Burn Standard's interests can be divided into three areas -- wagon building, refractories and project-related activities. The wagon manufacturing division is located at Burnpur in West Bengal. There is a foundry and an engineering division at Howrah and a refractory at Salem in Tamil Nadu. There are seven more refractories in West Bengal, Bihar and Madhya Pradesh, which are likely to be closed down.

The Rs 158-crore BIFR-sanctioned revival package, which was approved by the Union Government on April 16, 1999, does not mention anything about these seven refractories, one of which is located at Gulfurbari in Bihar. There are two at Newar and Jabbalpur in Madhya Pradesh andthe rest at Ranigunj, Durgapur, Ondal and Lalkuthi in West Bengal.

"Though nothing has been mentioned about these units, it is obvious that they will be winded up and the employees will have to opt for the voluntary retirement scheme," sources said. However, the Union Government has stated in the revival package that it is unable to extend support to these units.

Burn Standard personnel director BD Ghosh told The Financial Express that the seven refractories are loss-making units employing about 1,500 people, two of whom approached the AAIFR against the revival package. However, their appeal was turned down.

"In its May 21 meeting, AAIFR has told the employees' representatives that the matter is not within its jurisdiction. The revival package is based on the whole company and not on any single unit," sources said.

Earlier, the state governments of Bihar, West Bengal and Madhya Pradesh where these units are located have also expressed reservations against their closure. "However, much later theyunderstood the need of this drastic act and agreed to the proposal," sources said.

Managing director IC Sinha said the company wishes to reduce the workforce to around 6,740. "The revival package has advised the company to reduce the employee strength from 8,876 to 6,740. A sum of Rs 34 crore has been sanctioned from the National Renewal Fund for a voluntary retirement scheme," he said.

According to Sinha, there has been a drastic change in the attitude of the employees. "After the Government accepted the revival package, we have noticed a drastic change in the attitude of the workers. They are willing to listen to new proposals and cooperate with the management in every aspect of work. Even their productivity has increased," he said.

He also appreciated the role of the West Bengal labour department and the Union Government's department of industrial reconstruction. "This is the best possible revival package for a sick heavy engineering unit. Not only the central governments, even the four stategovernments have sacrificed a lot. The industry is already aware of these changes within Burn Standard and I can assure everybody that the company is ready for a huge leap forward," Sinha said.

In the revival package, the Union Government and Bharat Bhari Udyog Nigam, Burn Standard's parent company, have agreed to convert their plan loan of Rs 28.68 crore and Rs 17.97 crore respectively into equity. This will increase the equity base from Rs 50.87 crore to Rs 97.52 crore. Non-plan loans worth Rs 75.03 crore from Bharat Bhari and the Centre will be converted into zero rate debentures.