New Delhi, June 2: Steel Authority of India Ltd (SAIL) wants to risk running the gauntlet of political opposition and hasten selloff in all three of its loss-making units ó Salem Steel, Alloy Steels Plant (ASP), and Visvesvaraya Iron and Steel Ltd (VISL).
SAIL chairman V. S. Jain told The Telegraph, that the steel major would soon take up the lone unopened financial bid for Salem as ďa board sub-committee has gone through all the papers related to the disinvestment and has given us a clear chit for the process.Ē
The sale of Salem Steel had turned controversial as Jindal Strips was the sole bidder left in the fray and political parties in Tamil Nadu had cried foul, necessitating a face-saving reference to a separate committee.
While working out SAILís restructuring plan, McKinsey and Co had recommended the sale of ASP and VISL. But SAIL then decided to go slow and instead toyed with the idea to revive them.
However, Jain said, ďOnce we have finished with the next round of voluntary separation scheme, we will take up divestment in ASP and VISL.Ē ASP suffered a loss of Rs 151 crore last fiscal and a loss of Rs 120 crore in 2001-02. VISL ran up a loss of Rs 118 crore last fiscal and Rs 85 crore in 2001-02.
The sale of all these three units will be politically controversial. With elections slated for next year, it is unlikely that the Jayalalitha-led AIADMK party, which is a member of the ruling NDA coalition, will allow Jain to go ahead with the sale.
Similarly, the Mamata Banerjee-led Trinamool Congress has already made it clear that it will oppose any move to sell ASP at this juncture. The BJP, which sees itself poised to make gains in Karnataka, is unlikely to agree to VISLís selloff.
The sale of Salem Steel is also likely to continue attracting allegations of price rigging. The Jindals who remain the sole bidder are believed to have put in a bid of about Rs 800-1,000 crore. But the employees say Salemís worth is much more. SAIL had spent some Rs 700 crore on modernising the plant.