Decision on Salem Steel Plant cheers RINL staff

The merger of SAIL-RINL, if the government agrees, is easy as both are under the Ministry of Steel. It will benefit each other’s presence in a single public-sector entity - D Adinarayana, AITUC national vice-president tells Bizz Buzz

Win-Win Proposition

• VSP has 7.3 mn tonnes production capacity
• It’s facing acute raw material shortage
• RINL shelling down heavy amounts for sourcing iron ore and coking coal
• SAIL plans Rs1 lakh cr investment by 2030
• Surplus lands of RINL and its staff can support Sail’s expansion

Visakhapatnam: Hopes rise on saving Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), amid Centre’s move to withdraw the decision on privatisation of SAIL’s Salem Steel Plant (SSP). VSP, which has been grappling with problems such as working capital and raw materials, is on the verge of privatisation and employees have been agitating against it.

The unions as well as the officers’ body- Steel Executives’ Association (SEA) of RINL, have urged the BJP-led NDA Government to drop the strategic disinvestment of RINL, for which in-principle approval was given by the Cabinet Committee on Economic Affairs (CCEA) on January 27, 2021. Ever since, they have been on a peaceful agitation batting for the mega merger of RINL-SAIL for mutual benefit.

While RINL is shelling down heavy amounts towards sourcing iron ore and coking coal for want of raw material security, SAIL, which has plans for investment of over Rs1 lakh by 2030 will be benefited with surplus lands of RINL as well as its highly skilled manpower. VSP has 7.3 million tonnes production capacity.

“The merger if the government agrees is easy as both are under the Ministry of Steel. It will benefit each other’s presence in a single public-sector entity,” AITUC national vice-president and recognised union leader D Adinarayana told Bizz Buzz.

The Department of Investment and Public Asset Management (DIPAM) under the Ministry of Steel, which looks after disinvestment, announced that the disinvestment process for Salem has been annulled. It said Alternative Mechanism (Empowered Group of Ministers) has decided to annul the current EoI thereby terminating the present transaction. EoIs for Salem were invited on July 4, 2019.

Steel Employees’ Federation of India (SEFI) and National Confederation of Officers’ Associations of CPSEs (NCOA) have also appealed to Prime Minister Narendra Modi to accept the demand for merger of SAIL and RINL.

NCOA Secretary General VK Tomar said “the proposed merger is not only a strategic merger, but also a win-win situation for both SAIL and RINL. SAIL will enjoy a potential savings of Rs45,000 per tonne through a port-based plant, substantial land bank for future expansion and improved logistics. Along with other valuable R&D support, RINL will benefit from improved ore security which can save Rs4,000 to Rs10,000 per tonne of steel.”

He said, moreover, as SAIL has already disinvested 35 per cent, the merger will go smoothly with the government’s disinvestment policy. Integration of these institutions under the guidance of the Prime Minister will not only optimise the utilisation of resources, but also contribute significantly to the strategic objective of the government. This will also give a shot in the arm to the ‘Make in India’ mission, he remarked.

During the elections in Chhattisgarh, Home Minister Amit Shah had announced the decision not to go ahead with the privatisation of mining major NMDC’s Nagarnar Steel Plant. As BJP has formed the government in Chhattisgarh, now the privatisation of Nagarnar Steel Plant will not be done, according to the union leaders.

Though the government had invited EoI for both the Nagarnar Steel Plant and Salem Steel Plant, after appointment of merchant bankers, the valuation of RINL, its subsidiaries and joint ventures could not be carried out yet till date due to stiff resistance from the employees.

SEA president Katam SS Chandra Rao and general secretary KVD Prasad said Salem Steel Plant belonging to SAIL has now announced that it will look through alternatives, such as creating a separate entity by merging with other appropriate industries or other smaller firms, as has been the case with Dredging Corporation of India Ltd (DCIL), Hindustan Shipyard Ltd (HSL) and HPCL. A leader of Salem Steel Plant employees said financial assistance can also be provided by separating the existing organisation for its revival.

The decision on Salem was announced after the visit of the Prime Minister to Tamil Nadu. Due to pressure, the government also stopped the disinvestment of Singareni Collieries Company Ltd (SCCL). “SEA has always wanted merger of RINL and SAIL as a viable alternative and asked all the parties and organisations to support the demand for signing of an MoU between SAIL and RINL for mega merger,” Visakha Steel Employees’ Congress president Neerukonda Ramachandra Rao, said.