In the 1970s, a state fertilizer plant had been set up at Haldia in the state of West Bengal. Besides bungalows for managers and nice flats for workers in a sparkling new township, the plant entailed wide roads, bright lights, a school, a dispensary, a hospital and even a subsidized store for the employees. The only error being- the factory never produced a kilo of fertilizer! And this continued for years. The employees came to work, and everyone was paid, including a bonus, and even overtime in some cases. However, they had no work because soon after the factory was built it was discovered that the company was unviable. If they had produced, they would have lost a great deal of money. It was as a matter of fact, cheaper not to produce. Yet they could not shut down. Not only was it bad politics to close, but the law did not permit it.
Now after much paper had been pushed back and forth, a captive power plant was sanctioned. However, the Haldia Project did not start functioning despite the above. Why not? There is a lengthy list of excuses. First, the soil survey to determine the precise requirement of the foundation had been inadequate. Second, a major revision in the design of the ammonia plant was found necessary. Third, attempts to indigenize equipment's led to delays. Fourth, there were problems with the credit supply. And so on.
The Company was ultimately declared sick and referred to the Board for Industrial and Financial Reconstruction in the year 1992. According to 1995 prices, it would have required at least Rs 910 crore to start all over again. The count of total manpower on the project as of March 31, 2000 stood at 1,414. Another firm, Scooters India Ltd., in Lucknow, was still paying wages to 3000 workers in 1992, although it had not built a scooter for 10 years.
It staggers the mind to learn that people were being paid, at the taxpayers' expense, to do absolutely nothing. Eventually, in view of the continuing losses stemming from technical and financial viability of operations, the Government decided to close down the plant in September 2002. Consequently, a Voluntary Separation Scheme (VSS) was offered to all its employees. All the employees, who opted for VSS have since been released, except 7 employees who are engaged in discharging statutory obligations, including safety & security of properties/assets of the various units of the Company.
(Excerpts from "India Unbound” by Gurcharan Das)