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CITU flays disintegration move of SAIL
By Our Special Correspondent
NEW DELHI, DEC. 7. Dubbing it a ``destructive exercise in the name of restructuring'', the Centre of Indian Trade Unions (CITU) has opposed the disintegration move of the Steel Authority of India Ltd. (SAIL) management.
A meeting of all the major steel trade unions was convened by the SAIL chairman on Thursday where the proposal to disintegrate the public sector and its Central Marketing Organisation (CMO) was discussed. The CITU - which was represented by its general secretary, Mr. M.K. Pandhe, and the secretary, Mr. Ardhendu Dakshi - adopted a strong stand against any such move, calling it a ``disaster''.
As recommended by the American consultancy firm, Mckinsey, the proposed move for restructuring consists of bifurcating four major steel plants into two Strategic Business Units (SBU) with two plants grouped together on product line and selling out the remaining two. The plan also suggests trifurcating the CMO - one each to be attached to the two SBUs and the third one to be kept for shipping, export and other services.
Mr. Pandhe told The Hindu that such bifurcation exercise claimed to have been undertaken to improve the financial health of the SAIL ``is nothing but a preparatory exercise for privatising the public sector on a piecemeal basis, since it may be difficult to find a buyer for the SAIL in its single original size.''
Opposed to Government's move for privatisation, the CITU has done its homework to project the ``negative results'' of bifurcation. On an experimental basis, the SAIL has been carrying out an in-house exercise of bifurcated marketing on product line for the past 16 months.
According to Mr. Pandhe, all performance indicators, the market share, growth of net sales realisation in traditionally high priced market, the sale volume to project/common customers gave negative results. He said the customers were so inconvenienced that many switched to other producers.
``The management could not contradict any of the facts while other unions expressed concern over such unhealthy developments,'' Mr. Pandhe added to underline the futility of the proposed exercise.
He also pointed out how the proposed move of the SAIL would weaken its organised marketing set-up and lead to working at cross-purpose by the bifurcated wings. This would mean wasteful internal competition between the SBUs and weakening the overall competitive edge of the SAIL in the market.
In the bifurcated SBU set-up the weaker plants would face more difficulties. ``While the worldwide trend is to consolidate through merger and acquisition, the SAIL management is making an opposite move to break its monolithic structure,'' Mr. Pandhe said.
At yesterday's meeting, though the SAIL management conveyed that the restructuring plan was not yet finalised and that another meeting would be convened to discuss the issue, the CITU delegation asserted that the root of the problem lay in the ``anti-growth policies of the Government.''
``The situation in the SAIL has been made precarious by the policy of discrimination against it when compared to the private steel sector companies,'' the CITU leader said.
He stressed the need for removing anomalies and discrimination in tax structure on the domestically-produced steel, toning down high levels of taxation on essential inputs, addressing the problems of dumping from CIS countries, allowing duty-free steel import for export-oriented projects, and boosting the steel consumption through increased public investment on construction and other projects.
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