Steel Authority of India Ltd (SAIL) chief, Arvind Pande, reassured the trade unions that the company is keen on reviving its ailing subsidiary, Indian Iron and Steel Company (Iisco).
The meeting of SAIL top brass with the trade unions at Kolkata today was attended by senior central trade union leaders, as well as leaders of Iisco trade unions. Among those who attended were M K Pandhe of CITU, Gopeswar, Subrata Mukhejee and Rajendra Singh of INTUC and Aniruddh of AITUC.
Pande said that SAIL was keen on the revival of the Indian Iron and Steel Company and would not shut it down. The first option for Iisco's revival was the joint venture with Tyazhpromexport (TPE) of Russia. However, since this depends on intergovernmental clearance, Iisco and SAIL have also prepared an alternative Rs. 1,080 crore proposal, which has been submitted to the Government of India. This proposal has been developed by MECON.
TPE's revival proposal is with that company's bank, Vnesheconombank. It is to be submitted to their Ministry of Finance for allocation of funds from escrow account, after which it would be submitted to SAIL.
The possibility of this JV with TPE as strategic partner would become clearer after the Indo-Russian Joint Business Commission meeting scheduled to be held later this month.
The alternative proposal now with the government envisages relining of blast furnaces, installation of a second twin-hearth furnace, new sinter plant, revamping of rolling mills at Burnpur and investment at the collieries and ore mines to enhance their profitability. Iisco would achieve operational break even 2005-2006.
Funds for the investment at Burnpur, ore mines and collieries are expected as soft loans from the Centre, grant from Government for voluntary retirement schemes and for sustaining cash losses till 2002-2003. The proposals also envisage relief and concessions from the government.
However, the central and state governments may take time to clear the proposal and the proposal may not be ready within the BIFR deadline, November 23, 2001. In such an eventuality, both the management and the trade unions would appeal to BIFR for extension of time.
The trade unions also submitted to the management a copy of the proposal prepared by them in consultation with Mecon. M K Moitra, director (personnel) pointed out that the proposals prepared by both the management and the trade unions were conceptually the same. There were differences mostly in emphasis. It was agreed that both the proposals could be studied in detail and the final proposal submitted to BIFR.