Financial Daily from THE HINDU group of publications
Monday, Feb 18, 2002
Industry & Economy
Jessop unions urge Bengal to buy Centre's stake
KOLKATA, Feb. 17
THE unions of the engineering PSU, Jessop & Co, have asked the West Bengal Government to acquire the 74 per cent stake in the company being offloaded by the Centre.
Anger seemed to be the overriding emotion among workers at the Dum Dum factory of the company on the northern suburbs of the city. "Through our concerted efforts, Jessop had just begun turning around and had a gross positive margin of Rs 2.09 crore in the first 10 months of the current fiscal," they said, adding that railway transport was one of the strategic areas which could not be divested.
In a letter to the Chief Minister, Mr Buddhadeb Bhattacharjee, the Joint Forum of Unions and Associations of Jessop alleged that the Centre was making preparations to sell the 100-year-old engineering company at a low price. "We understand that the Government has decided to keep a reserve price of Rs 17 crore. The valuation of assets of Jessop is more than Rs 250 crore," the letter said.
The forum told Business Line that the company had at least 70 acres of land at its Dum Dum factory, of which 5.5 acres were sold to the Metro Railway recently at Rs 15.5 crore. "This land is now valued at Rs 1.8 crore per acre," they said, adding that "with five flats in upmarket localities and a 34,000-square feet engineering building, Jessop is a gold mine of a real estate."
The unions also reminded the Chief Minister that the company's head office in the central business district of the city was bought by the State Government at a price of Rs 27 crore three years ago.
Available information suggests that Ruia Coatex, with an offer of Rs 18 crore, has emerged as the highest bidder. Efforts to confirm this information drew a blank as Ministry officials as well as the top brass of Bharat Bhari Udyog Nigam Ltd, now camping in Delhi, preferred to maintain silence.
Mr R.P. Singh, Chairman, said from New Delhi that only the first round of meetings took place on Saturday and that he was not in a position to comment.
However, employees of the company are up in arms against the sale saying that they would not only launch a series of protest rallies from Monday but also withdraw all co-operation that they had extended to boost the company's production.
It may be mentioned that at a time when the group engineering companies under BBUNL had failed to reach their production target (between April and November 2001), Jessop had actually exceeded its target by 41 per cent, with a gross production of Rs 40.34 crore.
Jessop, which specialises in production of wagons and EMU coaches, produced 18 EMU coaches valued at Rs 18.2 crore in the April-November period in place of the targeted 13 valued at Rs 10 crore.
The salaries and other statutory dues of the workers are a huge backlog.
Jessop, which now employs 1,500 workers after paring its workforce through several rounds of VRS, have a wage arrears of Rs 23.08 crore which included a PF component of Rs 14.8 crore.
Many among Jessop's workforce, who have retired, are yet to receive their PF and gratuity dues.
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