The (Bombay) Mill Owners' Association chairman, Hiren Shah, has criticised the Maharashtra Government for not clearing the sale of surplus mill land in Bombay, saying several mills are on the verge of closure. Mr. Shah was addressing last week's Millowners' Association AGM.

Indian factories are not allowed to close, sell land, or relocate without Government permission.

Around 22 nationalised mills and 32 privately-owned mills are located in Bombay. Of the 22 Government-owned mills, one has been closed and the remaining 21 are working at less than 15 per cent of their manufacturing capacity. The story is even worse for the private mills. Fourteen of these are closed with four more poised to join them. The remainder are struggling to survive against the odds.

According to the Mill Owners Association, the losses of all of the Government-owned mills (there are 104 throughout the country) exceed their annual payroll and it would cost less if they were closed and workers were paid to stay at home.

The situation is further compounded by the higher utilities bills faced by mill owners. Power and water bills are differentially priced in India, according to political factors. Composite mills can pay four or five times more for the same service as other manufacturers; for example, while water and sewerage rates cost mill owners around Rs35.20 per kilolitre, power loom units in other parts of the country pay only Rs6-8.

The mills, both nationalised and private, have been seeking Government permission to sell land for over two decades. While some mill sales have been allowed there have not been enough to satisfy local businesses. Mill land sales can be hazardous, with politicians, builders, and the Mafia eager to benefit from future sales. Murders are not rare, the most spectacular victim being Mr Khatau. The majority shareholder of several mills, it is thought that he was murdered over a deal on one of his mills that had secured Government permission to sell land and relocate.

Real Estate prices in Bombay City are the highest in India. Built-up areas in upmarket residential buildings recently went for over Rs30,000 per sq ft. Land in mill areas will fetch much less, but the acreage is very high.

By Nazroz Havewalla