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Corporate Nov 1, 2012

Cargo handler ABG pulls out of Bengal, says Haldia Port unsafe

By Firstbiz Staff

After a month-long impasse, port equipment operator Haldia Bulk Terminals (HBT) on Wednesday finally decided to quit West Bengal over "poor law and order" and "safety" concerns of its employees, prompting industry experts to raise concern over the state's growth prospects.

The immediate trigger for the pull out are a series of incidents, including an "abduction" of some of its employees that the firm claims are aimed at forcing it to leave the state.

HBT,a joint venture of ABG Infralogistics and French Louis Dreyfus Armateurs, claimed the state administration couldn't protect its executives from being assaulted by retrenched workers and political activists.

HBT's decision came a day after Chief Minister Mamata Banerjee dubbed the Haldia Dock imbroglio as "exaggerated".

The West Bengal government sought to downplay cargo handling company Haldia Bulk Terminals deciding to exit the Haldia docks on security grounds, as Congress and the CPI(M)-led Left Front described the situation as critical.

ABG-LDA has sent a letter terminating the contract to Kolkata Port Trust, alleging complete breakdown of law and order in the Haldia port.

"We have decided to pull out from the Haldia Dock Complex," HBT CEO Gurpreet Malhi said in a communication to the Kolkata Port Trust (KoPT) on Wednesday.

Three officials of Haldia Bulk Terminals were allegedly abducted at gunpoint from their homes on Sunday to thwart the Mumbai-based operator from resuming operations at its two berths at the port. They were later released, but no action has been taken regarding the incident. ABG had threatened to suspend operations last month unless it was given a cargo commitment. They were later released. Before the police could take any action on alleged 'abduction' of ABG officials on Sunday, the local ruling party MP, Suvendu Adhikari, was quick to blame the company for 'fabricating' stories and blackmailing .

Even West Bengal Chief Minister Mamata Banerjee refused to admit breakdown of law and order in Haldia. She also claimed that everything was normal at the port and allegations of violence were media concoctions.

The state government and the police have termed the abduction as "cooked-up".

"For us, safety and security of our employees is of paramount importance," Malhi said, referring to the abduction of three officers of the company by a mob Sunday. He added, "Vested interests do not want HBT's operations to resume even though it is in the interests of the state, industry, trade, the Kolkata Port Trust and Haldia dock itself."

Industry experts have compared comparing the situation in Haldia to what happened at Singur, where Tata officials working on setting up the Nano car plant were also threatened by Trinamool supporters. The Tatas too finally pulled out of West Bengal and took the plant to Gujarat instead.

HBT's decision would complicate the situation at labour unrest-hit HDC, which handles an average 14 million tonnes of dry bulk cargo a year, including critical raw materials for eastern region steel plants.

The government, however, said the industry's confidence in the regime was high and dismissed claims of poor law and order situation.

Kolkata Port Trust Chairman Manish Jain took a tough stand against HBT saying its allegation of poor law and order situation at Haldia was "false, obnoxious and unacceptable" and an excuse to "run away".

"If they try to upset the agreement (with KoPT), then we will have to go for punitive action. According to the punitive action, we cannot allow the machines to go," Jain said.

HBT was operating at mechanised berths two and eight at the complex and handled five million tonnes of cargo per year.

The deadlock at KoPT's Haldia Dock Complex over HBT's operations has been continuing since the company retrenched 275 people in September. It said it was unable to operate its berths as its officers and employees were facing repeated threats.

Following the unrest, HBT stopped operations, resulting in KoPT moving the Calcutta High Court for permission to terminate its agreement with HBT.

The Congress and Communist Party of India-Marxist (CPI-M) attacked the Trinamool Congress-led government for "vitiating" the industrial environment.

Newly-inducted union Minister of State for Urban Development Deepa Dasmunshi demanded a Central Bureau of Investigation (CBI) probe into the Haldia stalemate.

CPI-M central committee member Mohammed Salim expressed "shock" over the "irresponsibility" of the state government.

Entrepreneurs and several industry bodies observed that the development would worsen the state's industrial prospect after the Singur fiasco.

Bengal Chamber of Commerce and Industry president Kallol Dutta said: "It is an unfortunate incident and it will surely have a negative impact on state's image."

"If ABG leaves Haldia, the port is bound to lose business, as bigger cargo ships will be heading for other nearby ports where mechanised loading-unloading is available," said Deepak Jalan, president of MCC Chamber of Commerce and Industry.

ASSOCHAM, however, said HBT's decision was hasty and it would "not have any impact on investment flow in the long run."

"But the government should also not be delaying action against those taking law and order in their hands," the chamber's secretary general D.S. Rawat said.

"Did they have any agreement with the state government? Ask the Port authorities," state Industries Minister Partha Chatterjee shot back when asked about the development.

Dola Sen, president of INTTUC, the labour wing of Banerjee's Trinamool Congress, claimed HBT's decision to leave would not affect the state's image for attracting investment.

"It was simply a contractor for cargo loading and unloading. What harm will happen if it pulls out," Sen asked.

She also said the way the cargo handler retrenched 275 workers was against labour laws. "They fired the workers by sending SMSes, which was against any law."

With inputs from Agencies

by Firstbiz Staff

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