The UPA poured in thousands of crores on revival and life support plans for chronically sick public sector units (PSUs), while closing only two of them in its five years. Now, towards the fag end of its tenure, the Centre has been forced to do an about-turn on its plan to liquidate a Tamil Nadu-based PSU ? thanks to poll pressures.

The Board for Reconstruction of Public Sector Enterprises (BRPSE) had asked the Centre to approach Jammu & Kashmir and Tamil Nadu to take charge of two sick central PSUs in their states. J&K has agreed to revive HMT Chinar Watches, which turned sick during the UPA?s tenure.

But the DMK-led DPA government in Tamil Nadu showed no interest in Ooty-based Hindustan Photo Films Manufacturing Company (HPFMC) ?a PSU with accumulated losses of nearly Rs 5,200 crore by March 2008. Subsequently, the BRPSE and the finance ministry had agreed to liquidate the company ? as it was running its core business of producing cine and X-ray films at less than 0.5% capacity in the last three years and had a negative net worth of nearly Rs 5,000 crore by 2008.

?We are at a loss about what to do with this company. In one of my meetings with (then Finance minister) P Chidambaram, he said let?s close this company. This company is of no use because the technology has changed to digital. We also want it closed,? said BRPSE chairman Nitish Sengupta.

But before the liquidation process could begin, the government has asked the Board to drop the plan till the Lok Sabha polls. ?The elections are going to take place and you know if we close this company now, what will happen,? a bemused Sengupta said at a meeting on public sector units last week.

HPFMC had turned sick and gone to the Board for Industrial and Financial Reconstruction as far back as 1995 and its staff strength has gone down from 3,462 to 859 since it launched a voluntary retirement scheme some year ago. In 2007-08, it had a turnover of just Rs 17 crore but registered net losses of Rs 790 crore!

With the liquidation on hold, the official line has reverted to asking the state government to become the Centre?s partner in HPFMC?s revival, as per Sengupta. A future business plan submitted by the company is now being ?studied,? according to Department of Heavy Industry (DHI) officials.

Meanwhile, the DHI has sent a draft memorandum of understanding (MoU) to the J&K government for playing an active role in reviving HMT Chinar, which was ironically set up in 2000 under the restructuring programme of another sick PSU, HMT Limited.

The firm never took off due to a liquidity crunch and declining demand for mechanical watches.

The company is incurring losses for the last eight financial years. It made a loss of Rs 49 crore in 2007-08 on sales of only Rs 1.43 crore. Accumulated losses added up to Rs 223.94 crore by 2007-08. Annual production has dipped below 10% of total capacity of four lakh mechanical watches.

But in HMT Chinar?s case too, the formal handover will have to wait till the elections are over. ?The J&K government had agreed to the proposal but further action could not take place due to elections,? S N Dash, DHI secretary told FE .

HMT Chinar Watches fell sick under the UPA?s watch, along with four other firms?Bharat Heavy Plates and Vessels Ltd (BHPVL), HMT Bearings Ltd (HMTBL), HMT Machine Tools Ltd (HMTMTL) and HMT Watches Ltd. Revival packages have already been put in place for BHPVL, HMTBL and HMTMTL.