SAIL rethink on Kulti asset use
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- Published 26.03.07
|Roongta: New interest|
Calcutta, March 26: Four years after it downed shutters at the Kulti Works, the Steel Authority of India Ltd (SAIL) has decided to take a re-look at the steel unit in Bengal.
The company is considering if it could utilise the asset, especially the huge tract of unencumbered land, for its internal use. A committee has been set up to explore the various possibilities at Kulti, the oldest steel unit in the country.
“SAIL is expanding its business. We are seeing if SAIL could do something in Kulti itself. For instance, non-ferrous casting could be an option there,” SAIL chairman S.K. Roongta told The Telegraph.
Kulti Works was set up in 1870. It became a part of erstwhile Indian Iron and Steel Company (IISCO) in 1936. SAIL closed down the unviable unit in April 1, 2003.
Following this, it appointed SBI Caps to sell the unit but that did not work out. Last year, SBI Caps had again sought expressions of interest (EoI) from interested parties.
This time four companies, including Tata Steel subsidiary Tata Metaliks and Jessop owner Pawan Ruia, had expressed interest. However, the process did not make any headway.
When SAIL announced a Rs 9,600-crore package to expand and modernise IISCO, nothing was mentioned about Kulti. However, steel minister Ram Vilas Paswan had promised to look into the matter then.
Observers feel the company might not be interested in selling the unit anymore. The EoI had sought to sell the plant, machinery and land on an ‘as is where is’ basis.
“The biggest stumbling block any industry faces at the time of expansion is availability of land. Kulti has it aplenty. Given SAIL’s intention to retain its existing market share in the future, the company will have to expand to 60 million tonnes over the next decade. It needs to conserve all the land it owns now,” analysts said.
For instance, SAIL is using 1,500 acres at Salem for setting up a special economic zone.
The total area in Kulti works out to 850 acres, which includes a sprawling colony of 2,300 residential units, a 9-hole golf course and a club.
The works is located on 228 acres of land even as more than two-thirds of the area is unencumbered.
Private companies were eyeing the foundry Kulti had. The works used to produce cast iron and spun pipes. After the advent of ductile iron pipes, spun pipes had lost their market.
The entire Kulti land was on a lease of 999 years to IISCO by the British government. After Independence, the lease was transferred to the Bengal government.
Last year, SAIL was given the authority to transfer the land to a successful bidder on condition that the new owner has to set up a plant there.