Ignoring the recommendation of its own Cabinet Committee, the State Government is going ahead full steam to divest the IDC-owned Kalinga Iron Works and the Ferrochrome units to private suitors while the SAIl has shown keen interest in the two units.
Interestingly, the ruling BJD is shouting itself hoarse against the Central Government’s move for stake disinvestment in the Nalco! In 2010, the State’s Cabinet Committee on Disinvestment recommended that the stakes in the two steel and ferrochrome producing subsidiaries of the State-run Industrial Development Corporation (IDC) be sold to any Central PSU or through formal route.
Accordingly, the search started and the Nalco along with the SAIl showed interest. Somewhere along the way, the Nalco dropped out, but the SAIl continued to be a strong suitor by signing an MoU in May last year.
Accordingly, the SAIl appointed the SBI Caps as its advisor. Sources say that on their advice the SAIl asked for clarification on certain points from the IDC.
They concerned the status of the land on which the two units operated, the way the contract workers in the units would be treated and the transfer of the chromite mines standing in the name of the IDC without which the ferrochrome unit would not be viable. They also asked for extension of the deadline from December to March to submit their offer. The SAIl has made it clear that after taking over the Kalinga Iron Works, it intends to start Asia’s biggest pellet plant there while the chrome unit would continue to operate as usual.
The IDC agreed to extend the deadline but was silent on the crucial points raised by them. Meanwhile, the IDC appointed a transaction advisor in January this year with a promise of a hefty fee whose mandate is to get the two units handed over to a suitable party in either private sector or public sector.
While SAIl sources say that they are still waiting to hear from the IDC about their queries on getting the mines along with the ferrochrome unit, an interesting aspect of the mandate to the transaction advisor is that it may find a party for the ferrochrome unit with chrome ore mines! Since mines can be offered, observers wonder why the SAIl has still not been contacted by the transaction advisor or the IDC.
In the entire process, the moves of IDC are being seen as quite far from transparent. It may be remembered that when the IDC came out with advertisements for appointment of the transaction advisor, The Pioneer had raised the issue citing the decision of the Cabinet Committee, and at that time the Chief Secretary had informed the media that no such moves would be made till the process of finding a Central PSU for the two units is concluded.
But sources now point out that the SAIl is being given a very reluctant cooperation and its recent request to allow it to meet the IDC functionaries in the later part of the current month has not yet been accepted while the deadline of March 31 is only a few days away.