TELCO Proposes, Government Disposes

Hansavivek TATA ENGINEERING AND LOCOMOTIVE COMPANY has not yet received industrial licence for its expansion programme and Government has yet to clarify the export clause in its 'letter of intent'. The condition proposed by Government earlier was that the company would have to export 20 per cent of the increase in output, in addition to the present level of exports. This condition was not acceptable to the company. Government is now proposing to reduce the export commitment to 10 per cent of the increase in production over the present licensed capacity. The export obligation will he binding for five years starting with 18 months after the expansion is complete. In the discharge of this obligation, the company may export any of its products. The proposal is acceptable to the company and it is awaiting government stipulation. The expansion at Jamshedpur, to 27,000 vehicles per annum, is expected to be completed by the end of 1976; at Poona, the company expects to set up capacity to produce 9,000 vehicles by the end of 1978. The new alloy iron foundry at Poona is expected to be completed before the end of 1974. With the completion of this programme, the company will be in a position to undertake further expansion. Meanwhile, the machine tools division is striving to manufacture many types of complicated special-purpose machines, hitherto imported, to serve the needs of future expansion. The new chairman, S Mool- gaokar, complains that the company's efforts at maintaining the quality of its assets will be adversely affected by Government's decision to withdraw the development rebate after May next. TELCO has requested Government to include the automobile industry in the list of industries eligible for initial depreciation allowance of 20 per cent. During 1972-73, TELCO produced 21,779 commercial vehicles as compared with 25,075 vehicles in the previous year. Production was affected, in the earlier months of the year, by heavy absenteeism. Towards the end of the year, power shortage affected the operations not only of the company but also of its ancillary suppliers. Prices of commercial vehicles were increased in April 1972 and again in April 1973. Value of spare parts sold increased by Rs 69 lakhs to Rs 15.04 crores. The excavator division produced 91 excavators against 69 previously. A manufacturing licence was secured to double capacity of the press-tool division which provides tools and dies for the expansion project. TELCO provided know- how to Tata Precision Industries, Singapore, for the design and production of machinery and tools. In payment for this it has received about Rs 7 lakhs in the form of shares, representing 10 per cent of the total equity capital of TPI. The company will also receive royalty at 3.5 per cent of net sales