By Anurjay Dhal
BHUBANESWAR: A day after the Union Minister of State for Finance and Corporate Affairs, Anurag Thakur, reply to BJD Rajya Sabha MP, Dr Sasmit Patra in Parliament, over the proposed disinvestment of Odisha’s Jajpur based Neelachal Ispat Nigam Ltd. (NINL), a 1.1 MTPA integrated Iron & Steel Plant, set up as a joint sector unit between MMTC of Ministry of Commerce, IPICOL & OMC of Odisha ,NMDC , a PSU under Ministry of steel , BHEL,MECON and banks & financial institutions, Neelachal Executive Association on Thursday demanded reconsideration of Government’s move for Disinvestment.MMTC holds majority stake of 49.78 % in NINL while Odisha Mining Corporation and Industrial Promotion and Investment Corporation of Odisha Ltd have 20.47 % and 12 %stakes respectively. Three other CPSUs NMDC, MECON and BHEL hold minor share in NINL.
Ajit Kumar Pradhan ,General Secretary of Neelachal Executive Association (NEA) of NINL, said that the Government should reconsider the decision of disinvestment of NINL and keep or merge all the assets of NINL under or with any steel sector PSUs other than MMTC( who had unilaterally announced for divestment of 49.78 % share on Dt: 27.06.2019) such as SAIL/RINL/NMDC or any conglomeration thereof since most of the shareholders are either State or Central PSUs who are in the business of mines and steel making and may pass any other order(s) as it may deem fit and proper.
“Any delay in restarting the production and sale will lead to loss of revenue to State and Union and will affect the livelihood of 5000 employees as well as the surrounding beneficiaries. After the merger NINL will play a major role in the economic activity of the country as well as bringing industrial harmony in the region,”Pradhan said.
Union Minister of State for Finance and Corporate Affairs, Anurag Thakur had said the Government has taken decision for strategic disinvestment of the 5 Central Public Sector Enterprises (CPSEs)/Units /Subsidiaries in the Steel Sector. The Minister Thakur said, CPSUs were Rastriya Ispat Nigam Limited(RINL),Neelachal Ispat Nigam Limited(NINL),NMDC Integrated Steel Plant(NISP), Nagarnar,Ferro Scrap Nigam Limited(FSNL) and Alloy Steel Plant, Durgapur; Visvesvaraya Iron and Steel Plant, Bhadravathi; Salem Steel Plant, Salem .
BJD MP Dr Patra had sought to know whether Government is planning to sell large tranches of equity stakes of Steel PSUs in India to private players; and if so, the steps being taken in this direction?, replying to it, Minister Thakur said the Government has recently introduced a New Public Sector Enterprise(PSE) Policy for Atmanirbhar Bharat notified on 4th February, 2021 applicable toCentral Public Sector Enterprises (CPSEs), Public Sector Banks (PSBs) and PublicSector Insurance Companies (PSICs). As per this policy, existing Public SectorCommercial Enterprises (except those specifically exempted) have been broadly classified under Strategic and Non-strategic Sectors.
The last date for submission of EoIs for NINL is March 29. The shortlisted bidders will be asked to put financial bids in the second stage. NINL posted a loss of Rs 402 crore in FY19 and Rs 827 crore in the first nine months of FY20.NINL posted a loss of Rs 402 crore in FY19 and Rs 827 crore in the first nine months of FY20.The Centre on Monday invited expressions of interest (EoIs) for strategic disinvestment of 100% stake in Neelachal Ispat Nigam (NINL) held jointly by four central PSUs and two Odisha government PSUs.
In the two-stage process, the last date for submission of EoIs for NINL is March 29. The shortlisted bidders will be asked to put financial bids in the second stage. The transaction is seen materialising in the next financial year. According to bidding terms, interested bidder/s for NINL must have a net worth of Rs 2,000 crore. However, again in 2019-20, it suffered Rs 3,910-crore loss in 2019-20.Cabinet to clear sale of Rashtriya Ispat Nigam (RINL) soonThe lender, which is still under the Reserve Bank of India’s PCA framework, had posted a net profit of Rs 30.12 crore for the second quarter.UCO Bank posts Rs 35-crore net profit in Q3, provisions fall 76%. NINL posted a loss of Rs 402 crore in FY19 and Rs 827 crore in the first nine months of FY20.
NINL has been producing and exporting Pig iron and in fact it was the largest exporter of Pig iron since 2002. Govt of Odisha has allotted undisputed 2500 Acre land along with iron ore mines of 110 Million Ton reserve & 50 years of lease expecting that the plant will bring economic prosperity to the state & the production capacity can be enhanced upto 10Million Ton.
After the decision of strategic disinvestment of 100% shares in NINL taken by the Central Government, Major promoter MMTC as well as other minor promoters have stopped further funding for running of the plant leading to suspension of production of all units from March 2020 during COVID-19 lockdown period. For no fault of the employees they are being deprived of getting their salaries/remunerations for past one year (March 2020). 10000 people are directly or indirectly affected including 650 land losers after the stoppage of plant production. NINL once acclaimed largest exporter of pig iron is in the process of disinvestment being carried out by DIPAM under Ministry of Finance. EOI (Expression of Interest) has also been floated on Dtd.25.01.21. In view of uncertainty arises due to global meltdown of economy caused by COVID-19 pandemic it is very difficult for DIPAM to arrange quickly a strategic investor to save this glorious public asset.
At present the IR situation at the plant site Duburi has become extremely volatile due to non payment of salary and wages for the last one year and demonstrations are being staged by different unions in and around the plant site there by disintegrating the relationship of quid pro quo/mentor and servant. It is pertinent to mention here that during one such demonstration held during February 2021, the situation become tensed necessitating interference of ADM,Addl SP and IIC of kalinga nagar ,Jajpur ,Odisha . A record of note of discussion/settlement has signed between Management of NINL and NINL employees Union in presence of ADM, Addl SP ,IIC kalinganagar.
High power committee meeting co-chaired by Honourable commerce & industry minister and Honourable Minister for PNG & Steel on Dt: 10.11.2020 was organised and minuted on Dt: 01.12.2020 related to NINL issues. From the contents of the decisions arrived during the high power meeting held on Dtd. 10.11.2020 the following conclusions were drawn :
In view of the promoters not being able to infuse further funds to NINL, in particular MMTC being under severe financial distress, DIPAM will take up the following with banks:
To create a corpus of about Rs 150/175 crore to keep NINL disinvestment ready. This money can be used to pay salary arrears and other statutory dues of NINL till its disinvestment is completed. Request SBI and other Banks to restructure NINL’s loans till its disinvestment process is completed, using RBI guidelines on Covid restructuring, if required.
Govt has permitted NINL to sell its 50% of annual production of iron ore i.e. 10 lakh tonne within a period of two years to release salary and wages vide letter no 16/54/2019-M.VI dated 9th March, 2021.“In this context if a long term contract is made with any potential buyer of 10 lakh tonne of iron ore such as SAIL/RINL/NMDC/ OMC then plant production would have been started with the advance payment which can save the livelihood of the employees as well as contractual workers,” the NEA said.
