Three NJMC mills to be shut

The Board for Reconstruction of Public Sector Enterprises ( BRPSE) has recommended closure of three Kolkata-based units of the sick public sector National Jute Manufactures' Corporation (NJMC).

The mills are National Jute, Alexandra Jute and Union Jute Mill. In parallel, it recommended revival of three other units of NJMC, called the Khardah Jute, Kinnison Jute Mill and RBHM Katihar Jute mill in Bihar.

NJMC sources said, Union Railway minister Lalu Prasad Yadav had taken active interest in the deliberations of Apellate Authority for Industrial and Financial Reconstruction ( AAIFR) and BRPSE for revival of the Katihar unit.

NJMC subsidiary Birds Jute and Exports Limited ( BJEL) would also be revived on BRPSE's recommendation. The recommendations were made on the basis of reports prepared by the textile ministry appointed operating agency Industrial Development Bank of India (IDBI) and internal assessments.

At one stage AAIFR has set aside NJMC's revival case and left it to the discretion of BRPSE and other government agencies. National Jute produced 120 tonnes of jute goods per day (tpd), while Alexandra produced 35tpd and Union 35tpd.

Khardah and Kinnison produced 65tpd and 82tpd. Katihar, a comparatively small mill, produced 30tpd. All the six units of NJMC stopped production in 2004. With net worth becoming negative due to huge accumulated losses the sick PSU was referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1992.

NJMC's accumulated loss during that time was Rs 3500 crore and outstanding by way of government loans and other financial support was Rs 6000 crore. The entire NJMC workforce accepted the government sponsored Voluntary Retirement Scheme (VRS).

Between 2006 and 2007, around 16,000 employees of NJMC have accepted VRS. The government earmarked Rs 978 crore for the VRS. Of the amount, Rs 325 crore was meant for VRS and Rs 208 crore kept for paying off bank loans and other statutory dues like provident fund ( PF), ESI and gratuity of employees of around Rs 135 crore, Rs 30 crore and Rs 49 crore respectively. NJMC officials claimed all workers were paid their dues.

NJMC currently had 1400 employees of which 1100were clerical staff and 290 high and middle-level officers.

One officer claimed, "The money earmarked for officers is lying unutilised as the government is yet to work out a VRS formula for us. We are being deprived of wage revision under Clause 13 of the Sick Industrial Companies Act ( SICA) and this has created a resentment and blocked things".