Adani Group cement plants shut in Himachal: What is the row about?

The sudden suspension of operations at two Adani Group-owned cement plants in Himachal Pradesh has not only left around 25,000 families in the lurch but also brought development works in the hill state to a halt. Even as the government issued show-cause notices to the two cement companies owned by Adani Group on Friday, no solution is still in sight to the impasse. So, what is the row about? Here’s an explainer.

Origin of the impasse

The Adani Group acquired the ACC Cement Plant at Gagal in Bilaspur district and the Ambuja Cement Plant at Darlaghat in Solan district only in September. However, the company has been complaining about the high freight rates for quite a while.

Transportation rates are generally high in the hills, as fuel consumption is higher. However, with the plant management’s talks with transport unions in the state coming to a naught so far, the group on Thursday suddenly decided to suspend operations at the two plants indefinitely.

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Even though the company has cited transport cost as the reason, many believe it is a vengeful move against the new Congress government in the state. The Congress’s major poll promise was to reduce cement rates in the state, which is a major issue.

Adani Group’s demand

Currently, the cement transportation rate is Rs 10.58 per tonne per kilometre (PTPK) in hilly areas and Rs 5.38 PTPK in the plains. The company has cited a report titled “Fixation of freight rates of goods carriage in Himachal Pradesh” made by a permanent committee to demand a freight rate of Rs 6 PTPK. The company has claimed that it is incurring losses due to the steep transportation costs and finding it difficult to compete in the market.

Transporters’ argument

Hindustan Times quoted Jai Deva Kaundal, the president of Solan District Truck Operators, Darlaghat, as saying, “What will truck owners earn if they agree to these rates (Rs 6 PTPK), as fuel consumption is higher in the hills?”

Who has been affected?

Around 25,000 families that directly or indirectly depend on the cement plants to earn a living are now staring at uncertainty.

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According to HT, 530 regular employees and 450 contractual employees are employed at the cement plants. Besides, around 3,800 truck operators work at the Barmana cement factory and around 2,000 work for the Darlaghat factory. All of them will be jobless overnight if the plants shut down.

Apart from them, 600 mechanics and repair shops between Bilaspur and Swaraghat and small eateries in the area depend on the truckers.

Apart from unemployment, the closure of the plants may lead to a cement shortage. Cement from these two plants is supplied not only across Himachal Pradesh, but also to Punjab, Haryana, Gujarat, Maharashtra, Chhattisgarh, and West Bengal.

As the Himachal government’s cement godowns ran out of stock on Saturday, it decided to buy cement from UltraTech, the third largest cement producer in the state. The government needs 6,000 tonnes of cement daily to carry on with its various development works.

What has the state done?

The state government on Friday issued show-cause notices to the companies for shutting down operations at the plants without prior intimation.

However, Chief secretary RD Dhiman has also admitted that the row is between the companies and the truckers and they have to find a solution. Dhiman has held several meetings with labour, transport, and industries officials to break the deadlock but to no avail.

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Even as the Himachal Pradesh committee of the Centre of Indian Trade Unions (CITU) protested outside the DC office in Shimla on Friday, the state Communist Party of India (CPI) unit urged the government to file a criminal case against the group.

According to the CPI, cement companies in the state have earned huge profits by arbitrarily raising cement prices over the past two years.

Truck unions and Adani Group representatives have held two rounds of talks in Bilaspur and Solan but no solution has emerged so far.

(With agency inputs)