The committee consists of members from the Ministry of Steel, PSUs and technical experts, Minister of State for Steel Vishnu Deo Sai said in the Lok Sabha.
"A committee... has been set up for revival of Rashtriya Ispat Nigam Ltd (RINL) and Steel Authority of India Ltd (SAIL). Experts have submitted reports...
covering several functional aspects of SAIL and RINL like improvement in techno parameters, marketing and branding, equipment maintenance, product mix, raw material handling etc for improving performance," he said.
The minister said the losses in the two PSUs are due to adverse market conditions and lower net sales realisation of steel products. Increase in imported and indigenous coal prices and downturn in the global steel industry, among others, are also at work.
Both the PSUs, the minister said, have taken various steps to bring down cost of production, namely slashing consumption of BF coke in blast furnaces (BF), increasing production from new facilities, product mix enrichment, reduction in specific power and water consumption etc.
Earlier, the steel ministry had appointed retired executives with vast domain knowledge about the units of the PSUs to prepare a plan for revival. Each expert will closely monitor the workings of SAIL’s five integrated units and RINL’s Vizag unit and devise step-wise action plans to plug the loopholes.
Individual experts, mostly retired officials from SAIL and Tata Steel, have no fixed tenure. They will continue to provide expertise as long as the steel ministry wants them to. They will be given an honorarium. While BK Singh, an advisor to SAIL, has been asked to prepare the revival plan for RINL’s lone Vizag plant; RP Singh, former advisor to SAIL, BN Singh, former RINL CMD, and Tridibesh Mukherjee, former Tata Steel deputy MD, have been given the mandate for SAIL’s plants.
While depressed steel prices have hurt domestic steel firms, the government has taken a series of tariff and non-tariff measures to protect the domestic industry from the onslaught of imports. Recently, it has firmed up a policy that will make mandatory sourcing of domestically produced steel for government tenders. But, the two PSUs still lagged behind while their private sector peers took advantage of the steps and returned to profits.
The government wanted sweeping changes in the way SAIL and RINL functions so that they could turn profitable and catch up with their private sector peers. SAIL has been incurring losses for the last eight quarters. It is also likely to remain in the red for the entire current fiscal. RINL incurred a loss of Rs1,421 crore in 2015-16. Though it remained in the red, RINL’s turnover grew by 4 percent to Rs12,781 crore in 2016-17 over Rs12,281 crore in 2015-16. Sharma said the steel ministry is also setting independent targets for each units.
“The terms of reference of the committee will include chalking out a revival plan for turning around loss-making PSUs of Ministry of Steel, to profit-making PSUs in 2017-18. The plan will focus on increasing production, sales and improving financial health of these PSUs,” reads the steel ministry directive for committee. The revival plan will include recommendations on bringing down cost of production, improving branding and marketing, value-addition and diversification for better margins, among others.