Category Archives: PSU

Matters connected with Public Sector Units (PSU)

Cabinet Committee on Economic Affairs decides on 30% Quota to ITI

15 Wednesday Jan 2014

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The Cabinet Committee of Economic Affairs (CCEA) has approved the proposal of the DOT to continue allotment of 30% quota on telecom equipments for BSNL, MTNL to the ITI. The Press Statement issued by the Govt. in this connection is given below:

Procurement quota to M/s. Indian Telephone Industries Ltd. on procurements made by BSNL and MTNL

The Cabinet Committee on Economic Affairs has approved the following proposal of the Department of Telecommunications regarding continuation of reservation quota for M/s Indian Telephone Industries Limited (M/s. ITI Ltd.).

This will enable ITI to survive in the competitive environment of telecom manufacturing.

a) To continue the reservation quota policy for M/s ITI Ltd. by reserving 30 percent of procurement orders placed by BSNL and MTNL for M/s ITI Ltd., for products manufactured by ITI Ltd. and 20 percent of the network roll out orders for their turn key projects (like GSM network roll-out) of BSNL and MTNL.

b) ITI would accept orders under the reservation quota only after the price is known and it is commercially viable.

c) BSNL/MTNL will give 10 percent advance against the orders placed on ITI, subject to liquidation of advances outstanding against previous projects awarded to M/s ITI Ltd. by BSNL/MTNL., so that ITI does not face the problem of working capital for execution of orders, subject to adequate safeguards for proper utilization of these advances.

d) ITI shall exercise its option under the reservation quota within 15 days of the opening of bid.

e) The aforesaid policy measures shall remain in force for a period of one year with effect from 21.09.2013 and shall again be reviewed considering the financial health of ITl after the expiry of this period. However, the Government has introduced the Public Procurement Bill 2012 in Parliament, and under the provisions thereof, procuring entities, including CPSEs, would have to frame Rules for Public Procurement of Goods, Work and Services. Once such public procurement rules for CPSEs are framed after the enactment of the Public Procurement Act, these would also be applicable to CPSEs under the administrative control of the Department of Telecommunications.

BSNL and MTNL will be requested to extend the benefit of reservation quota to ITI Limited for a period of one year with effect from 21.09.2013.

The extension of the benefit of (i) 30 percent of procurement orders placed by BSNL / MTNL for M/s ITl Ltd. for products manufactured by it and (ii) 20 percent of the network roll out orders for turn key projects (like GSM network roll-out, etc.) of BSNL/ MTNL with 10 percent advance against the orders placed on M/s ITI Ltd., subject to liquidation of advances outstanding against previous projects awarded to M/s ITI Ltd. by BSNL/MTNL will ensure enough orders for ITl for production activities.

Hindustan Zinc Limited being privatised.

15 Wednesday Jan 2014

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The Hindustan Zinc Limited, a Central PSU will be privatised shortly. The Government is having only 29.5% stake in the PSU now. This also will be sold through action. the proposal is already approved with the Attorney General clearing the proposal. The Government is expecting Rs. 16,000 crore from the sale.

One after another, the Public Sector Units are being sold to the private companies at cheap rates. These PSUs are located in central areas with a large area of land. The market prices are high. The equipment, building etc. also cost much. But in the name of liberalization, all these are handed over to the private at very cheap rates.

The Government is only the Manager and not owner of these PSUs. The people are the owners. But the Management is selling these PSUs at their whim and fancy. A strong movement should come against these anti-national disinvestment.

Govt. takes away Rs. 16,485 crore from CIL as Special Dividend

15 Wednesday Jan 2014

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The government is squeezing all the profitable PSUs to find out funds to patch up its financial crunch. Now the Coal india Limited (CIL) has been pressurised to give Special Dividend. Accordingly the CIL will have to pay Rs. 18,317.46 crore as SD out of which Rs.16,485 crore will go to the government and the rest to the other share holders. This is the biggest dividend of all times any company has given.
CIL had already given an amount of rs. 8,842.91 crore to the government for 2012-13.
The government not only wants money, but also wants to cripple all the PSUs to ensure benefits to the private companies.

MTNL to order GSM lines worth Rs. 600 crores

14 Tuesday Jan 2014

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The CMD MTNL, Shri Garg has stated that MTNL would order GSM lines worth Rs.600 crores to update and improving its network, mainly 2G.
This most necessary considering the present efficiency of the MTNL services.

General Insurance Employees on Strike against FDI increase

14 Tuesday Jan 2014

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The employees of the General Insurance has called for strike against the increase of FDI in Insurance sector from 26% to 49%. The unions stated that there is no justification to increase the FDI which is against the interest of the sector and is only to benefit the private insurance companies.

5 Year Wage Revision Discussion in Banks

14 Tuesday Jan 2014

Posted by in PSU, TU News - India

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On the eve of the All India Strike call given by the United Forum of Banks Unions (UFBU), the Indian Banks Association (IBA) will meet the union representatives and start discussions. The call is given for strike on 20th January 2014.
The decision to have the discussions prior to the strike was agreed by both the parties in the meeting called by the CLC yesterday, 13th January. The main issue is about the % of fitment in the Five year Wage Agreement to be effective from 01-01-2012.

PSUs being harassed by the Government

12 Sunday Jan 2014

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Unable to meet the Disinvestment target of Rs.40,000 crore this financial year, the government has started harassing the PSUs to somehow get the money from them. Disinvestment in coal could not take place due to the strong opposition from the workers. Now the disinvestment in IOC also could not take place.
In this situation, the government is asking all the cash rich PSUs to provide funds to the government either through disinvestment, ross-holding or special dividend.
This has been what happened to BSNL also. The government took away all the cash through Spectrum charges, notional loan, interest and so on. Now BSNL is not having funds to expand and even to pay the wages of the employees. The government wants all the PSUs to reach that position so that privatisation will be easy and the corporates and big business can maximise their profits.

Wage Revision in SAIL w.e.f. 01-01-2012

12 Sunday Jan 2014

Posted by in PSU, TU News - India

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A report on the wage revision of SAIL employees w.e.f. 2012, a five year agreement is given below:

NEW DELHI, JAN 12:
Annual wage outgo of SAIL will go up by at least Rs 1,000 crore with the PSU set to sign a pact with its 85,000 non-executives for a 16 per cent hike in basic and dearness allowances and six per cent rise in perks.

Wage revision in SAIL, done every five years, is pending since January 2012 due to differences on the extent of hike between the company management and its unions’ umbrella body, National Joint Committee for Steel (NJCS).

“The management and the unions have nearly reached an accord at the last meeting held in December. It will be given a final shape in the form of an agreement in the next meeting slated later this month,” a source involved in the discussions told PTI.

At the last meeting, the management conveyed to the union representatives that given the current scenario of the steel industry, it would not be able to shell out more than 16 per cent hike in basic and dearness allowances apart from a 6 per cent rise in perks and pensions each.

Union representatives involved in wage talks were demanding between 17 and 18 per cent hike, the source said, adding the management has asked them to come back with a consensus in next meeting.

Initially, the union had asked for a 21.6 per cent hike, similar to the rise in 2007, in basic and dearness allowances.

However, the management said given the current market condition of steel in which consumption grew by just 0.5 per cent during the April-December period, an encore of 2007 is just not possible.

“Even if the unions agree with management’s proposal, it will add at least Rs 1,000 crore burden on wage front for SAIL each year. Since the revision has been pending for two years, the immediate outgo will be over Rs 2,100 crore,” the source said.

SAIL has already made the required provisions for paying out majority of the arrears and the disbursement would be made soon after the wage revision pact is signed.

The company’s net profit more than doubled to Rs 1,180 crore in the July-September quarter, although realisation fell by 6.5 per cent on subdued prices. Its employee expenses, however, went up to Rs 2,495 crore during the quarter from Rs 2,090 crore in the same period a year ago.

Syndicate Bank to Recruit 5,000 new Staff

11 Saturday Jan 2014

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Banking industry seems to have understood that new recruitment is necessary for the growth of business and beer service to the customers.
The Syndicate Bank, one of the Public Sector Banks has decided to recruit about 5,000 new staff in the coming year, 2014-15. it has opened 145 new branches in this year and is projected to open another 250 branches.
This is a good news for the customers and the staff in Syndicate Bank. Young blood, new recruits are always necessary for the growth and health of any institution.
Will BSNL Management realise this truth!

Disinvestment of PSUs in a new Avatar

11 Saturday Jan 2014

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The UPA II Government in its last phase of rule, with only a few months left for general elections is moving for a new method of disinvestment. Due to strong opposition from the unions, the government has not been able to disinvest in some of the rich PSUs.Only Rs.3,000 crore could be mopped up disinvestment so far, although the target was Rs.40,000 crore. Now without direct disinvestment, the shares are being diverted to the market for exchange etc. Just before the elections, the government want to satisfy the corporates from which about 70% of the election fund is mopped up. This new decision should be completely opposed.

The report published in the Business Line is reproduced here for more details.

ETF of PSUs set for launch in a month

NEW DELHI, JAN 10:
Soon investors can boast of a portfolio consisting of shares of 11 blue-chip Central Public Sector Enterprises without any risk considerations. An empowered Group of Ministers (eGoM) under the chairmanship of Finance Minister P. Chidambaram has approved the composition of the Central Public Sector Enterprises Exchange Traded Fund (CPSE-ETF).

Alternative

This fund will be used as an alternative to direct share sales of CPSEs. It will be listed on a stock exchange and trade like other shares on the bourse. Here, investors get the benefit of the constituent shares without directly owning it. Shares of companies, such as ONGC, Coal India, IndianOil and GAIL, would be among those that constitute the fund. Goldman Sachs has been assigned to manage the fund.

“It will be an open-ended scheme,” Disinvestment Secretary Ravi Mathur told reporters after the eGoM meeting here on Friday.

Mathur said a draft prospectus will be filed with the market regulator Securities and Exchange Board of India shortly. Once the approval is obtained, the scheme will be launched.

Difficult time

The fund is being launched at a time when the Government is struggling to meet the disinvestment target of Rs 40,000 crore. Till now, it has mopped up less than Rs 3,000 crore.

The Disinvestment Secretary did not provide any direct answer on the target shortfall, but said he hoped the companies that are not being divested will give special dividends. For example, Coal India has called a board meeting next week to take a call on dividend. Coal India was originally listed for disinvestment, but strong opposition from the unions forced the Government to back off. (Courtesy : Business Line)

(This article was published on January 10, 2014)
Keywords: Empowered group of ministers okays PSU exchange-traded fund, Coal India, CIL to be part of exchange-traded fund, 11 companies to be part of exchange-traded fund, PSU exchange-traded fund to raise Rs 3, 000 cr, Disinvestment Secretary Ravi Mathur, Central Public Sector Enterprises Exchange Traded Fund