Adani writes to HP government demanding revision in freight rates

Adani signage (Photo by Indranil Aditya/NurPhoto via Getty Images)

Adani Cement has written to the Himachal Pradesh government requesting its intervention to end the group’s stand-off with truck unions, government sources said. The company had suspended operations at two of its cement units in the state since 14 December.

In the letter dated January 19 and addressed to the permanent standing committee of the state, Adani said that freight rates in Himachal Pradesh, which are controlled by truck unions, have been set artificially high causing inefficiencies and complications in its cement plant operations. It attributed the suspension of operations at its units — the ACC plant in Barmana and Ambuja Cements factory in Darlaghat — in the state to these inefficiencies.

Such unbridled control by the unions without authority or accountability has created not only inefficiencies but also multilayered complications in the sector with far-reaching consequences for all stakeholders, the CEO of Adani's cement business, Ajay Kapur, is said to have written, according to the sources cited earlier.

Kapur also pointed out that at least thrice the Himachal Pradesh high court had "passed scathing remarks against the functioning and undue interference of the unions," they said.

Kapur’s letter to the government offered a solution to the government to resolve the impasse, in effect placing four demands.

One, it asked for a phased revision in truck freight calculation over a period of three years.

Two, it has proposed to phase out the excess trucks operated by ACC and Ambuja Cement units over three years. The letter said only 550 trucks were required compared to the 3,311 deployed currently.

Third, it called for an immediate moratorium on fresh additions to the truck fleet in the state.

Four, it demanded autonomy for private enterprises to make operational decisions in transportation including deployment of vehicles, routes, capacity and types of trucks, and so on.

An email sent on Friday, January 20, to Adani Cement requesting a comment remained unanswered at the time of writing this story. We will update the story as and when we get a response.

Media reports said that Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu has now authorised the Industries Minister Harshwardhan Chauhan to act as a mediator between the two parties.

In September, Gautam Adani promoted the Adani group and completed the acquisition of ACC and Ambuja Cements from the LafargeHolcim group.