Plan to hive off sick PSUs’ real estate

The government is considering a proposal to hive off real estate owned by sick public sector companies in Mumbai, Kolkata, Pune and Ahmedabad to state-owned National Buildings and Construction Corporation (NBCC), before selling off the chronically loss-making entities.

Senior government officials told TOI that NBCC, which is developing real estate in the national capital, has shown interest in prime plots owned by companies such as Bengal Chemicals, National Bicycle Corporation and Richardson & Cruddas in Mumbai’s Worli and Byculla.

Similarly, in Kolkata, the company is looking at land owned by NJMC as well as state-government entities such as Lilly Biscuits and West Bengal Warehousing Corporation.

When contacted, NBCC chairman and MD Anoop Kumar Mittal confirmed that his company has written to the disinvestment department and the Board for Reconstruction of Public Enterprises to enter into a partnership with some of the loss-making PSUs. “Our interest goes beyond metros as we also want to look at tier-II cities,” Mittal said, but refused to discuss the issue further.

Separately, the company has initiated a dialogue with some of the companies to develop land. Government officials said NBCC has suggested various models, including direct sale of land and even joint ventures for the development of real estate. There are also suggestions of a holding company model, which will bring the sick companies under its fold, along with the staff and other assets and liabilities.

“It is something that we are considering but there is no decision on the issue,” an official said.

The government is keen on maximizing its disinvestment receipts and is looking at various ways to maximize its mop-up to meet the stiff Rs 48,000 crore target fixed by finance minister Arun Jaitley for the current financial year. Although the BJP government is continuing with the UPA’s disinvestment policy, it has not ruled out looking at strategic sale in profit-making PSUs as well.

Under the policy approved by the UPA, loss-making PSUs were to be put on the block but it’s a different matter that no action was initiated for a decade. But, before these companies are sold, the government will want to sell off its real estate so that it is not accused of handing over prime property at throwaway prices. Analysts, however, say that there may not be many takers for the sick companies minus the real estate.