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PSUS:
TEMPLES OF DOOM
On
The Wrong Foot
Tafco is a virtual gold mine in real estate. Its 176-acre complex has
an estimated value of Rs 400 cr.
By
Sumit Mitra
TANNERY
& FOOTWEAR CORP
Nationalised: 1969; HQ: Kanpur; Product: Footwear; Public investment:
Rs 297 cr; Wage bill in 1998-99: Rs 8.07 cr; Net worth: -Rs 281.87 cr
If
Kanpur is a graveyard of public-sector undertakings (PSUs), Tannery and
Footwear Corporation of India (TAFCO) stands as the most decrepit of its
tombs. The pity is that the century-old shoe company has a colourful history,
having put generations of British soldiers on the march in battlefields
ranging from Europe to China.
TAFCO was
incorporated out of Cooper Allen and North West Tannery, founded in 1882
by British investors Sir William Earnshaw Cooper and Sir George Allen
on the south bank of the Ganges in Kanpur. The duo introduced the western
method of tanning, set up large assembly lines on floors spread over two
huge sprawls by the river, and, by 1883, it became the leading supplier
of shoes and saddles to the British Indian Army. By 1900, it began mass
manufacturing for civilians, without losing its edge in military supplies.
Its Flex brand of shoes had become popular in India two decades before
Bata was a household name.
The British
owners left with Independence, and it took the Indian successors no more
than five years to make the units sick beyond repair. In 1969, when the
units were nationalised and renamed TAFCO, the consideration that weighed
with Fakhruddin Ali Ahmed, the then industry minister, was not its future
viability but the fact that the employees-mostly Muslims and Dalits-were
a potential vote bank of the newly split Congress party led by Indira
Gandhi.
None of
TAFCO's 1,368 employees talks of re-starting production, which, after
petering out over the decades, came to a standstill with the Kanpur Electricity
Supply Administration cutting off its power lines for non-payment in the
1990s. At TAFCO's administrative block, powered by a diesel generator,
the buzzword now is VSS, or voluntary separation scheme. It cannot be
called a retirement scheme because of a stay order on VRS from the high
court. There is also a stay on BIFR's winding-up order under the Companies
Act, 1956. Now the Government wants the employees to be retrenched under
the Industrial Disputes Act, with a VSS package more liberal than what
is prescribed under the law. "We have given notice to employees,
but the response is poor," says P. Gauri Shankar, a director of the
Bharat Yantra Nigam (BYN) who has, since May 1, been given the additional
charge of TAFCO. Operating from BYN headquarters in Allahabad, he has
seldom been present in TAFCO's prize room for the chairman and managing
director, the only one to have an air-conditioner connected to the generator.
The VSS
is unlikely to attract the employees, who come to the work place only
to sign the register. Many of them are housed in the 600 residential quarters
that the founders had built. The salaries, though irregular, are guaranteed.
VSS is made further unattractive because there hasn't been a pay revision
since 1987. "The staff are expecting a better severance package,"
admits divisional manager S.C. Shukla. It's a tall order, considering
the average monthly salary of Rs 4,916, which is the highest in the industry.
However, keeping the company on the oxygen of state funds, after having
spent Rs 298 crore, borders on necrophilia. Once freed from its legacy
of manufacturing, the sprawling 176-acre TAFCO complex will be prime real
estate. Situated near the river bank, its present market value is estimated
to be over Rs 400 crore. The British certainly had an eye for location.
Loss
Spinner From The Raj
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INDIA TODAY Deputy Editor Swapan Dasgupta voices the despair of a community that Jyoti Basu forcibly converted into a diaspora in his 23 years of zero-contribution rule. 
