Six PSU Consultancy Corporations To Merge With EIL
In order to herald efficiency in the way of functioning of public sector undertakings, the government is taking the merger routs. The Cabinet has authorised the merger of SBI with its five associates, all state-owned oil corporations will become one, and now, the government’s six consultancy corporations will merge into Engineers India Ltd to create a mega-consultancy agency.
The merger of consultancy corporations such as MECON, Telecommunications Consultants India (Ltd), Engineering Projects (India), WAPCOS, and so on has been proposed within the Union Budget 2017. The thought behind creating a giant entity is to take on competition worldwide and set up India’s footprint in the worldwide enterprise of project consultancy.
Merger rationale and advantages
There are practically a dozen state-owned firms that provide a range of consultancy providers and there’s a scope of merging a few of them to create an enormous company that may compete globally and put India on the worldwide map of doing flip-key initiatives. At current, Engineers India Ltd (EIL) is the most important state-owned consultancy agency in the nation which provides flip-key engineering options to tasks in India and abroad and Engineering Projects (India) gives turnkey execution of projects within the infrastructure area.
Then there are specialized consultancy corporations like Telecommunications Consultants (India) Ltd which does comparable work in the telecom trade at house and abroad. The truth is, the corporate has spearheaded a bunch of projects in Africa. Similarly, WAPCOS provides consultancy in water, energy and infrastructure related initiatives. MECON gives technical consultancy and challenge implementation services within the infrastructure sector.
The merger of consultancy companies will allow the brand new company to bid and take initiatives across industries and even compete will chemistry for petrochemical engineering international consultancy giants like Bechtel and domestic corporations like Larsen & Toubro and ABB. Merger of consultancies can assist them combine throughout the worth chain of an industry. It also provides them the chance and capability to take dangers and discover new business, avail economies of scale, take increased investment selections and create more value for stakeholders. A bigger merged entity will assist to diversify in enterprise and herald operational efficiency.
The merger of state-owned firms will scale back inefficiencies across the sector and create an entity that will likely be better placed to compete globally. It can have all of the sources – monetary, manpower, technical capabilities to bargain and bid for initiatives internationally and herald value for shareholders.
The government’s vision is that the merged entity or a much bigger EIL will be able to take on global consultancy agency Bechtel, which is one of the vital revered world engineering, development, and venture management companies. Established in 1898, Bechtel has executed over 25,000 projects throughout 160 countries on all seven continents. It operates in infrastructure, nuclear, security and environmental, oil, chemistry for petrochemical engineering gasoline and chemicals, mining and metals.
About Engineers India Ltd (EIL)
Established in 1965, state-owned EIL is an engineering consultancy company which gives design, engineering, procurement, development and integrated venture administration providers. It gives services primarily in oil, gasoline and petrochemical industries and has additionally diversified into sectors like infrastructure, water and waste management, photo voltaic and nuclear energy and fertilizers to leverage its sturdy technical competencies and track report. The company’s company office is in New Delhi and has four regional engineering offices in Mumbai, Kolkata, Chennai and Vadodara. The corporate has chemistry for petrochemical engineering an overseas office in Abu Dhabi, which caters to the enterprise wants in UAE/Center-East area. It additionally has places of work in London, Milan, and Shanghai to coordinate the actions of international procurement and advertising and marketing.
EIL has two subsidiaries — Certification Engineers International Limited (CEIL), gives providers in the field of certification, re-certification and third-celebration inspection providers. The second subsidiary EIL Asia Pacific Sdn. Bhd. (EILAP), Malaysia is engaged in the enterprise of providing technical providers for initiatives in oil and fuel and different industrial sectors. The corporate additionally had three strategic Joint Ventures. The TEIL Tasks Restricted with Tata Tasks Limited pursues initiatives in oil and gas, fertilizers, steel, railways, power, infrastructure and so forth. Secondly, Ramagundam Fertilizers and Chemicals Limited with National Fertilizers Limited (NFL) and Fertilizer Company of India (FCIL) and Jabal EILIOT Co Ltd, with Jabal Dhahran of Saudi Arabia and IOTL to pursue enterprise opportunities in hydrocarbon and infrastructure sector in Kingdom of Saudi Arabia. A number of the notable tasks executed by EIL are world’s longest deck on single jacket for SHG Platform of ONGC, Jamnagar-Loni Pipeline of GAIL, certainly one of the most important LPG pipelines on this planet and 9 MMTPA Guru Gobind Singh Refinery of HMEL.
For the quarter ended December 2016, the corporate has reported standalone gross sales of Rs 325 crore, down -4.1% from the quarter ended September 2016. On a year-on-yr basis, gross sales have been down eleven.Eight%. The corporate reported web profit after tax of Rs eighty five crore in the quarter ended December 2016.
It gives services in technical consultancy in design, engineering, and project implementation from concept to commissioning for industrial growth in infrastructure and different service sectors. Established in 1959, MECON Restricted was earlier called Metallurgical & Engineering Consultants (India) Limited. It’s a state-owned company beneath the Ministry of Steel of the federal government of India. Actually, the corporate started operations in 1959 as the Central Engineering and Designing Bureau (CEDB) of the Hindustan Steel Restricted (HSL), the primary public sector steel company.
After that CEDB grew as Metallurgical and Engineering Guide (MECON), a subsidiary of the Steel Authority of India Restricted (SAIL) in 1973. It later grew to become an autonomous firm reporting to the Ministry of Steel in 1978. It offers companies in energy, power & setting, infrastructure, oil & fuel, metallurgy and other specialized areas and is the primary engineering consultancy organization in India to be accredited with the ISO 9001 certification.
About Telecommunications Consultants India Ltd (TCIL)
Telecommunications Consultants India Ltd is a state-owned company established in 1978 under the administrative control of Department of Telecommunications, Ministry Underground of Communications. It’s a notable telecommunication consultancy and engineering company and has made its vast and different telecom expertise to many growing nations. It has extended its telecom consultancy and turnkey tasks execution services to telecom operators, bulk users and others in India and 80 other international locations in the Middle East, Africa, South & South East Asia. The success story of TCIL lies in its high quality administration and excellence in venture execution.
The company’s natural and inorganic development has led to multiply its standalone as well as group turnover manifold. In many international locations, it has taken up initiatives in fields of telecommunications and knowledge know-how and is deploying new applied sciences in the field of Telecom Software, Switching and Transmission Programs, Cellular Companies, Rural Telecommunications, Optical Fiber primarily based Spine Transmission Methods etc. TCIL has diversified its operation and has been executing turnkey tasks of energy transmission, rural roads, and civil building.
It’s a consultancy and engineering, procurement & building (EPC) firm which offers built-in and customised options for sustainable growth of water, power and infrastructure initiatives in India and abroad. Integrated in 1969, it is a Mini Ratna company under the aegis of the Union Ministry of Water Useful resource. It’s a techno-business organization, which utilises the expertise and expertise developed in the varied organizations of government of India and state governments.
The state-owned company achieved highest ever profitability of Rs 129.19 crore and secured new business of Rs 1,747.Forty six crore within the financial 12 months 2015-16. It had paid a dividend of Rs 25.25 crore for 2015-sixteen to the government. That is the highest ever since its inception. The corporate declared a composite score of a hundred, which is the best achievable rating as per the MoU analysis system of the ministry of heavy industries and public enterprises.
While the government’s intent to merge the six consultancy companies into Engineers India Ltd is laudable, it is going to face stiff resistance from the Union. The government should stay clear of any roadblocks and go forward with the plan to cut cost and herald operational efficiencies in the lengthy-run.
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