Cabinet approves closure of loss making BWEL

Speed Post News Network

New Delhi : The Cabinet Committee on Economic Affairs chaired by PM Narendra Modi on August 23, 2017, approved the proposal of Ministry of Railways to close the Bharat Wagon and Engineering Company Limited (BWEL), a Central Public Sector Enterprise (CPSE) under Ministry of Railways.

Six hundred twentysix employees of BWEL will benefit from the voluntary retirement scheme to be offered at 2007 payscale. The government will have to provide one time grant off Rs 151.18 crore towards severance package and for clearing the current liabilities of the company. 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, according to a PIB release.

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 Ministry of Railways combined with low probability of its revival in future, Bharat Wagon and Engineering Co. Ltd. is being wound up, according to the PIB release.

BWEL was incorporated on December 4, 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 BIFR (Board for Industrial and Financial Reconstruction) in December, 2000, and was declared sick in 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. The company is engaged in the manufacture and repair of wagons and is having two manufacturing units at Mokama and Muzaffarpur in Bihar.