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Basu govt okays surplus land sale to revive sick units

Arup Chanda in Calcutta

Over 100 sick, defunct units in West Bengal will be permitted to sell their surplus land and use the proceeds to revive their units. The West Bengal government has identified these units.

Earlier, no sick or closed units were allowed to sell their land. However, the law was amended permitting the funding of revival packages by selling excess land.

The moment the law came into force, the state government started identifying the units. This issue was widely discussed at the meet of industrialists and West Bengal government at Raichak on January 17.

According to state industry ministry sources, the companies belonged to both private and public sectors.

The government has divided these units into three broad categories depending on their revival prospects, said sources in the state industrial reconstruction ministry which oversee the revival of sick units in West Bengal.

The process was aimed at classifying the excess land within these sick and closed units and aiding the respective managements to evaluate their properties and scout for prospective buyers.

Earlier, the process of selling sick or closed units was not only lengthy but cumbersome. The companies had to submit the sale proceeds to the West Bengal Industrial Development Corporation, which granted loans against the amount at a two per cent interest rate.

But real estate developers found it difficult to obtain loans from other financial institutions as it was mandatory for them to reveal the WBIDC loan in their balance-sheets and it complicated their first charge on assets in the event of a default.

Following the amendment of the law the West Bengal government permitted direct access of the sale proceeds to the real estate developers.

The West Bengal government has constituted a committee to oversee land sale and the execution of revival programme with the sale proceeds. Other than representatives of the state government the committee comprised nominees of the financial institutions and representatives of the promoters of sick and closed units.

At the Raichak meet, the ruling Marxists had categorically stated that they were not interested only in seeking fresh investments. "We are equally interested in revival programmes of sick and closed units and that was why we amended the law to help cash-strapped managements to sell their unused and excess land and raise the necessary funds to expedite implementation of revival schemes," a source in the industry department told Rediff On The NeT.

A taskforce, comprising Chief Minister Jyoti Basu, Home Minister Buddhadeb Bhattacharya, Finance Minister Asim Dasgupta, Industry Minister Bidyut Ganguly, WBIDC chairman Somnath Chatterjee and industrialists such as J R Irani, Sanjeev Goenka, Rajive Kaul, Rajesh Shah and others has been constituted.

The West Bengal government has already sought the opinion of various chambers of commerce on its industrial policy and necessary changes needed in it to expedite industrialisation in the state. It has also urged them to suggest viable proposals regarding the utilisation of wealth locked up in excess land in the sick and closed units.

However, after consulting the chambers of commerce and the state industrial reconstruction ministry, it is the taskforce which will take the final decision.

If West Bengal can succeed in implementing this package, the state will witness a turnaround by way of revival of more than 10,000 sick and closed industries in the state.

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West Bengal