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Konark Jute Mill may be privatised
12
Feb '10
Rather than shutting down the sick Konark Jute Mill, the Orissa government has opted to privatize it. Board of Industrial Development Corporation of Orissa Ltd (Idcol) and the existing owners of the mill will take a final decision with regards to demand for higher wages from workers, before proceeding further with the process of privatization.

In the meantime, the State government has decided to carry out negotiations with Piyush Suppliers, the company which has presented an offer for acquiring the unit through the Company Court, in accordance with government's terms and conditions.

The decision was taken at an important meeting officiated by the State Finance Minister, Prafulla Chandra Ghadai. While addressing the press subsequent to the meeting he informed that over 800 workers employed in the unit are insisting on higher compensation.

The unit's total loss, inclusive of its debt of Rs 6 million to farmers has touched Rs. 240 million. Moreover, amidst other liabilities the company is also accountable for payment of statutory dues of ESI and EPF amounting to Rs 70 million.

Ghadai added that, as the payment of enhanced compensation to the workers is subject to Idcol's financial strength and hence its panel would consider the matter prior to reaching a conclusion.

He said, the government will initiate efforts to continue running the unit rather than shutting it down and that if the bid of Piyush Suppliers varies with government's terms and conditions, then they may summon fresh bids for sale of the unit.

According to the sources, the production at the Konark Jute Mill is bare minimum. The unit's former workforce of 1500 has been trimmed down to 800 workers, subsequent to the induction of voluntary retirement scheme (VRS). Of total 200 looms in the unit, just 40 looms are operational and has never been run at full capacity till date.

Fibre2fashion News Desk - India

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