No new investment in SAIL, RINL till project completion: Govt

Steel Minister Birender Singh

THE Centre has ruled out any fresh investment in PSU steel majors SAIL and RINL before the completion of existing projects and earning returns from investment. Union Steel Minister Chaudhary Birender Singh had earlier pulled up India’s largest steelmaker, Steel Authority of India (SAIL), for slow progress in modernisation and capacity ramp-up.
When asked if the steel companies are planning any fresh investments, Steel Secretary Aruna Sharma said, "For the coming three years, they (SAIL, RINL) must complete...
their incomplete projects and start getting return on their investment. (It's) a must. There cannot be anything (fresh investments)."
The cumulative expenditure by SAIL on modernisation and expansion activities till December last year was to the tune of Rs 64,562 crore.
"At this moment, first, they have to first complete it... Already, SAIL has put Rs 60,000 crore. RINL has put Rs 17,000 crore. So, they must start getting return on their investment. It is very important," the secretary added. The delays in projects by SAIL and Rashtriya Ispat Nigam Ltd (RINL), she observed, have put both at a disadvantage.
"After all, when you are in a race and... when you are a weak player, then you have to tighten your belt from every corner. You can't afford to be weak and that is very clear... Now, they (SAIL and RINL) have to gear up. They have no option, but to gear up," Sharma made it clear.
SAIL has undertaken modernisation and expansion of its integrated steel plants in Bhilai, Bokaro, Rourkela, Durgapur and Burnpur and the special steel plant in Salem.
"While they plan this kind of investment, there are some major gaps. So, they will have to cover those gaps and make sort of the whole system absolutely commercially viable and then they are into expansion mode," Sharma noted.
In the meantime, SAIL is running a nationwide campaign which is aimed at boosting steel consumption in country. This has started to reflect positively through the dealer sales numbers, which posted 18 per cent jump in the month of August 2017 over the corresponding period last year selling 91,000 tonnes of steel in the month, a ministry release said.
SAIL targets to sell 1 MT steel through its dealer network this financial year and aims at doubling it in next three financial years, as per the directions from the Steel Minister.
SAIL had identified the potential of rural markets for enhancing steel consumption which is currently around 10 kgs per capita per year as against around 150 Kg per capita consumption in Urban India.
The Maharatna PSU had identified the potential of rural markets for enhancing steel consumption which is currently around 10 kg per capita per year as against around 150 kg per capita consumption in Urban India.