PSU IN MEDIA

Govt mulls merger of 6 consulting firms in the EIL

  • by Psu Connect
  • Date: 09-02-17

New Delhi. The government is considering the merger of half a dozen state-owned consultancy firms such as Engineering Projects (India) Ltd with Engineers India Ltd (EIL) to create a mega consultancy player that can take on the might of global giants such as Bechtel. 
 
Taking a cue from the budget speech of finance minister Arun Jaitley, officials said, "Merging an array of consultancy firms into Engineering India can result in providing consultancy across the spectrum of projects and would create more value for stakeholders." 
 
There are close to a dozen PSUs that provide a range of consultancy services and there is a scope of merging some of them to create a company of global standards. 
 
"We see opportunities to strengthen our Central Public Sector Enterprises (CPSEs) through consolidation, mergers and acquisitions. By these methods, the CPSEs can be integrated across the value chain of an industry. It will give them capacity to bear higher risks, avail themselves of economies of scale, take higher investment decisions and create more value for the stakeholders," Jaitley had said. 
 
While EIL is the biggest state-controlled consultancy firm providing engineering consultancy principally focused on the oil and gas and petrochemical industries, Engineering Projects (India) provides turnkey execution of projects in the infrastructure space. 
 
MECON provides technical consultancy and project implementation in the infrastructure and services sectors. In the telecom space, there are companies such as Telecommunications Consultants (India Ltd) and WAPCOS, which may be on the merger list. 
 
The merger could reduce inefficiencies across the sector. It would also create an entity that is better placed to compete globally, he said adding that such a consolidation would give the new entity much stronger bargaining power for projects. 
 
Meanwhile, the government is scouting for asset valuers to undertake valuation of two unlisted PSUs - Projects & Development India Ltd (PDIL), and Hindustan Prefab. TELEHRAPH

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