Ruia threatens to shelve reopening of Dunlop unit

Dunlop India chairman Pawan Ruia has threatened to indefinitely shelve the plan to reopen its Sahagunj factory if supply of electricity is not restored this week.

The recession-hit company had earlier temporarily shut its plants at both Sahagunj, near Kolkata, and Ambattur, near Chennai. But with the rising demand in the the automobile sector, it was decided to resume production. According to Ruia, the Ambattur plant will resume operation from October 19.

As for Sahagunj, there is a problem of clearing earlier electricity bills for the cash-starved company. Last month, Dunlop claimed to have lined up bank credit for resumption of its operation. And entered an agreement to repay the total outstanding electricity bill of Rs 11.5 crore (Rs 115 million) with WBSEDCL, the distribution company.

Accordingly, a letter of credit for Rs 53.77 lakh (Rs 537.7 million) was given to WBSEDCL on September 19. But the latter refused to accept it. WBSEDCL has refused to accept the letter of credit. It wanted an LC drawn according to certain conditions, which the company has yet to do.

Meanwhile, political pressure is mounting on the power company to resume supply. Apart from ruling party representatives, the workers union staged a demonstration at the WBSEDCL's Hooghly office, demanding immediate power restoration. In addition, Union railway minister Mamata Banerjee has also spoken to Ruia on the issue.

Image: Pawan Ruia