Neelachal Ispat Nigam Limited, Odisha (NINL) is a 1.1 MT integrated Iron Steel Plant in Kalinganagar, Odisha. Plant production is stopped since mid-June 2019 ( Blast furnace) i.e., more than 2 years. Long shutdown of the plant is severely affecting health of plant, equipments & machineries. Plant with its Captive Iron Ore Mines (110 Million ton reserve) is under disinvestment by DIPAM with the approval of CCEA on 8 Jan 2020.
Being a Public Sector Undertaking, NINL was granted captive sources on out of turn basis without following the auction process. At no point of time, the Mines granted/allotted to this public sector undertaking since 1999 was explored. The raw materials were purchased from outside at higher rate. 4 deadlines of completion of disinvestment already crossed.
Preliminary Information Memorandum was published to invite EOI (Expression of Interest) on 25 January 2021. Bidders have been shortlisted by DIPAM for further process. It has been already been reported in media, this month itself that strategic sivestment of NINL does not seem to be a possible and viable option as the valuation of the PSU is already in doldrums. The delay in finalizing the valuation for strategic sale has also delayed the sale of the PSU.
The Ministry of Commerce has objected to the valuation methodology adopted for NINL i.e. “Enterprise Value Method” for disinvestment. The administrative ministry of MMTC, which holds a majority stake in NINL, has pointed out that the method is inappropriate for NINL and could encourage low bids covering only a part of debt, leading to suboptimal outcome.
According to DIPAM this will lead to complex bidding structure and commencement of insolvency and bankruptcy code proceedings by financial and operational creditors.More importantly this enterprise value method was unanimously decided by Secretaries of administrative department and DIPAM, based on the advice of transaction advisor.
AQs the completion of disinvestment process is unpredictable and uncertain as of now, employees of NINL continue their battle of survival in very pathetic conditions. NEA on 06 Jul 2021 communicated to Union Steel Ministry & Union Commerce Ministry that “when joblessness & sluggish economic growth is a worry now in Indian economy, almost 3500 contractual employees have lost their job in NINL during the Covid-19 pandemic period.
Further, employees of the PSU are unpaid for last 1 year i.e due from March 2020 ; more than 10,000 people are directly & indirectly adversely affected due to this. NINL has already lost 17 employees due to nonpayment of salary and/or want of medical facility.
MMTC Ltd, under Ministry of Commerce, major Shareholder of NINL has informed that “disinvestment proceeds of Neelachal Ispat Nigam Ltd may be affected by cases/ Anglo Coal, Government directives and Covid-19 pandemic situation etc.” A meeting co-chaired by Ministries of Commerce, Industry, Railways and Petroleum &Natural Gas and Steel, on 10 Nov 2020 it was decided to create a corpus to pay arrear salaries to the employees, but the same has not happened yet.
On 09 Mar 2021 NINL has got permission to sell 50% of annual capacity of iron ore mines to sell in open market to meet employee salary & arrear salary with other legitimate dues. Even if MDO has been selected but production from mines will take time. Employees of NINL are helpless, almost for 2 years now, production from the plant has come to a grinding halt and no steps by from shareholders, both Central Government and State Government have been proved fruitful.
Neelachal Executive Association (NEA) seeks intervention and strong support from Ministry of Commerce and Ministry of Steel of the Government of India and also from the Government of Odisha to save NINL, a national property in Odisha from ruin by immediately resuming plant operation by engaging any steel PSUs under Steel Ministry like SAIL/RINL/NMDC.
Distressed members of NEA are peacefully protesting wearing black badges demanding their arrear salaries and other legitimate dues as plant production is stopped and salary is due since March 2020: They raise quite a few pertinent question which www.indianpsu.com would like to bring to the notice of both the Central and Odisha Governments –
- Why is DIPAM not taking necessary steps to revive NINL by merging with SAIL/RINL/NMDC as there is history/record of merger and acquisition proposal?
- Already 17 no of employees have died since stoppage of plant and salary then why production of NINL is not resumed by starting of its captive mines with the support of steel PSUs such as SAIL/RINL/NMDC ?
- Since March 2018 a high power committee of MOC & MOS had decided to disinvest NINL and the same process is going on and on by DIPAM. In the last four years plant production units were stopped one after the other. Four deadlines for completion of disinvestment of NINL have already been crossed. Salaries are due since March 2020. So why NINL production could not be resumed by restructuring of loans by deferment of loan interest as decided in high power meeting Dt: 10.11.2020 and by starting operation of the captive mines of reserve of 110 million tonnes of iron ore to save the livelihood of direct and indirect employment of 10000 people ?
- Why DIPAM, under the aegis of Ministry of Finance, is not creating a corpus of about Rs 150/175 crores to pay salary arrears pending since March 2020 other statutory dues as decided in the ministerial meeting Dt:10.11.2020 and minuted on Dt:01.12.2020 to save the employees of Neelachal Ispat Nigam Limited, Jajpur, Odisha from starvation ?
- Why is DIPAM is not making necessary arrangements with consortium of banks for restructuring of NINL’s loan or deferment of loan interest using RBI guidelines on COVID restructuring for starting of plant production.
These are valid questions and the answers of the same are sought by workers/staffers of NINL as well as www.indianpsu.com……