What happened at the Haldia dock complex in West Bengal last week is likely to be compared with Tata Motors’ decision four years ago to abandon its Nano car project in Singur, less than 40 kilometres north of the state’s capital city of Kolkata. In October 2008, Tata Motors decided to pull out of the small-car project as the state government, then led by the Left Front, failed to provide adequate safety to its employees who were being threatened by a protest movement spearheaded by Trinamool Congress leader Mamata Banerjee. Last week, Haldia Bulk Terminals Pvt Ltd (HBT), a joint venture between Mumbai-based ABG Infralogistics Ltd and France’s Louis Dreyfus Armateurs group, decided to pull out of the Haldia dock complex because the state administration, ironically now led by the Trinamool Congress, failed to provide necessary protection to the cargo handler’s employees against assaults and physical intimidation by retrenched workers and political activists.
Newspaper reports suggest that developments at Haldia are perhaps worse than what happened at Singur. In less than three years since it started operations in 2009 at two of the mechanised berths of Haldia port, HBT had complained of losses, and sought more cargo allocation in accordance with its contract with the port authorities. The dispute that arose out of this was resolved through a court-mandated agreement, which if implemented would have ensured priority cargo allocation for HBT’s berths at the Haldia dock complex. Adequate cargo allocation, however, was not the only problem that HBT faced while executing its 10-year cargo handling contract. The company says it received no support from the local administration in facing the wrath of militant trade unionism after it retrenched some employees — three of its senior employees were abducted and released later with the warning that they should not return to Haldia, a development that West Bengal Chief Minister Mamata Banerjee dismissed as untrue. While HBT claims it followed all labour laws while retrenching its surplus workers, the West Bengal government’s labour department counters this saying that it has received complaints from 275 workers of HBT who were summarily dismissed in violation of rules. This is why HBT’s travails appear worse than those of Tata Motors. The cargo handling company has to deal with a state administration that appears to be unfriendly, in addition to facing an agitation led by workers with allegiance to a trade union organisation affiliated with the current ruling party in West Bengal.
It is now clear that, with HBT deciding to retrench all its employees and closing its operations, the dispute is not likely to be resolved soon. The consequences of such a stalemate in a vital infrastructure area such as cargo handling in the state’s major dock complex will be adverse not only for those who still use the Kolkata port for export or import of their goods, but also for the state’s investment climate. Since she took charge as chief minister of West Bengal a year and a half ago, Ms Banerjee has done little to raise industry’s confidence in her government’s ability to encourage fresh investment in the state and provide an investor-friendly administration. Worse, the circumstances under which HBT has now pulled out from Haldia are likely to scare away even those industries that have investments in the state at present.
