The Centre's tax sop for MSME's notwithstanding, ancillary units catering to the needs of Central Coalfields (CCL) are shutting down due to lack of orders.

While CCL points to a quality issue, the association representing the ancillaries claimed that the units were perfectly capable of producing quality materials but that the PSU was deliberately withholding orders.

According to preliminary estimates of CCL Ancillary Industries Association, of the 76 ancillary units established in 1983 across Ranchi, Ramgarh and Daltonganj, 56 have shut and around 20 are on the verge of closure. Over 1,000 workers associated with these units are now out of work while several others are likely to be unemployed too.

"All spare parts and small components required to run mining equipment is being purchased from outside and local entrepreneurs are suffering without any purchase orders," claimed Ashok Srivastava, the president of the association, adding that while the Centre was focusing on the development of mirco, small and medium enterprises across the country, the Coal India subsidiary seemed unperturbed by the crisis.

Srivastava said that the entrepreneurs expected work orders from CCL as they had set up the ancillary units after a lot of formalities overseen by a committee comprising members of CCL, Ranchi Regional Development Authority (RIADA), district industries centre (DIC) and MSME Development Institute and financial institutions.

Explaining the formalities, Srivastava said that 76 units were declared ancillary units of CCL after proper inspection.

"The inspection was done after entrepreneurs running small scale units responded to a newspaper advertisement asking them to participate in the selection process under which their capacity to produce spare parts would be judged," he said.

CCL CMD Gopal Singh could not be contacted for comment, but its GM (material management) A.K. Thakur denied the allegations. "There is no question of ignoring ancillary units of the state. They are being given purchase orders," he countered, but added that there were issues of quality.

"We need products according to our specifications. When the ancillary units fail to provide the same we have to purchase from outside," he said.

Srivastava opposed Thakur's contention, saying the ancillary were capable of providing quality products. "This (quality) can be judged only when the CCL gives trial orders which it deliberately not given out for a long time," he alleged.