Red tape forces Mexican company to shift unit from Jharkhand to China

  • B Vijay Murty, Hindustan Times, Ranchi
  • Updated: Jan 07, 2016 10:57 IST
The company’s human development coordinator for India, Saurabh Prasad, said it was forced to pay bribes at various levels to get things done despite adhering to global norms in terms of pollution, licencing and ethics. (Representative Photo: Shutterstock)

India’s loss is China’s gain as red tape and threats forced Metalsa, a global structural component solution providing company from Mexico, to shift its proposed strategic business unit for the Asia-Pacific region from the Jharkhand industrial hub of Seraikela to Beijing.

Metalsa’s move is a blow for Jharkhand chief minister Raghubar Das as he has been stressing on zero tolerance on corruption in his first year in office, which he completed on December 29. The efforts earned him Prime Minister Narendra’s Modi’s praise for pushing development at several business forums.

But the results on the ground are not encouraging; Metalsa is one big victim of the state’s corrupt bureaucracy.

The company’s human development coordinator for India, Saurabh Prasad, said it was forced to pay bribes at various levels to get things done despite adhering to global norms in terms of pollution, licencing and ethics. Worse, local ruffians have allegedly made a habit of extorting money from it for anything and everything.

“The problems are aplenty that cannot be counted on fingers. Fed up, the company decided to shift its strategic business unit to China,” Prasad said.

A strategic business unit is a wing of the parent company that carries the responsibility of controlling the entire business of a particular region. Had the unit come up in Seraikela, it could have created hundreds of job opportunities for the local population, thereby boosting the region’s economy.

The decision of the company, which has operations in at least 15 countries, is seen as a setback for Modi’s ambitious Make in India campaign. Also, it mocks a World Bank report that recently declared Jharkhand as the third among 32 states and Union territories in terms of ease of doing business.

Only two states, Gujarat and Andhra Pradesh, have been rated above Jharkhand in the report.

The situation got industry heads worried too. “Industries are not getting government support to flourish,” said Ram Bangar, chairman, law and order, Federation of Jharkhand Chamber of Commerce and Industry (FJCCI).

Metalsa’s Prasad alleged that the company approached the police and civil administration on several occasions for help but most often it ended up getting a cold response.

“I cannot reveal everything to the press but time to time we do inform authorities about the hardships we are facing in running the existing plant. Unfortunately, the problems persist still,” he said.

A copy of a complaint letter lodged by the company on August 30 and assessed by Hindustan Times reveal how 10 hoodlums, most of them facing serious criminal charges and currently out on bail, barged into the campus, abused guards, misbehaved with woman staff members and demanded extortion money as well as steel scrap material.

Authorities said the accused were still moving freely and are constantly threatening to bomb the company premises and harm officials, four months since the complaint was filed.

“Metalsa is plagued with industrial relation hazards,” police superintendent Indrajeet Mahtha said. “We are committed to providing security to all institutions, companies that are contributing towards development of the area provided specific complaints are lodged with us. We will waste no time arresting the culprits if the company lodges FIR.”

Md Akhtar, one of the accused, denied the allegations and said the company has failed to keep its promise of providing jobs. “Villagers who donated land for the plant are feeling duped and, hence, they resort to peaceful demonstrations occasionally. The company dislikes the protests and frames us in false cases.”

Exodus of companies, at least three in the past three years and withdrawal of FDI in a state that has been miserably failing to contribute towards the national GDP and whose investment has fallen from Rs 1 lakh crore in 2005-06 to Rs 33,000 crore in 2014-15 is not auguring well for Jharkhand’s ruling government.

“This government has failed on all fronts,” said former chief minister and leader of the Opposition, Hemant Soren.

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