Will the Steel Complex SAIL through this crisis?

The woody tract leading to the sales depot.  

A locked-up gate and the heavily wooded tract that leads to the sales depot will give you a fair idea about the condition of Kozhikode-based SAIL-SCL Kerala Ltd., popularly known as Steel Complex, one of the few steel plants in the State.

There is no production at the plant at Cheruvannur for around three years now and 48 permanent staff and around 150 contract employees are staring at an uncertain future. Wages are regularly irregular and have not been revised since 2008.

Only some staff are left in the production, administration, mechanical, electrical, and security divisions. Some of those in production and mechanical divisions have been redeployed as drivers and security guards. Those in electrical section were sent to help flood-hit people recently. To earn a livelihood, some are taking up part-time jobs such as farming, food catering and painting.

The main gate of SAIL-SCL Kerala Ltd.

The main gate of SAIL-SCL Kerala Ltd.   | Photo Credit: K_RAGESH


“Now, we suspect a move to privatise the company in the guise of reviving it. A group of government officials and representatives of a private steel firm recently visited the premises,” claims K. Shaji, general secretary, Steel Employees’ Union, affiliated to the Indian National Trade Union Congress (INTUC).

Steel Complex, launched in the 1970s as a joint venture between a private entrepreneur and the Kerala State Industrial Development Corporation, was taken over by the State government in the ’90s. On the brink of closure, it was relaunched in 2008 as a joint venture with equal shares between Steel Authority of India Ltd., and the government and renamed SAIL-SCL Kerala Ltd. The employees, however, alleged that efforts were never made to make it a profitable venture.

Between 2012 and 2014, semi-finished steel pieces or billets were produced here from scrap iron at a high cost, some times up to ₹33,000 a tonne. The company kept on making losses while those who bought billets from here, including private players, made profits. A re-rolling mill set up at a cost of over ₹60 crore during this period ended up in losses.

The locked up gate of the sales depot of Steel Complex. The woody tract leading to the sales depot

The locked up gate of the sales depot of Steel Complex. The woody tract leading to the sales depot   | Photo Credit: K_RAGESH


In 2014 September, billet production was stopped and a ‘conversion agreement’ was introduced. SAIL would supply billets, and they would be folded and rolled into Thermo-Mechanically Treated (TMT) steel bars here and returned. This agreement also did not help revive the factory’s fortunes as the conversion charges were not revised regularly. The slash in import duty on TMT steel bars in 2016-17 compounded the troubles. The company refused to renew the agreement with SAIL in 2016 November and the production was stopped thereafter.

Revival moves

“The Union government had offered ₹20 crore to revive the company two years ago after Minister Veerendra Singh visited the premises. A high-powered committee had proposed that the State Public Works Department (PWD) should purchase 30% of the TMT steel bars produced here for various government works. Though the State government agreed to this, an official order is yet to be issued,” Mr. Shaji pointed out.

Meanwhile, the Kerala Electricity Board cut off the power connection on June 25 this year after dues reached ₹2.6 crore. Though a three-phase connection for domestic use has been restored, it will not help. The employees said that the weigh bridges in the factory would turn useless soon as they need to be mechanically cleaned of the rainwater collected in them over a period of time. Five transformers and a sub-station would get damaged due to moisture if they were left unused for long.

In view of the crisis, Chief Minister Pinarayi Vijayan called a meeting of SAIL representatives and the company management on August 5 to discuss the future course.

Though SAIL again sought help to sell the TMT steel bars via PWD, the government was of the view that it could not force contractors to buy them. The public sector undertaking is learnt to have reiterated the demand in a report submitted to the government in mid-August. Sources said that the other two proposals were to sell off the unused land of the company to the Union government, clear the debt, and start operations on a clean slate, or involve private players to turn it around.

Hopes pinned on govt.

While the INTUC has opposed any move to bring in private players and declared to launch an agitation in the coming days, the Centre of Indian Trade Unions (CITU) is more guarded in its response. “We are not aware of any move to privatise the factory though we don’t know if SAIL is planning to sell its shares to any one. Our union wants to retain the company in the public sector and revive its fortunes,” M. Raju, general secretary of the CITU unit there, said. Blaming the management for the current crisis, he expressed the hope that the State government would help their cause.

C. Maheendranath, Managing Director, too is pinning his hopes on a favourable stand from the State. “SAIL is reported to have submitted a revival proposal. Follow-up discussions at the government-level are expected this month,” he said.

Will the Left Democratic Front government exhibit its political will to help an ailing PSU is what remains to be seen.

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Printable version | May 13, 2021 3:22:42 AM | https://www.thehindu.com/news/cities/kozhikode/will-the-steel-complex-sail-through-this-crisis/article29316756.ece

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