The thumb rule for companies, including the cement companies when there is a diesel/petrol hike, is to revise the freight rates. But, Adani group lowered the freight rates instead of making any hikes.
Two rounds of reconciliatory talks between Gautam Adani-led cement companies management and striking truckers failed to make any headway have evoked fresh fears in the industrial sector and raised fallout concerns on the overall investment climate in the state.
Industrial associations, primarily based in Baddi-Brotiwala-Nalagarh claim that the two-month-long deadlock between the transporters and the cement company is neither in the interest of the state nor investors.
Rajendra Guleria, President of Baddi-Barotiwala-Nalagarh Industries Association, in a letter written to Chief Minister Sukhwinder Singh Sukhu has raised concerns about the closing of industrial units in the state owing to the higher cost of transportation of raw materials and finished goods. In his letter, Guleria recalls how the industrial association once had to approach the High Court in a matter relating to truck unions.
“The transportation cost is a worrying factor as also is the cartelization of the transport in Himachal Pradesh. The transport cost is almost 40 percent higher than in the rest of India, even in the hills. This has rendered the industrial sector highly unsustainable” he pointed out.
Meanwhile, the transport unions are not ready to budge on their stand.
“The transport business has also become highly unsustainable due to the high cost of vehicles, fuel, and spare parts. The thumb rule has been that whenever there is a diesel/petrol hike, companies, including the cement companies, have to revise the freight rates. But, Adani group lowered the freight rates instead of making any hikes. Thereafter the company chose to shut down both their plants” Naresh Gupta, President of the Federation of Truck Unions stated.
This week, Ultratech cement – which owns a cement plant at Baga, barely a few kilometers away from Adani group’s Darlaghat and Barmana cement plants, hiked the freight charges from Rs 10.58 to Rs 10.71 per quintal per kilometer. The truck unions are now asking why doesn't adani also follow the same norm and accept their demand.
The truck unions assert that accepting lower freight rates would make the business unsustainable. “How will we survive and repay the loans to the banks? Around one lakh persons are facing a livelihood crisis due to closure of the cement plants” Gupta alleges.
Last week, the unions had offered Rs 10.20 per quintal per km during their negotiations with the company representatives. But, the meeting could not break the deadlock. They have refused to agree to Adani’s offer of Rs 9.95 per quintal per km made during bilateral negotiations.
“Today, we are told that Chief Minister Sukhwinder Singh Sukhu will be back in Shimla on Sunday evening and there could be a fresh round of talks with the unions to reach some compromise. We are keeping our fingers crossed. The solution will be found only if the representatives of the Adani group agree to our offer. We have resolved not to accept anything below Rs 11 per quintal per km. There is a plan to intensify the agitation from February 20” says Ram Krishan Sharma, a union leader.
Having watched the situation for nearly 59 days, Guleria expressed the need for early resolution of the issue by persuading the companies to resume operations and also reach an amicable resolution with the truckers.
Guleria, in his letter also took cautioned the state government against supporting only a section of the transporters under the garb of “ sons of the soil” and ignoring the concerns of the investors who also belong to the same land.
“Sir, we also believe in the concept of co-existence with the son of the soil, but it should not be unidirectional towards the son of the soil. The business has become global and such practices of cartelization do not exist anywhere in the world. It is very painful to close any business after investing crores being in existence for decades” he wrote.
He further added, “Incurring losses continuously is more painful and unsustainable for the investor. There are some examples in the BBN also about investors shifting their business to other states from Himachal Pradesh due to the higher cost of transportation in the state”
When contacted by Outlook, Naresh Chauhan, Principal Advisor (media) to the Chief Minister said, “the government is very keen to see that the impasse ends at the earliest, the truckers resume their business and also the cement plants get back to functioning as usual”.