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Steel minister asks Tamil Nadu to waive off SAIL liabilities
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Wednesday, 26 Dec 2012
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Indian Express cited the steel ministry as saying that Tamil Nadu public sector SAIL will scale down operations unless the state waived the company’s accumulated liabilities of INR 470 crore and re-validated its mining leases. The move to close a refractory unit could leave over 300 employees jobless.

SAIL had acquired the refractory unit of Burn Standard and Co at Salem last year. The new entity, SAIL Refractory Company Limited produces critical inputs for iron and steel plants.

In a letter to Mr Debendranath Sarangi chief secretary of Tamil Nadu on December 17th, Mr DRS Chaudhary steel secretary said that the steel maker has finalized capex plans to overhaul SRCL’s old machinery and expand production capacity but none of this was likely to happen unless the liabilities of the refractory company were erased.

Mr Chaudhary said that the Collector, Salem district has asked SRCL to pay INR 458.61 crore towards rent charges of three leasehold land strips held by the company. The demand, dates way back to 1943 and is 10 times of the net worth of the firm and the basis of calculating the rent is also unclear, he argued.

He said that “SRCL has requested for waiver of this demand. Needless to say, enforcement of this claim will lead to certain closure of the operations of the company.”

The Centre said that the notice by the Salem district administration is on top of the INR 2.25 crore the company was asked to pay towards local cess and surcharge and another INR 4.27 crore as interest charges. While the company has paid the principal amount, the Board for Industrial and Financial Reconstruction has asked the state to waive the interest since it was a sick company.

Mr Chaudhary said that “The firm is still waiting for a positive response from the state government.”

The refractory unit holds about 1718.3 acres of leasehold mining land spread over 3 locations. But it has mounted a series of dues to the state government over the years. For instance there is a pending stamp duty of INR 5.07 crore, which the ministry has pitched for a waiver after SAIL bought the unit.

He further added that “The payment of the above charges, as demanded by the state government have direct implication on the viability of SRCL as indeed on the continuance of operations. I request your personal intervention in the speedy resolution of the above issues in the best interest of the state.”

Source - www.indianexpress.com

(www.steelguru.com)

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