Fresh bid to revive Kerala Steel Complex

KOZHIKODE, JULY 24. The revival of the sick Kerala Steel Complex Ltd at Cheruvannur here has emerged as a serious challenge to the managerial skills and political will of the State Government.

The Government is under pressure to keep the steel factory going since its closure would further darken Kozhikode's already dark industrial scene. The Industries Minister, P.K. Kunhalikutty, has already said the Government is determined to retain it in the public sector.

In a desperate bid to keep its commitment, the Government and the company management have prepared a revival package. The fate of the firm, the only steelmaking unit in the public sector in the State, now depends on how successful the Government would be in getting the package approved and executed.

The most worrying factor is that the company now has an accumulated loss of Rs.40 crores and was declared a sick unit way back in 1993.

Rs.8-cr. package

At a meeting called by Mr. Kunhalikutty in Thiruvananthapuram on July 13, the Minister promised full support of the Government for a Rs.8-crore revival package prepared by the management. The Opposition MLAs Mathai Chacko and V.K.C. Mammed Koya, besides UDF MLAs, were among those present at the meeting. All major trade unions had promised support to the efforts to revive the unit.

The proposed revival package includes a scheme for a captive rolling mill on the factory premises, which the management hopes would help cut down on expenditure drastically. In return, the management has promised to hand over to the Government some company land in Ernakulam or Kozhikode, which could be sold to raise funds, if necessary.

Staff strength

The Government, it was announced at the meeting, would seek all assistance from all quarters, including the Central Government, for the revival package.

The Steel Complex managing director, K. Unneenkutty, told The Hindu that he was confident that the Rs.8-crore revival project would help the company break even in one year and wipe out its accumulated loss in six years.

The measures for revival have already been set in motion. The staff strength has been pruned to 237. As many as 167 employees accepted VRS (Voluntary retirement scheme) in March this year and were paid benefits out of the Rs.4 crores granted by the Government for the purpose. Overstaffing was identified as one of the factors that had pushed the unit into the red. The management hopes that the downsizing would make the unit viable.

Government agencies such as the Public Works Department and the Kerala Water Authority are ready takers for steel billets. There is good demand for it from Lakshadweep also. The State construction sector is quite active and is dependent on steel from other States for its requirements.

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