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Our Bureau

Kolkata , Dec. 28

STEEL Authority of India Ltd (SAIL), for the first time, has favoured the proposed mega merger of steel-related public sector units, including the Vishakapatnam-based Rashtriya Ispat Nigam Ltd (RINL).

Addressing a press conference here on Wednesday, Mr V. S. Jain, Chairman of SAIL, said the emerging steel market in India could witness fierce competition among all the steel producers.

In this context, he said that public sector steel companies should avoid competing among themselves.

Instead, they should be merged and a single entity should be created.

He, however, clarified that these were his personal views and Union Government would be considering all opinions, including those of the State Governments and individual employees, before taking a final decision.

About three months back, the Union Steel Ministry had formed a high-powered committee to study the matter but no deadline was set for submission of a report.

After the merger of Indian Iron & Steel Co Ltd (IISCO), SAIL is now hoping that it would succeed in merging the Orissa-based Neelachal Ispat Nigam Ltd (NINL) with itself.

Mr Jain said talks are on with the Orissa Government for this purpose. Minerals & Metal Trading Corporation (MMTC) is the principal promoter of NINL and holds around 40 per cent.

Several Orissa Government undertakings hold a 25 per cent stake in NINL, whose annual crude steel capacity is 1.1 mt.

Earlier, RINL and Tata Steel were keen to pick up equity in NINL.

NINL recorded a profit of over Rs 200 crore in 2004-05 and also won an iron ore-mining lease from the Orissa Government.

It had merged its subsidiary Konark Met Coke Ltd with itself last year.

"We are hoping to merge NINL next, and are quite positive about it, but the whole process takes six to seven months," Mr Jain said.

He, however, accepted that SAIL was facing difficulty in merging its subsidiary, Maharashtra Elektrosmelt Ltd and Manganese Ore India Ltd.

SAIL-CIL arrangement: SAIL and Coal India Ltd (CIL) have entered into an arrangement whereby SAIL would be giving Rs 116 crore to CIL for the development of mines at Monidih 16 and 15.

These are located at Jharia in Jharkhand and owned by Bharat Coking Coal Ltd, a subsidiary of CIL. Mr Jain said that the money would be adjusted against future coal supplies.

A similar arrangement is likely to be worked out for the Kapuriah mines too.

Mr Jain said that SAIL and CIL may float a joint venture for overseas mine acquisitions in future.

At present, SAIL's annual coal bill is Rs 6,000 crore.

While 60 per cent is imported, the rest is purchased from CIL.

In the first eight months of this fiscal, SAIL has recorded a 7 per cent growth in saleable steel production and hopes to continue this trend till the end of the fiscal.

Referring to the Rs 34,000-crore SAIL Corporate Plan, he said projects worth Rs 3,800 crore have already started.

For IISCO, a Rs 8,000-crore package has been worked out, which includes Rs 5,000 crore for the steel plant, Rs 2,000 crore for Chiria mines and Rs 1,000 crore for the collieries.

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