The Steel Executives Federation of India (SEFI) has urged the steel ministry to merge state-run Rashtriya Ispat Nigam Limited (RINL), Ferro Scrap Nigam Limited (FSNL) and Nagarnar steel plant with the Steel Authority of India Limited (SAIL), bringing together the expertise of each of these firms to form a mega public sector undertaking.
The federation, which represents SAIL, RINL, MECON Ltd, NMDC Iron and Steel Plant and National Mineral Development Corporation, asked the government to consider “the merger of these national assets instead of privatisation”.
In a submission to the ministry, it said that owing to the individual strengths of these firms, the merger is likely to help SAIL achieve its 35 million tonnes capacity expansion target by 2030. These firms are grappling with problems such as inadequate human resources and raw materials, affecting their financial feasibility. Nagarnar steel plant, Bastar, with a capacity of 3 MT, has abundant availability of raw materials but only 200 officers and 1,000 employees to operate it.
To top it, MECON Ltd has been asked to operate the plant “but MECON has no prior experience in steel plant operations”, the SEFI said. RINL, it said, has a total production capacity of 7 MT, but its capacity utilisation is around 60%, owing to a lack of iron ore and other raw materials. “RINL has human resources available with skilled and technical capabilities, but as it doesn’t have its iron ore mines, shortage of raw materials and compulsion to buy raw materials at higher prices has hampered the company’s ability to make profits,” said the submission. The federation also questioned the rationale behind the FSNL disinvestment, as the entity has reserves of Rs 170 crore, movable assets amounting to ₹100 crore and a work order of more than Rs 1,000 crore.
Source: Economic Times