The Hindu Business Line : Dunlop’s Sahagunj facility halts on power supply cut

Kolkata, Jan. 1 Dunlop India’s Sahagunj facility has come to a grinding halt once again. West Bengal State Electricity Distribution Company (WBSEDCL) has stopped supplying power to the facility from December 24.

According to Mr Moloy De, Managing Director of WBSEDCL, the power supply was disconnected as Dunlop had failed to submit an irrevocable letter of credit and the revocable letter of credit against which power was being supplied so far was revoked by the bank concerned.

“As per law we have to provide connection to industry against only irrevocable revolving letter of credit or bank guarantee. Though Dunlop had not submitted the same, we continued supplying power to the factory to help revival of the company. As the letter of credit is now revoked by the bank, the company is asked to submit the irrevocable LC for restoration of supply,” Mr De told Business Line.

The Dunlop management, however, described the incident as unfortunate. “There is no denying that the LC was revoked by Axis Bank on December 20 followed by disconnection on December 24. We have approached WBSEDCL with requisite LC for one month’s revolving credit twice on December 29 and 31 seeking restoration of supply. However, WBSEDCL now wants the company to deposit one year’s forward payment in advance for restoration of the same,” said a senior company spokesperson.

The company today moved the Calcutta High Court challenging WBSEDCL’s decision.

Having re-opened in October 2006 (after almost eight years of closure) this is the second time operations have come to a halt at the facility. In June 2007, production was stopped for a few months reportedly to carry out further refurbishment and repairs.

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