Employees of crisis-ridden Neelachal Ispat Nigam Limited (NINL) in Odisha on Sunday urged the Centre to immediately ask psu steel major like Steel Authority of India (SAIL) to run the plant.
Lack of working capital has led to shut down of major units like Steel Melting Shop (SMS) and blast furnace of the plant at Kalinga Nagar steel hub, Neelachal Executive Association (NEA) president Subash Chandra Sahoo said.
"Immediate steps must be taken for the resumption of normal operations at the plant and we urge the Central government to direct psu steel major like SAIL to run the plant during the transition period," Sahoo said.
The NEA president in a statement said "Severe liquidity crunch has forced the authorities to suspend production at the plant though coke oven is operating with 40 to 43 per cent capacity as it has to run continuously to prevent permanent damage."
He said NINL plunged into crisis as MMTC, which holds the majority stake of 49.6 per cent in the company, has decided to divest its share and allegedly stopped infusion of working capital for running of the plant since last June.
As a result, equipment condition is fast deteriorating because of the shutdown and reduced capacity utilisation, while interest burden to the company is more than 1 crore per day and its net worth is going down, Sahoo said.
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"Now that the main promoter MMTC has decided to quit NINL, it will be prudent to review the proposal to merge it with steel behemoth SAIL," he said adding over 10,000 people depend for their livelihood on NINL, which needs immediate capital infusion.
The NEA president said the association has also written to Prime Minister Narendra Modi recently and sought his intervention to pull NINL out of the deep crisis. Odisha Government has also been apprised of the situation.
On NEA's suggestion, Odisha's Steel and Mines Minister Prafulla Mallik said there was a proposal for merger of NINL with SAIL sometime ago but nothing concrete has emerged.
The authorities concerned have been asked to take necessary steps for running the plant till a final decision is taken on disinvestment of NINL, he said.
Apart from MMTC, Odisha government through OMC and IPICOL holds a share in the cash-strapped NINL.
The issue was also raised in the state assembly last month when a ruling BJD legislator sought the intervention of Chief Minister Naveen Patnaik to bail out the company.
Neelachal Executive Association also pointed out that despite being in a crisis, NINL will turnaround when the steel maker starts operating its captive iron ore mines at Koira.
"The biggest strength of NINL is its captive iron ore mine of 874.29 hectares, 110 million tonnes of estimated reserve. With production from these mines, NINL will save Rs 250 crore per 1 MTPA on the raw material front," Sahoo said.
Stating that NINL is an integrated steel plant of 1.1 million-tonne capacity, he said it has more than 2500 acres of land which is sufficient for expansion up to 5-10 MTPA.
Just like merger, amalgamation and acquisition is being done in banking, oil and insurance sectors, merger of NINL with steel psu may be done by the government in the larger interest, he said.
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