Not paid salaries for 9 months, employee unions challenge NINL disinvestment in Orissa HC

  • Petitioners have mainly accused MMTC (primary promoter of NINL) as sole responsible for imbroglio, a top representative of the executives’ association said

  • NINL employees have been pushed to starvation during the COVID-19 pandemic as they are unpaid since February 2020, he added

New Delhi: The employees unions and associations of state-run Neelanchal Ispat Nigam Ltd (NINL) have filed a writ petition in the Orissa High Court, challenging the Centre’s decision pertaining to the PSU’s disinvestment, which has put the future of the company in limbo and has left its employees without salaries for the last nine months now. “Petitioners have mainly accused MMTC (primary promoter of NINL) as sole responsible for imbroglio. After the decision of disinvestment was taken in January 2020 by the Cabinet Committee on Economic Affairs, promoters were not interested in infusing money to run the plant and severe liquidity crunch that followed has led to the shutdown of the plant, and employees have been pushed to starvation during the COVID-19 pandemic as they are unpaid since February 2020,” Ajit Pradhan, General Secretary of Neelanchal Executives’ Association (NEA) told PSU Watch. NINL employees have also sought the merger of the PSU with Steel Authority of India Ltd (SAIL), Rashtriya Ispat Nigam Ltd (RINL) or National Mineral Development Corporation (NMDC). 

Two writ petitions have been filed by NINL associations and unions. One challenges the action/inaction of NINL’s managing promoters on the ground that after the proposed decision of disinvestment of 100 percent equity share in NINL, because of the illegal and arbitrary action of the promoters, more than 10,000 families are adversely affected and deprived of maintaining their livelihood. The other petition has sought a direction from the court for disbursement of salary to employees since February till date. The Orissa High Court has already served notices to MMTC and other promoters National Mineral Development Corporation (NMDC), Industrial Promotion and Investment Corporation of Odisha Ltd (IPICOL), Odisha Mining Corporation (OMC), represented through the Ministry of Commerce & Industries, Ministry of Steel, and the government of Odisha represented through the Steel and Mines Department.

‘Interest paid to MMTC compensates total loss of NINL’

An official statement released by the NEA said that the total commission and interest paid to MMTC is Rs 1,653 crore, which compensates the total loss of NINL. “The capital investment was only Rs 747.64 crore but the required fund for the plant set up, required expansion, day-to-day operation was borrowed from bank, MMTC and OMC collected as bond. Due to this overburden of liabilities, which is presently Rs 5,700 crore, NINL started incurring huge loss from 2012-13,” the statement said.

Employees have also contended that even though a mining lease was granted to NINL in 1999 but MMTC did not make attempts to get mining clearance for two decades, from 1999 till 2019, until the government took the decision to disinvest NINL. “After the decision of disinvestment of NINL was taken, the activities to make the mines operational, which had been stuck for the last 20 years, picked up pace. This was done deliberately to attract private bidders to the disinvestment process,” said Pradhan.

Employees suffer due to inaction on part of promoters

At a high-level meeting held in August which was attended by Steel Minister Dharmendra Pradhan, Minister for Corporate Affairs Piyush Goyal, DIPAM Secretary Tuhin Kanta Pandey and the top executives of MMTC and NINL, it was decided that overdue and current salaries will be released to employees and disinvestment will be fast-tracked. However, three months on, employees are still waiting for the disbursement of dues and little progress has taken place with respect to NINL's disinvestment. NINL employees have not been paid since March and only part of the salary for February has been released to them so far this year.

ALSO READ: Centre asks DIPAM to close NINL disinvestment in 3-4 months, say sources

“Nine employees/oustees have succumbed to death due to lack of medical assistance and money and one of the workers has committed suicide for such sheer inaction of the opposite parties,” the employee unions and associations have said in their petition to the Orissa HC. They have requested the HC to merge NINL with SAIL and to direct authorities to clear arrears and current salaries.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Telegram. Join PSU Watch Channel in your Telegram and stay updated)