PROPOSALS FOR REVIVAL OF CLOSED AND AILING CENTRAL PUBLIC SECTOR UNDERTAKINGS IN DURGAPUR, WEST BENGAL

Durgapur, located in the Paschim Bardhaman district of West Bengal is perhaps the only city in the four states of West Bengal, Jharkhand, Bihar and Odisha combined that has the immense potential of leapfrogging as the city of the future. Yet the vast potential is being wasted due to lack of Government initiative and harmful political activity. Needless to say that the principal sufferers are the residents of Durgapur and its vast surroundings, all of whom the industrial city sustains through employment, business and a host of other economic activities. 

Three Central Public Sector Undertakings (CPSUs) that were amongst the vital pillars on which the industrial city grew and sustained itself while providing much needed employment to thousands of people across the country, were shut down in the early 21^st century for having suffered losses over a protracted period of time. The three CPSUs that were shut down were the Mining and Allied Machinery Corporation (MAMC), Hindustan Fertilizer Corporation Limited (HFCL), Durgapur and Bharat Ophthalmic Glass Limited (BOGL). Lack of much needed modernization resulting in failure to keep up with technological changes, inefficient management, certain economic factors and irresponsible trade unionism were some of the reasons behind the sustained financial losses suffered by the three CPSUs. Additionally, in 2018 the Government of India recommended the strategic disinvestment of another ailing CPSU, the Alloy Steels Plant (ASP), a subsidiary unit of SAIL. The move has been temporarily shelved.   

Industries once shut down, does in no way mean that they should be shut down forever. Ways have to be explored to revive them and make them profitable. More than one and a half decade has passed, since the three CPSUs were shut down. And a lot has changed in Durgapur during this intervening period, for which it is imperative to revisit all the three closed CPSUs as also ASP, with some concrete plans for revival. Some of the important points in Durgapur’s changing profile are discussed below.

·         With the gradual erosion of the support base of the Left parties, militant trade unionism is virtually nonexistent in Durgapur these days.

·         The NSSO’s report on employment is a cause of concern. The issue of unemployment has to be addressed by the Government on a war footing. The existing infrastructure of the three closed CPSUs can be profitably utilized for their revival or to set up new industries in their place.

·         Leaving the leftover facilities of closed industries like shed, buildings, machinery, land etc. to rust and rot amounts to non-utilization of available resources. In a state like West Bengal where land for industries is hard to come by and land acquisition becomes a political issue of discontent, leaving industrial lands unutilized for decades after the industries have shut down is nothing short of a sin. If the earlier industries cannot be revived, some new industries must come up in their place. But land and other facilities simply should not be wasted.

·         Durgapur was included in the initial list of smart cities, although it was subsequently excluded. This signifies that it has the basic modern infrastructure on which a smart city can come up. Indeed, there is no dearth of educational institutions imparting quality education at school and higher levels, good hospitals and recreational facilities. Basic infrastructure like power, roads (both internal and NH-2), water supply, telecommunications and railway connectivity are excellent. If there are adequate modern amenities, it is surprising indeed that the same is not matched with infusion of industries through Government initiative.

·         A vital new infrastructure that has come up in Durgapur in the not too distant past, is the Kazi Nazrul Islam Airport, Durgapur. Initially, air services to and from the airport had to be shut down occasionally due to lack of adequate number of passengers. Fortunately, services have become more regular these days and flights are operating to different new routes. The future of the airport and the air traffic industry at Durgapur depends to a great extent on organized industrial growth of the city. Similarly, the land port that exists in Durgapur can also optimally fulfill its purpose with adequate industrial growth.

·         Durgapur has a vast pool of young, educated and professionally trained work force, who unfortunately are forced to leave their city for other far away destinations in search of employment. Any industry in and around Durgapur can be serviced from this local talent pool. Employing the local youth, companies can thereby save the expenses of providing housing facilities, which they would have to incur on employees recruited from outside.

·         Durgapur is generally renowned as a peaceful city inhabited overwhelmingly by law abiding, honest citizens. The law and order situation is generally very good. It is a modern city with a multi ethnic population known for peaceful cohabitation of people from all over the country and even from abroad. No caste and communal clashes have ever been reported from Durgapur.

·         Inspite of its gradual downslide over the years, Durgapur still remains the most developed city in the region. Revitalisation of the industrial scene in Durgapur will definitely act as a catalyst in the industrial development in the adjoining districts of Bankura and Birbhum, which will lead to much needed all round development of the entire region with Durgapur as the epicenter.

·         There is no labor in all the three closed CPSUs in Durgapur, although the land, shed and staff quarters (both in dilapidated condition) and infrastructure like good road connection and water supply still exists. Hence, with none of the baggage from the past to carry, new initiatives can be started from scratch.   

Some proposals for the revival of the three closed CPUs and ASP are given below. The proposals are neither entirely new nor original. They might be inadequate for Durgapur’s revival. But they are definitely something to think over, maybe over again. The one and only issue is industrial revival. If these proposals are partially viable, they may be suitably modified. If they are entirely unviable, fresh proposals may be considered. There is no dearth of experts in our country. But let the Government kindly take the first concrete steps towards industrial revival of Durgapur. If the aforesaid proposals are seriously considered and implemented, the turnaround for the ailing ASP will be spectacular and unlike any industrial turnaround that India has ever seen.   

1)       Mining and Allied Machinery Corporation (MAMC): Set up in 1965 with Soviet help and technology for manufacturing equipments for various mining industries. It slipped into the red in 1992 and was shut down in 2002 on the recommendations of BIFR. 

·         A failed revival scheme: A consortium of Bharat Earth Movers Limited (BEML), Coal India Limited (CIL) and Damodar Valley Corporation (DVC) was formed to revive MAMC. DVC could source equipments and spares for its aging thermal power plants, while CIL will get its equipments for coal mining with the Centre emphasising on even greater volumes of mining of coal. The Centre has to formally approve the consortium’s move. But unfortunately the revival plans are yet to materialise and the reasons for the same are unknown.

·         Alternate proposals for revival: If the consortium has backtracked on its plans and are no longer interested in MAMC’s revival, let the reasons for the same be known. If the viability of MAMC’s traditional mining products is an issue, alternative mining products in keeping with modern times and trends can be manufactured. If it is beyond the financial capacity of the consortium to go into the manufacture of a new line of products, let the Central Government think seriously about selling the facility to one of the internationally renowned manufacturers of construction and mining equipments like Hyundai, Kobe, Komatsu, TATA HITACHI, JCB etc.

·         Assets of the CPSU: The CPSU has its land and shed although most of the machineries are stolen. There are no employees. There is also a sprawling township with residential quarters which only need minor repairs. MAMC and its residential township have good electricity and water connections as well as a good network of roads. Thus a buyer can virtually start from scratch. There is every possibility of international corporations showing interest in taking over the closed PSU. Let some serious thought be devoted to MAMC’s revival instead of letting it rust and rot. If no mining industrial company expresses interest, the Government may contemplate inviting automobile manufacturers.

2)       Hindustan Fertilizer Corporation Limited (HFCL): Set up in 1974 for manufacturing fertilizer from naphtha, production stopped in 1998 and was shut down in 2002 on the recommendations of BIFR. 

·         Revival stalled: It is learnt that revival of the Durgapur unit of HFCL was proposed by converting production from naphtha to gas to be supplied through pipeline laid from Jagdishpur, Uttar Pradesh or from coal bed methane gas from Raniganj, West Bengal. However, no concrete decision has been arrived at and the exact reason for the delay is also unknown.

·         Is land acquisition standing in the way of revival: It is also learnt from certain unconfirmed sources that the Centre had requested the West Bengal Government for additional land acquisition for the sake of the unit’s revival, but the State Government has turned down the request. While I personally discount the validity of such a report, it would be extremely unfortunate if the same is true and Central and State Governments fail to converge on matters of national development.

·         Revival can contribute to agricultural development: The Central Government over the years, has exhibited great concern for the nation’s agricultural sector through increased budgetary allocations. Availability of fertilizer at affordable prices to the farmers is a vital component of the nation’s agricultural development and rural prosperity. In this perspective, there is no plausible reason as to why HFCL, Durgapur should not be revived, as it can play a major role in the nation’s agricultural development.   

·         Assets of the CPSU: Like MAMC, HFCL, Durgapur has its land and shed, though much of the machinery is stolen and the land is now a jungle. The quarters in the sprawling beautiful township are in need of urgent repairs. But there is electricity and water connection. Thus, inspite of all this positives, why should this CPSU not be revived? Should petty politics play overwhelming role in the perpetual shutdown of rich revenue and employment opportunities?

·         Alternate proposals for revival: If the Central Government cannot renew fertilizer production by reviving HFCL, Durgapur, it may consider making the unit a subsidiary to or selling the unit to a reputed Government owned or private national or international fertilizer and chemicals manufacturing company. Mangalore Chemicals & Fertilizers Limited; Zuari Agro Chemicals LTD.; Gujarat Narmada Valley Fertilizers & Chemicals Limited; The Fertilizers & Chemicals Travancore Ltd.; Rashtriya Chemicals and Fertilizers Limited; Chambal Fertilisers and Chemicals Limited; Gujarat State Fertilizers & Chemicals Ltd.; Coromandel International Ltd. etc. are some of the important names in the fertilizer industry that can be considered for the purpose. If fertilizer production is not possible at this unit any more, it may be sold to some prominent chemicals and/or pharmaceuticals company, rather than leaving it to rot.

3)       Bharat Ophthalmic Glass Ltd. (BOGL): Set up in 1972, BOGL made ophthalmic flint buttons (FBs), optical glass items and radiation shielding window glass. Its entire product range were import substitutes and some were of strategic importance. It went to BIFR in 1992 and was shut down in 2006. 

·         Assets of the CPSU: Of all the three closed CPSUs in Durgapur, it is estimated that revival of BOGL would cost the least. The land and shed as also the employees’ quarters in dilapidated condition still exist. There is proper road connection too. Being located within the Durgapur Municipal Corporation area, providing of electricity and water connections are no problem either.

·         A glorious past: The optical glass produced by BOGL was a product of strategic importance and was indigenously developed by BOGL. Radiation shielding window developed by BOGL, used to absorb short-wave X-ray and Gamma radiation, had received national award for import substitution and were used in the nuclear research establishment in Kalpakkam. It is highly unfortunate that the organisation that once played such an important role in India’s ophthalmic industrial self-sufficiency has died such a pitiable death.

·         Inputs for revival: Close interaction with the Central Glass and Ceramic Research Institute, Kolkata can help in the revival of this closed CPSU, while Coke Oven (CO) gas, which acted as a fuel for BOGL can be procured at a concessional rate from The Durgapur Projects Ltd./WBSEDCL.

·         Alternate proposals for revival: If revival of BOGL is considered totally unviable, the Central Government could consider selling the facility to prominent ophthalmic glass manufacturers like Zeiss, Essilor etc.

4)       Alloy Steels Plant (ASP): Proposal for revival of another CPSU, the Alloy Steels Plant (ASP), Durgapur, a subsidiary of the Steel Authority of India Ltd. (SAIL), is another matter that should come up for serious consideration. Set up in 1965, ASP produces a diverse range of stainless and special steels catering to critical end-use by strategic sectors like Defence, Railways, Automobiles, Power Plants etc. 

·         Great contribution to India’s defence sector: The special steel used to make the country’s first indigenously designed artillery gun ‘Dhanush’ which was inducted in the army on 8^th April, 2019, was supplied by ASP, Durgapur. Earlier, ASP had also supplied special steel used in the manufacture of army’s MBT Arjun and the Indian Navy’s INS Vikrant, INS Kiltan, INS Kamorta respectively. Undoubtedly, ASP has played a major role in providing valuable support and self-reliance to India’s defence sector.

·         Strategic disinvestment decision: ASP has been consistently running into losses since many years, with the figure touching 483 crore rupees between 2011 and 2016. Consequently, the Government of India decided to strategically disinvest ASP in 2017, whereby ASP was planned to be transferred to the strategic investor on a going concern basis by way of slump sale through business transfer agreement. The plan had been shelved, which many people believe to be only temporary in view of the elections. Workers apprehend that the elections being over, the Government would now push for disinvestment of ASP once more.

·         Proposals for turnaround: However, the following actions if taken, can turn ASP into a profitable entity, thereby obviating the need of disinvestment.

Ø  Modernization of the plant: ASP has remained largely deprived of major modernization since inception. Considering the last modernization/augmentation of the plant took place as far back as 2012, there is a need for comprehensive, immediate modernization of ASP.

Ø  Merger of Durgapur Steel Plant and Alloy Steels Plant: Both plants are subsidiaries of SAIL and are located adjacent to each other. A merger of the two plants is a very healthy proposition for either of them considering that some of DSP’s outputs can be directly utilized by ASP, while the latter can save substantially on its expenses on sourcing those inputs from elsewhere. Merger would also lead to a wider array of finished steel products, which can be enhanced even more over the years. Since finished products add to the profitability quotient, the merger will be a win-win situation for the unified entity. Optimal utilization of the synergy and resources of each will considerably enhance the efficiency and output of the other.

Ø  Streamlining of the labor force: If considered as utmost necessity, voluntary retirement scheme can be offered down the line for the sake of a leaner and more efficient work force.

04.41 PM, 19^th June, 2019

Bhopal
© Sugato Mitra