NINL staff demands merger with a PSU

Says merger with a PSU under Ministry of Steel will allow investment in NINL's future modernisation, capacity expansion

Visakhapatnam: The employees of Neelachal Ispat Nigam Limited (NINL), which has a 1.1-million tonne integrated steel plant at Kalinganagar in neighbouring Odisha, are on a warpath against its strategic sale, demanding merger with Rashtriya Ispat Nigam Limited (RINL), SAIL or NMDC as a viable alternative.

While Metals and Minerals Trading Corporation Limited (MMTC) holds 49.78 per cent in NINL, Odisha government and NMDC hold 32.47 per cent and 10.12 per cent, respectively.

NINL has 2,500 acre of undisputed land, which is sufficient for expansion up to 10 million tonne, captive mines with 110-million tonne of estimated reserves, state-of-the-art production units, rail linkage and road from Paradeep Port.

Merger with a PSU under the Ministry of Steel such as SAIL/RINL/NMDC will allow investments in NINL's future modernisation and capacity expansion. Simultaneously, it will satisfy SAIL/RINL's basic requirement of raw material from the mines owned by NINL. It will also help achieve the national target of 300 million tonne steel production by 2030.

Neelachal Executive Association's General Secretary Ajit Kumar Pradhan and President Avijit Koley said the merger would benefit all. The government should put the strategic sale decision on hold and conduct a feasibility study to consider the merger plan, they told Bizz Buzz on the phone from Delhi on Monday.

The Cabinet Committee on Economic Affairs has taken a decision for 100 per cent disinvestment of NINL on January 8, 2020. With the decision, shareholders, mainly MMTC, stopped infusion of funds for day-to-day operations, leading to severe liquidity crunch, thereby forcing a shutdown of the plant on March 26 March, 2020, NINL employees say. NINL was an EBITDA-positive company, garnering net profit up to FY-2011-12. The company has been incurring losses after 2012-13 due to low equity infusion, insufficient cash flow, commission at high rate (3 per cent) to MMTC upon purchase and sale, overburden of liabilities and high interests, resulting in a low-capacity utilisation and restricted production. Mining lease was granted to NINL in 1999. In 2019, Stage-II clearances were granted just before the disinvestment decision. It took nearly two decades to get clearance for the mines.

According to Pradhan, NINL has incurred a loss of more than Rs 1,500 crore towards procurement of iron ore. The total loss of NINL almost compensates the amount paid to MMTC as commission and interest. Future of the employees, including nearly 1,000 displaced and land-losers, mostly Adivasi and weaker sections of society, is in darkness. He said NINL employees have not received salary and other legitimate dues for the last 11 months.

NINL has 1,550 employees on its payrolls, while close to 10,000 people are dependent on it indirectly for their livelihood.