Thursday 28 Mar 2024

Road block

Govt must intervene more forcefully to resolve mining truck crisis

| JANUARY 07, 2016, 12:00 AM IST

The clash between employees of Sesa Goa and truckers at Bicholim is a sign of a government unable to resolve a dispute and wary of enforcing its writ. The violent clash, the fifth in the last 30 days, is an indication of the crisis faced by the mining industry. This time staff of the company decided to sit in the driver’s seat and form a cordon to ensure that iron ore reached the jetty at Sarmanas. The tactic did not pay off because truckers sat on the road and blocked it. Stones were pelted and about 10 persons from both sides were injured. On the international side, the price of ore is at a low pf $25 per tonne and this has hit the bottom lines of companies. Added to this complex situation is a tax regime that was formulated when prices were $120 per tonne.

Sesa Goa is willing to pay the truckers Rs 8 per tonne per km and Chief Minister Laxmikant Parsekar’s offer to truckers is Rs 9 per tonne per km for the first 10 km, Rs 8.50 per tonne per km for 11-20 km and Rs 8 per tonne for the remaining distance. This was also rejected by truck owners who want a flat rate of Rs 12 per km per tonne. The government would like to see the resumption of mining because it would come out smelling like roses and take a huge financial burden off its back. And the condition placed by miners for this to happen is a reduction is certain category of taxes and rescinding of the district mineral development fund on grounds that it amounts to double taxation. The problem is that this matter is before the Supreme Court and not the government.

No matter how loudly one shouts about profits made by mining companies in the past, the reality of the situation is that no businessman would like to run his business at a loss. The argument for takeover of the mines by the government might look rosy on paper, but in reality it would be a logistics and financial nightmare. To think of a government take over at a time when the government is selling of shares in public sector units to bridge the fiscal deficit is equivalent to being permanently trapped in Utopia.

Somebody has to give in for the ore laden trucks to start moving to the jetties. The mining companies cannot be legally compelled to run at a loss and neither can the truckers, even though it might be pointed out that coal is transported at Rs 6 per tonne per kilometer, which is half of what mine truckers are demanding.

The government, which first thought of providing police protection to those truckers who were willing to transport ore gave up the idea and it is perhaps, this show of weakness that emboldened truckers to harden their stand. There are a good number of truckers who are willing to transport ore at the rate offered by Sesa Goa, but are being stopped by the union.

In this game of one-upmanship there are no winners. Money will not flow in if there is no sale of iron ore and if there is no money everyone dependent on the industry will be poorer. The government must intervene more forcefully and hammer out an agreement between the company and truckers because it has a responsibility to ensure that jobs and livelihoods are not lost.

Share this