24 closed tea estates to get new owners

24 closed tea estates to get new owners

Kochi: For the first time in 54 years, the commerce ministry has set in motion the process for identifying buyers for the 24 closed tea gardens across West Bengal, Kerala and Assam after taking them over by early September.

The commerce department, through an order from director Raj Singh, has set up a committee to evaluate the proposals to be received for change in management of the closed tea estates, 13 in Bengal, nine in Kerala and two in Assam.

The ministry has already issued notices to the owners under Section 16(E) of the Tea Act, 1953, which states that if a garden remains closed for more than three months, the government has the power to take over them without investigation and find a new owner.

Jairam Ramesh, minister of state for commerce, said that talks with the owners of the other closed tea estates seem to have reached a dead end, forcing the ministry to invoke Section 16(E). “Section 16(E) has never been invoked in the last 54 years. There are no set procedures and we will be writing on a clean slate," the minister noted.

The owners of the closed gardens have been given time until end of August to identify new owners or reopen them. Or else they will be taken over by the government which will pass over the management to new buyers.

Through the latest order of 16 August, a committee headed by O.P. Arya, additional commerce secretary (plantations) has been formed to evaluate the bids of those who intend to take over the estates. Others in the committee include Basudev Banerjee, chairman of the Tea Board, the government’s trade promotion body, the chief secretaries and the finance secretaries of Bengal, Kerala and Assam and Sutanu Behuria, additional secretary in the commerce department.

The crisis in the tea sector in early 2000 when prices plunged led to the estate closures. Of the 14 estates that closed in Bengal between 2001 and 2003, only one has reopened. In Kerala, though 23 estates had closed between 2000 and 2003, six of them reopened by 2003. Attempts by the commerce ministry and the Tea Board of India, begun nearly 10 months ago, led to the reopening of eight of the closed gardens by April.

Ramesh said that in the Ramjorah estate in Bengal, the lease period had ended and so the government was free to invite bids for takeover. In the case of a few other estates, such as Chamurchi, the owners had identified prospective buyers.

“The process of reopening closed tea estates in Kerala is proving to be less cumbersome, compared to Bengal," added Ramesh. This was mainly owing to some of the estates having common owners. The four estates of the Ram Bahadur Thakur Group (1) had reopened, including a factory of the group. However, the reopening of the five estates of the RBT Group (2) look remote though talks have been held with the owners. Manoj Sharma, chief executive officer of the RBT(1) had earlier expressed willingness to take over the management of the other five estates. Three MMJ estates of the Manarcaud family had also opened with a factory slated to open in2008.

Ramesh said that most of the closed estates in Kerala were in Peerumedu in Idukki district, which were suitable for manufacture of high quality orthodox tea that had high demand abroad and the owners were being requested to look at shifting from the manufacture of cheaper CTC (cut, tear and curl) teas. The government has readied a Rs60 crore relief package for the closed estates, which includes waiving all dues to the tea board and defaults under the provident fund. Loans from banks and other institutions of about Rs58 crore are to rescheduled with penalties written off.