Dalmiya’s Leather Pitch

It is the ‘‘world’s largest’’ integrated leather complex, says Dalmiya, ‘‘which, once completed, will change the face of Kolkata.’’ He also knows that the project can change the face of his company as well.

When it bagged the contract for the Rs 300-crore project, the company had about Rs 12.66 crore as its share capital and reserve and surplus. Talking to The Sunday Express, Dalmiya did not deny that the leather complex is a make or break project for him. ‘‘At the moment it is delicately poised. But right now I am badly out of the pocket,’’ he says. The latest status report submitted to the Supreme Court shows his company has invested about Rs 132 crore till date.

The Supreme Court’s verdict on November 22 asking the West Bengal government to ensure that the polluting tanneries do not operate any more in their present locations has been a booster for Dalmiya. Because, it was not only a section of tanners who were complaining of poor infrastructure at the new complex. The state government too, including the chief minister had expressed reservations about the progress of work. Within the government it wasn’t a secret that Dalmiya had the blessings of ruling CPM veterans like Jyoti Basu and Somnath Chatterjee. In fact, tanners in Kolkata had set up a company called Calcutta Tanneries Development Company Ltd in June ’94 at the government’s advice during Basu’s tenure as the CM, that was to be a joint sector venture in setting up the new complex. The move was shelved abruptly in May 1995 when M.L. Dalmiya & Company was awarded the BOT contract for the project.

When Buddhadeb Bhattacharya took over the state’s mantle, he made it clear that there was no love lost between him and Dalmiya. He preferred to go by the company’s performance at the leather complex. In the past year and half, the government had several times issued threats, some veiled, some direct about inducting new partners in the project to marginalise his role.

But the last fortnight virtually changed it all. Several state ministers, including the powerful industries and commerce minister Nirupam Sen certified after a visit to the complex that the work at the leather complex was satisfactory and there is no alternative for tanners but to shift.

Delicately poised he is, nearly 180 acres of land given to the relocating tanneries are priced at Rs 600 per sq m while the cost of development of the land claimed by his company to be over Rs 1,250 per sq m. The loss incurred here will have to be cross subsidised by the sale of the balance land to be priced at a much higher rate and might touch Rs 2,000 per sq m, say officials.

Dalmiya himself explains what he is banking on in the future. Out of 1,100-acre of land, almost 50 percent is to be kept free as per project development specifications. That leaves a total of about 550 acre of land of which 180 acres have already been allotted to the relocating units. The BOT party will be left with another 350 acres of land. This is no mean asset. Located in the fast developing east Kolkata, this prime land is what Dalmiya wants to capitalise on. His plan include — apart from setting up backward and forward linkages to the leather industry — hotels, housing complex and spaces for international brand names in leather (and he is said to be already getting lots of business queries). For Dalmiya the worst is over. It is an empire he is looking at, east of Kolkata.