Rlys get Rs 270 cr for Bengal PSUs in fuel hike trade-off

The fuel price hike last week was done with all allies of the government on board. But, the Trinamoool Congress, which initially criticised the move in the beginning, has managed a bargain finally.

Union railway minister Mamata Banerjee has struck a deal with the UPA leadership for Rs 270-crore seed capital to run the West Bengal-based PSUs Burns Standard and Braithwaite?recently taken over by the railways. Finance minister Pranab Mukherjee has called a meeting on the issue, which is expected to be attend by the railway minister along with heavy industries minister Vilas Rao Deshmukh.

Banerjee, while overtly disagreeing with the fuel price hike, had promised not to rock the boat as an ally.

?Reviving these two companies was a pet project of Mamata Banerjee, who wants to prove that industrial revival in the state need not mean taking land away from the farmer,? said a top source in the railway ministry.

Both these PSUs have been ailing for sometime. Since Banerjee took charge of the railway ministry, she has been insisting that these PSUs are given over to the railways for revival. The initial deal had been that the companies would be transferred to Banerjee on a ?clean slate basis? that is with all the liabilities totalling upto Rs 1,900 crore being written off by the heavy industries ministry. The wagon manufacturing units of the two PSUs are located in West Bengal. While Burns Standard has 1500 employees on its rolls, Braithwaite has 500.

After the give-and-take over the fuel price hike, Banerjee said she wanted seed capital for the revival of the two PSUs. For good measure, Banerjee also raised the issue that hike in diesel prices would hit railway revenues to the tune of Rs 450 crore.

?On top of all this, there is a big problem with regard to the salary structure in these two companies, as they cannot be made commensurate with railway salary structures, the cash required for that would be too much,? said a source.

With the heavy industries minister Vilas Rao Deshmukh away in Mumbai, Pranab Mukherjee has committed to Mamata Banerjee that the meeting would take place in a day or two, ?as soon as Deshmukh returns?.

Agriculture minister Sharad Pawar has already said that he wantd the government to consider more ethanol blends in fuel?a nod to his sugar belt lobby. What the DMK will demand is still a matter of curiosity.