"SAIL should step up the good efforts for overall...
improvement in its physical performance so as to make the company more competitive with other players in the market," the 31-member committee said.
The panel said it is concerned to note the poor performance of Rourkela Steel Plant, IISCO Steel Plant, Alloy Steel Plant and Visvesvaraya Steel Plant that could achieve only 79 percent, 56 percent, 38 percent, 60 percent and 33 percent, respectively of their installed capacity of crude steel during 2016-17.
"The company should take all necessary steps to address all the bottlenecks which hampers full capacity utilisation of these plants so that production targets for 2017-18 which are lagging behind during the first half of the year are fully achieved," the committee observed.
It also directed the PSU to ensure that all its plants are operated at full installed capacity.
The panel noted that though slowly and steadily SAIL has "managed to come on track after suffering initial setbacks during last two years, a lot is yet to be accomplished".
It said the turnover of the company which was Rs 50,627 crore during 2014-15 was reduced to Rs 43,294 crore during 2015-16 and again rose to Rs 49,180 crore during 2016-17.
Last year, Steel Minister Chaudhary Birender Singh had warned PSUs, including SAIL, to "perform or perish" saying complacency cannot be tolerated at a time when private players are excelling on various parameters. Chairing a meeting of chiefs of top steel PSUs, the minister had pulled up public sector firms like SAIL and RINL for not only lagging behind on international benchmarks, but were behind their private counterparts and complacent in ramping up capacities. "On production and productivity parameters, PSUs are far behind their counterparts in private sector. In terms of international benchmarks, performance of Indian steel companies is very poor," Singh had told PSU top brasses as per the ministry sources.
Also pulling up SAIL for slow progress in modernisation as well as ramping up of capacity, the minister has said deadlines were missed one after another which cannot be tolerated anymore.
In a related development, ArcelorMittal and Steel Authority of India (SAIL) are exploring a joint bid for Bhushan Steel, the distressed company referred to the National Company Law Tribunal, a news portal reported quoting sources.
Both ArcelorMittal and SAIL had separately submitted their expressions of interest for the Bhushan asset. While the LN Mittal-headed company had shown its interest in October last year, SAIL was a last entrant in the race, throwing its hat in the ring only in December.
Though SAIL might not be in pink of health, its legacy in India makes it well placed when it comes to handling domestic operations. A partnership with SAIL would also be backed by the government.
ArcelorMittal, the world’s largest steelmaker, brings with it financial prowess and years of experience in making acquisitions work. The company, which produced 90 million tons of steel last year, had a turnover of $56.8 billion in 2016, with a net income of $1.8 billion. Though the initial discussions between the two sides have been for Bhushan Steel, there is an option to extend the partnership to Bhushan Steel & Power and Essar Steel, both of which have also been referred to the NCLT.
ArcelorMittal and SAIL had recently revived a joint venture to manufacture auto-grade steel in India. The memorandum of understanding for the Rs 5,000-crore project was initially signed in 2015. It was reviewed in 2016, and late last year, Union Steel Minister Birender Singh said that the JV is “almost finalised.” The JV will set up a steel plant with a capacity to produce 1.5 million tons of auto-grade steel a year. Bhushan Steel has an annual capacity of 5.6 million tons. Though claimed to be the country’s biggest producer of cold rolled steel, which is used in white goods and auto sectors, Bhushan has piled up a debt of Rs 46,000 crore. It now has reported net losses in 16 straight quarters. It had a net loss of Rs 3,127 crore in the 2017FY.