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Home / Business News / 'Merger with SAIL will be a mixed blessing'

'Merger with SAIL will be a mixed blessing'

RINL Chairman PK Bishnoi says it is up to the government to decide on the proposed merger with SAIL, reports Suman Layak.

business Updated: Sep 16, 2007, 23:17 IST
Suman Layak
Suman Layak
Hindustan Times

Rashtriya Ispat Nigam Ltd (RINL) Chairman PK Bishnoi sees a lot of minuses in the proposed merger with Steel Authority of India Ltd (SAIL), despite the positives like availability of coal and iron ore. SAIL Chairman SK Roongta recently proposed the merger of the two central government-owned steel makers.

The central government-owned RINL operates a steel plant at Visakhapatnam, and is planning to raise its capacity to 16 million tonne over the next decade.

Bishnoi, who was in Mumbai to attend a conference, told Hindustan Times: "RINL was formed after a political struggle. There are political issues attached to the proposed merger, which the government has to decide on."

In a telephonic interview, Bishnoi pointed out that the merger would have obvious advantages for RINL, including the availability of captive raw materials like coal and iron ore. RINL’s applications for captive mines have been pending with state governments, Bishnoi added.

According to the RINL chairman, there are negative sides to the proposed merger as well. “Decision-making in a small company is quicker and faster. A bigger company has its own way of taking decisions, which is often slower and there are more bureaucratic procedures involved.”

Bishnoi also cited culture as an issue in the proposed merger. "The cultural environment at the two companies are different," he said. When asked if he saw any major differences in culture, Bishnoi said: “I do not want to imply that there is something negative in the cultural environment at SAIL. What I want to say is that Visakhapatnam being a small place has a different culture that is also evident within the plant. Even Tata Steel and Corus have culture issues to sort out in their merger."

RINL was in the process of opening the tenders for stage two of its modernisation plan and would evaluate the bids later this month, Bishnoi added.

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