Hindustan Steelworks Construction Ltd (HSCL), the public sector undertaking currently under the Board for Reconstruction of Public Sector Enterprises, has firmed up plans to enter into the real estate, utilising the excess land under the various public sector undertakings (PSUs).
HSCL chairman and managing director Malay Chatterjee said various steel and other PSU’s are holding excess land without being able to make any commercial utilisation. Some of such PSUs also require housing for their staff and workers and HSCL has offered itself as a developer of realty on such land, which would enable the PSUs to exploit their excess land commercially.
According to Chatterjee, while various state governments have already entered into the realty segment and also widely adopted the public-private-partnership model to develop housing, HSCL ‘s foray into realty would be the first PSU initiative into commercial housing projects.
He said Indian Oil Corporation (IOC) has already evinced interest to transfer 5 acres to HSCL in Bahadurgarh for developing housing for low and middle income groups. It is also talking to Burn Standard and Hindustan Cables to get their land for developing realty. HSCL’s nodal ministry, the ministry of steel, has already written to the West Bengal housing minister Goutam Deb to allot HSCL land at Rajarhat for developing.
We are likely to get 10 acres initially at Rajarhat, on which we will start developing MIG and LIG flats,Chatterjee said.
HSCL, primarily engaged in setting up steel projects on turnkey basis (Bhilai and Bokaro), later diversified into civil construction for power, mining, dam, barrages, oil refineries, railway, highway, flyover and airport projects. But from 2002, it started posting losses and was referred to the BPRSE.
The ministry of steel engaged A. Fergusson & Company to work out a revival package for HSCL and after A. Fergusson submitted its final report in August 2007, BPRSE recommended all its proposals for revival in totality.
Abhijit Ghosh, director finance, said although the company has an accumulated loss of Rs 14,07 crore in the form of non-plan loan (Rs 513 crore), plan loan (Rs 518 crore) and interest burden (Rs 376 crore), it has been making operational profit from the past five years.
Chatterjee said a draft cabinet note following the BPRSE recommendation has asked the ministry of finance to convert the plan loan with the accrued interest into equity, waive the non-plan loan as well as its interest, reimburse the outstanding interest subsidy on term loan basis and waive the outstanding guarantee commission on term loan, bank guarantee and cash credit basis. The finance ministry, he said, seems to be in agreement with the provisions in the draft cabinet note.
If the finance ministry clears the BPRSE proposals, HSCL would be out of red, Chatterjee said adding that the company currently has a job order worth Rs 3,300 crore. He said HSCL has already kept aside Rs 50 crore for its realty foray.