The Centre, through the Steel Ministry, has reached out to the Tamil Nadu government, for “subsiding the existing resentment” against the proposed disinvestment of SAIL’s Salem Steel Plant and facilitate site visit of prospective buyers.
The Steel Authority of India Ltd (SAIL) – the largest steel-making PSU – has also agreed to hand over nearly 1,600 acres of land, valued at ₹2,000 crore, which is part of the Salem Steel Plant, to the Tamil Nadu state government for facilitating the setting up of defence corridor and reportedly in lieu of facilitating the disinvestment.
Those aware of the discussions said SAIL is willing to “part with the land parcel at market rate”, but so far there is no call yet on whether the Tamil Nadu government on the same.
As per an internal assessment of the Steel Ministry, the Salem plant has a total land of 3,900 acre. Of this, 1,700 acre was proposed to be under disinvestment; and of the remaining (2,200 acres), a land parcel of 1,600 acres has been identified for the proposed defence corridor. This leaves the Ministry with a balance of 600 acres.
“GoTN (Government of Tamil Nadu) to extend security for facilitating site visit by prospective buyers,” read an internal review note of the Minisrty.
Officials aware of the discussions told businessline that top officials of the Steel Ministry have discussed the issue with the state government (Tamil Nadu government) to facilitate subsiding the existing dissent and resentment against divestment of the steel plant. “Government of TN is internally deliberating,” sources said.
The review note of the Ministry adds that some of the top brass in the Ministry had a “telephonic conversation” with the Chief Secretary, Tamil Nadu, regarding the land parcel and SAIL’s decision to part with the land at market rate.
The Salem Steel Plant, a special steels unit, pioneered the supply of wider-width stainless steel sheets and coils in India. The plant can produce stainless steel in the form of coils & sheets with an installed capacity of 70,000 tonnes/year in Cold Rolling Mill; and 3,64,000 tonnes/year in Hot Rolling Mill. The steel melting shop can produce 1,80,000 tonnes of slabs per annum.
Divestment Held Up
The Union Cabinet had on October 27, 2016 approved strategic divestment of Salem Steel Plant. Subsequently, SBI Capital Markets was appointed as transaction adviser; while Saraf & Partners were appointed as legal advisors. Asset values and Tax-cum-Accounting consultants were also appointed.
Bidding documents were issued in October 2020 and SAIL took up the issue of organising a site visit of Salem Steel Plant with police and district administration authorities “several times”. Letters have been written by SAIL CMD to the Chief Secretary, Tamil Nadu in 2021 to facilitate the visits.