As per its “strategic disinvestment plan”, the Centre will offload only up to 51% stake in the Tamil Nadu-based stainless steel maker Salem Steel Plant, a unit of SAIL; while retaining the balance 49%.
As per its “strategic disinvestment plan”, the Centre will offload only up to 51% stake in the Tamil Nadu-based stainless steel maker Salem Steel Plant, a unit of SAIL; while retaining the balance 49%. The Centre, however, will relinquish the management control of the loss-making unit to the propspective buyer and entrust it with the job of running the unit, steel minister Birender Singh said on Monday while replying to a question in the Lok sabha.
Salem Steel Plant has 3.39 lakh stainless steel manufacturing capacity in a year. The unit is considered as one of the best in the country to produce stainless steel used mainly for making utensils. However, mainly due to higher power costs, the unit incurred a loss of Rs 1,855 crore in the last five years (2011-12 to 2015-16). The minister said a “lot of efforts” were made with the state government to ensure that the plant gets power at a concessional rate, but “it did not pay”.
There have been protests in Tamil Nadu over the disinvestment of stake in the firm. The state chief minister has also written to the steel minister to ensure that the disinvestment does not take place. Stating that the government has already taken “a decision for, not total but, strategic disinvestment of this plant, Singh said, “We have appointed transaction advisor, legal advisor and asset valuer.” A clear picture will emerge only after they submit the report. The government has also plans for strategic disinvestment of SAIL’s alloy steel plant in Durgapur and Visveswaraya iron and steel plant at Bhadravati. These are incurring losses year after year.