The revival of ailing Indian Iron & Steel Company (Iisco), a subsidiary of the Steel Authority of India Ltd (SAIL), may be undertaken in a phased manner.
As per a report submitted by consultancy firm M N Dastur to the steel ministry, the total revival package of Rs 1,081 crore should be broken into smaller packages. Also, the plant renovation and modernisation should be undertaken in phases.
The entire revival of the plant could take about seven to eight years, government sources said.
Though the exact cost for the revival of each of the phases would vary, as per estimates, it could cost Rs 150 crore per phase, said sources. "Small infusion of fund is easy to raise. Financial institutions would be ready to fund small amounts of funds and each renovated division can start earning some return for the plant," sources said adding that financial institutions otherwise may not be interested in a "junk" plant. Till now no institution has shown any interest in footing the entire bill for the Rs 341 crore capital investment.
However it is understood that the government is holding a meeting on Monday to take a final call on the issue.
The Cabinet Committee for Economic Affairs (CCEA) gave an in-principle clearance to the Rs 1081 crore revival package for Iisco on Tuesday. It will now have to decide the exact financial arrangements and the revival plan.
The final plan would then need to be cleared by IDBI, which is the operating agency, which in turn would report to the Board for Industrial and Financial Reconstruction.
The government may also decide to sell off the captive mines of Iisco at a later stage. Meanwhile the Australia-based BHP Billion has shown fresh expression of interest to buy the coal mines. "At present the government is keen to chalk out a strategy for the steel plant," said a government official.
