Tamil Nadu government has opposed the move to privatise the Salem Steel Plant, saying such a proposal would cause “considerable unrest” amongst the people, particularly amongst those whose lands were acquired. In a letter to Prime Minister Narendra Modi, Chief Minister E Palaniswami said the plant had acquired a global reputation for its high-quality steel and “is an iconic symbol” for Tamil Nadu. The people of the state have a deep sense of pride and attachment to the public sector plant, he said in the letter dated April 26, which was officially released today.
Palaniswami said the state government had acquired about 15.5 sq.km. of land in 9 villages more than four decades ago at the foothills of Kanjamalai in Salem for the plant. “It was possible to undertake such extensive land acquisition mainly because of the public sector character of the plant.”
“Today, any proposal to privatise the Salem Steel Plant would cause considerable unrest amongst people, particularly amongst those whose lands were acquired,” he said. Palaniswami said the land was “perhaps” the most valuable and sought after asset in the possession of the steel plant today. It was providing employment to about 2000 persons while many ancillary and subsidiary units also depended on it, he added.
Tamil Nadu government had supported the Rs 2005 crore expansion project of the plant with a “structured package” of incentives in the form of capital subsidy, soft loan, electricity tax exemption and environmental protection subsidy, he said.
Highlighting these, Palaniswami said the establishment and subsequent expansion of the Salem Steel Plant have received much support from the state government as well as the people, “primarily on account of its public sector character.” Referring to the proposed privatisation, he told Modi that the move “has caused a lot of apprehension and dismay amongst the people of the state.”
He said public sector undertakings were capable of performing very well provided they were given the right support and direction in the dynamic economic scenario. “The causes for the company’s recent losses must be studied and Salem Steel Plant must be given a chance to improve its efficiency and make a turnaround,” he said. If that was done, he said the plant will transform once again into a profit making company.
“I, therefore, request you to kindly intervene in the matter urgently and advise the Ministry of Steel and the Steel Authority of India Ltd (SAIL) to reconsider any proposal that they may have of privatising the Salem Steel Plant,” he told Modi. The Centre had last month approved an outright sale of state-owned SAIL’s three special steel units, including Salem and Alloy Steel plants.