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State wary of selling stakes in NINL

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BHUBANESWAR, July 28: The proposed merger of Nilachal Ispat Nigam Limited (NINL) with public sector steel giant Steel Authority of India Ltd (SAIL) has moved a step ahead with the Odisha government giving green signal to the SAIL proposal for development of NINL.

“The state government supports SAIL’s proposal for the development of NINL. Accordingly, OMC and IPICOL would facilitate induction of SAIL as a partner in NINL’s development,” said a letter written by Industry secretary Parag Gupta to Sashi Sekhar Mohanty, Director (Technical) and additional charge Director (Commercial) SAIL recently.

The letter, however, left no room for doubt that the state government is averse to selling off the stakes held by the two state PSUs in the steel company.

The chairman of SAIL had discussed the proposal before Chief Minister Naveen Patnaik during at the state secretariat here on July 8.

Though talks between the two sides have been going on for the last few years, the proposal to merge SAIL and NINL was scrapped as the Commerce Ministry was not willing to give away the country’s largest pig iron producer, sources said. A Committee of Secretaries had given the go-ahead to the proposal in July 2005.

State-run trading company Metals and Minerals Trading Corporation (MMTC), which falls under the administrative control of the Commerce Ministry, is the principal promoter of NINL.

NINL, jointly promoted by MMTC and the Industrial Promotion and Investment Corporation of Odisha (IPICOL) and Odisha Mining Corporation (OMC), is the country’s largest producer and exporter of pig iron with its 1.1 million tonne per annum (MTPA) plant at Duburi in Odisha. MMTC Limited owns the majority stake in the steel company while the Odisha government owns 26.29% through IPICOL and OMC.

Industry sources said the merger would have been a win-win situation for both NINL and SAIL. The iron ore mines owned by NINL could prove beneficial for the steel maker. On its part, NINL could have benefited with SAIL’s expertise on running steel mills.