White Elephants to be shut down

White Elephants to be shut down
Golden handshake to the employees of SITCO, Sikkim Jewels & SPIL
Naresh Chettri | www.sikkimexpress.com

SITCO Factory, Deorali

10 March, Gangtok: At a time when the labour front of the ruling Sikkim Democratic Front (SDF) is preparing for a final showdown with the private companies here, the State government has decided to wind up its three white elephants , Sikkim Time Corporation SITCO, Sikkim Jewels Limited and Sikkim Precision Industries Limited SPIL and give a golden handshake to the 321 employees working in these loss-making units.
“The three State public sector units, SITCO, SPIL and Sikkim Jewels , which are suffering heavy losses, will be shut down as per the decision of the cabinet which met on March 2. The cabinet took a historical decision after summarizing the pitfalls and wrecking health factor of these units of state undertaking units.
Secretary MG Kiran IAS, Sikkim Industries & Commerce said that the market’s demand on the products manufactured from these units have a very low responses said to media. The decision to pull the plug on these ailing State public sector undertaking has not been reached overnight as the State Government has taken all effort to rejuvenate them by injecting funds and seeking help of private companies. The State exchequer had been bleeding while providing grants to these units and the government had been giving signals to them to be viable and self-sustainability.
However, following the recommendations of the 13th Finance Commission to shut down all government run companies going in the losses, the state government re-looked and formed a committee headed by Chief Secretary TT Dorji in August last year to explore the possibilities of disinvestment or privatization of the SITCO, Sikkim Jewels,SPIL and Sikkim Fruit Preservation Factory SGFPF.
The committee’s report was followed by an invitation from the State Government to companies and investors for a joint venture in its four ailing units in October.
The commerce & industries secretary informed that five private companies had shown interest in bidding for Sikkim Jewels, SITCO and SPIL. They could not meet up with the criteria outlined in the tender and they failed to qualify to run these companies privately, he said.
“A notification has been sent to these three units that they will be shutdown soon”, said Kiran.
Regarding the after of the employees working in these units, Kiran said that the cabinet has decided to give the employees a golden handshake in form of voluntary retirement schemes where the employees would get reasonable retirement benefits.
The Government Fruit Preservation Factory seems to have escaped the guillotine with the government hoping to channelize this unit better. The government has decided to acquire this factory and upgrade to better standards and norms to run smoothly rather than shutting down, said Kiran.
The fruit preservation factory located at Singtam is the oldest PSU of Sikkim established way back on 1956 and produces 40 odd items including squashes, pickles, juice, ketchups, jams and marmalades with most of the raw materials procured from the local farmers. There are 90 employees in the factory.
Though it was a financial mess over the decade, dynamism infused by a new management has led to tangible improvement in all sections in past one year. The factory is in its path towards rejuvenation had been hit hard by the landslide in the last monsoon season affecting the production for almost one month. Meanwhile, the decision of the state government to shut down these units would be affected some 321 employees engaged in Sikkim Jewels, SITCO and SPIL. The first two units have served Sikkim for more than four decades.
The Sikkim Jewels Ltd is the second oldest PSU established in the year 1972 at Tadong. It is spreaded across 32 acres of land and manufactures industrial jewels bearings and water meters and supplies products to Titan Watches. It has around 109 employees.
According to the company sources, the company machines do not stand relevent in terms of present market requirement and company’s revenue went down due to present recession and a proposed tie up with the SWISS Company did not materialize in time to save it from being shut down.
The SITCO was established in 1976 at Deorali here and was arguably the most viable unit with Baichung Bhutia being the brand ambassador for the period of three years in the mid-90′s . The company with its 110 employees produces SITCO watches and souvenir with a price ranging from Rs 300 to Rs 2500. The ISTCO earlier had tied up with Hindustan Machines and Tools (HMT) and manufactured watch parts for HMT. The tie-up is stagnated since 2001 and SITCO has started making its own watches.
The third PSU to be shut down, SPIL is based at Namchi in South Sikkim.
According to its website, the SPIL was setup in 2001 and presently has 102 employees. It produces industrial power devices and small industrial parts.
There are more PSUs under the Sikkim Government Directorate of Handicrafts and Handlooms established in 1957 and Sikkim Khadi and Village Board established in 1978.