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SAIL may seek new partner for IISCO

G. Rambabu

NEW DELHI, March 24

STEEL Authority of India Ltd (SAIL) is likely to seek a new joint venture partner in place of Tyazpromexport, Russia (TPE), to turn around its sick wholly-owned subsidiary, Indian Iron and Steel Company Ltd (IISCO).

According to official sources, although an agreement was reached with TPE earlier as it was expected to take a majority stake in IISCO, no progress was possible because of the Russian Government's dilly-dallying.

It was decided to give the Russians time till March 31 to take a decision. However, with just a week left for the deadline, the company is not hopeful of any positive response, the sources said.

They pointed out that as per the earlier plan, SAIL had chalked out a Rs. 2,107-crore revival scheme for IISCO, which envisaged the participation of TPE as an equity partner and was sent to the Russian Government last year since it involves the rupee-ro uble escrow account.

However, even as the Russian Government delayed its clearance, a revised version of the scheme was forwarded by TPE in June last year. The proposal, as it stands today, envisages majority participation for TPE and a total investment of Rs. 800 crores.

SAIL is not perturbed over the ``unnecessary delay'' by the Russians as a few Chinese companies have shown interest in replacing TPE.

The sources said a Chinese delegation which visited India between November 22 and 26 last year, to discuss issues of collaboration in the area of technology transfer and enhanced cooperation, had evinced interest in IISCO. Since TPE was yet to get back, the offer was put on hold.

The tables have turned now. Earlier, SAIL was desperately seeking Russian support for the revival of IISCO. But

now that the Union Government has written off IISCO's loans, the subsidiary company of SAIL can look forward to better days, they said.

The financial restructuring package for SAIL, cleared by the Union Cabinet recently, involved the write-off of loans from SAIL (of Rs. 1,566 crores) and Government loans (Rs. 381 crores) to IISCO. The subsidiary is, therefore, on a firm footing and no l onger considered a liability to SAIL.

However, officials observed that IISCO was referred to the BIFR in 1994. ``The Board had appointed IDBI as the operating agency with respect to its revival scheme. The FI had, in turn, retained Mr. M.N. Dastur to prepare feasibility reports on both the f inancial and technical angles of the TPE proposal. While Mr. Dastur has already submitted a preliminary report, BIFR has extended the date for final submission of the report to March 2000,'' they said.

It is only after the final report is submitted that the Board can take a decision on IISCO's revival. Any scheme taken up for revival or modernisation of the subsidiary company will have to be in accordance with BIFR's orders, they said.