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Viability study on NTC mills

Jayanta Mallick

KOLKATA, Sept. 26

THE Union Textiles Ministry has decided to run the viable mills of the National Textiles Corporation (NTC).

The Textiles Secretary, Mr Anil Kumar, told Business Line here that a study was currently being carried out to identify viable mills out of the 104 NTC mills, whose future would be decided by the Board for Industrial and Financial Reconstruction. (There are a total of 119 mills under the NTC of which 15 are out of the purview of the BIFR).

The BIFR had earlier agreed to the Ministry's proposal for a unit-specific viability study. ``The viability of the NTC or its subsidiaries had not been found to be the appropriate strategy,'' Mr Kumar said.

A broad-based proposal involving sale offer to workers' cooperatives, State Governments, private entrepreneurs and permanent closure of mills have been placed before the BIFR by the two operating agencies -- IFCI and IDBI. ``BIFR's view on the proposal i s waited,'' Mr Kumar said.

The sale of NTC mills as also six mills of the National Jute Manufacturers Corporation, the Secretary said, would be bound by three conditions so as to protect the interests of the employees and guard against asset-stripping.

These are: 1) No retrenchment can be made for the permanent employees; 2) If a VRS package is prepared, it has to be in line with the compensation provided to Central Government employees; and 3) The unit has to be run for at least 10 years after the sal e.

Mr Kumar admitted that the employees of NJMC had been resistant to sale proposal. ``We are trying to sort out the misconception prevailing among the workers''. So far, 13 expressions of buying-interest have been received in response to the offer put out by Industrial Investment Bank of India, the operating agency for NJMC. ``As the offer is still open, more bids are expected to come in.''

Last week a pre-bid conference could not be held here in the face of steep opposition from a section of workers. The visit of prospective buyers to the five NJMC mills in West Bengal was also thwarted.

Mr Kumar said textiles exports were likely to be affected by the developments in the US after September 11. ``The economic slowdown in the developed markets has been putting pressure on the exports from India. We are yet to measure the impact of the curr ent crisis on textiles exports. But there are already reports that buyers in US are putting their orders on hold.''

In 2000-2001, the country's textiles exports stood at $5.58 billion.