Home ECONOMY Plan to sell off lone PSU steel plant in Odisha’s Kalinganagar

Plan to sell off lone PSU steel plant in Odisha’s Kalinganagar

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Odisha Sun Times Bureau
Jajpur, June 9:

If reports are to be believed, a well planned conspiracy has been hatched by interested quarters to sell off Nilachal Ispat Nigam Ltd (NINL), the lone public sector steel making unit in Kalinga Nagar in Odisha’s Jajpur district, considered as the steel hub of India.

ninl

While the Steel Melting Shop (SMS) unit of the NINL, built at a cost of Rs 1,600 crore, has been lying shut down for the last three months, the company has to repay a loan of Rs 1,200 crore.

Moreover, the plant which started production in 2002 has reached a stage of bankruptcy having incurred losses amounting to about Rs 623 crore in the last five years between 2010 to 2015.

NINL was then allocated 1798 hectares of iron ore mines in Koida to meet its raw material requirements for smooth operations.

However, instead of operating captive iron ore mines allocated to NINL, company managers kept buying iron ore from outside to keep the plant running.

While crores have been spent on buying iron ore, the current funds crunch has been attributed for failure to operationalize the captive mines.

With delay in NINL operationalizing its captive mines, the Odisha government has recalled 974 hectares out of the 1798 hectares of iron ore mines originally allocated to NINL.

Industry sources blamed MMTC Ltd, another public sector company which is under the Centre’s Commerce Ministry and holds 49.78 percent stake in NINL, for the sorry plight of the NINL. They blamed MMTC Ltd’s excessive profit seeking attitude for NINL’s bankruptcy.

While industry experts have rooted for take-over of NINL by Steel Authority of India (SAIL), the public sector steel behemoth, it’s MMTC Ltd which is allegedly playing spoilsport. MMTC officials have been giving statements year after year that the plant is all set for expansion, but nothing has happened.

However, managing director of NINL G S Gill has refuted reports of any plan sell off of the public sector unit outright.

Gill said NINL has been granted environmental clearance and other necessary permissions for its captive mines. Once the mines are operationalized, the plant’s production capacity will increase from the existing 1.1 million tonne to 5 million tonne, he added.

Gill said the management board has put curbs on the production in view of the fall in demand for steel in the international market. Brakes have been put on the expansion plans of the plant for th same reason, he added.