Revival brew

Calcutta, April 1: The Union commerce and industry ministry has written to Buddhadeb Bhattacharjee, chief minister of Bengal, urging him to refer to the Kannan Devan Hill Plantation (KDHP) company management model that was used to reopen nine closed gardens in Vandiperiyar, Kerala.

This comes at a time when deaths from starvation in the closed gardens of Jalpaiguri, North Bengal, has been haunting the sector, which is mired in labour problems since many decades.

Concerned about the closed gardens — 20 in Kerala, 16 in Bengal and two in Assam — affecting around 30,000 families, the Union cabinet is also expected to come out with a scheme for closed and ailing gardens shortly.

“We have done endless studies on them (the closed gardens). It is time for concrete action on both our parts,” said the letter sent by Jairam Ramesh, minister of state for commerce and industry, to the Bengal chief minister.

Under the Kannan Devan model, which was initiated by Tata Tea, workers own a 30 per cent stake.

Kannan Devan, a private limited company, has submitted a proposal to the commerce ministry to reopen nine of the 20 closed gardens in Kerala.

The company aims to duplicate its successful revival model.

Kannan Devan said in the proposal that it would manage the sick gardens and revive them in five years. The timeframe will be confirmed after a first-hand study of the selected gardens to see how badly they are affected.

The company will provide ownership to workers and a representation on the board if it buys the gardens or else the government can sell them.

KDHP will charge a fee as a percentage of profits for this period and an MoU has to be signed giving it the first option to buy the estates at an agreed price after five years. This will be at the current price of the gardens plus the investment made for the revival.

The company has suggested that the central government should use the provisions of the tea act to take over the management of the sick gardens and give it to them with a free hand to manage and to fund the management period for revival.

The state government is expected to support maintaining wages at current levels and create special purpose vehicles for the sale of the gardens.

There is an alternate proposal to ask banks to implement securitisation and reconstruction, to enforce the securities interest act and sell gardens.

The banks and financial institutions can then have the same MoU with KDHP to sell and share the proceeds of the gardens.