Friday, August 19, 2016

No smooth sailing: SAIL staff not to get perks as part of cost-cutting

THIS won’t bring any cheers among the staff of the state-owned PSU SAIL. The long downturn in the steel sector has forced public sector unit SAIL to opt for some tight measures including cutting down on perks for employees.
In the latest advisory, the personnel department has written to the marketing department employees, asking them to shun air travel and instead opt for rail journey if the destinations...
are connected by an overnight train.
Even in case of medical treatment, executives and their dependents, who are entitled to travel by air, have been asked to travel by train, unless there is an emergency. A few months ago the facility to provide furniture and furnishings to executives had been "deferred", which was seen as a step towards suspending the benefit that was available to a large number of employees across offices and steel plants. Similarly, encashment of earned leave has been stopped for all employees during their service period apart from cases related to superannuation, resignation, death or in case an employee was disabled. This was done citing the poor financial state due to market conditions as well as the modernisation and expansion plans not stabilizing.
A spokesperson told a national daily, "We are increasing production from efficient route and rationalising from inefficient ones. We are focusing on energy-saving measures such as power and coke rate and reducing overheads. So far, VRS has been given to 1,038 personnel. It has helped reduce cost by 10 percent in the fourth quarter of FY16."
During the January-March quarter, the state-run company reported a loss of Rs 1,230 crore, with annual loss estimated at R 4,137 crore. A large part of the blame is placed on the fall in global commodity prices, which had resulted in a rush of cheap imports from China until the government clamped down with a series of steps. But the loss has not deterred SAIL from stalling its expansion plans as it expects demand to pick up in the years ahead as India remains a small consumer on a per capita basis.
Earlier, the Maharatna PSU had decided curtail the strength of its workforce to reduce the manpower cost of the steelmaker and had reintroduced the voluntary retirement scheme (VRS) which came into effect from May 1. It was almost after six years that SAIL came out with the offer to propel its employees to opt for VRS. The VRS scheme launched by the PSU in 2001-02 continued till 2008-09. When the scheme was launched, SAIL had a strength of more than 160,000 employees and the manpower cost accounted to nearly 16 per cent of the company’s gross sales — the highest among the steel makers. Post VRS and natural separation of employees, its manpower has been reduced to 88,655, of which 13,968 are executives and the remaining 74,687 being non-executives.
According to officials, the VRS would be applicable for those employees who have worked for at least 15 years and whose minimum age is 50 years.
SAIL is India's largest steel producing company. With a turnover of Rs. 50,627 crore in the year 2014-15, the Maharatna PSU has five integrated steel plants, three special plants, and one subsidiary in different parts of the country. The Maharatna PSU is targeting steel production at 17 million tonnes for FY17 and 20 million tonnes for FY18. The PSU also plans to target 70 percent sales in the northern and eastern regions and increase its presence in the Make in India sectors like defence, aerospace and nuclear power.

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