In June 2010, a consortium of BEML Ltd, Coal India Ltd (CIL) and Damodar Valley Corporation (DVC) acquired the plant and machinery of the closed Durgapur-based Mining and Allied Machineries Corporation (MAMC) from the official liquidator of the Calcutta High Court.
It was promised that a BEML-led joint venture between the three will re-open the mining machinery facility.
Two years down the line, as in June 2012, the consortium may now fall apart as BEML — 48 per cent majority stakeholder in the consortium — now wants to pull out of the initiative.
The partners are yet to enter the shareholders agreement, the basic minimum to start a joint venture.
There is no business plan of the proposed facility either.
Failed initiative
While BEML did not respond to queries on the issue, sources told Business Line that the Bangalore-based mining equipment maker blames CIL and DVC – each holding 26 per cent in the consortium – for the failure.
BEML, allegedly expected CIL and DVC - the consumers of mining equipment - to place firm orders worth over Rs 1,000 crore to the non-existent venture as a pre-condition to take the initiative forward.
The partners, on the other hand, felt such orders could only be placed once the proposed joint venture has a business plan (detailed feasibility report) in hand.
“How could a public sector company place firm orders to JV which is yet to decide what would they manufacture?” a source in one of the partner companies told Business Line .
Land trouble
But, can the consortium take the initiative forward without BEML?
Sources suggest that the possibility appears bleak as Asansol Durgapur Development Authority (ADDA) has already transferred lease of 193 acres of closed factory premises in the name of a BEML subsidiary, MAMC Industries. Allegations fly that CIL and DVC had little clue about this move.