All options open for closure or merger of MMTC, STC, PEC: Piyush Goyal
He said gradually the purpose of these companies is getting eroded and they are no more canalising agencies.
“All options are open… We have started discussions. One by one we will do,” he said on the sidelines of an event organised by the Confederation of Indian Industry here.
The decision to shut down the three PSUs was taken last month after a review of investments by central public sector enterprises (CPSEs) in publicly listed state-level entities to ensure that these CPSEs are not saddled with unrelated ventures or loss-making firms. In all, there are around 500 state-level public enterprises (SLPEs), of which 200 are loss making.
The commerce department is yet to finalise a cabinet note on their closure. Goyal said gradually the purpose of these companies is getting eroded and they are no more canalising agencies. “It is not the government's business to be in the business,” he said, adding that there is no meaning for such a big infrastructure (MMTC) to carry out gold imports.
While the government wholly owns PEC, it has about 90% stake in MMTC and STC. According to STC's annual report for 2018-19, the company is facing “severe liquidity crisis” as all the lender banks have reported STC's account as NPA due to non-payment of interest on the banking limits availed by the company”.
The company reported a net loss (after tax) of Rs 881crore during 2018-19 compared to net profit (after tax) of about Rs 38 crore in 2017-18. In March, Syndicate Bank initiated solvency proceedings against STC for Rs 625 crore.
While STC was set up in 1956 as a trading arm of the government to undertake trade with east European countries, PEC was incorporated as a subsidiary of STC in 1971 to handle canalised business of export of railway and engineering equipment. It became an independent firm in 1997.
MMTC was created in 1963 as an independent entity on separation from STC primarily to deal in exports of minerals and ores and imports of non-ferrous metals.