SAIL TO MERGE IISCO WITH ITSELF
Steel Authority of India (SAIL), has finally decided to merge
its wholly owned arm, the Burnpur-based Indian Iron and Steel
(Iisco) with itself.
The announcement was made by Ram Vilas Paswan, Union minister
for steel, chemicals & fertiliser, after a meeting with
West Bengal chief minister Buddhadeb Bhattacharjee at the
Writers' Building.
The Union Cabinet's formal approval is now the only thing
left between the nearly 5-7 years' dream and the reality.
"The government has decided to merge Iisco with SAIL,"
Mr Paswan said. He remarked that SAIL has earned over Rs 2,500
crore in net profits this year, and therefore funds would
not be a problem for the revival of Iisco.
SAIL chairman VS Jain, who accompanied Mr Paswan during his
meeting with the chief minister, said: "We have taken
an in-principle decision regarding Iisco's merger with SAIL.
Now, the required procedures regarding the merger will be
followed."
A SAIL spokesman said the state government has agreed to
continue its support to Iisco, as was agreed by the terms
of the revival package, cleared by the BIFR in June '02, which
is under execution right now.
The possibility of the merger has been speculated for long.
The announcement by the minister, therefore, came as a very
big relief, not only to the beleaguered Iisco, but also to
the West Bengal government. Tuesday's announcement by Mr Paswan
may actually end Iisco's struggle for survival, that was turning
bleaker by the day ever since the company slipped into the
red, a couple of decades ago.
The merger decision, however, couldn't have been better timed.
It comes when Iisco, aided by a boom in the steel market,
has finally begun to show signs of a turnaround. Ending a
two decade-long drought, Iisco did finally manage to rake
in a net profit of Rs 27.1 crore last year, on a total turnover
of Rs 1,051.3 crore.
Since the clearing of Iisco's Rs 1,089-crore revival package
by BIFR, about Rs 186 crore has been earmarked for providing
VRS to around 3,000 employees of Kulti Works, which was closed
down in March '03. Another Rs 207 crore was also provided
to meet cash losses during the limited revival period. A further
sum of Rs 354 crore will be spent on providing VRS to about
6,000 employees at the Burnpur Works, the collieries and the
mines.
Earlier in June this year, during his first visit to the
plant Mr Paswan had announced a modernisation programme of
Rs 341 crore. About Rs 230 crore was to be spent on Burnpur
plant while another Rs 111 crore was set aside for modernisation
of the collieries and mines.
IISCo had a total employee strength of 16,740 as on August
1, 2004, of which some 800 were executives, while the rest,
including the workers at the Burnpur Works, collieries and
iron-ore mines, belong to the non executive grade.
