Company sources said the high-powered committee set up by prime minister Atal Behari Vajpayee to look into the revival of Iisco is now working out the details for floating the tender. The members are finance minister Yashwant Sinha, steel minister Naveen Patnaik and the deputy chairman of the Planning Commission, Jaswant Singh.

"We came to know from steel ministry officials that the committee which was supposed to look into the revival of Iisco now plans to sell the company," the sources said. The disinvestment commission chaired by GV Ramakrishnan had recommended full privatisation of Iisco after a restructuring.

During the 1992 bid to privatise Iisco, SBI Caps was engaged to study the bids thatcame in from three private parties -- Usha Rectifier Corp, Mukand Ltd and Mitsui & Co. The steel ministry also formed a committee of experts, headed by TL Shankar, to study the bids.

The committee accepted Mukand's offer, although it was opposed by KC Khanna, the only technocrat in the committee. Mukand was supposed to get a control of 80 per cent of Iisco's Rs 370-crore equity against a payment of Rs 120 crore over four years and a down payment of Rs 40 crore. SAIL also agreed to waive part of Iisco's loan liabilities. The one-million-tonne plant is running at a capacity of only 38 per cent owing to a cash crunch.

"We have curtailed our production because a number of our products no longer have a market. Moreover, the company does not have the funds to meet the raw material costs for higher production. If steps are not taken immediately it will be a steel plant with zero production," sources noted.

The Board for Industrial & Financial Reconstruction (BIFR) has already drawn up a revival package forIisco worth Rs 2,100 crore. The package is split into three phases and spread over six years. However, it is waiting for the final clearance from the union government. Iisco, with an equity base of only Rs 385 crore, has an accumulated loss of Rs 1,300 crore, 70 per cent of which is interest burden. In 1997-98, it reported a loss of Rs 212 crore of which the interest cost component was Rs 125 crore.

Although nothing much has changed in the six years since the first privatisation attempt, a section of the 16,000-strong workforce is ready to accept partial privatisation. Malay Mazumdar, chairman of the Iisco Officers' Association, said they are against full privatisation, but will accept a joint venture with a private company.