Tamil Nadu Chief Minister Edappadi K. Palaniswami has urged Prime Minister Narendra Modi to advise the Ministry of Steel and Steel Authority of India Ltd not to privatise Salem Steel Plant.

Palaniswami recalled his letter written to Modi on April 26, 2017, making a similar request.

The plant’s employees told Palaniswami that a Legal Advisor, Asset Valuer and Transaction Advisor were appointed by the Centre in June. It was also decided to constitute an advisory committee to speed up the plant’s privatisation by calling a global tender.

In his letter to Modi yesterday, Palaniswami said the plant had acquired a global reputation for high quality steel and was an ‘iconic’ symbol for the state and the people of Tamil Nadu. “We have a deep sense of pride and attachment to this public sector plant,” he said.

The plant provides employment to around 2,000 people and many ancillary and subsidiary units also depend on it. “It was brought to my notice that the financial condition of plant had improved in financial year 2016-17 in comparison to financial year 2015-16,” he said.

The state government had supported the plant’s expansion project costing Rs 2,005 crore with a structured package of incentives in the form of soft loan, capital subsidy, electricity tax exemption and environmental protection subsidy.

In 2015, the state government granted a one-year extension from January 1, 2010 to December 31, 2011 to enable the plant to complete its expansion activities and avail of the incentive package.

Public sector undertakings (PSUs) are capable of performing better provided they are given the right support and direction in a dynamic economic scenario.

The reasons for the plant’s recent losses must be studied thoroughly and the plant must be given a chance to improve its efficiency to make a turnaround. “If that is done, the plant will certainly transform once again into a profit-making PSU, Palaniswami said in the letter.

comment COMMENT NOW