The much awaited revival of Travancore Rayons Limited, Perumbavoor, is apparently entering its final lap.
A proposal to revive the industrial unit which had been the lifeblood of Perumbavoor is expected to come before the Cabinet soon.
If the rayons unit storms back into the industrial scene in Ernakulam, it will become a trendsetter in the field of industry in the State. Travancore Rayons Limited will then pave the way for the revival of many industries in the State.
Situated on over 70 acres of land on the banks of the Periyar, the unit was set up in 1946 in the private sector on leased land of the government. The company, manufacturing biodegradable cellulose-based viscose filament yarn and cellulose fibre, started production in 1950 and made profits till 1974. However, inadequacies in marketing of products and power cuts led the unit into the red.
On the verge of closure, the unit found a saviour in the State government which stood guarantee for loans of about Rs.20 crore to revive the company. The company was locked out in 1984. The closure of the rayons unit, the pride of Perumbavoor during its heyday, dashed the hopes of hundreds of families living in and around the town. Many workers were left to eke out a living by taking up odd jobs outside; scores died in penury. However, two years later the company reopened at the initiative of the government.
It was referred to the Board for Industrial and Financial Reconstruction (BIFR) in 1986. However, efforts to revive the unit did not fructify. Later, a rehabilitation scheme, sanctioned by the BIFR in 1989, was implemented under the joint promotership of the government and a consortium of financial institutions and banks to revive the company.
In 2002, BIFR declared the scheme had failed. It referred to the Kerala High Court for winding up the unit. The company management and trade unions approached the Appellate Tribunal for Industrial and Financial Reconstruction for a reversal of the BIFR order. But they did not succeed.
As years passed by, the debt burden crossed Rs.100 crore. The financial institutions involved in lending to the unit, under the leadership of IDBI, wanted to rope in a promoter for the company. The Coimbatore-based NDEE group came forward and a memorandum of understanding was signed in 2004 when the United Democratic Front government was in power. The promoter was expected to clear the dues including that of the employees.
As the NDEE group failed to make progress in implementing the proposals for running the unit, the LDF Government which succeeded the UDF government began negotiations with the Elanjikkal group. The group reached an agreement with banks and financial institutions as well as with trade unions. The court finally ordered the wind-up in December 2008, which was later suspended as the company sought more time for revival.
The management invited global expression of interest from prospective companies to take over the unit. The UAE-based Midland group came forward, but later abandoned the plan. A plan to takeover the company was floated during the tenure of the previous LDF-led government. The decision is now being carried forward by the present government.
The government is in the process of settling the outstanding issues and working out modalities of the proposed takeover of the company by the Kerala Industrial Infrastructure Development Corporation (KINFRA).
However, the planned takeover is a vexed issue as the government owns only 37 per cent of shares in the company. Now, clearing the liabilities arising out of provident fund and gratuity arrears of about 1,000 employees and dealing with the mounting interest on the loans taken from banks and financial institutions has been posing a formidable challenge to the government. In fact, the takeover issue has been going through long-drawn discussions that seem to end nowhere.
After marathon talks with banks and financial institutions in recent years, an understanding for a one-time settlement was arrived at. Top officials involved in the discussions said the government had aimed to resolve the matter by the end of the last financial year. However, the deadline could not be met owing to the complex problems the issue has run into.
With no allocation made in the budget, it was difficult for the departments concerned to find finance for implementing the proposal.
The social security of the company’s employees and their families is now stake and the government is duty-bound to protect lives. “I get calls from people describing their plight; some threaten to commit suicide if a settlement eludes,” said a top official involved in the ongoing exercise for takeover.
One of the high points of the prolonged efforts is the unity shown by different trade unions. They have come together, resolved not to rebel and have sought an end to the impasse. The opposing political parties too have come together to find a solution. These are positive signs for the government to capitalise on. The unit is now being taken care of by Kinfra.
The employees are being given monetary assistance as an interim measure as part of the takeover deal. Five acres at the site have been allocated to the KSEB for establishing a 220 KV sub-station. An information technology park is planned to be set up in the land after disposing of the old machinery.
