Calcutta, June 1: Prime minister Inder Kumar Gujral is taking initiatives to get the Russian finance ministry approve release of funds from the rupee-rouble escrow account for the modernisation of Indian Iron & Steel Company (Iisco), sources in Steel Authority of India Ltd (SAIL) said.

Gujral, who served as the Indian ambassador to Moscow in the eighties, has good rapport with a host of Russian leaders, and this can go in his favour, sources say.

The finance ministry cleared the release of escrow account funds for Iisco recently. The ailing subsidiary of SAIL needs around Rs 3,500 crore for its modernisation. However, SAIL is not in a position to mobilise the full amount and, therefore, the Russian steel company Tyazhpromexport (TPE) was invited to be an equity partner. It was also decided that SAIL would hold 51 per cent equity stake in the venture, while TPE will pick up 39 per cent.

The West Bengal government and Iisco employees agreed to share the remaining 10 per cent.

Though TPE had agreed to raise its stake to 49 per cent, it was not in a position to mobilise funds in the form of equity. The TPE management said they were ready to provide technology and equipment, which would form part of the equity.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.