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Defence Ministry to take over VISL?

By Pramod Mellegatti

BHADRAVATI, AUG. 25. The Visvesvaraya Iron and Steel Limited (VISL), a unit of the Steel Authority of India Limited (SAIL), facing an uncertain future in the light of the reported decision to privatise it after it was included in the list of public undertakings covered under the disinvestment scheme, seems to have got a breather following reports that it is likely to be handed over to the Defence Ministry.

What appears to have strengthened the VISL's case is that the Defence Ministry has an annual requirement of 35,000 tonnes of alloy steel, of which VISL is the major producer in the country.

The hopes of handing over VISL to the Defence Ministry brightened following the visit of the Union Minister for Culture and Tourism, Mr. Ananth Kumar, to the VISL plant on August 20.

Mr. Ananth Kumar, who visited the plant at the suggestion of the Prime Minister, Mr. Vajpayee, promised that initiatives would be taken to arrange the meeting with the Defence Minister, Mr. George Fernandes, and other ministers concerned, if the Officers' Association and the Workers' Association of VISL prepared a report making out a strong case for the takeover of their undertaking by the Defence Ministry and approached him within two months.

Addressing the workers during his visit to the plant, he said the concern of the workers over the proposed move to privatise VISL was understandable because ``VISL is not like any other industry, it symbolises the pride of Karnataka''.

If the disinvestment move had to be shelved, then the possibility of handing it over to the Defence Ministry should be explored as nearly 60 per cent of its products were being used for defence purposes, he said.

The problems of VISL - the premier producer of alloy steel in the country, founded by Dr. M. Visvesvaraya, in the Thirties - could be attributed to the lack of financial and technical support. Burdened by mounting losses, the State Government asked the Union Government to arrange for the takeover of VISL. As a result, VISL was taken over by SAIL in 1989 as a subsidiary of it. In December 1998, VISL was merged with SAIL.

However, the expectation that good days of VISL would begin and that it would turn around after it was taken over by SAIL proved to be short lived as it continued to suffer ``discrimination'' in the absence of adequate investment for the modernisation of the plant. The Union Government had made a commitment during the takeover that it would invest around Rs. 500 crores on the technological upgradation of VISL.

In the past 11 years, SAIL has invested only Rs. 200 crores on this plant. The investment made is not adequate and because of it VISL has not been able to yield the desired results. Lack of planning is also attributed as one of the reasons. SAIL invested Rs. 20 crores for modernisation of the ferro silicon furnace, which was subsequently scrapped.

The leaders of VISL Workers' Association allege that the step- motherly treatment to VISL by SAIL was the main reasons for its downfall. The benefits pertaining to workers which were prevailing in SAIL were not extended to the VISL staff. This led to the downfall of their morale and resulted in fall in productivity, they added. ``This clearly shows that the SAIL has no interest in running VISL'', they said urging the Union Government to prevent the SAIL from selling VISL to any private entrepreneur.

The leaders of the Workers' Association have also taken exception to the decision of SAIL to divest in VISL based on the report of its consultants, M/s. Mc Kensey, who they said never visited the plant before submitting the report.

They said that VISL had the capacity and expertise to produce sophisticated and strategic steel. In fact, it had developed many grades of steels in the past in coordination with various defence establishments in the country. It was the major supplier to defence establishments and its only competitor for supply of steel to defence establishments was the ASP of Durgapur, they said.

It is stated that a move has been initiated for the takeover of VISL by the Defence Ministry, and the authorities of major ordnance factories have also shown in this direction.

The Workers' Association says that the only way to save VISL is to hand it over to the Defence Ministry and has reiterated that any move to hand over the plant to a private enterprise would create social tension in the region. ``It is the will of the VISL collective and the people of Karnataka that VISL, founded by Sir M. Visvesvaraya, should not be allowed to go to into private hands'', it said.

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