Adani Cement Proposes Freight Mechanism Amid Standoff With Himachal Transport Unions
Adani Cement asked for allowing companies to make operational decisions regarding transportation, as is the case in other states.
Adani Cement Ltd. has written to the sub-committee looking into exorbitant freight rates in Himachal Pradesh, proposing a mechanism for resolution of the issue.
The letter dated Jan. 19, viewed by BQ Prime, came as the company's production facilities in Barmana and Darlaghat remain closed amid disagreement with the state's transportation unions over freight rates.
The Barmana facility is operated by ACC Ltd., while the Darlaghat one is run by Ambuja Cements Ltd. Adani Cement had acquired both cement players from Switzerland-based Holcim Group in September last year.
"We are forced to close our operations after the transport unions adopted an unworkable position on the freight rate and distribution model," Adani Cement wrote, in the letter decrying the conduct of transport unions.
"The impasse has caused not only significant economic loss to the state but also immense hardship to all stakeholders, particularly small businesses, retailers, dealers, petrol pumps, truck drivers, loaders, small eateries, our employees, and the general public."
In the proposed solution, Adani Cement suggested fixing optimum distance per annum for freight calculation at 50,000 km. To make the transition easier, the company suggested a staggered arrangement spanning three years, with optimum distance for the first year pegged at 40,000 km, for the second year at 45,000 km, and the third year at 50,000 km.
The Adani Group firm also called for reducing the number of deployed trucks to 550 from the current 3,311 over the next three years. It also requested a moratorium on deployment of new trucks.
The company proposed allowing companies to make all operational decisions regarding transportation, as is the practice in other states. This would include decisions on deployment and route, based on market principles, as well as capacity and type of trucks according to the companies' transportation needs.
Adani Cement also asked for swapping of cement bags between Ambuja Cement and ACC units and other group units.
Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.