The Telegraph
Sunday , August 10 , 2014
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Jessop reopens, doubts linger

Calcutta, Aug. 9: The government today announced the reopening of Jessop & Co. Ltd after assuring the management that it would take care of law-and-order issues, but doubts on the long-term future of the company remained.

Sources said the reopening of the Dum Dum-based Jessop was part of the government’s efforts to reopen closed units before Puja.

The management had issued a suspension of work notice on May 15, citing large-scale indiscipline, regular theft of equipment and sustained agitation by a section of workers, among other reasons.

The decision to reopen the factory came soon after the government told the management that police would organise regular patrols and set up a camp on the premises for round-the-clock vigil.

The mood at Jessop, established in 1788, was one of celebration this afternoon. Around 300 of the 600-odd permanent workers cheered in the presence of industries and finance minister Amit Mitra, labour minister Malay Ghatak, local Trinamul MP Saugata Roy, Calcutta police commissioner Surajit Kar Purkayastha and Pawan K. Ruia, the chairman of the Ruia Group that owns Jessop.

“It’s a new beginning. Production is likely to start in two months after refurbishing of facilities,” Ghatak said.

The management today cleared a month’s salary backlog and announced that another month’s dues would be paid next month. The remaining three-and-a-half months’ backlog will be cleared in 24 monthly instalments.

Some questions, however, remained unanswered.

“They are saying the factory has reopened and work will resume. But the question is for how long?” asked Manab Parui, a cleaner employed with Jessop for 23 years.

The genesis of the doubts lie, perhaps, in the chequered history of the factory.

Following its nationalisation in 1973, Jessop’s net worth eroded through the 1980s and losses added up to several hundred crores. In 2003, the Centre divested its stake in the factory. It sold its 72 per cent stake to the Ruia Group.

A manufacturer of railway coaches and wagons, cranes, road rollers and hydraulic equipment, Jessop’s problems have increased in the recent past with the Ruia Group failing to turn around the factory in 11 years.

“Orders dried up in the past decade and militant trade unionism raised its head. Jessop steadily became an under-performer, compared with the likes of Titagarh Wagons and Texmaco. The Ruia Group has said it has invested Rs 50 crore but the results are yet to show,” a senior government official said.

At the programme to mark the reopening of Jessop, Ruia said: “I hope production will resume soon. We have an order book of Rs 200 crore, which will help sustain the factory.”

Alleged infighting within the Trinamul-led union at Jessop is another area of concern, Nabanna sources said. They said Ghatak was trying to curb the problem.

The unions at Jessop, according to labour department officials, have always been at loggerheads with the management.

Last year, Ruia had proposed a productivity-linked salary and set a production target of four road rollers and one railway coach a month, apparently one-tenth of what Jessop can potentially produce. The unions had rejected the plan.

According to a new agreement, a committee of government, union and management representatives will determine how much the available manpower can produce. The committee will file a report within 30 days.