While the debate on disinvestment has taken on a life of its own since the new government came to power, it is at Bharat Aluminium Company (BALCO) that theories about privatisation are being put to the test. This is where it all began. Some 270 km from Raipur, Balco hit the headlines when a 51-per cent stake in the aluminium giant was sold to the Sterlite group for Rs 551.5 crore some three years back. Today, it can serve as a laboratory on the results of disinvestment. The place bears no resemblance to the ageing giant that was sold off three years back. In a strange way, both the management consultant and the labour unionist will point to the latest numbers coming out of Balco and say they have been proved right. The company is churning out more aluminium than it has ever done before—a record 2 lakh tonnes, of which 17,000 tonnes will be exported. At the same time, it now employs fewer workers than it has done for a long time. The staff strength has fallen from around 6,500 to 4,300 as 2,100 workers have taken VRS over the past three years. One particular statistic sums up the situation. Over the next couple of years, the company’s production would have gone up four times while it will be using just about half the workers that it originally employed. It takes no great genius to figure out the impact on the balance sheet. The company that suffered a loss of Rs 25 crore in 2000-2001 and went further into the red—it lost Rs 43 crore the following year—today boasts a profit of Rs 85 crore. This is despite a payout of Rs 60 crore towards VRS last March. The difference lies in the willingness to modernise and to tie pay with performance. But this also means that those that cannot deliver or are surplus to the conmpany’s needs are shown the door. ‘‘The executives enjoy full working freedom to implement their ideas and show results,’’ said a senior official. ‘‘Those who do so are given cash benefits.’’ Meanwhile, the smelter unit has been upgraded and a new boiler installed at the 270 MW power plant. The new management claims to have invested Rs 300 crore in just two years and there is more to come. This is a far cry from the days when funds were sanctioned for modernisation in 1991, only for the plans to be shelved. Balco’s new bosses say they have no choice but to keep their productivity high and their costs low. ‘‘We are getting ready for stiff competition from metal producers within and outside the country,’’ said C P Baid, Balco’s president. The next few years will see the face of the company change even further. As it sets up a second, atomised 3.5-lakh tonne capacity plant, a new refinery (Rs 1,150 crore), two smelter pot lines (Rs 2,875 crore) and a 540 MW power plant (Rs 1,860 crore), the company would have moved into a league it had not imagined in the past. But with the government change at the Centre, those who had opposed privatisation are sharpening their knives for a confrontation. Within days of the ouster of the NDA government, six workers’ unions have served strike notices. Their demands range from seeking job guarantees for the dependants of the workers to wage revisions. ‘‘For the past three years, workers have lived in terror,’’ said Brahma Singh, president of the Balco employees’ union affiliated to INTUC. Also doing the rounds is a memorandum signed by 58 former employees, who say they were forced to accept VRS. ‘‘All senior executives were given targets to cut down their staff. Those who secured the most number of applicants for VRS were rewarded with cash incentives,’’ says one signatory. The management denies pressure tactics. Baid says that 1,600 applications for VRS had been pending with Balco even before the disinvestment process set in. But he agrees that the company would like to lay of staff to cut cost and would not like to keep workers who are not earning their keep. He said compared to the other major aluminium producers, Nalco and Hindalco, who spent less than Rs 7,000 to produce a tonne of aluminium, Balco had been spending Rs 17,000 a tonne till 2002-03. So costs had to be slashed.‘‘We have a plan to cut down 20 per cent staff every year,’’ said Baid. And when the second plant comes up, it will be fully automatic and require just another 400 workers to operate it. The company means business. For the workers, that is not always a pleasant affair.
