Leather units shifting, at last, from Dharavi

STATE UPDATE/MAHARASHTRA

Shabbir Sheikh owns a leather dyeing unit at Dharavi, one of Mumbai's largest slums. His unit is illegal.

He doesn't pay local taxes (he bribes the civic authorities a fraction of the sum he'd have to pay as taxes) and has an illegal water supply connection.

Five years from now, he will have to shift his business out. That's because Dharavi is now being developed into a residential-cum-business district.

More to the point, the state government has finally decided to shift polluting industries out of Dharavi and set a five to seven-year deadline for them to move out (ceramic pots and pans, food processing units and garment manufacturers will be allowed to stay on at Dharavi).

Sheikh says mournfully: "We set up our business here over 10 years ago. Our buyers come here and pick up our products, which they then export."

Sheikh is among the owners of 400 leather businesses and 30-odd leather processing units who will have to shift out of Dharavi. They have a place waiting for them "" at the 80-acre Ambernath Export Promotion Leather Complex (MEPLC), set up at a cost of Rs 36 crore in 1997.

Last fortnight, the Dharavi Leather Goods Manufacturers' Association (DLGMA) met officials of the Maharashtra Industrial Development Corporation (MIDC) to book space for its 200-odd members. (The complex was jointly financed by MIDC, which spent Rs 22 crore on it, and the Centre, which footed the rest of the bill.)

That enquiry represents a triumph of sorts for MIDC, which has waited for seven long years to relocate Dharavi's leather belt. But Dharavi's leather men had declined to shift to Ambernath, located 65 km from the heart of the city.

Their reluctance to shift is explained by Sheikh's fear that costs will jump. "If we shift to the industrial zone at Ambernath, our costs will go up and we will not have a competitive edge any more." Translation: he'll have to pay taxes, among other things.

But now that Dharavi's leather men have no other option, they have accepted the inevitable. Says DLGMA secretary Sambhaji Mahajan : "For the last two to three years we have been negotiating with MIDC for suitably prices plots for our leather manufacturing members to buy. Over the next couple of weeks this should become a reality."

Says MIDC's joint chief executive officer (environment) R K Das: "We even reduced the plot rates from Rs 750 per square metre to Rs 350, less than MIDC's input cost of Rs 520. Already, four big tanneries from New Delhi and Kolkata have booked plots in the park. We are hopeful that the reduced land rates combined with the state of the art infrastructure created by MIDC will encourage more local entrepreneurs to buy space here."

Another attraction: MIDC offers water at the rate of Rs 18 per cubic mili litres, lower than in Karnataka (Rs 20), Gujarat (Rs 22), Delhi (Rs 24.50) and Andhra Pradesh (Rs 30).

The four tanneries that have taken up plots in the complex are In Leather from New Delhi, Exemplan Chemicals, Olympic Tannery and Hupson Tannery (all from Kolkata).

Another 10 leather manufacturers from outside Maharashtra and the state government's Sheep and Goat Development Corporation have also descended on the MEPLC.

But at least one of these out-of state leather manufacturers complains about the slow progress made at Ambernath.

He doesn't want to be identified but says: "It has been two years since I purchased the plot thinking that the park would develop fast. We expected it to become a hub of activity following the Supreme Court ruling to extern tanneries and leather manufacturing (read polluting) units outside city limits.The Ambernath facility fits the bill in all ways and more. For instance, the availability of raw materials (animal hides) is plentiful in Maharashtra and Gujarat. And we were told that the Dharavi leather manufacturers, for whom the park was originally conceived, would also shift here. This is yet to happen."

He says that till the big leather units are housed at the Ambernath leather park, the common effluent treatment plant (CETP) cannot be made operational to meet the requirements of only a few.

When told that around 200 Dharavi leather manufacturing units are procuring space in the park, he exclaims. "More should come, more big ones. This is an interesting development, but I hope it won't be another five years before the leather park becomes a hub of activity and trade for leather manufacturers."

The leather park has been carved out of an additional MIDC 507-hectare zone. The 80-hectare leather zone can house nine large and medium tanneries, six small tanneries, 10 leather chemical manufacturers (medium and small), five hide warehouses, 20 large and medium leather products and ancillary units, 40 small such units and 400 tiny units like Sheikh's.

What is more, it has bus terminals, an upscale hotel for overseas visitors, a helipad, exhibition centres, communications centres, banks and so on.

Small wonder, then, that Dharavi's leather men have succumbed to the lures of the Ambernath leather complex.