles to get new projects and generate enough revenue. However, it is not clear as to whether it would be able to generate revenue to the extent of paying its staff for the next few months without sufficient projects in hand. The chairman, however, told FE that he was hopeful that ITI would recover in two years.

Apart from the Rs 150-crore fund disbursement, the government has since 2014 released around Rs 300 crore as soft loan, Rs 190 crore for infrastructure upgrade and Rs 165 for payment of salary arrears, as per the 1997 wage revision.

ITI started incurring losses from 2002-03 onwards due to falling prices of telecom equipment, rapid changes in technology, the high cost of production and labour costs and, importantly, competition from private players abroad. While the telecom sector saw rapid growth, ITI saw a decline.

The company has been reducing its losses in the recent past. It reported a Rs 297-crore net loss for 2014-15, the lowest in the last 13 years. Despite being referred to BIFR in 2004, the revival package was approved only in 2014.

“Around 50% of the loss is bank interest charge against borrowings. We have written to the government and the banks to reduce the interest rate by about 5%. This, clubbed with financial assistance in the form of a ‘revival package’, will alter the outlook of the company,” Dhingra said.

Salary payments have been irregular since 2010 and employees have faced continued hardship while remaining under-utilised.

According to S Gopu, director (human resource) at ITI, around 70% of the total employee strength spread across three units in Uttar Pradesh is severly under-utlised. The Raebareli unit, which has 2,038 employees, has a utilisation rate of only 20%; Naini and Mankapur enjoy less than 10% utilisation. Only the Palakkad and Bengaluru units, which have 481 and 548 employees, respectively, are utilised to an extent of 70-80%, he said.

“The average age of an employee at ITI is 54 today. We have recommended a reduction of 1,200-1,500 employees through VRS and suggested the induction of fresh manpower in the company, who are skilled to handle newer technologies,” Dhingra told FE.

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