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Trade Union seeks Vizag plant merger with SAIL, govt says no
However, a section of trade unions argued that the merger of the RINL with SAIL will be a win-win situation for both.
In the last ditch attempt to stall the central government’s move to privatise Rashtriya Ispat Nigam Ltd (RINL), also known as Visakhapatnam Steel Plant, the employees’ associations have put forth a proposal to merge it with another public sector steel giant Steel Authority of India Ltd,(SAIL).
Union minister of state for finance Bhagwat Krishna Rao Karad told Rajya Sabha on Tuesday that there was a proposal from Steel Executives’ Association (SEA) and Steel Executives’ Federation of India (SEFI), seeking the merger of Visakhapatnam Steel Plant with SAIL.However, the minister said the proposal could not be entertained as a matter of policy. He reminded that as per the new policy for Atmanirbhar Bharat, the public sector undertakings in non-strategic sectors will be considered for privatisation or will be closed.
“Since steel manufacturing comes under non-strategic sector, there is no reason for considering the merger of the RINL with SAIL,” he said.
As per the policy, one public sector undertaking cannot bid for other central PSEs (public sector enterprises) meant for privatisation, as such it would result in continuation of the inherent inefficiencies of the PSE to be privatised.
With regard to the RINL, Karad said the Department of Investment and Public Asset Management (DIPAM) had appointed a transaction adviser, legal adviser and asset valuer through a competitive bidding process.
However, a section of trade unions argued that the merger of the RINL with SAIL will be a win-win situation for both. “Both the companies are under the ministry of steel. The SAIL is looking for expansion of its capacity and requires ₹ 20,000 crore for the same. With the help of RINL, which has 7.3 million tonnes capacity, this investment will be brought down drastically,” V M Naidu, a trade union leader of Visakhapatnam Steel Plant said.
On the other hand, the SAIL has its captive iron ore mines and it can be used for the RINL, which is presently buying the raw material from outside at high cost. “Besides, the RINL has a talented workforce and land bank of 20,000 acres, which can be a big asset for the SAIL,” Naidu said.
He reminded that in 2021-22, the RINL had recorded profit to the extent of ₹900 crore and a turnover of ₹28,000 crore. “Next year, we are confident of achieving more than ₹1500 crore profit, if there is no privatisation threat,” he said.
Union minister of state for steel Faggan Singh Kulaste told Rajya Sabha on Monday that there were 15,773 permanent employees in the RINL, including 5,190 in executive cadre and 10,583 in non-executive cadre. Besides, there are 16,816 workers engaged on contract basis, he said.
The minister assured that while deciding the terms and conditions of the strategic sale of the RINL to the private sector, legitimate employee concerns will be suitably addressed through appropriate provisions made in the Share Purchase Agreement (SPA) or other agreements to be signed by the government with potential strategic buyer.
