While major national trade unions such as Intuc and HMS have finally agreed to the business restructuring proposals of the steel major, the SAIL management has failed to elicit a firm positive response from Citu, even after several rounds of discussions.

Intuc is the dominant trade union at Bhilai, Bokaro and Rourkela steel plants, while Citu is the dominant and recognised trade union at Durgapur Steel Plant (DSP).

Earlier this fiscal, SAIL's chairman Arvind Pande had indicated that considering the present market trends the company could reduce its net losses by 50 per cent this year. Although the company reported a net loss of Rs 231 crore in the first quarter, it posted a cash profit of Rs 60 crore after eight red quarters.

Many in the SAIL management now feel that the way performance of individual plants are improving, the company would be able to restrict its net losses within Rs 700 crore this fiscal. And if its power plants could be hived off, they would fetch Rs 750 crore, thus giving the PSU a marginal net profit.

"At this stage, our recovery is definite. The performance only emphasises the need for quick restructuring, particularly as the recent buoyancy visible in the markets appears to have softened," Pande had said after releasing the first quarter results.

Last fiscal, Rourkela Steel Plant incurred a net loss of Rs 700 crore, DSP Rs 650 crore, while its special steels plants - Alloy Steels Plant, Salem Steel Plant and Vishvesvaraya Iron & Steel Co - together made a loss of Rs 500 crore. Both RSP and DSP is expecting better results this fiscal and the losses of special steel plants are likely to decline to Rs 350 crore.

On the other hand, Bhilai earned a net profit of Rs 92 crore and Bokaro Rs 120 crore last year. Bhilai's profit was low due to lack of rail orders from the railways.

This year, SAIL believes Bhilai's profit will go up thanks to substantial orders from the railways. Considerable improvement in hot-rolled and cold-rolled steel market and stabilisation of modernised units is expected to push Bokaro's net profit to even Rs 500 crore.

Meanwhile, the SAIL management has launched a major communication exercise at DSP to convince employees about the immediate necessity of business restructuring.

In a written communication to the DSP employees, SAIL management has argued that unless it can collect funds from its business restructuring, it is not in a position to repay loans and invest in capital schemes. "This may lead to forced closure of the plant," the managment has warned. It has also said, "the critical financial position will affect even the payment of salaries."