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Enquiry ordered into SAIL modernisation plan `lapses'

G. Rambabu

NEW DELHI, July 10

THE `navaratna' Steel Authority of India Ltd (SAIL) has come under fire from the Minister of Steel, Mr. B.K. Tripathy, for the huge time and cost overruns in the modernisation of its plants at Durgapur, Rourkela and Bokaro.

According to highly-placed sources, concerned over the reported irregularities in SAIL's modernisation programmes, the Minister has ordered a high-level enquiry to fix responsibility. A technical committee for this purpose is to be constituted soon, whic h will be expected to finalise its report before the end of the current fiscal.

The sources noted that SAIL's argument that the time and cost overruns in the implementation of the modernisation projects were due to the weakness in the system and the various extraneous factors over which it had no control, did not cut ice with the St eel Minister.

He also dismissed its pleas that the massive projects were the first of its kind ever undertaken by SAIL and since a project of such magnitude was never undertaken by it earlier, it had encountered many problems in carrying them through.

The sources noted that a decision to order an enquiry had been pending in the Steel Ministry for over a year now. Mr. Tripathy, who assumed charge only a month ago, decided to give his green signal following the severe indictment of SAIL by the Comptroll er and Auditor General (CAG).

They pointed out that the modernisation of Durgapur Steel Plant was approved by the Government in February 1989 at an estimated cost of Rs. 2,667.56 crores with a scheduled date of completion of March 1993. However, it was completed only in March 1998 at an estimated cost of Rs. 5,075 crores.

The modernisation of Rourkela Steel Plant was sanctioned in October 1989 at estimated cost of Rs. 2,461 crores and is now anticipated at Rs. 5,112 crores. While the modernisation of Bokaro Steel Plant was sanctioned on July 23, 1993 at an estimated cost of Rs. 1,625.99 crores, which is now anticipated at Rs. 2,235.45 crores.

When contacted by Business Line, Mr. Tripathy confirmed that he has ordered an enquiry. ``I have decided to cut short this trend of time and cost overruns in the implementation of the projects undertaken by the steel PSUs. Unless responsibility is fixed, the delays will only continue. There has to be a stop somewhere, and we just cannot let this waste of public resources continue,'' he said.

However, he noted that the irregularities in the modernisation programmes of SAIL were a thing of the past. He said that he was happy with the way the business restructuring of the company has been progressing.

``I am happy that SAIL is making every effort to bounce back. The rate at which they are proceeding, they should be back in the black soon. I have cautioned them not to be complacent. The Government cannot afford another financial restructuring package,' ' he said.