They believe that even after writing off of loans totalling Rs 1,947 crore, Iisco does not have funds for proper operations, while funds for capital expenditure is out of question.

SAIL has already issued notification for privatisation of Iisco and has offered majority stake to a private party in a joint venture for viable operation of this one of the oldest integrated steel plants of the country.

Preliminary information memorandum has been issued today and the last date for "expression of interest" is July 15, 2000. It may take even more than a year to complete the formalities for privatisation.

What is worrying the Iisco insiders is that the blast furnace no 3 of its Burnpur works is virtually in the state of collapse. Many feel that this could lead to a total collapse of the plant.

Iisco has gradually been scaling down its level of operations over the past two years due to capital shortage of funds. In 1999-2000, it produced 730,000 tonne of hot metal, 290,000 tonne of ingot steel and 250,000 tonne of saleable steel. It has already scaled down its operations of its steel zone to 30 per cent of its installed capacity, while that of iron zone to 60 per cent.

The company has been surviving on the large-scale sale of pig iron - around 350,000 to 400,000 tonnes annually over the past few years. Now, even this may be disrupted, Iisco insiders believe.

Incidentally, the cost of iron making at Iisco is comparable to that of otherSteel Authority of Indiaplants, its cost of steel making is abnormally high. Its operations have for years been unviable because of technological obsolescence.

"The scaling down of the operations has now reached such a stage that further scaling down would lead to situation where its operations can no longer be carried out from the financial point of view," a senior official of the plant admits.

Iisco has been operating only two of its four coke oven batteries. Battery nos 7 and 10 were phased out in 1989 and 1997 respectively, while nos 8 and 9 are in operation. The last two, commissioned in 1958, were rebuilt in 1987 and 1991 respectively.

Rebuilding of one coke oven battery costs about Rs 100 crore and Iisco at present is in no position to invest. Moreover, the pollution control norms for fugitive emissions, to be implemented within 2002, could also be effective for Iisco.

Similarly, Iisco has been operating only two of its four blast furnaces, nos 3 and 4. The 1 and 2 are out of operation since 1996 and 1998 respectively.Its blast furnace 3 faced two major hearth breakouts in the past two months. The operation of this furnace has been scaled down to around half of its normal capacity. The furnace was last relined in 1997 and, many believe, should have been in operation for at least another two years. With two hearth breakouts, this furnace may have to be taken down for the premature relining.

In order to face immediate crisis, action has been initiated for the revival of blast furnace no 1 of 1922 vintage. An investment of around Rs 40 crore is required in the blast furnace zone.