Cabinet approves closure of loss-making PSU Burn Standard Company Limited
05 Apr 2018
The union cabinet on Wednesday approved the closure of Burn Standard Company Ltd (BSCL), a central public sector enterprise under the ministry of railways.
The company is engaged in the manufacturing and repair of wagons and production of steel.
The cabinet decision was taken in view of the continuous poor physical and financial performance of the company for over 10 years despite financial assistance and other support provided by government, and low probability of its revival in the future.
This government expects to save funds, which are currently being used to keep BSCL afloat, for "other developmental work".
The government will provide one-time grant of Rs.417.10 crore towards severance package and for clearing the current liabilities of the company.
In addition, an outstanding loan of Rs35 crore given to the company by the railway ministry will also be written off. The 500 employees of BSCL will be offered voluntary retirement.
Burn Standard Company Limited was incorporated in 1976 following nationalisation and amalgamation of Burn and Company, which was founded in 1781 at Howrah, West Bengal, and Indian Standard Wagon Company Limited, founded in 1918, in 1987 under the department of heavy industries.
The company was referred to Board of Industrial and Financial Reconstruction (BIFR) in 1994 and was declared sick in 1995, and continues to be sick.
The administrative control of the company was transferred from DHI to ministry of railways in 2010, as approved by the cabinet committee on economic affairs.