The NDA tried it in 2002, but the Mayawati government in Uttar Pradesh refused. UPA-I tried again in 2005, but the Samajwadi Party government led by Mulayam Singh Yadav shot it down. UPA-II revived it again, only to be rebuffed by the Mayawati regime?a revival plan for a chronically sick public sector unit has been sent back to the drawing board yet again with successive state governments refusing to convert its surplus land from leasehold to freehold.
Among the biggest textile mills in the state and the oldest in former industrial hub Kanpur, Elgin Mills, is a subsidiary of sick British India Corporation. BIC was declared sick in 1992 and the Board of Industrial & Financial Reconstruction (Bifr) approved Rs 210-crore plan in December 2002 to revive two units at Lalimli in UP and Dhariwal in Punjab.
However, the plan could not be implemented in full, as the UP government, led by Mayawati then, refused to change the nature of land to freehold. The company was expected to generate Rs 125 crore through the sale of this land to make a one-time settlement with its creditors.
Later, on the recommendation of the Board of Reconstruction of Public Sector Enterprises (BRP-SE), the Centre again approved a revival package in 2005, sweetening the deal for the UP government by making an additional non-plan allocation of Rs 47.35 crore as consideration for the conversion of land. But the state scuttled the proposal again.
The proposal to sell the land was a key element of the recommendations given by BRPSE to turnaround the BIC. ?The UP government is not keen on converting the nature of the land into freehold. This would delay the revival process as the board has to derive some other way to revive the sick firm. After the UP government?s rejection, getting final approval of the Cabinet for the revival would also be difficult,? a senior official in the textiles ministry told FE .
At the end of 2007-08, Elgin Mills was saddled with losses of over Rs 1,000 crore and overdue interest of over Rs 500 crore on government loans.
