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New Delhi: The Steel Executives Federation of India (SEFI) has asked Prime Minister Narendra Modi to merge Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL), NMDC Steel's Nagarnar plant and MECON Ltd into a single, mega PSU steel company under the Ministry of Steel. The demand was made in a letter dated August 31 and signed by SEFI chairman Narendra Kumar Banchhor, and was reaffirmed by a resolution at the federation's council meeting in New Delhi on September 1.
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SEFI is a national organisation recognised by the Ministry of Steel, representing 20,000 officers across SAIL, RINL, NMDC, MECON and the Nagarnar Integrated Steel Plant (NISP). Officers' association representatives from all SAIL plants, RINL's Visakhapatnam Steel Plant (VSP), MECON and Nagarnar attended the council meeting at the SCOPE Minar complex in New Delhi, according to a statement issued by the Steel Executives Association (SEA), Visakhapatnam Steel Plant, on September 3.
The letter's central argument is that the government is expanding one steel PSU, while selling two others. SAIL has been directed to reach a capacity of 35 Million Tonnes (MT) by 2030, SEFI says, an expansion for which it will invest more than Rs 1 lakh crore. RINL and the Nagarnar plant, with capacities of 7.3 MT and 3 MT, are meanwhile listed for disinvestment. SEFI has called this contradictory and wants SAIL to acquire the two units out of the budget already earmarked for its own expansion, which it says would save time, energy and financial resources.
The acquisition route would let SAIL reach its target without a waiting period, according to the letter. It says direct and indirect employment tied to the two units would be protected, and that the step would give fresh direction to social, economic and infrastructure development in Bastar, the district where Nagarnar steel plant is located.
The letter sets out a case for each unit in turn. Nagarnar was built at a cost of Rs 24,000 crore with modern technology and is well supplied with iron ore, but has only about 200 officers and 500 employees available to run it, a number SEFI calls 'inadequate.' RINL has a workforce of skilled technical specialists, it says, but is struggling with a shortage of iron ore and high prices.
"The merger will address issues pertaining to raw material security, will lead to closure of skill gaps and working conditions will improve," Banchhor told PSU Watch.
"This Mega Steel merger... shall greatly help to realise the targets of National Steel Policy of 300 MTPA steel capacity by 2030-31. Each steel units has its strengths and weaknesses, but merger of them into single unit would help them to synergise their strengths like raw material security, technology transfer etc and turn the weaknesses into opportunities and it overall benefits to Nation," said the resolution passed by SEFI.
The council resolution carries a second demand, that steel be declared a strategic sector. It describes steel as an essential component in the growth rate and a heavy contributor to GDP, and says the sector should be kept under the strategic category. "Steel being an essential component in the growth rate, contributes heavily to the GDP of our country, it should be kept under Strategic Sector of the Nation," it said. The resolution was first originally passed in April 2021. Since then, SEFI has made several representations to the government to consider its demands.
The body has argued that if atomic energy, space, defence, transportation, telecom, power, oil and gas, coal and minerals, and insurance and banking are considered strategic sectors by the government, and then why is steel, on which those sectors depend, is classified as non-strategic.
The council also urged the Central government to release Rs 2,500 crore immediately for restoration of the coke oven batteries at Visakhapatnam Steel Plant, which the statement said had been pushed into losses by adverse policies.
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The SEA said that a SAIL-RINL merger will benefit both the PSUs. It said production cost at Visakhapatnam would fall by Rs 8,000 to Rs 10,000 a tonne, that the plant would reach 7.3 MT within a year and could be expanded to 20 MT, and that it would gain access to SAIL's captive iron ore mines. For SAIL, it claims access to a land bank for expansion, improved reach into southern and western markets, and a stronger export position as Visakhapatnam is a shore-based plant. This, the steel executives' body claims, would strengthen the position of the merged entity, allowing to contribute towards India's target of producing 300 MT of steel by 2030-31.
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