The standing committee in its meeting on June 26 decided to close down this loss making organisation. The Union finance ministry is also ready to disburse the necessary funds for this purpose.

General secretary of the Hindustan Steelworks Construction Workers' Union Debanjan Chakraborty said that the committee decision has been passed on to the PMO for the final approval.

"In the June 26 meeting, majority of the members was in support of closing down the company, except the CPI(M) member, Sunil Khan. After finance ministry agreed to provide Rs 1,500 to 1,600 crore, the matter has been forwarded to the prime minister for the final nod," Chakraborty said.

However, the management of HSCL has denied any such move. Finance director PK Gupta said that they are still pursuing the government to accept their revival plan.

"We met the steelministry officials on June 23 and nothing was discussed on winding up of the organisation. However, we requested the Union steel secretary to accept our revival plan. Any development after that meeting is not within our knowledge," Gupta added.

As part of its revival plan, HSCL has been proposing a restructuring of its capital base from Rs 20 crore to Rs 100 crore by converting Rs 57 crore out of Rs 81 crore of non plan loan to equity in the first phase and the second part of Rs 24 crore over the next four years, since 1992.

It has also asked the government to convert the non-plan loans into subsidy. From the National Renewal Fund it wanted Rs 300 crore for a voluntary retirement scheme and another Rs 150 crore for employees benefit, on line with the recommendations of the fifth pay commission.

Gupta said HSCL has also requested the government to waive the non-plan loan of Rs 92 crore it received to carry out a contract at Libya and the subsequent interest burden of Rs 328 crore (as on March 31,1997).

"In 1978, mostly due to political compulsions, Hindustan Steelworks Construction entered into a contract with the Libyan government to build 97 school buildings. In 1988, after completing 50 buildings we had to pull out because of economic problems in that country. "We are requesting the government to waive off the loan and interests because the decision to participate in that contract was theirs and not ours," Gupta said.

Chakraborty along with Gupta said that the government should accept the revival proposals instead of winding the company. However, the two deferred on the retrenchment of the workers.

Gupta says: "We asked the government to give us Rs 300 crore for VRS, whereby we will reduce the work force from around 14,000 to 8,000. If that can be done then we are sure of registering a profit."

The accumulated loss of HSCL as on March 31, 1997, was Rs 877 crore and is likely to cross Rs 1,000 crore by the end of the last fiscal. The turnover of the company went up from Rs 390.42 crore in1994-95 to Rs 414.69 crore by 1996-97. It has reported operating profits in the last three years. Audit of the 1997-98 accounts is currently on.

"In 1997-98, the turnover is likely to drop and we may not register the operating profit due to new annual wage burden of Rs 27 crore added to the existing wage and salary bill of Rs 142 crore," Gupta said.