Is GIDC going belly Up

1st published in Heraldo Nov 2019

We have seen an iconic and well run airline suddenly tank, the “Jet Airways” story is well known, what is not clear yet is why a well run airline with all it flights going full, with dedicated staff who ensured the airline was on the top of its job, suddenly tanked. Indications are that the owners conspired to defraud the airline and thus it bled to death, for any enterprise bleeding to death means that the funds required to run day to day operations are syphoned out leaving nothing to run on. Loyal and dedicated employees are left stranded and flyers left in a lurch when one fine day, the airline finally stopped operations. Till today not a single person is held accountable, speculation is rife that the founder Naresh Goyal is responsible but that means nothing to the employees who are not paid, flyers who still wait for refunds on cancelled flights, creditors awaiting payments and ofcourse banks (read taxpayers) waiting for their money or is a write off a given. Should it not be imperative for the powers that be to act quickly and recover the money and clear the dues of those effected at the least if not be able to revive the airline?

The recent news report that GIDC is unable to fund its new industrial estates due to paucity of funds is alarming and is indicative of another Jet Airways in the making with even more serious ramifications. The two estates Panchawadi and Latambarcem have been on the cards for a while now and land allotments have already been made. However infrastructure is far from being anything but ready. Can you see the plight of those entrepreneurs who were allotted land in  these estates. At the Vibrant Goa inaugural, the CM promised fast approvals in future, but what about those in the pipeline.

We will not talk about the new industrial estates announced as the land has not been acquired and given the new acquisition rules, GIDC’s empty coffers and no Government funding possible, this announcement will remain on paper for a while. However at present no entrepreneur is effected.

At the recently concluded Verna Industries Association, the Industries Minster, Mr. Vishwajit Rane and GIDC Chairman Mr. Glen Ticklo, displayed serious intent to bring GIDC and the industrial climate in Goa on track. They were keen to sort out the financial woes of GIDC. Mr. Rane said the Government would try and auction 5 lacs square meters of land as that was necessary to tide over the financial crunch, he also promised allotment of lands to those companies of repute who would also give ancillary suppliers business. Mr. Ticklo promised faster decisions in GIDC. These are welcome and entrepreneurs must not just watch but work actively with Government to ensure it is a reality.

One disappointing aspect is the fact that the Government feels that “looking ahead” is the best option. This means that mistakes have been made and since they were made by previous dispensation nothing can be done to recover the situation and thus let bygones be bygones.

Consider the following bad decisions taken in the past, lower transfer fees and delayed payment fees not collected from the transaction involving the now Dy CM Mr. Kavlekar and Watson. Maybe Mr. Kavlekar should voluntarily pay up in the interest of Goa and development of Goa and set the example for good public behaviour. There is the SEZ land allotment which has now been reversed and GIDC has borrowed heavily to pay back the promoters. Why is there no action against the GIDC officials and promoters who conspired to cause a loss to the exchequer? Infact this transaction is going to put a lot of pressure on GIDC with almost 1.16 crore interest a day burden. This can be the proverbial last straw on the camels back if something is not done quickly.

Then there is the surreptitious transfer of Metastrips illegally to a logistics company. The GSIA led by Mr. Shekhar Sardesai had led a strong fight against the ills of GIDC and got the rules modified to prevent allotment of industrial land to commercial projects. Despite this rule in place the Government transferred almost 2 lac sqm in a day, not withstanding the fact that the land was under lien  to a bank, and the transfer fees which is wrongly calculated was not fully paid. This happened a day before the elections results, is it not strange because normally no government work gets done, under the guise of election code. Lastly there is a huge backlog in collections of lease rent, even as plots are illegally sub leased. Who is responsible for monitoring the situation?

While the above transactions cannot be reversed because of cumbersome procedures, what GIDC and Government can do is 1) recover the dues as per the rules 2) penalise officials involved in these transactions which have caused a loss to the exchequer where applicable. 

These actions will have two effects: one, promoters will hesitate to short change GIDC in collusion with officials in future and two, officials knowing there is a consequence will make sure they follow the rules in force and deliver as required. RIght now, everyone knows nothing happens and so they merrily do what is required to feather their own nest at the cost of the exchequer and GIDC.

Industry Associations must join hands with the Government and GIDC and work out solutions because if the GIDC goes the Jet Airways way, the effects will be felt on each and every unit in the industrial estate and that will be devastating. Given we have a responsive government in power, this appears to be the best time to make a change and salvage GIDC. The writing is on the wall, lets read it and act.