Govt decides to shut Tungabhadra Steel

Government has decided to close ailing Tungabhadra Steel Products Ltd by offering a voluntary retirement scheme (VRS) to remaining 72 employees.
The decision regarding closure of Tungabhadra Steel was approved at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi last evening, sources in the Heavy Industry Ministry told PTI.
"An attractive VRS package at 2007 pay scale is being offered to the 72 employees of Tungabhadra Steel, who were earlier drawing salary as per 1992 pay scale.
"Tungabhadra Steel has around 90 acre of land and heavy machinery and equipments, which will be auctioned. We have also negotiated with the bank for the outstanding amount including Rs 15.28 crore principle and 17.9 crore interest that the company owed to it. The bank has agreed to waive the interest amount of Rs 17.9 crore," a senior official said.

The official further informed that there was virtually no production by Tungabhadra Steel since 2013-14 and the decision to close down the company was taken under the Industrial Disputes Act, 1947.
The Cabinet had earlier given in-principle approval for shutting down five PSUs under the Heavy Industries Ministry including Tungabhadra Steel after which the individual proposals entailing VRS etc. Of the company were firmed up for the CCEA approval to go ahead with the closure formalities.

Tungabhadra Steel Products was established in 1960 with equal equity participation of governments of Mysore and Andhra Pradesh.
It is a successor to Work shops & Machinery Division (1948) of Tungabhadra Project, which was set up with an idea to undertake manufacture of Gates & Hoists required for spillways, Sluices & Canal Gates of Tungabhadra Dam.

Government of India invested 79 per cent of the shares and became a major shareholder, bringing the company under the administrative control of Ministry of Heavy Industry, Government of India.