Financial Daily from THE HINDU group of publications
Saturday, Aug 10, 2002
SAIL may shut Kerala stockyard
KOCHI, Aug 9
STEEL Authority of India Ltd (SAIL) appears to be contemplating closure of its stockyard and offices at nearby Irimpanam and to divest the portfolio through dealership networks.
SAIL is looking for consignment agencies with independent handling facilities to handle iron and steel items in the State so that it would be able to sell its facilities, Mr A.C. Jose, MP, who has taken up the issue with Union Minister of State for Steel, told Business Line.
SAIL's move to sell the stockyard has come at a time when a proposal from the public sector Steel Industrials Ltd Kerala (SILK) is being considered by the Central Government, Mr Jose said.
He added that the Central Minister concerned had assured him that he was looking into the matter.
According to Mr Jose, in a letter to SAIL, SILK had said that it was willing to take up distribution of steel items produced by various steel plants of SAIL throughout Kerala. For this purpose, SAIL could lease its facilities at Irimpanam to it.
With the help of the State Government and Indian Railways, SILK would take up providing rail line and Railway siding to accommodate rakes at Irimpanam for receiving material from SAIL's plants.
Road transportation of items would be avoided to the extent possible by convincing the Railways to extend the benefit to telescopic rates from Coimbatore to Kochi, Mr Jose said.
"If the yard were given to SILK, it would benefit not only the Railways but make SAIL products more price-competitive and ensure market availability.''
Also, SAIL's marketing office at Marine Drive in the city might not be necessary as SILK could construct a necessary facility at the Irimpanam yard itself.
SILK had also assured that it would take up the entire responsibility of handling, marketing and sale of products throughout Kerala.
According to Mr Jose, the expansion of the Kochi refinery, construction of the Vallarpadam container terminal and enhanced ship building activity at Cochin Shipyard Ltd (CSL) would ensure a large turnover for SAIL's products, in addition to its existing market.
CSL alone imports 20,000-40,000 tonnes of ship building quality plates conforming to Lloyds Specification from Japan, Korea, etc. These imports qualify for certain concessions in Customs duty.
"We are sure that SAIL is capable of manufacturing ship building quality plates of international standards. If concessional excise duty is accorded to SAIL, rather than subsidising steel plants in Korea or Japan, SAIL will be in a position to cater to CSL's entire requirement of steel material."
Mr Jose said that closing down of the SAIL stockyard would adversely affect the industrialisation of the State, apart from depriving Kerala of Rs 6-10 crore towards tax revenue per annum.
SAIL owns the stockyards in Chennai and Kochi, while the other two at Coimbatore and Tiruchi are on leased land.
"Therefore, instead of selling the Kochi yard, it should have thought of divesting the one on leased land. SAIL's decision is discriminatory.''
The stockyard at Kochi was developed on land acquired by the State Government and hence, its sale needs the Government's permission.
The previous Government had granted the necessary permission which had facilitated the sale process, Mr Jose said.
He called upon the State Government to cancel the permission granted earlier and take up the issue with the Centre.
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