Shifting Of Mumbai Iron & Steel Mart A Blunder

BS: Do you feel that the Centre's shifting of the local Iron and Steel Market from south Mumbai to Kalamboli, Navi Mumbai, has been an act that has proved futile?

Bakulesh Vora: Truly speaking, the whole process of shifting the Iron & steel market to Kalamboli has been proved a blunder for the government and the steel trade. It was an ill-conceived scheme by short sighted politicians and rigid & callous bureaucrats.

Plus the inexperience and ignorance of traders is also to be blamed.

While the largely political decision of decongesting the century-old south Mumbai markets was appreciable, the implementation of the scheme was marred by indecisiveness, lack of co-ordination between different government agencies and lack of understanding of ground realities of the trade.

 

Traders were offered land through their associations, as an alternative place for storing their material, instead of bringing it in south Bombay. They were lured by the so called cheap prices of land which they found attractive as the land prices in south Bombay were very high at that time.

Though they had reservations about going to a place 50 kilometres away, in a remote and underdeveloped area, having no infrastructure like railways, power, roads, water and telephones, they agreed to store their material, in the larger interest of the city, hoping that the government will in due course provide at least the minimum facilities.

However, the real problem started in 1983, when government enacted the Bombay Metropolitan Region Act, 1983, (regulation of location ) making it compulsory for wholesale traders to shift from Bombay to Kalamboli within a time frame.

It was then that traders realised that they were duped by the government which blocked their money in plots and warehousing and then forced them to shift there. This initiated an altercation between the government and the traders, with the latter demanding facilities to enable them conduct their business from Kalamboli.

Even after 15 years, Kalamboli is not on the suburban map. Power is provided only upto the substation, the roads constructed are not suitable for carrying heavy steel material and potable water is

available at an exorbitant price, which itself reflects the inefficiency & lack of co-ordination of concerned government agencies, mainly CIDCO & MSEB etc.

Unfortunately, due to frequent changes of ministers & secretaries of urban development ministry, no definite guidelines were set for different implementing agencies. This resulted in every agency sticking to its jurisdiction.

For example, CIDCO insisted that its role was over once the plots were allotted at the offered price and that they were not responsible for providing asphalt roads and power.

Whenever, the traders approached the government, they were asked to first shift and then put forth their demands which was ridiculous.

In spite of the total indifference by the respective governments, traders have on their own invested huge amounts in the purchase of residential and warehousing plots, constructed boundary walls and huge office complexes amounting to nearly 70 crore and have clearly proved their intentions to go and operate from Kalamboli. Even the present chief minister promised to allot Rs 4 crore out of 16 crore required for road construction a year back, but till date not only a single rupees has come.

In the meanwhile, the whole scenario of steel trade has drastically changed in last to 6 years. The prominence of Mumbai as a distribution point is lost as other centres around have developed.

Steel manufacturers, both government & private, have opened their stock yards at different consuming centres due to excess production. This has resulted in automatic decongestion in South Bombay.

BS: What is the present status of the iron and steel market?

BV: Despite all problems explained earlier, 90% of the trade has been shifted to Kalamboli, because the main producer's stock yards are situated there, and the traders have no alternative but to go and operate in an underdeveloped area.

So one can safely say that the trade has shifted. The government has failed to understand this and is repeatedly asking the trade to shift.

Under the present recessionary situation, warehouses are a luxury very few traders can afford as the material is easily available from the stock yards & private manufacturers. Hence, the traders are now stuck up with warehouses which they can not sell to any one except steel merchants.

Traders, on their part, have repeatedly suggested to the government to first widen the usage to include small scale industries based on iron & steel, which in turn will need power and other infrastructure. Secondly, it should immediately define terms for the iron and steel and the wholesale and retail trade.

Lastly the government will have to provide power & suitable roads at their cost which traders can not do on their own.

BS:What is your opinion on the government's policy vis a vis the market.

BV: Historically, the traders were a vital link between the consumers and manufacturers in an era of controlled economy, serving the consumer by supplying them material on the spot, on credit and other related services.

Manufacturers were concentrating on production while traders had taken over responsibilities of distribution.

After the decontrol of steel and liberalisation, manufacturers started offering these facilities themselves, minimising the role of traders.

The introduction of the new Mod vat system was the final death blow, which drastically reduced traders. Nearly 70% of traders who were registered with the central excise have surrendered their registration. Lastly, the dumping of imported material from different countries have affected the domestic manufacturers since they are not able to compete.

BS: What are the problems faced by the traders and what, in your opinion, should be done to mitigate the problems?

BV: I have already enumerated different problems faced by the traders from different quarters. My view is that government should consider the trader as a vital organ in the distribution network and in this light, should treat them at par with the consumer while offering prime quality material. Secondly, the old system of gate pass should be re-introduced so that more and more traders can offer their services to the consumers as in the past., Thirdly, handling charges in Mumbai, which are very high at present, should be reduced through proper legislation. An anti-dumping duty is the need of the hour and should be enforced without fear or favour.