New Delhi: The government today approved a revival package for loss-making public sector unit National Projects Construction Corporation, envisaging a conversion of Rs219 crore loan with interest into equity.
“This (NPCC) is a public sector company not making profit. Nevertheless, we have agreed to convert a loan amount of Rs219 crore with cumulative interest into equity and write down the value by 10%,” Home Minister P Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs.
He said the CCEA decided to approve the package despite a question mark over economical viability as NPCC played an important role in the development of the North East region.
“In terms of economics, there is a big question mark. The key point is that this corporation that has worked mainly in the North Eastern region, where very few private sector or joint sector companies venture, we need organisations to carry out works in that region,” he said.
“NPCC is also involved in building some border roads and hopefully with this conversion to equity, their interest cost will come down and maybe their balance sheet will become stronger,” he added.
The need to have an organisation of this kind to carry out projects in the North East has persuaded CCEA to approve the proposal that requires a conversion and a writedown, he said.