The divestment of Rashtriya Ispat Nigam Ltd (RINL) is on track and the Centre continues to be in discussion with interested bidders, said officials. As part of the first phase of the divestment process, the operations and maintenance of the forged wheel unit of the RINL plant will be hived off.

Expressions of Interest (EoIs) to invite interested bidders for the forged wheel unit was floated in September last year. A transaction advisor was also appointed, sources said, adding that the Department of Investment and Public Asset Management (DIPAM) — which is overseeing the divestment process — is awaiting feedback from the former.

Financial viability

RINL’s forged wheel unit has a capacity of 80,000 units, but the same is not operational yet. In fact, one major reason for it being hived off is to ensure better financial viability for RINL, those aware of the discussions in the Steel Ministry told businessline.

“The divestment process is on track. And for better financial viability, there are plans to hive off the forged wheel plant to a private agency. This will see that the unit is optimally utilised and become a source of revenue for RINL,” said a source. Additionally, land monetisation of about 24 acres will be done too, according to a review document of the Ministry.

A previous proposal to hive off the plant to SAIL — so as to provide liquidity to RINL to sustain its core business of steelmaking — was reportedly shot down.

Acceptance certificate

According to sources, a preliminary acceptance certificate (PAC) has been issued for the forged wheel plant at Rae Bareli and in all likelihood, the production will be ramped up to 55,000 wheels within the current fiscal.

Railways has reportedly accepted a variance level (called tolerance in technical parlance) of 2 mm in forged wheel-making by RINL — as against 1 mm previously — in line with its present requirement. So this makes it easier for the plant to begin operations on a trial basis soon.

Recently, RINL had sought intervention from the Ministry in ensuring supply of 8-10 rakes of MCC (medium coking coal) per month from Central Coalfields Ltd; allocation of pulverised coal combustion and MCC on long-term basis from Bharat Coking Coal Ltd; and supply of one rake of boiler coal per day on continuous basis from the Mahanadi Coalfields. The issues were reportedly taken up by the Ministry of Coal.

Related Topics
comment COMMENT NOW