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Losses mount at strike-hit Balco

Losses are mounting at the newly privatised Bharat Aluminium Company Ltd (Balco) in Korba and are expected to exceed Rs 1.50 billion due to a month-long strike by employees, a senior company official said.

"The situation is very, very serious. The losses are increasing by the day and would be more than Rs 1.50 billion," C W R Deoras, general manager of the plant, said on Sunday.

Some 7,000 workers have been on strike since the beginning of last month in protest at the federal government's sale of a controlling stake in Balco to private sector metals firm Sterlite Industries.

Deoras said it would now take about six to nine months to revive the plant, during which time there would be further losses. The smelter was shut down on March 9 and there has since been no production-related activity in the plant.

He said about 700 employees who have been voluntarily inside the plant since the strike began were maintaining essential services as well as preventing any leakage of toxic waste from the alumina plant.

Balco, which supplies 15 per cent of India's aluminium output had earlier said that it was losing Rs 4.5 million per day due to the strike.

Test of will

The sale of Balco is viewed as a test of the government's will to press ahead with privatisation, a key element of India's economic reforms launched a decade ago.

India has lined up 27 more state-run firms for privatisation.

Deoras said the decision by the Chhattisgarh state administration, which opposes the privatisation, not to allow the new management to move products from its warehouses to its customers, had also dealt a huge blow.

"We have been asking them for permission but they have so far not got back to us. We are losing our goodwill in the market," Deoras said.

The state administration has refused permission to Balco's management to move products worth about Rs 750 million from its warehouses to customers fearing violence.

Deoras said the management was in touch with the striking unions to seek a solution. "But so far, there has been no positive response from them," he added.

The sale of the state-run aluminium firm has triggered a political storm with opposition parties accusing the federal government of selling the profit-making firm too cheaply.

Chhattisgarh Chief Minister Ajit Jogi who has backed the striking employees has demanded that Balco be restored as a state-run firm.

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