Hilla Tea Estate

Background
Hilla tea estate, located in Nagrakata block behind the Nagrakata TE is owned by the public sector undertaking West Bengal Tea Development Corporation Limited (WBTDC Ltd.). It has a lease area of 709 hectares, of which less than half (310 hectares or 44% ) is under tea. It has 779 permanent employees of which 713 are daily rated workers, while the rest are factory workers, staff and sub-staff. The total population of the garden is 3049 as per the census report. In 1972, the estate was closed for 18 months, during which period 300-350 people died of starvation. Workers were reduced to begging in the neighbouring gardens. The garden was taken over on 1st December 1979 by the WBTDC Ltd.

Management Problems and Losses

The main concern of the workers on the estate is that gradually the estate is becoming sick. As proof of this, they offered figures of falling green leaf production as given below.
2008 2009 2010 2011 average 22% as tea green tea in lakh kgs 17.02 17.04 15.27 14.57 15.975 made 3.51

They have also heard that the new Government plans to hand over the garden to the private sector. Their fears are further fuelled by the fact that the lease of the garden has lapsed about 6-8 months ago , but has not been renewed by the State Government. Newspaper reports confirmed their fears. After a cabinet committee meeting on 23rd May 23rd 2012 , the Industries Minister Shri Partha Chatterjee announced that the Government was spending Rs.13 crores annually on the 5 gardens owned by the WBTDC. He stated that the Government would be reducing its equity stake in the gardens and that they would be going in for a joint venture for the revival of the gardens. He also stated that
"Whatever we do with regard to revival, we will do it after taking care of the interest of the existing workers in the tea garden."1 On May 28th 2012, he stated that We are trying hard to reduce the amount of financial loss first and then try to make all such units profit-making companies."2

As per a Comptroller and Auditor General (CAG) report 3 on the functioning of the WBTDC Ltd for the period 1997-98 to 2001- 02, West Bengal Tea
1

Economic Times , May 23rd 2012 Economic Times May 28th 2012

Report prepared after a New Trade Union Initiative Team visit on 5th and 6th August 2012

Development Corporation Limited (Company) was incorporated in August 1976 with the main object of purchase/ takeover of economically viable tea estates for carrying on the business in plantation, manufacture and sale of tea. The Company took-over the ownership of four sick tea estates abandoned by the erstwhile private owners while it developed one tea estate in the district of Darjeeling and Jalpaiguri. However, the Company did not evolve any corporate plan for making these tea estates viable. The main points about WBTDC Ltd and Hilla TE that the CAG report mentions are as follows:-

There was a lack of good corporate management. For example, as on 31 March 2002, all the 10 directors of the WBTDC were nominated by the State Government, of whom only two (including the Chairman) were from tea industry, six were civil servants and one each was a Member of Parliament and a scientist. During the period under review, Government appointed four Managing Directors for duration ranging between 2 and 32 months. Further, the Company did not appoint any whole time Secretary. The Company had no plan on how to make the estates into viable entities, despite 26 years of existence. As on 31st March 2002, the Company had finalised its accounts up to 1994-95 and has prepared its provisional accounts up to 1996-97. The Company received 70% of the Plan Fund it had applied for from the State Government , and of this Plan Fund, 69% was diverted to operational expenses affecting development work in the estates. During 1997-2002, the Company spent only 8 per cent (Rs 0.57 crore) of total plan fund (Rs 7.46 crore) for new plantation. Only in Hilla TE, plantation area was increased marginally by 38 hectares during this period. The poor working results, as analysed in the audit report, were mainly attributable to low productivity of estates arising from old tea bushes, absence of replantation/ infilling, high employees cost and realisation of lower sales price in auction

Comparison of the 2002 CAG report with figures provided by the tea workers for 2011 show the following: Debt equity ratio for the WBTDC has improved from 4.60:1 to 2.33:1 Of the total land, available land under tea has decreased from 348 ha or 49% in 2002 to 310 ha or 44% in 2011 The five years average in 2002 for the period 1997-2002 for made tea was 2.93 lakh kgs per year. This has increased to 3.51 lakh kgs per year (the average for four years from 2008-11) at present. Young tea of 10 years or less was 141 ha or 40.5% of total tea land in 2002. It is now 170 ha or 54.8% for bushes of 8 years and less. Similarly, of over 50 years old bushes were 207 ha or 59.5%. It is now 140 ha for bushes over 80-100 years or 45.2%

Audit Report (Commercial) for the year ended 31 March 2002 at http://saiindia.gov.in/english/home/Our_Products/Audit_Report/Government_Wise/state_audit/recen t_reports/West_Bengal/rep_2002/com_CH2C.pdf

Report prepared after a New Trade Union Initiative Team visit on 5th and 6th August 2012

Even the CAG report of 2002 shows Hilla as being one of the better performing estates amongst the five owned by WBTDC. The 2002 report shows that though Hilla TE, also reported operational losses during 19972002, in 1999-2000, it earned a meagre operational surplus of Rs 6.55 lakh. The workers are of the same opinion they feel that about 80% of the present Government subsidy of Rs.13 crores was going to the Rangmook Cedars tea estate. The earlier CAG report seems to confirm this, as that also shows the Darjeeling estate as being the most loss making. They were also of the opinion that managers who had worked for their garden, had earlier in collusion with higher officials looted funds of the garden. The Hilla workers strongly feel that bad management practices are responsible for the losses in their garden. These include leaving a large part of their estate vacant, lack of irrigation, not giving pesticides in time, no replacement of old bushes. They are also opposed to the garden going into private hands, as with Government ownership, at least workers are paid regularly and there are no dues for them. They feel with a little bit of effort and some investment ( they said a plan for Rs.40 lakhs had been submitted to the Government), it was possible to get the garden back on its feet. They were also ready to participate in a joint management committee along with the management to ensure better functioning.

Other Problems
In terms of other problems, there are about 50 labour quarters that need immediate repair. Many of these have been damaged by elephants. However, they have not been compensated by the Forest Department, which claims that the house damage on a private estate has to be given by the estate management. There is also a severe drinking water problem in the labour lines. There are 4 tubewells for drinking water. About 400 families get piped water under the Sajal Dhara programme , but this is also only for 6 months in the year. In some of the labour lines (4 No line, 5 No line and Mandir line) workers have to walk 1-2 kms to get water from a river nearby. A large part of the population depends on the water of open wells. While these are disinfected regularly by the estate hospital staff, there are still large numbers of diarrohea cases on the estate, along with many malaria cases. There are no arrears for any kind of labour dues at present.

Conclusions and Recommendations

The Hilla TE seems to be heading for privatization, though the workers do not seem to be in favour of the same. In fact, though the workers will be the most affected by this, none of them have been consulted on this issue. The estate seems to have been mismanaged by the officials who were appointed by the Government of West Bengal to manage the estate. It is also not incurring huge losses at present and it is possible with some amount of care and investment to revive it. Though WBTDC may be incurring heavy losses as a whole, not much of this has been contributed by the Hilla TE. Most Report prepared after a New Trade Union Initiative Team visit on 5th and 6th August 2012

importantly, while workers have fairly severe problems of drinking water and housing, there are no pending dues for the workers. In these circumstances handing the estate over to a private owner would be fraught with risk for the workers. They would be going from the Government, an employer that provides them their dues, to a private employer who may make things worse for the workers. If one looks at the behaviour of employers in many of the estates that are tethering on sickness in the industry, the chances of workers being left high and dry with huge dues and of the garden being stripped by an unscrupulous employer are quite huge. Such incidents have been taking place regularly before the eyes of the previous and present Government without any pro-active action by the Governments. It is therefore suggested that the Government should seriously consider retaining ownership of the Hilla TE . However, the WBTDCs method of management should also be improved and some capital for investment in the estate should also be arranged for. The workers should also be asked to cooperate in the recovery, especially as they are ready to be part of a joint management committee if needed.

Report prepared after a New Trade Union Initiative Team visit on 5th and 6th August 2012