(Weekly Organ of the Communist Party of India (Marxist)
June 06, 2010
Disinvestment in Sail Hampers Growth of Public Sector
M K Pandhe
of performance of public sector undertakings in steel industry, the
the government of
to the advent of globalization,
public sector steel industry was contributing 60 per cent of the
the industry which has now come to about 30 per cent. The government of
South Korean steel giant, POSCO is coming with a big plan of producing 10 million tonnes of steel and Arcelor Mittal is also contemplating big investment in steel industry. Inspite of modernisation plans of SAIL and RINL, the private sector steel plants are planning to produce more steel in the forthcoming period.
According to Composite Project Feasibility Reports of SAIL in the next 10 years the production of SAIL is likely to be doubled. Its hot metal capacity is likely to be increased from 13.82 million tonnes to 26.18 million tonnes during this period while the crude steel capacity will go up from 12.84 million tones to 24.59 million tonnes. SAIL is also planning to invest Rs 54,623 crores in the modernisation programmes and Rs 10,264 crores for the development of raw material and Rawaghat iron ore mines. IISCO steel plant has the largest investment plan of Rs 14,443 crores which will raise its production capacity from the existing 0.85 million tonnes to 2.91 million tonnes.
The production, modernisation and expansion plans visualise expansion of installed capacity in Bhilai Steel Plant from 4.08 million tonnes to 7.50 million tonnes. Durgapur Steel Plant will increase its installed capacity from the present 2.09 million tonnes to 2.45 million tonnes. The Rourkela Steel Plant will enhance its installed capacity from 2 million tonnes to 4.50 million tonnes. The production programme of Bokaro Steel Plant indicates a rise from existing 4.58 million tonnes to 5.77 million tonnes in the same period. The Salem Steel Plant will also expand its installed capacity from the existing 18 lakh tonnes to 3.5 lakh tonnes.
However, the Plant does not spell out the expansion programme of Alloy Steel Plant and Vishweshwaryya Iron and Steel Plant. Without expansion and modernisation the existence of the plant is likely to be at stake. It should also be noted that Durgapur Steel Plant has been allotted the lowest investment and its capacity will increase marginally. After modernisation DSP will be the smallest integrated steel plant under SAIL. Without additional investment and development of finished products, the Plants profitability is likely to be adversely affected in the forthcoming period.
programmes of Indian and foreign private sector companies are taken
account, the total steel production in
The position of all trade unions of opposition to disinvestment of shares of public sector and for making uniform wage levels and regular employment in private sector is being curtly ignored by the UPA government which is profusely helping the private sector to strengthen their grip over the steel industry.
private sector steel
companies are allowed to violate all the labour laws. They do not
formation of genuine trade union while only company scab unions are
in the industry. Victimisation of large number of workers for trying to
democratic union in private sector steel plants has taken place while
production in the world during 2009 was 1220 million tonnes.
It is estimated that the world steel output is likely to increase by 8 per cent to reach a level of 1340 million tonnes during 2010. Despite this possibility of growth in some countries, the production level would be still below 2007 level indicating continuation of the economic crisis in their economy.
During 2008-09, SAIL earned profit before tax to the tune of Rs 9403 crores and during the year it paid dividend of 13 per cent to the government. During April to December 2009-10 alone, the profit before tax earned by SAIL was Rs 7065 crores and the total for the year 2009-10 is likely to exceed previous yearís performance. During 2009-10, the SAIL will pay 16 per cent dividend. Despite such improved performance, the proposal of the government to disinvest share has no justified reason except the commitment govern by the UPA government to the World Bank and the IMF.
Despite such a good performance, SAIL is resorting to engaging contract labour in an increasing scale in the industry while the vacancies created by superannuation of the workers are not being filled up. The SAIL management is recruiting contract labour even in permanent and perennial nature of jobs. These workers who do the same work as regular employees, the wages paid to them are one fourth of the wages paid to the regular employees. SAIL management is not implementing all the statutory commitments as a principle employer. The trade unions have demanded payment of scales of regular employees to all contract workers but the management has not taken any step in that direction. It is estimated that about 40 per cent of the workforce in steel industry are working under contractors with extremely bad working and living conditions. Despite announcement by former union minister for steel that every contract worker would be paid Rs 1000 per month over and above his wage, it has not yet not been implemented by the SAIL management.
committee of public
undertakings of parliament had pointed out excess expenditure incurred
management in modernisation of
The contractors do not maintain safety standards and workers lives are in danger. SAIL should strictly supervise the observation of safety rules by the contractors. At times SAIL officials ignore this aspect in return for some benefits given to them by the contractors under the table.
Under these circumstances, the proposals of the UPA government to disinvest upto 49 per cent equity of SAIL in the share market will only cripple the public sector steel industry. The trade union movement in steel industry is campaigning against disinvestment and privatisation and fighting for strengthening the role of public sector in steel industry which alone will ensure the self reliant development of Indian steel industry.