Core panel set up to review Iisco revival plan with SDF
Madhumita Chakraborty
NEW DELHI, December 29: The Union cabinet on Monday set up a four-member core committee to assess the Union steel ministry's proposal to rehabilitate the ailing Indian Iron and Steel Company Ltd (Iisco) with the Steel Development Fund (SDF) kitty.
The four-member panel will comprise prime minister Inder Kumar Gujral, Union finance minister P Chidambaram, Union steel and mines minister Birendra Prasad Baishya and Union minister for agriculture Chaturanan Mishra. The new Iisco rehabilitation scheme, that is an alternative to involving the private sector in the project, was discussed by the Union cabinet, after Baishya raised the long-pending issue on Monday.
Sources in political circles said the high-powered committee was now authorised to take a stand on the revised Iisco revival scheme, which need not be referred back to the Cabinet again. Rajya Sabha member of Parliament (MP) and Centre for Indian Trade Unions (CITU) secretary Jibon Roy divulged that West Bengal chief minister Jyoti Basu had discussed the plight of the ailing Steel Authority of India Ltd (SAIL) subsidiary with the prime minister a couple of days ago.
The once premier steel plant is located 200 km away from Calcutta on the West Bengal-Bihar border. The revised Iisco revival proposal is an alternative to a scheme that had been approved by the Union cabinet earlier, for rehabilitating the company through a joint venture between SAIL and a private sector partner.
Russian steel consultant Tyazhpromexport won the bid for the project at the end of a global tender. The project, however, developed a hitch when the Union finance ministry and its Russian counterpart could not make up their minds about allowing Tyazhpromexport to draw its share of the equity capital from the rupee debt repayment account left over from the days of the rupee-rouble trade.
Union steel and mines minister Birendra Prasad Baishya initiated a fresh Cabinet note, proposing that SAIL be allowed to write off some of its roughly Rs 3000 crore SDF loans.
The loan write-off, should spruce up SAIL's balance sheet and enhance its borrowing capacity, so that it could raise funds on its own for upgrading its sick subsidiary.
The Russian company had drawn up a roughly Rs 2,000-crore scheme for doing a quick patch-up job on the 75-year-old steelworks.
The proposal for utilising SDF funds, sources pointed out, should find favour with the high-level team, since it did not involve any budgetary support.The proposal also does not involve any pre-election taboos like a major investment, expenditure or change in policy.
Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.
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