The Hindu : Business : Posco, Orissa govt. to sign MoU, says Paswan

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Friday, Jun 10, 2005

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Posco, Orissa govt. to sign MoU, says Paswan

Special Correspondent

Rules out disinvestment in companies under his ministry

NEW DELHI: The Korean steel giant Posco and the Orissa government will conclude a memorandum of understanding (MoU) for setting up a steel plant at the end of this month as all issues have now been sorted out. This was disclosed here by the Union Steel Minister, Ram Vilas Paswan, who said the Korean company had agreed not to insist on supply of additional iron ore sought by it originally.

Addressing a press conference, he said Posco's requirement was only 600 million tonnes and it had therefore agreed not to insist on export of 300 million tonnes of iron ore. He said the Centre had opposed this export as had the State government earlier. Posco was earlier to sign an agreement with the state government for setting up a 12 million tonne steel plant in April but the deal could not be concluded in view of issues relating to iron ore exports.

On the proposed merger of IISCO (Indian Iron and Steel Company) and the Steel Authority of India Limited (SAIL), he said it had been cleared by the Steel Ministry and had been sent to the Cabinet for approval. The merged company would have at its disposal 35-40 million tonnes of iron ore reserves lying with IISCO.

Regarding other merger proposals in the steel sector, he said the Ministry was discussing prospects for merging small companies like Rashtriya Ispat Nigam Limited with SAIL but these were at an extremely preliminary stage. Besides, the Ministry was considering whether to create two separate entities, one for iron ore mining and another for steel production. These issues were being considered from the management point of view and would not be decided in a hurry.

Mr. Paswan said a new steel policy had also been formulated with a target set for ten per cent growth in this sector. It would be sent for cabinet approval by the end of this month. A draft of the policy had been circulated for obtaining comments from various ministries and departments. After the policy was approved by the Cabinet, a Group of Ministers, headed by Mr. Paswan would be set up for charting a detailed action plan for implementation and monitoring of the policy. Mr. Paswan also took the opportunity to rule out disinvestment in the companies under his ministry and denied that any letter had been received from the Finance Ministry on this issue. He stressed that even the loss-making companies were not being disinvested. In this context, he said the public sector companies under the Ministry were making profits barring two — Hindustan Steel Constructions Limited and Bharat Refractories Limited — for which the department was preparing revival packages.

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