As per the schedule given by SAIL in the memorandum of understanding (MoU) signed with the ministry of steel, selection of strategic alliance partner would be completed by November 30, the official said adding that "we need about one month to process the bids before selecting the partner."

The selection of a strategic alliance partner would be followed by signing of an MoU between SAIL and the partner to complete the deal.

Asked about the projected proceeds from this deal, the SAIL official refused to comment saying this might affect the bidding process.

Divesting stake in the oxygen plant is part of SAIL's business restructuring which was approved by the cabinet along with a financial package of over Rs 8,400 including writing off of loans of over Rs 5,400 crore from the Steel Development Fund (SDF) and Government of India.

Meanwhile, the SAIL official said that the Bhilai steel plant was facing a severe crisis arising from shortage of water and the plant was on the verge of shut-down.

After getting government approval in February, SAIL had invited bids through expression of interest for selling stake in the oxygen plant-II at Bhilai steel plant. The four shortlisted parties having started the due diligence on September 16 completed it on October 4, SAIL sources said.

The oxygen plant at Bhilai started operations in 1997-98 and in 1999-2000 the plant was operating at 88.8 per cent capacity utilisation, the official said adding the plant's total capacity was 8,50,374 thousand normal cubic meter.

There are three air separation units of 550 tonnes per day capacity and the products include oxygen in both liquid and gaseous form, gaseous and liquid nitrogen and liquid argon. According to sources, the employees strength is about 160 and after the joint venture, the entire workforce would be transferred to the new JV company.