| This way out of the sick bay
New Delhi, Nov. 24: The Board for Industrial and Financial Reconstruction (BIFR) has finally cleared a Rs 881-crore package to revive Indian Iron and Steel Company Ltd (IISCO).
Simultaneously, Steel Authority of India Ltd (SAIL) has decided to invest heavily in IISCO’s Chiria mines, Asia’s largest iron-ore deposit. However, most of the mines’ output will go to SAIL’s Durgapur, Bokaro and Rourkela steel plants, not to IISCO.
The original scheme for revival had been pegged at Rs 1,400 crore, but was later pared to just Rs 881 crore, because the Union cabinet was split on full funding for the scheme.
The bulk of the money — about Rs 540 crore — is to be spent on a voluntary retirement scheme, which is already being implemented. However, the rest of the money had been blocked as the BIFR had not cleared the scheme so far.
Even as the quasi-judicial body gave its verdict in the case, which lasted for nearly eight years, labour union members from IISCO's shut-down Kulti works, assaulted chief executive A. K. Jaiswal and head of personnel, Rajeshwar Tiwari, demanding release of pay and benefit arrears.
Although the revival scheme had been earlier cleared by the government, SAIL, which owns a controlling stake in the ailing steelmaker, had not pumped in any money into physical infrastructure, essential for turning around the Burnpur-based company, on the plea that BIFR had not cleared the package yet.
SAIL officials said they would now go ahead with investments worth about Rs 230 crore in the Burnpur plant and Rs 111 crore in attached collieries and mines.
SAIL's plans are to increase Burnpur steel works' output from 3 lakh tonnes to 5.4 lakh tonnes of saleable steel a year. This will be done by spending the Rs 230 crore earmarked for Burnpur works on a sinter plant, two new blast furnaces and a new wire and rod mill.
The 125-year-old company was taken over by the government in 1972 and attached to SAIL as its subsidiary six years later. Since the takeover, the government has mulled over some 11 proposals to modernise IISCO's more than 75-year-old Burnpur steel plant.
However, political and bureaucratic indifference put paid to virtually all of them. In the first quarter of this year, IISCO produced about 73,000 tonnes of steel and 74,000 tonnes of pig iron. Once the revival plan is implemented, this figure is expected to increase dramatically.