With its financial health still far from impressive, the steel ministry has put the PSU on a tight leash
The countdown has begun for the state-owned Steel Authority of India Limited (SAIL) with the Modi government setting strict deadlines for it to deliver and turn the corner by the year-end.
SAIL, one of the two steel PSUs, has been in the red for sometime now. Its Rs 60,000-crore investment, which has fetched nearly no returns since 2009-10, has drawn the ire of the steel ministry.
Worse, the steel major has not followed certain basic protocols. Complaints about using coking coal without quality segregation and making fundamental mistakes in terms of blast furnace designs have not earned it any favour with the Central government.
The steel behemoth posted a loss of Rs 2,833 crore for the year ended 31 March, 2017. Sources told ThePrint that stringent key result areas (KRAs) have been identified for the SAIL top brass and the target is to deliver by the year-end.
With its financial health still far from impressive, the steel ministry has put the PSU on a tight leash. It is learnt that a high-level panel monitoring SAIL’s performance has directed the company to ensure that it at least breaks even in this financial cycle.
Industry insiders say that the steel sector has witnessed stability globally and analysts expect top companies’ earnings to rise over the next year riding on rising domestic demand.
With 85,000 employees at SAIL, the committee is also looking at ways to cut the flab at the PSU and is hoping that superannuation over the next few years may help.
Aruna Sharma, chairperson of the panel and Secretary, Ministry of Steel, confirmed to ThePrint that SAIL has been asked to put its basics in order immediately.
“Yes, the committee is chaired by me and we put the experts there. We got the feedback from them and we are asking them to tighten their belts. It has to ensure that it gets basic SOPs right that the returns on investments are as fast as possible,” Sharma said.
“As far as their many units are concerned, we have asked them to take a call on as to which units they want to continue or hive off. The SAIL board has already taken a call on that and they are moving on it,” he added.
Sharma said her ministry was also attempting to build a consensus towards bulk environmental clearances ahead of 2020 when a number of mining leases open up for auction.
“We would like that first of all, forest areas be mapped and once that is done, they give all forest and environment clearances before the auction. Today, once you have an auction, whoever gets the bid has to do the running around to get the environmental and forest clearance. This process takes two to four years. The idea of bulk clearances is being explored by the environment ministry ahead of 2020 when there will be major auctions. If a streamlined process is brought in before that, it could go a long way,” Sharma said.
The steel secretary also observed that while the POSCO story may be over in Odisha, the same was not the case for other parts of India—the south Korean steel major does have a presence in Maharashtra’s Raigad district.
She pointed out that it is essential create an enabling ecosystem for a greenfield steel project, complete with backend support and iron ore linkages. Separate auctions for end users and mercantile use could help create greater trust in the system. This is also a suggestion made by the steel ministry towards amending the Mines and Minerals Act. The ministry has suggested changes to the definition of medium and small enterprises so that it is more sector-specific.
The top management is the main culprit for the situation. People who get into top positions will have maximum left over service of 3to 4 years which will be utilized by them for their own sake. Top management in all verticals of this organization needs to be rejuvanized for betterment of this organization. Promotions to the levels starting from HOD’s should be by UPSC.
Modernisation in durgapur steel plant bloom cum round caster and medium structural mill are completly failed. These two shop not give their performance and almost closed. Who are the main culprit for this? Please identify and punished them.DSP loss are mainly for these two shops. Culprits should be punished.
Payment term for Projects is the main reason for failures of contact
Contractors are given 80% against supply of Materials and after taking this 80% they ran away leaving commissioning and erection
In absence of Proper commissioning and erection
Which is must for getting envisaged advantages all investment got into vain
It has two sides of the same coin which is affecting SAIL’s performance. (i) Govt threatening SAIL top brass and (ii) Govt policies of controlling the Steel behemoth (a) through appointment of useless, unworthy independent Directors, ignoring the professional stake holders like MDs of ISPs and Sr Executives, to provide some respectable berth to their party men is not for making profits for SAIL. (b) Govt giving threats for privatising SAIL Plants is anpther ploy to demoralise the professionals working on the ground, make it a losing concern and then hand it over to some private enterpreneurs for some give and take. What SAIL top brass should have done is to ‘Leave their egos here’ recall Retired personnel of high calibre, entrust them with some responsibility and use their long & short term advice. No doubt SAIL has become a self-centered egoistic behemoth, with extremely bad communication system like No response for years. And it is uniformly being done throughout SAIL incl all its Units. In any case SAIL should gird up their loins and take the challenge with Retirees with them shoulder to shoulder. With best wishes.
It’s good to see govt trying to put SAIL in tight leash. But wud Ms Aruna Sharma explain the rationale behind taking over sick VISL, Bhadrawati and Malvika Steel,Jagdeeshpur? Why no probe is done on Bokaro modernization done mostly by Italian company Danielli which has the access to 10,Janpath.
We will overcome soon definitely.
We will sail through this turbulent time shortly.
Difficulties lead to development.Under the present leadership we expect to see a turnaround.
Some financial help for the pioneers of sail who joined in fifties and retired in nineties with a paltry sum varying between 80,000/ to 40,0000/ and still living was being considered recently. This started after almost 12 years of by the oldies. Will Sail take this as an excuse to stop this?
We the SAIL people are a dedicated lot and committed to bring turn around.
Top management is dysfunctional as most of appointment and posting is not on merit basis,huge corruption in company,top management officer who r going to retire in 2 to 3 years want to mint money as their earlier retired officer,captive mines r running like contract and contractor r eds and CEO,employees productivity is less ,less than 3hours,contractor employees r also not working now a days,most of eds and CEO r corrupt to core,