The Hindu Business Line : Pondy Govt panel to explore Swadeshi Cotton takeover

EVEN as the National Textile Corporation's (NTC) proposal for closure of its loss-making textile unit in Pondicherry, Swadeshi Cotton Mills (SCM), hangs in balance, the Union Territory Government has constituted an expert committee to assess the viability of taking over the two NTC units - SCM and Bharati Mills.

The Union Labour Ministry is yet to approve of SCM's closure application filed before it by the NTC's Tamil Nadu/Pondicherry subsidiary under the Industrial Disputes Act.

The constitution of a four-member expert committee - under Mr Ragesh Chandra, Additional District Magistrate, Pondicherry, to explore the scope of taking over SCM and Bharati Mills through Pondicherry Textile Corporation - has broadly indicated the pressure being mounted by trade unions to avoid the closure of the 150-year old SCM.

The closure of SCM, assessed as an unviable textile plant, has been in the air for quite sometime.

But the proposal has run into rough weather with SCM workmen putting up stiff resistance to the closure move.

The NTC management had served notices to the workmen that SCM would be closed by June 17, and had offered the workers who did not opt for the voluntary retirement scheme to shift to the nearby Bharati Mills. The NTC subsidiary had filed the closure application under Sec. 25 (0) of the ID Act, which calls for a mandatory hearing by the Labour Ministry with regard to closure of any public sector undertakings; the hearing of the NTC's SCM closure petition was held on June 11 when both the workmen unions and the NTC's TN and Pondicherry subsidiary officials were present to make out their cases. The representatives of the unions are reported to have opposed the move to close SCM.

The Joint Secretary in the Ministry of Labour who conducted the hearing has put off the hearing without specifying the date for next hearing in the wake of the workmen unions pleading that efforts were on to prevail upon the Pondy Government to consider taking over SCM, according to trade union sources.

The sources told Business Line that the workers' representatives had asked for a month's time so that they would be able to work out the takeover of the unit with the help of the Union Territory Government.

The sources further added that the Pondicherry Government's Planning and Research Department had on June 9 came out with the announcement of setting up the four member committee which would go through assessing the viability of the two textile mills and their takeover `if necessary' by the State Government. The committee - expected to go into the annual fund requirement for meeting recurring and non-recurring expenditure - is expected to submit its report within two weeks, which means anytime now.

The NTC management in its closure application has, however, maintained that SCM had remained a perennially loss-making unit whose accumulated loss as on end-March 2003 stood close to Rs 56 crore and its networth is negative to the extent of Rs 60 crore.

The SITRA study had proved that SCM would be an unviable unit. SCM is among the six textile units under the NTC (TN and P) subsidiary identified as unviable and hence to be closed. While five other units were already cleared for closure, SCM is the last one awaiting the orders for its closure.

As for the unions demand that they would be deprived of employment opportunity in the event of closure of SCM, the NTC management had maintained that those who did not opt for the VRS would be given alternative employment in the NTC-owned Bharati Mills.

The closure of SCM tangling for nearly two years now, several workers in the past had availed themselves of the VRS package that had reduced the current strength of the workers to around 230 from its full strength of 2,800-odd workers.