Ministry o' To Sops For Iisco

The finance ministry has refused to grant budgetary support or tax concessions to the ailing SAIL subsidiary, Iisco.

It has also written to the steel ministry that the Russian government has been approached on the proposal of utilising $300 million from the rupee-rouble fund for the rehabilitation of the Indian Iron and Steel Plant at Burnpur.

The proposal would have to be endorsed by the Russian government since the rupee-rouble debt account is normally used only for trade in commodities and not capital expenditure.

It may be recalled that the steel ministry had sent a note to the union cabinet recently seeking permission to allow the Russian company to utilise the rupee rouble fund.

 

The finance ministry has also questioned why the bids of other contenders who had picked up the tender papers were not considered by the steel ministry. SAIL had invited global tender to find a partner for IISCO's modernisation project, which was estimated at around Rs 4,350 crore.

A global tender was floated for the modernisation project to which 14 companies responded but only the Japanese trading giant Mitsui and Tyazhpromexport submitted the tender papers. Mitsui later backed out since it was not interested in participating in the equity of the project.

The Russian trading house Tyazhromexport is keen to partner SAIL in the revival of the ailing plant as per the rehabilitation package structured by the Board for Industrial and Financial Reconstruction (BIFR).

TPE has suggested that it be allowed to route a part of the funds through the Rupee-rouble account.

The remaining funds would be invested through the supply of machinery. Last February the BIFR had asked the ministry of steel to consider circulating a cabinet note, while giving four months time to it and IISCO's promoter, SAIL to concretise their proposal.

The Rs 1,040-crore integrated steel plant at Burnpur in West Bengal came under BIFR in 1994.