Workers' threat forces DMK hand

A day after the Cabinet decided to divest a small stake in Neyveli Lignite Corporation (NLC), Tamil Nadu Chief Minister M Karunanidhi issued a statement supporting a strike called by NLC workers on July 4. This has since been called off.

No less than 10,000 out of the 13,000-strong blue-collar workforce of NLC belong to a DMK-backed union called the Workers' Progressive Front (WPF). This workforce had threatened to join Left-backed unions, which were getting uncomfortably close to AIADMK leader J Jayalalithaa.

The strike affected mining operations and power production in NLC as the thermal power stations were shut down. According to NLC officials, power generation in the 1470-Mw third thermal station in NLC was reduced to 110 Mw.

It would have been brought down to 50 Mw to ensure supply to households, hospitals and other emergency services in the NLC township, while the other two thermal stations were fully shut down.

NLC, on an average, contributes 1,000 MW to the state. Following the strike, this would not have been available.

The Left had already questioned Karunanidhi's doublespeak on privatisation, since he supported privatisation of the Chennai airport and FDI in the telecom sector.

The Left, which is a crucial ally of the DPA government in the state, was also concerned that the entire union agitation would be hijacked by the AIADMK.

"Karunanidhi was also upset about the fact that he called up Prime Minister Manmohan Singh and wrote at least three letters to him and Finance Minister P Chidambaram, but did not hear from them," said a source close to him.

The option of offering NLC workers first preference in purchasing shares of the company made matters worse.

"The combined salary of these workers is not more than Rs 88 lakh, and the government was asking them to raise Rs 1000 crore to buy shares. This had made the mood ugly and Karunanidhi read it correctly," added the source.

"Frankly, it is unacceptable that a government which came to power on the promise of free television sets would be consenting to such a non-populist measure," said the source.

With local body elections in the state slated for October, Karunanidhi's only remaining option was to threaten to pull the plug on the government. With the prime minister's announcement that disinvestment is to be put on hold, the threat seems to have worked.

"Karunanidhi went into a panic. So he exercised his veto. In a coalition government, decisions are a function of who has the veto," a Congress minister at the Centre said.