Reliance laying off staff at its Haryana SEZs

Reliance laying off staff at its Haryana SEZs
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First Published: Mon, Dec 01 2008. 10 05 PM IST
Updated: Mon, Dec 01 2008. 10 05 PM IST
New Delhi: Reliance Haryana SEZ Ltd has begun laying off a majority of around 226 employees hired to set up special economic zones, or SEZs, at Jhajjar and Gurgaon in Haryana as the global financial crisis compels parent Reliance Industries Ltd (RIL), India’s most valuable company, to go slow on such projects.
The termination process started on Friday (28 November), and those asked to leave include employees of vice-president rank, said a senior RIL executive who didn’t want to be named as he isn’t authorized to speak to the media. “They have been given three months’ notice,” this executive said.
Reliance Haryana SEZ is a joint venture between Reliance Ventures Ltd, a subsidiary of RIL, and the Haryana State Industrial and Infrastructure Development Corp. Ltd, or HSIIDC, the state’s industrial development agency. While Reliance holds a 90% stake in the SEZ arm, the rest is with HSIIDC.
Mint had reported on 10 November about RIL’s plans to go slow on such projects because of the global financial crisis and fall in demand for space in SEZs. Analysts say the gestation period in such capital-intensive projects tends to be drawn out, delaying revenue generation, while SEZ promoters have also faced problems in land acquisition.
RIL had reassigned some people at the SEZs to other roles and other projects and discontinued the “services of certain resources, largely comprising of non-performers”, Manoj Warrier, an executive with Neucom Consulting, a public relations agency working for RIL, wrote in an email on Sunday evening.
“The total number of resources affected by this exercise is less than 100. This entire exercise is expected to be completed over the next 45 days,” Warrier said.
Senior Reliance Haryana SEZ executives who were asked to leave confirmed the start of the termination process.
“Around 90% of the permanent employees have been asked to leave,” said a Reliance Haryana SEZ executive who was asked to leave and didn’t want to be identified. “In the first phase, employees from the administration, infrastructure and commercial departments have been asked to leave. Of the 86 executives in the infrastructure division of Reliance Haryana SEZ, around 72 executives have been asked to leave,” the executive said.
The company’s land department has been spared so far, but its employees, too, will be asked to leave in subsequent phases of the termination process, the executive said.
SEZs are industrial enclaves the government has promoted to boost manufacturing by offering fiscal and other incentives to companies that invest in them. Companies wishing to set up SEZs have to obtain initial approval from the government, acquire the land, and then have the zone “notified”, making units based there eligible for the incentives.
RIL’s Haryana SEZs are expected to require an investment of Rs25,000 crore and have provisions for a cargo airport and a 2,000MW power plant. While S.V. Goyal, chief executive officer, Reliance Haryana SEZ, did not respond to phone calls or to the message left on his mobile phone, P.K. Gupta, head of human resources at the company, declined to comment.
“With regards to the project, we have decided to presently focus on getting the requisite permissions, statutory approvals and clearances, transfer of the legal titles along with enhancing the connectivity and working on the financial closure of the project,” Warrier said. “We continue to pursue these critical project requirements for starting the development of the proposed SEZs and are committed to all stakeholders.”
Reliance Haryana SEZ employs around 800 people. Of these, about 226 are company employees, with 574 jobs being outsourced to consultants and contractual workers.
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First Published: Mon, Dec 01 2008. 10 05 PM IST