NMDC offers employment to NINL staff on deputation basis at its Nagarnar plant

  • NINL has been under a severe financial crisis and has not paid its employees since February this year

  • The minutes of the Aug 13 meeting show that the Steel Minister has asked all major promoters of NINL, except MMTC, to infuse funds into NINL

New Delhi: State-run NMDC Limited has agreed to a request made by Neelanchal Ispat Nigam Limited (NINL) and has offered to take the latter’s employees “on loan basis” for its iron and steel plant in Nagarnar, Jagdalpur in Chhattisgarh. NMDC is keen on commissioning its 3 MT steel plant in Nagarnar in the near term. In an internal circular issued by the NINL HR department, a copy of which was accessed by PSU Watch, the Odisha-based PSU said, “NMDC has agreed to our request for deployment of NINL’s personnel on loan basis in NMDC’s Iron and Steel Plant (NISP) at Nagarnar, Jagdalpur, Chhattisgarh…”

NINL has been under a severe financial crisis and has not paid its employees since February this year. The move to send employees off on deputation to NMDC’s plant in Chhattisgarh is being seen as employees as a ploy to lighten the financial liabilities of the company ahead of its disinvestment. At a high-level meeting held on August 13 between Steel Minister Dharmendra Pradhan and Minister for Commerce and Industry Piyush Goyal and other stakeholders, there was no clarity on whether the plant will be restarted or not before disinvestment. And this has been a major concern for employees because unless the plant is restarted, there is little clarity about their future and also the clearance of past dues.

What is NMDC offering to NINL employees?

According to the document, NMDC has offered three years of engagement (which can be extended by another two years) at the existing pay scale and allowances as applicable in NINL. The Housing Rent Allowance would be 10 percent of the basic pay and will not be applicable if accommodation is provided by NMDC. 

NMDC will forward the employees’ salaries to NINL on the basis of the monthly attendance details and NINL will be required to disburse the salaries. The contribution towards superannuation benefits and annual increment would be as per the existing terms of NINL. One of the conditions listed in the document says, “Considering the requirement/performance/conduct, the engagement can be terminated at any point of time as per the recommendations of a committee.”

Govt has asked all promoters, except MMTC, to infuse funds

The proposal from NMDC has come in the backdrop of the Minutes of the Meeting released by the Ministry of Commerce and Industry for the August 13 high-level meeting. Apart from what was known earlier — that the government has asked the Department of Investment and Public Asset Management (DIPAM) to expedite the disinvestment of NINL — the minutes of the meeting show that the Steel Minister has asked all major promoters of NINL, except MMTC, to infuse funds and help NINL in releasing payments to employees. MMTC has categorically said that it will not be able to infuse funds anymore but has sought views from other shareholders to sell the finished products lying at NINL premises. 

Also read: NINL will be disinvested as soon as possible: DIPAM Secretary

The Centre has also asked the NINL board to take a decision on declaring lockout as well as termination of contract workers. It has also asked the Odisha-based PSU to seek assistance from the government of Odisha in discharging finished products to buyers with delivery orders from MMTC and restructure its loans and defer interest payment. As was reported by PSU Watch earlier, even if past dues of NINL employees are cleared, there is little clarity on what will the future hold for them and whether the plant will be restarted before disinvestment to realise fair value of the 1.1 Million Tonne integrated iron and steel plant.

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