The Hindu Business Line : Govt plans merger of small steel PSUs with SAIL

THE Government is considering a plan to merge the small state-owned steel companies with Steel Authority of India Ltd (SAIL), according to the Steel Minister, Mr Ram Vilas Paswan.

Speaking at a news conference, he said: "After a complete study of all operational aspects, the proposal to merge the companies, if found feasible, will be implemented in a time-bound manner."

On the national steel policy, he said that a Ministerial panel would be set up to work out an action plan for its implementation. The draft of the proposal has already been circulated for approval, he added.

One-third of the country's 36 million tonnes of steel-making capacity is owned by SAIL.

On the proposal to merge the ailing India Iron and Steel Co with SAIL, he said that all formalities had been completed and the proposal referred to the Union Cabinet on May 20. The merger proposal has been on the cards since last year.

The Government has also told public sector steel companies to ramp up production by at least 10 per cent annually.

According to Mr Paswan, the Government had set up two panels to explore issues related to pricing of iron ore.

While one is looking into the need for a uniform policy on iron ore pricing, the other is examining whether National Mineral Development Corp Ltd incurred losses through the sale of iron ore at different rates to various producers.

Currently, iron ore producers charge variable rates for export and domestic consumption.

Both panels have submitted their reports and the Government will soon take a decision on implementing their recommendations.

However, Mr Paswan said that there was no move to divest Government equity in steel PSUs. "There is no question of divestment, not even in loss-making companies," he added.

Mr Paswan said that all the public sector companies under his Ministry were profitable, except Hindustan Steel Constructions Ltd (HSCL) and Bharat Refractories Ltd.

The Department is preparing revival packages for these two sick PSUs. The Government has appointed AF Ferguson as consultant for HSCL, which reported a loss of Rs 96 crore for 2004-05.

Mr Paswan also said that the Korean steel major, Posco, was likely to sign a memorandum of understanding (MoU) with the Orissa Government by the end of this month.

"The MoU will be signed by end of the month as all issues between the State Government and Posco have been sorted out." Posco is planning to establish a 12-million-tonne steel plant involving an investment of Rs 40,000 crore in the State.

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