The government has announced plans to close the loss-making Bharat Wagon and Engineering Company Limited (BWEL), a central public sector enterprise (CPSE) under the ministry of railways.
The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi on Wednesday approved the railway ministry's proposal to close BWEL and offer a voluntary retirement scheme for its employees.
The VRS scheme will be offered to 626 employees of BWEL at 2007 pay scale. The closure will involve a one-time government grant of Rs151.18 crore towards severance package and for clearing the current liabilities of the company, a railway ministry release stated.
This measure will stop flow of financial support from public funds for carrying on the operations of sick/loss making BWEL resulting in savings for the government, an official release stated.
The implementation will be done as per the timelines prescribed in the guidelines issued by Department of Public Enterprises (DPE) on time bound closure of sick/loss making CPSEs.
In view of the continues poor physical and financial performance of the company for more than 10 years, in spite of financial assistance and other support provided by the ministry of railways combined with low probability of its revival in future, Bharat Wagon and Engineering Co Ltd is being wound up.
BWEL was incorporated on 4 December 1978 as a CPSE after taking over two sick private sector companies - Arthur Butler & Company, Muzaffarpur and Britannia Engineering Company, Mokama. The company was referred to the Board for Industrial and Financial Reconstruction (BIFR) in December 2000 and was declared sick in the year 2002. The company continues to be a sick company since then. The administrative control of the company was transferred from Department of Heavy Industry (DHI) to the MoR in August 2008, as approved by the Cabinet Committee on Economic Affairs.
The company is engaged in the manufacture and repair of wagons, and is having two manufacturing units, at Mokama and Muzaffarpur in Bihar.