The Hindu Business Line : `Delay in land development led to demise of many Mumbai mills'

THE delay in allowing development of mill land was "without question" one of the reasons why most of Mumbai's cotton textile mills had not survived. This had led to dwindling of workforce from 2.5 lakh workers more than a decade ago to approximately 25,000 jobs today, according to Mr Ness N. Wadia, Deputy Managing Director, The Bombay Dyeing & Manufacturing Co. Ltd.

Despite its best efforts, by 2001 "Bombay Dyeing had established a debt of Rs 900 crore due to textiles... because we had to modernise and borrow and we had an operating loss of Rs 105 crore... And we've only survived in Bombay because of our other divisions."

He said that between 1993 and 2001, the company retired 200-400 people almost every year, retrenching 3,200 workers last year. "In 1993, we had about 10,000 workers, we are now down to 2,500-3,000 workers."

Mr Wadia said that under the 1991 Development Control Regulations mill owners had no incentive to develop their lands because a large part of it would have gone to the BMC and MHADA. Only a few mill owners, such as Modern Mills, Phoenix Mills and Kamala Mills, chose to develop their lands then.

However, the modification of DCR 58 significantly increased their share and a great number of mill owners opted to develop or sell their lands.

The sale or redevelopment also meant that workers and financial debts could be paid. He estimated that over Rs 1,500 crorehas been paid to workers.

"You had defunct cotton textile mills in the heart of the city getting worse. Large tracts of land, which can be used to benefit the community at large — residential, retail, green space, low income housing. Nothing happened. So in 2001, when this amendment came out, it was a big benefit for mill owners and everyone else."

He added that under the 1991 law the company was allowed to develop 15 per cent of its land and use the proceeds to modernise. However, while the company did apply for permissions it was stalled in 1996. He said not moving to cheaper production sites had also hampered the company. He compared manufacturing costs in Mumbai with those in Vapi, Gujarat — the average cost per worker in Mumbai was Rs 10,000 over Rs 4,000 in Vapi; power costs Rs 4.25 per unit in Mumbai over Rs 3.8 in Vapi; while water per litre is Rs 45 in Mumbai and Rs 15 in Vapi.

On the public interest litigation regarding the development of mill land, pending with the High Court, Mr Wadia said: "The environmentalists state that Bombay has lost out... I beg to differ... Mumbai got nothing earlier. Please show me in Phoenix, Kamala, Modern, Matulya or any of the other mills... where has the public community benefited? Not one place." He added that roughly 70 acres were developed between 1990 and 2001.

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