Mamata threatens to take over Duncans tea gardens

Trouble erupted at the Duncans' estates after operations came to a halt in the last few months

West Bengal Chief Minister Mamata Banerjee on Tuesday said her government would take over non-operational tea gardens of Gouri Prasad Goenka-led Duncans Industries Ltd.  The company’s management has been facing a Criminal Investigation Department inquiry.

Addressing a public meeting in North Bengal’s Alipurduar, Banerjee said, “If Duncans cannot run estates, they can quit. We will either hand over to someone else or the government will run them. The workers should not be betrayed.”

Duncans has 14 estates in Dooars, Terai and Darjeeling in North Bengal, producing 14 million kg. About 25,000 workers are associated with the estates and ahead of the Assembly elections next year, the government has taken a tough stand on the issue.

Industry representatives said it was possible that the state government was contemplating taking over the estates. Earlier this year, the government had auctioned five tea gardens under the West Bengal Tea Development Corporation.

Trouble erupted at the estates after operations came to a halt in the last few months; eleven workers had allegedly died following the closure. Business Standard could not speak to Gouri Prasad as his mobile remained switched off all through Tuesday. On Monday, the company had informed the stock exchanges that Gouri Prasad’s son Shrivardhan Goenka had resigned from the board of the company. The investigation is being initiated on the basis of workers’ complaint about non-payment of wages and provident fund dues.

Gardens in North Bengal have been under pressure with tea prices showing downward trend and input costs going up. “The yield in Dooars is typically low and the problem gets compounded because it is primarily not of exportable quality. Dooars is nestled between Assam and Darjeeling, where both have high wage cost structure, but that tea is of exportable quality,” an industry representative explained.

 “Over a three-year period, tea prices have increased three-four per cent per annum while wage costs have increased 42 per cent in three years and input costs 10 per cent. But Duncans apart, only four-five gardens are closed in Dooars, though industry representative pointed out, “Some are on the brink.” West Bengal accounts for around 27 per cent of India's total tea production.

For the quarter ended June 2015, Duncans reported revenues of Rs 8.41 crore and a net loss of Rs 20.57 crore.