Abad dairy powerless in face on loans

The Bureau for Industrial & Financial Reconstruction (BIFR) had in its last meeting in January ordered closure of the dairy. BIFR had said that for closure of the dairy, the work force should be offered voluntary retirement.

BIFR further observed that the funds for the voluntary retirement scheme (VRS) were to be raised by disposal of land and other assets. However, the state government has also been asked to forward a proposal for rehabilitation of the workers.

BIFR suggested that the company could dispose of the surplus assets of the dairy and use the funds. Acting on this, the then managing director of Gujarat Dairy Development Corporation (GDDC) D. Kishore Rao had submitted in the meeting that the dairy was located on prime land and would fetch about Rs 25 crore.

Against that, GDDC’s losses, by BIFR’s estimates, were Rs 59 crore on March 31, 1997, including Rs 21 crore on the Abad dairy front.

Abad dairy has also taken a loan of Rs 6 lakh from National Dairy Development Board (NDDB) Indian Dairy Development Board(IDDB) for installing new machinery under `Operation Flood,’ which it has failed to repay in the last six years.

Sources pointed out that in the last week of September the GDDC invited tenders to scrap off about 40 odd vehicles owned by Abad including rickshaws, matadors and trucks used for transporting milk. The tenders were invited for vehicles which were over used or were rejected by the engineering section of the dairy. However, NDDB and IDDB had asked the government not to invite tenders for the machinery as this could not be done till the loans were repaid.

Besides, about 540-odd employees of the dairy have not been paid salaries for more than three months. The last time the employees got salaries was in December when the state government had sanctioned the amount on loan to the dairy. A employee said about five months back the government has announced voluntary retirement scheme (VRS) and he along with another 100 odd employees had opted for the VRS. But the government is yet to relieve these employees.

Trouble for Abad started only after Amul entered the Ahmedabad market in the early 80s. Sources said that A’bad supplied nearly 3.5 lakh litres daily before Amul entered the market. But Amul with a sound marketing network soon captured the city’s milk market and dominated it. The supply gradually decreased while in 1997 the total supply was reduced to only 25,000 litres which was supplied only to corporation hospitals and the Sweet makers in the city.

The vice-president of the Abad Employees Union Govind Chauhan has demanded that all employees be given be given VRS and the employees should relieved immediately. Moreover, he said the state government should not sell the dairy to any other private dairy.