Apprehending a political backlash ahead of the scheduled assembly election early next year in West Bengal, the Centre has put on hold its plan to divest Alloy Steel Plant (ASP), a loss-making unit of Steel Authority of India (SAIL), located in Durgapur.
However, as per a steel ministry note, it is going ahead with the disinvestment plan for two other loss-making units – Visvesvaraya Iron and Steel Plant (VISP) in Bhadrawati and Salem Steel Plant (SSP) in Salem – of the public sector steel major.
“Meeting of the inter-ministerial group (IMG) under the chairmanship of secretary, Dipam, regarding disinvestment of two units of SAIL – SSP and VISP – was held on October 9, where issues involved in finalisation of transaction documents for strategic disinvestment of these SAIL units were considered,” said the steel ministry note. The ASP sale was part of an earlier plan, but the ministry note is silent on this.
The Cabinet gave its ‘in-principle’ approval in October 2016 for strategic disinvestment of all the three units. On February 1, 2018, SAIL issued notice seeking expression of interest (EoI) for disinvestment of ASP, but EoIs received did not meet the specified eligibility criteria. Fresh process was initiated and revised EoIs for ASP, VISP and SSP were issued in 2019, but nothing concrete came out of the process since then.
These three units reported a combined pre-tax loss of `500 crore last fiscal. ASP contributed around `100 crore into the loss pile.
As FE reported in September, the steel ministry directed SAIL to expeditiously identify its idle assets and chalk out detail plans for monetising of such assets and selling off its investments in joint ventures and steel processing units (SPUs), a move that may render the state-run firm to a pure-play steel and mining company in the coming days.
BJP, the ruling party in the Centre, has already made huge inroads into West Bengal in the Lok Sabha election. The assembly elections are likely to be held in April-May next year, if not earlier.
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