A long-standing tussle between the state government of Jharkhand and the Heavy Engineering Corporation, a central public sector unit under the ministry of heavy industries and public enterprises, is set to be resolved on Thursday when the Cabinet Committee on Economic Affairs (CCEA) considers a compromise solution arrived at between the two parties over the issue of land use.
Set up in 1958 as India’s largest integrated engineering PSU to supply equipment to the first set of domestic steel plants, HEC turned sick after the steel industry, its main clientele stopped expanding in the nineties. With accumulated losses of Rs 1,088 crore and its net worth wiped out, the company had been referred to the board for reconstruction of public sector enterprises, the sick PSU doctor appointed by the Manmohan Singh government.
While the CCEA had cleared a revival package for HEC earlier, the issue of land had remained unresolved. HEC has 2,342 acres of land on lease in Jharkhand’s capital, Ranchi and the Jharkhand government functions out of buildings within the same campus. Even the state assembly is within this patch of land.
With the steel industry increasing capacity yet again, HEC’s order books are better than in recent years and it even registered a net profit of Rs 5 crore in 2007-08, the first time it came out of the red in several years. HEC had been demanding that the land be transferred to it for its expansion plans, but the state was playing tough on the issue.
Now, a compromise has been reached and it has been decided that HEC will retain the land it needs for its expansion plans, while the state government will retain its administrative buildings and the adjacent land it operates from. The state will pay HEC Rs 170 crore for the same.
Proposals to this effect have been moved simultaneously at the Centre as well as the Jharkhand cabinet.