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Jindals in IISCO rescue mission

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By SATISH JOHN in Mumbai
  • Published 22.08.04

Mumbai, Aug. 22: Ailing Indian Iron and Steel Company (IISCO) will soon find a saviour: Sajjan Jindal, who controls the Rs 4000-crore Jindal South West.

The overture to Jindal was made by Bengal chief minister Buddhadeb Bhattacharjee at a roadshow organised by ABP Ltd in Mumbai to drum up investments for the state.

“IISCO has no future. If you take over, it has one,” Bhattacharjee told Sajjan Jindal when he enquired about the fate of his proposal to revive the steel plant. Bhattacharjee’s response took Jindal by surprise. “Before I met you sir, I had received mixed signals from the state’s bureaucracy and political establishment,” Jindal said.

Jindal has been interested in the steel unit, which the government wants to delink from the Durgapur steel plant. “I don’t see how this arrangement with DSP can work for more than a few years,” Bhattacharjee said.

The Bengal government has been hunting for suitors to revive IISCO and talks have been held in the past with the L. . Mittal, Jindal and Mukand groups as well as a consortium led by Russian companies.

Jindal, who owns Jindal Iron & Steel Company and Jindal Vijaynagar Steel, is drawing up plans to pump in Rs 15,000 crore to refashion IISCO into a brand new integrated steel plant with a capacity of 5 million tonnes.

“I am going to meet Union steel minister Ram Vilas Paswan and convince him about your proposal. It may take time. But you must be ready to take over the plant,” the chief minister said at a gathering of industrialists that included Ratan Tata, the head of the Rs 57,000-crore Tata group, which has substantial interests in steel.

Later, at the sidelines of the roadshow, a much-heartened Sajjan Jindal was heard telling his officers to gear up. “The chief minister has said so much; now it’s our duty to deliver.”

“We have informed the chief minister that we will retain the IISCO workforce and invest up to Rs 15,000 crore to raise capacity to 5 million tonnes,” Jindal told The Telegraph. “We have also promised that we will protect the iron ore in the captive mines by adding value to it in the plants and then exporting it,” he added.

Jindal said he had informed the chief minister that there would be many foreign suitors for IISCO but they would only be interested in exporting ores from the iron ore mines there. “My group will invest in the assets of IISCO. That will rejuvenate the Asansol belt,” he added.

Jindal’s revival plan for IISCO entails the setting up two large blast furnaces. Recently, Paswan had unveiled a Rs 341-crore revival package for the Burnpur unit of IISCO but ruled out reopening of its Kulti plant.

“The Bengal government has made several requests but we do not plan to reopen the Kulti unit. We have asked all 57 workers there to opt for VRS,” Paswan had said. The Burnpur unit would be upgraded and modernised. The money, Paswan said, would be provided by financial institutions with the Centre as a guarantor.

SAIL had floated a global tender for the revival of IISCO on April 14 on the advice of IDBI, its global adviser on the divestment of its subsidiary. Russia’s Tyazpromexport (TPE) was expected to take part.