Even as the government is pushing for industrial development across the nation with the ‘Make in India’ programme, closer home in Mumbai, the entire industrial hub at Ambernath – home to 900 businesses – is down in the dumps. For more than a decade, the state failed to ensure proper treatment of toxic waste that just kept building up over the years and now finally threatens to lay waste to the entire industrial park.

The Common Effluent Treatment Plant has remained out of order for over a decade, leading to a build-up of tonnes of toxic sludge. Pic/Sameer Markande
The Common Effluent Treatment Plant has remained out of order for over a decade, leading to a build-up of tonnes of toxic sludge. Pic/Sameer Markande

It was with a similar goal of boosting industrial production that the state had set up an Additional Maharashtra Industrial Development Corporation (MIDC) in Ambernath in 2002, even setting up a state-of-the-art Common Effluent Treatment Plant (CETP) to tackle the hazardous industrial waste from the factories. But a mid-day investigation has now uncovered that this treatment plant has remained out of order for over a decade, leading to a build-up of tonnes and tonnes of toxic sludge. Now, the entire industrial park might have to shut down after the state pollution board slapped a notice on the authorities, threatening to shut down the CETP if the waste is not dealt with immediately.

The hazardous SUM removed  from the industrial waste is segregated and stored in polythene covered pits for preventing soil from getting polluted
The hazardous SUM removed  from the industrial waste is segregated and stored in polythene covered pits for preventing soil from getting polluted

Butterfly effect
If this happens, it will lead to catastrophic repercussions — the entire MIDC will have to shut down, 50,000 workers will be out of a job and the state will lose out on a whopping Rs 15,000 crore of GDP, and the Centre stands to lose even more – R50,000 crore of national GDP.

Before being sent to the CETP, effluents are first segregated in SUMP collection centres such as this one
Before being sent to the CETP, effluents are first segregated in SUMP collection centres such as this one

Out of a total of 900 units in the MIDC, 87 are chemical industries that are totally dependent upon the CETP to process the hazardous waste. The rest of the industrial park is comprised of ancillary industries that support the chemical units — in other words, if the CETP is shut down, the chemical factories will have to close and then the remaining industries will also go out of business.

AAMA members, who are industry owners within Additional MIDC Ambernath, held a meeting to decide the future course of action
AAMA members, who are industry owners within Additional MIDC Ambernath, held a meeting to decide the future course of action

The situation is so grim that eight of the chemical units have already started the process of moving to the Bharuch-Dahej industrial area in Gujarat to avoid future losses, said members of the Additional Ambarnath Manufacturers Association (AAMA).

Gross neglect
Industries began to set up at the MIDC from 2002 onwards. Although the treatment plant was also ready by then, it was only made operational a decade later, when MIDC handed it over to Bharat Udyog Limited for 20 years on a Build-Operate-Transfer (BOT) basis. The treatment plant was to be handled by the company’s subsidiary -- M/s Ambernath MIDC CETP Co. Pvt Ltd, a company floated by chairman and managing director Shrichand Kukreja. But there was no system in place to keep a check on the operator, which did not honour the terms of the BOT lease and failed to uphold environmental standards as well. The company did not even bother to renew the permit from the Maharashtra Pollution Control Board (MPCB) when it expired in December 2014, and instead continued to control the CETP without permission.

The MPCB kept sending notices to the operator but got no response. Finally, the National Green Tribunal cracked down on the MPCB and the operator, levying a fine of R15 crore on Bharat Udyog for violating pollution control norms. Finally the operator filed a writ petition in Bombay High Court for requesting an appointment of arbitrator demanding damages from MIDC. Kukreja also challegend the contract termination. The matter is now sub-judice in the Kalyan court and a hearing is scheduled for June 23.

Scam uncovered
All the while, the operator did not even operate or maintain the treatment plant, and the industrial waste continued to build up there. It was after Bharat Udyog moved the court that MIDC and AAMA discovered another bombshell — the operator had mortgaged treatment plant and availed a loan of Rs 11.88 crore against it. The company had exploited a clause on the BOT agreement that reads: “Developer shall be entitled to create any right title of interest thereon in favour of any financial institutes/ third party by way of mortgage during the effective BOT period of 20 years integral part of the project.”

“It is ironical that the operator did not operate or upgrade the CETP, but instead mortgaged it for a huge sum of money, even though it is a property that was constructed by MIDC and only given for operational purpose on a lease basis,” said Umesh Tayade chairman of AAMA.

AAMA takes control
Retired Justice JN Patel was appointed as the sole arbitrator in the matter, and on December 3 last year, he stated that AAMA could be given the opetion to run the CETP itself, after which the contract with Bharat Udyog was terminated and the industries association took control on February 3 this year.

But even now, the main gate of the facility remains under lock, and Bharat Udyog is yet to respond to their pleas to unlock it. Meanwhile, the industries are taking of stock of what needs to be done and have realised that they will need to put together R6 crore to clean up the treatment plant, carry out repairs and make it operational again. They have already started to collect this amount through contributions from each of the unit holders but can’t help grudge the fact that they are being made to pay for Bharat Udyog’s mistake and the government’s negligence. The usual practice is for such treatment plants to be operated with a subsidy that comes in from the Ministry of Environment and Forest (MoEF), MPCB and MIDC which contributes 75% of the expenses, while the remaining 25% is funded by the industry association.

There are other roadblocks too. Irrespective of the termination notice, the operator has not vacated the premises and has put a lock on the main gate of the CETP, causing hindrance for the AAMA team to operate it. The race to meet the MPCB’s norms has now become a struggle for their very survival, since the pollution watchdog has threatened to shut down the treatment plant otherwise.

“The industry members never defaulted on payment of any due. Rather, we have now chipped in to resolve the issues by taking control of the CETP since February. The CETP was always under the control of BOT operator Kukreja, so how can we be penalised for no faults of ours. AAMA is equally concerned about the livelihood of thousands of people and the environment as well, and hence, has decided to do everything possible to sort out the issues,” said Tayade.

Bank says...
A senior official from the legal department of Abhyudaya Co-operative Bank Limited, where Kukreja mortgaged the plant, said, “We had issued a mortgage loan to the tune of R11.88 crore to the concerned company after obtaining sufficient security. Apart from the company property, also the borrower’s personal properties are mortgaged with the bank. We have already won the case through the arbitration process, and the properties will be sealed and auctioned through civil court. The bank will be recovering the entire amount with interest, from the lender and the process should be complete by the end of this year.”

Other side
Attempts to contact Shrichand Kukreja, chairman and managing director of Bharat Udyog Limited did not yield any result.