MESCO had sought MIDC land at Rs 100/sq m
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The land at MIDC bought by the Maharashtra Ex Servicemen Corporation (MESCO) Ltd for Rs 7 crore, part of which was a Rs 3-crore loan from the Flag Day Fund raised from charity — this was revealed in an RTI reply and reported by The Indian Express earlier — came at more than what the MESCO had bargained for.
On June 7, 2010, the Maharashtra Ex Servicemen Corporation Ltd (MESCO) had written to the then Industries Minister Rajendra Darda that an MIDC industrial plot be offered to MESCO at Rs 100 per square metre for an Ex Servicemen Industrial Estate.
MESCO had worked out that the project would be feasible only if 10,000 square metre was offered at Rs 100 per square metre. MIDC had quoted the price at Rs 7,000 square metre. In spite of the difference of Rs 6,900 per square metre, which took the price from Rs 1 crore suggested by MESCO to a whopping Rs 7 crore, it was purchased for 'employment generation for ex servicemen'.
The project, reported to be the brainchild of Col (rtd) Suhas Jatkar, the MESCO Managing Director, was proposed in 2009.
MESCO, saying it would generate employment for over 1.98 lakh retired services personnel in the state and citing the retirement of 6,000 personnel from the three services every year, proposed an industry for manufacture of automobile components, spare parts, engineering components, and fabrication works including niche components for defence, Railways and even scientific equipment.
"The industry will have sufficient orders from defence organisations as well as civilian industries. To fulfill increasing demands of various engineering and automobile industries, there will be various categories of works using advanced technology," a brief project note proposed.
What makes the proposal unrealistic is the ground zero situation at MESCO and the inadequacy in planning and projections needed for such projects.
MESCO is a non-profit organisation with a turnover of Rs 75 crore and as of 2011, marked a profit of Rs 21.69 crore. It may be noted that in the past four years, MESCO has not been audited and the file does not mention as to how this figure was arrived at.
It took three years for MESCO to generate Rs 7 crore for the land. MESCO roped in Big Consultants as consultant for the project. On June 15, 2011, Big Consultants wrote to Col V V Jadhav, project manager, MESCO that the project will need Rs 8.77 crore as construction cost.
From 2009 till date, MESCO knocked on the doors of almost five banks for loans and all of them rejected its application. In a proposal MESCO also asked the Government of Maharashtra to sanction a loan of Rs 10 crore with a payback period of 10 years. The loan proposals varied, in one instance it was mentioned as Rs 15 crore with a payback period of 15 years and in another undated report, the cost was estimated at Rs 19.35 crore, which was later projected at 22.85 crore.
"The industrial estate will have defence-oriented production units, an incubation centre, a training centre, metallurgical labs, inspection and testing labs, a design centre, and raw material banks," the project statement says. A feasibility study, in spite of land cost climbing seven times higher than proposed, does not form part of the file.
On March 4, project manager for MESCO wrote to Dharmendra Prakash, joint development commissioner, MSME, Government of India requesting support.
On December 28, R G Kulkarni, GM, MESCO wrote to Tata Strategic Management Group for preparation of a business plan for setting up a Mahasainik Industrial Estate. There was no reply.
Jatkar said, "We are supposed to get a loan of Rs 10 crore from the MSME."
Efforts from the Department of Sainik Welfare (DSW), Jatkar happens to be its director as well, to invite potential entrepreneurs for the plan yielded no results. Zilla Sainik Welfare Officers (ZSWO), Satara, subordinate to DSW, in a letter dated October 10, 2011 wrote to Jatkar, "An appeal was made in local newspapers asking for ex- servicemen to participate in manufacture of automobile and engineering components. The appeal has yielded no results."
In 2010, MESCO organised a seminar wherein MCCIA was requested to be the sponsor. In fact, a meeting between MESCO and MCCIA officials took place on Monday. However, Brigadier (retd) S B Ghorpade, chairman, Defence Committee, MCCIA, refused to reveal the outcome of the meeting.
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