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BUSINESS: BALCO PRIVATISATION
Back In Business
The agreement that ended the 67-day strike at BALCO isn't
final yet with each party offering its own interpretation
By Neeraj Mishra
The strike has ended,
but not the uncertainty. Though the sound of the hooter at 6 a.m. on May
9 brought workers back to BALCO's Korba plant after 67 days of shutdown,
none of the three parties involved in the negotiations-the BALCO unions,
the Chhattisgarh Government and Sterlite Industries-is sure what the final
shape of the peace agreement will be. Not only that, the state Government's
case against the sale of the company to Sterlite still awaits a decision
in the Supreme Court. This after the strike has already dealt a loss of
Rs 100-150 crore to BALCO.
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| RISING
HIGH: BALCO's Korba plant comes to life after the end of strike |
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What's clear from the settlement hammered out
late on the night of May 8 is that all the three parties have decided
to dilute their erstwhile polemics to arrive at a compromise. "The
strike had to end after the Supreme Court intervened. But what is important
is that a message went out that there was something fishy in the deal.
No other PSU can now be sold without transparent guidelines," claims
Chhattisgarh Chief Minister Ajit Jogi. It was the same Jogi who had claimed
in March that he would not relent unless Sterlite's majority stake in
BALCO was diluted.
The trade union leaders too claim credit for
setting the privatisation process in order in their own way. "We
have shown the way to the employees of other PSUs which are on the block
for disinvestment," remarks L.N. Soni, a union leader affiliated
with the All India Trade Union Congress (AITUC). Sterlite Industries,
which bought a 51-per cent stake in BALCO for Rs 551.5 crore, is hoping
that the worst is over. Says Chairman Anil Agarwal: "It was the biggest
challenge of my life. It's like buying a second-hand car. Sometimes you
have to spend money on unexpected repair of such cars."
The ball for the agreement was set rolling by
the Supreme Court on a May 8 deadline for acceptance of its suggestion
that workers go back to work with two months advance interim payment,
to be adjusted against their future salary. The Korba Collector K.D.P.
Rao took the initiative to call a meeting between the Sterlite management
and the workers on May 7. "The labour unions had provided me a list
of 25 demands. I only had to persuade the BALCO management to discuss
them," informs Rao. After an initial face-off, the BALCO management
led by Managing Director S.C. Krishna and 35 leaders of the five unions
that supported the strike finally sat down to hammer out a compromise
on May 8. The 12-hour discussions finally yielded some agreements, most
of which are not yet final.
Union leaders claim that 24 of their 25 demands
have been met. But a closer scrutiny shows that this is not the case.
For instance, Soni claimed that the management has agreed to treat the
days lost in strike as working days and no deductions will be made in
wages. But the management claims that the interim payment it has agreed
to make is to be adjusted against future salaries, unless the Supreme
Court rules otherwise when the case come up for hearing. The management's
logic is simple: payment of wages for days of strike will set a bad precedent
for its other plants. Unions also wanted an assurance that no worker will
be transferred from Korba to BALCO's other plant at Vidhan Nagar in West
Bengal or to malco near Chennai which is also owned by Sterlite. BALCO
has agreed to freeze transfers for a year and assured against "mala
fide transfers". The company has also undertaken not to retrench
anybody (see box: The Agreement).
Intriguingly, while these agreements have been
arrived at, the state Government is still fighting a case in the Supreme
Court against the very sale of BALCO to Sterlite. Its claim: the Fifth
Schedule of the Constitution prohibits sale of lands owned by tribals
and the entire BALCO plant at Korba is on tribal land. That makes the
sale unconstitutional. Sterlite claims that it is being unfairly singled
out whereas companies like Daewoo and Essar too have been given tribal
land. Jogi admits that Daewoo had signed a contract with the Madhya Pradesh
Government, but is now winding up in Chhattisgarh. He is also examining
the mining lease of Hindalco and six other companies. Moreover, while
unions affiliated to INTUC and AITUC have called off the strike, a few
workers associated with CITU are yet to join work.
Agarwal concedes that in the end he and all
others related to the deal "will have to accept whatever the Supreme
Court rules". For him BALCO is still a good bet. "It's no longer
viable to set up a new aluminium plant anywhere in the world. The cost
of building up infrastructure is just too prohibitive. Our experience
in turning around aluminium plants (MALCO) makes us confident that we
will be able to make BALCO a world-class aluminium company," he claims.
As for Jogi's postures, the Sterlite chief dismisses them as political
compulsions and hopes for the chief minister's cooperation in turning
around the company. A desperate hope or incorrigible optimism?
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