Reeling under heavy losses for years now, Neelachal Ispat Nigam Limited (NINL), which was India’s largest exporter of saleable pig iron since 2004-05, is going for strategic disinvestment.
Initiating the process of Neelachal Ispat Nigam Ltd’s (NINL) privatisation, the government has invited global expressions of interest (EoIs) for strategic disinvestment of the public sector undertaking (PSU).
The Department of Investment and Public Asset Management (DIPAM)- nodal body in-charge of inviting bidders, has issued a global invitation for EoIs. As per the invitation, the government aims to disinvest 100 percent shareholding of the six state-run stakeholders of NINL which include four Central PSUs – Metals and Minerals Trading Corporation (MMTC), National Mineral Development Corporation (NMDC), Bharat Heavy Electricals Ltd (BHEL) and MECON – and two Odisha government companies IPICOL and Odisha Mining Corporation (OMC) are shareholders in NINL.
MMTC holds a maximum 49.78 percent shares in NINL, followed by NMDC (10.10 percent), OMC (20.47 percent), IPICOL (12.00 percent), MECON (0.68 per cent) and BHEL (0.68 per cent). The Odisha-based NINL had set up 1.1 million tonne integrated iron and steel plant at Kalinganagar, Duburi, in the state’s Jajpur district.
Ajit Kumar Pradhan, General Secretary, Neelachal Executive Association (NEA), NINL told www.indianpsu.com “NINL has been producing and exporting Pig iron and in fact it was the largest exporter of Pig iron since 2002. It also produces Billets, LAM Coke , Crude Tar, Fertilizer and Sinter etc. The present capacity of the plant is 1.1 Million Ton per annum. Govt of Odisha has allotted undisputed 2500 Acre land along with iron ore mines of 110 Million Ton reserve & 50 years of lease expecting that the plant will bring economic prosperity to the state. The plant has all infrastructure facilities to enhance its capacity to 10 Million Ton per annum without any hassles as regards to availability of land and raw material supply. All the technical and non technical employees as well as contract labourers totalling about 5000 have sufficient expertise, sincerity, hard working and dedication to meet any challenge for its capacity enhancement. Govt of India has envisioned to produce 300 Million Tonne of steel by 2030 out of which 100Million Tonne are planned for productions from Odisha it self in which case NINL can play an important role”.
Pradhan added that after the decision of strategic disinvestment of 100% shares in NINL taken by the Central Government, Major promoter MMTC as well as other minor promoters had stopped further funding for running of the plant leading to suspension of production of all units from March 2020 during COVID-19 lockdown period. For no fault of the employees they are being deprived of getting their salaries/remunerations for past ten months(March 2020). This has also lead to restlessness among employees and strikes on several occasions. NINL once acclaimed largest exporter of pig iron is in the process of disinvestment being carried out by DIPAM under Ministry of Finance. EOI (Expression of Interest) floated yesterday i.e on Dt:25.01.21. In view of uncertainty arises due to global meltdown of economy caused by COVID-19 pandemic it is very difficult for DIPAM to arrange quickly a strategic investor to save this glorious public asset.
Praqdhan said that recently a high level meeting co-chaired by Honourable commerce & industry minister and Honourable Minister for PNG & Steel on Dt: 10.11.2020 was organised and minuted on Dt: 01.12.2020 related to NINL issues. In view of the promoters not being able to infuse further funds to NINL, in particular MMTC, DIPAM will take up few issues. A corpus fund of Rs 150/175 crore to be kept for payment of salaries & arrears and other statutory dues of NINL. . Govt permits NINL to sell its 5 lakh tonnes (25% of its production capacity) vide letter no 16/54/2019-M.VI dated 5th January, 2021 iron ore from its captive mines to alleviate its financial stress as decide in the above high level meeting.
Pradhan also said that as now that GOI has envisioned for the development of eastern India under look east policy and mission PURVODAYA , it is pertinent that GOI to reconsider its decision of disinvestment and instead keep all the assets of NINL under a central PSU. Since all the present share holders are from State and Cental PSUs NINL merger with steel PSUs should not create any problem. Hence an alternate model to be worked out, so as to merge the unit with a steel PSU, SAIL/RINL/NMDC who are in the business of mines and steel making. In such an event MMTC shares can be taken over by a steel PSU. Any delay in restarting the production and sale will lead to loss of revenue to state and central Govt. and will affect the livelihood of 5000 employees as well as the surrounding beneficiaries. After the merger NINL will play a major role in the economic activity of the country as well as bringing industrial harmony in the region.